Soap molecules have two opposite ends, one end is attracted to water (hydrophilic) and the other is repelled by water (hydrophobic). The hydrophobic end attracts to dirt and oil on your hands, allowing soap to act as a cleaning agent and washing away dirt down the drain. Similarly, recessions usually act as a cleansing agent by removing the weak players from a marketplace. This cleansing creates an opportunity for those with strong business models and sustainable competitive advantages to accelerate out of a recession and take market share.
Today, with no recession in sight, what will be the mechanism through which weak players get washed away? We believe that the inability to recruit and retain talent in the short- and medium-term will be that mechanism. Firms that do not have comprehensive human capital programs and career tracks to develop existing talent and recruit new talent will, over time, see degradation in their ability to sell and deliver products and services, thereby losing competitive advantage and market share.
In today’s market, firms can’t afford to ignore talent issues. We have clients who have firsthand experience of the negative consequences that inadequate talent has on sales, quality, competitive advantage, and market share. Ultimately, these consequences will have the same effect as a recession on the weak players in most industries – wash them away (although in slow motion).
CBIZ CMF recommends these tips to avoid a “talent recession” and maintain your market share:
- Stay competitive with compensation programs – the landscape is changing quarterly and can vary materially across industry and geography.
- Always be recruiting, internally and through outside resources.
- Create explainable, realistic career tracks for key functions, or consider outsourcing such functions.
For additional commentary and perspective, click here for a short article from Inc.