The Chief Financial Officer of a company asked his Chief Executive Officer, “What happens if we invest in developing our people and then they leave the company?” The Chief Executive answered, “What happens if we don’t, and they stay?”
From the age of three I started to get my daughter’s hair professionally braided following utter and complete failure on my part to tame her African locks into a respectable and worthy outcome at home. But it was a nightmare trying to find a braider who could get my daughter to sit still until I mercifully discovered Rose. Rose and her team at Salon V specialized primarily in professionally attending to children’s hair and had magic touch with kids. Within a year of getting used to her benevolent services, she sent a text saying she had moved to Salon W about 1 km away as the crow flies. We moved with her. Nine short months later, another text message saying she had moved to Salon X. Then Salon Y and now we are on Salon Z, which mercifully is about 100 metres from my house. Rose moves around with the same five other ladies: three stylists and one washer. All their salon moves have been within a two kilometer square radius. I don’t know about others, but I have and will continue to move with Rose for no other reason than that she’s figured out how to get my now six year old daughter to sit still for the two hours it takes to get her hair washed and braided.
To buy, borrow or build is a human resource strategy that many organizations grapple with unsuccessfully. Buying means you pay a premium to poach talent from the competition. It works perfectly, especially where they come already trained and carrying a mobile phone full of customer contacts. The problem is, they encounter colleagues at your organization who are at the same job grade but at a significantly lower pay grade. Then the murmurings of staff dissent begin, and the pressure to deliver results immediately to justify the higher pay ensues. Borrowing means setting up alliances with key partners to lend you resources for a defined period or entering into contract agreements with relevant resources to deliver the task within a stipulated time. Building requires you to invest in your talent by first identifying the individuals and then designing a career track for them that requires detailed training and work assignments whose objective is to hone the skills required for the target job.
The professional football industry has honed combining these HR strategies to a fine art. Professor Laurence Capron from Insead Business School and Muhammad Tousif a bank executive and football writer jointly penned an article titled “Build, borrow or buy your talent” that featured in the May 2014 issue of Insead’s Knowledge magazine. The article captures the reasons for the success behind English Premier League’s Manchester United. “Manchester United is one of the best talent factories in the world. Internal innovation is engrained in the Red Devils. Players such as Duncan Edwards, Bobby Charlton, George Best, Nobby Stiles, Mark Hughes, Ryan Giggs, Paul Scholes, David Beckham and Johnny Giles were all spotted as youngsters and came up through the ranks of the club. Yet, despite its internal development culture, Manchester United actively loans out its players to other clubs to accelerate their development, providing more game time and diverse sources of learning. And it has complemented its internal pool by buying high-profile players like Robin van Persie (from Arsenal), Shinji Kagawa (Dortmund) and more recently Marouane Fellaini (Everton).”
If you’re like me and couldn’t differentiate a football player from a jar of jam, don’t worry. This article is not about football, rather it is about consciously being aware that buying or poaching as we call it locally, can not be the sole HR strategy for your business as it comes at a detrimental cost. It’s not only expensive in the long run, but it also destroys your customer service proposition when the poached talent invariably moves on. That’s not to say that poached talent is only motivated by higher remuneration, there is often other motivational planks such as working for an organization with a good social responsibility platform or one that provides international work opportunities. The act of loaning out players is fairly widespread in the European football industry and is one that can be replicated within an alliance of non-competing companies. It allows for talent to expand its wings by working in a different industry with different challenges at an extremely negligible training cost to the source employer. The talent gets exposure and can take or bring back best practice to the organization. Of course, requisite “do-not-poach-at-the-end-of-the-assignment” contracts will have to be signed by participating companies in such an alliance. But putting together such a system requires a group of CEOs and their HR directors who put the talent squarely in the centre of their company’s overarching growth strategy.
Rose and her crew of four have developed a fairly lucrative scam: get hired by a new salon owner, work, disagree on terms and keep on Johnny walking. However, it is unsustainable in the long term and it is only a matter of time before their reputation as being blow-dryers for hire catches up with them, hopefully by which time my daughter will be able to sit still for the 2 or so hours it takes to do her hair and can move to a more stable environment. The salon owner where I get attended to cottoned onto this fact eight years ago and trained the entire staff on hair and beauty techniques. Her aim was to reduce the reliance on a few “stars” running the show and holding her hostage. It worked and there has never been a time that a mass exodus has left her with an empty salon as Rose’s crew have now specialized in doing. Poaching can never be an effective strategy if you are not building your own talent simultaneously.