economic indicators pointing to a lingering recession and many
businesses in regroup mode, it seems that building and adding to talent
would be the last thing on the minds of managers and corporate

But, according to Charles F. Goetz, distinguished lecturer in entrepreneurship and an adjunct professor of organization and management at Emory University's Goizueta Business School,
ignoring the value of human capital, particularly when a company and
the economy are in turmoil, can be a big mistake. Companies, large and
small, must continually add to and work to retain talent, or they run
the risk of damaging their bottom line, he says. Sharper corporate
leaders are growing to understand the true value of the people in their
organization, says Goetz.

In a recent study, global consulting firm Watson Wyatt Worldwide
found that “four out of ten companies (40 percent) believe workforce
planning has become more important to their organization’s business
success since the economic slowdown, and almost a third (31 percent)
have already begun to increase activity around it.” Conducted in
October 2008, the survey included the responses of 129 North
America-based employers across a variety of industries.

The study noted that the “most prevalent concern among employers is
the scarcity of critical talent.” Despite the economic downturn, 50
percent of the employers surveyed said they would “respond by
maintaining their status quo in terms of replacing talent,” while only
one in three of those surveyed indicated they were scaling back
replacing people across the organization. Of the companies interviewed
for the report, “77 percent of respondents said attracting
critical-skill employees is currently a challenge, and 60 percent said
attracting top performers is a challenge.”

Russell Coff, associate professor of organization and management at Goizueta, says
that “managing the talent base is a fundamental problem for employers.”
For firms able to weather the current economic storm, they are finding
that it is a buyer’s market for companies that can afford to add to
staff, he says. “There are people looking for positions who may not
have another choice, and they may take a salary and a position that
they may not have considered before.”

However, Coff worries that the current downturn—deeper and possibly
longer than most—just might leave other firms with critical holes in
staff. “Right now, some companies just may go wanting for talent, as
they may not have the capacity to fill needed spots.” Smaller
businesses may need to structure more creative deals, in order to
afford the talent they might need, says Coff. “The type of
entrepreneurial people that smaller businesses require might be brought
on board with a more commission-based type of setup,” he says. “This
can shift some of the risk onto the employee. But if you share in the
risk, you have to share in the profit. If you get someone who believes
they can accomplish something new, then they might leap at this setup.”

Shifting the risk also helps address the real risk of landing the
wrong person, says Coff. Businesses constantly face the costly problem
of bringing people on staff, and then finding out that the person is
simply not the right fit for the company. “Even research on the use of
social networks to find good employees—considered a tried and true
method—still only gets you so far,” he notes.

Goetz adds that it is certainly easier to assess sales or
commission-based employees and executives. “People who work in a
number-driven environment are easier to analyze,” he says. “You can ask
about their previous earnings.” It’s a much more difficult process to
assess one’s management, marketing or customer service ability.
Ultimately, he says, success on the job is a complicated mix of talent,
personality, and luck in hiring. “Often, personality issues are

Kevin P. Coyne, a senior teaching professor in organization and
management at Goizueta and a partner at the Coyne Partnership, an
Atlanta, Georgia-based strategy consulting firm, says businesses need
to remember that hiring is a “value proposition. He notes, “Businesses
simply cannot afford to stop grooming and growing their people.”

Part of the natural evolutionary process in a workforce means that
some staff members will move up the ranks, as they should, and others
will inevitably move on to other positions outside the firm, or they
may need to be let go. “It’s not smart to upset the hiring process,”
says Coyne. “It can’t be ignored. If you neglect staffing issues, it
can haunt you for five to six years or more.”

The C-suite isn’t immune to turnover. Coyne notes that this is when
workforce planning and succession issues become particularly key.
Poaching talent from the top corporate spot of a more successful
competitor is a common practice. Having talented and knowledgeable
executives on board to provide continuity, or even to move up the
ranks, is an important and constant consideration for companies today.
Coyne cites the recent grab for Nigel Travis, former CEO and president
of Papa John’s International. On January 6, Travis assumed the spot of
CEO for Dunkin’ Brands, the parent company for Dunkin’ Donuts and

Coyne notes that more turnover does happen in the lower or middle level
of the ranks, but the disruption it causes can be very problematic.
“There are certainly ‘academy companies’ that are good for almost
anyone to have on the resume—the investment banks or Fortune 500
companies, like Procter & Gamble,” he notes. Firms like these are
especially mindful of having a constant influx of talent to replace
those moving on from these “training grounds,” he says. Even firms with
layoffs in one division of the organization, or in the chain of
command, might be adding staff in another part of the company. Coyne
concludes, “There will always be turnover, and you have to constantly
work to replace people, or there will be a gap in the development of
your organization along the way.”

Republished with permission from Knowledge@Emory, a service of Emory University's Goizueta Business School.