Mission Critical Skills: The Haves & The Have Nots

I posted recently about the harsh realities of the marketplace and the tough-to-swallow fact that all skill sets are not equal in the eyes of the labor market.

It may not be a happy fact, it may not be "fair", but it's a reality I think will only loom larger in the times to come.  Business success in our fast moving, knowledge based and technology driven world will become more and more dependent on certain types of human talent.  The lucky holders of that talent will be able to command a premium price for their skills, and the rest of us will look on with envy.

Related to this is a concept that is pushing to the forefront of base salary management.  It is the idea that base salary decisions can no longer hang simply on the traditional merit matrix variables of individual performance and position in range, but must increasingly reflect the need to invest in talent that is critical to the success of the organization's mission.

My brief discussion of mission critical talent in yesterday's Workforce webinar (Making Compensation Work in 2010 and Beyond) generated a lot of questions - more than we were able to get to in our allotted Q&A time.  Some of them focused on the approach and process for figuring out which skills are critical for a particular organization; others reflected concern about the impact of this delineation on the workforce.  What about the "have nots" who still do important work for the organization?  Won't they be demotivated to learn they've been excluded from a category defined as "mission critical"?

My response, where I relayed the story of a client who very aggressivly promoted (to all employees) their plan to pay a premium for mission critical skills, felt (to me) somewhat short of hitting the mark - and I've been doing some reflection today.

I think this is an important talent management question going forward.  The market is going to keep doing  what the market does best: sort through talent supply and demand, and drive up the price of those skills most critical to the most organizations.  We must figure out how best to respond to this from the standpoint of our organizations' talent needs, but we must do so in a truthful, forward-thinking and compassionate manner.

I believe we owe our employees an education in how the talent marketplace works, and the impact it has on compensation programs and practices.  Employees need this information and understanding to make the best possible decisions about their own careers and livelihoods. 

But more than that - wouldn't it be in everyone's best interest if we took it a step further?

What if we not only identified and tracked the skills and competencies critical to our organizations - today and into the future, but also communicated this regularly to our employees?  What if we regularly shared specific information on the kinds of education and certification steps it would take for employees to retool in these areas?  What if we tailored our tuition reimbursement and even flexible work options to support an employee's pursuit of these credentials?  Offered internal apprenticeship or mentoring connections to help them along that path? And made this a part of every performance management discussion?

This so that every employee who complains about the unfairness of not having and being paid for mission critical skills could be pointed to a coordinated set of resources to help them make the necessary investment in themselves to get there.

Wouldn't that, in fact, be a very smart investment for the employer as well?

I'm certain that there are forward-thinking organizations out there already on the cutting edge of this practice.  I'd love to hear about them.

Lots more to say about the concept of mission critical skills and the role they will play in reward - and overall talent management - programs going forward, but that's all I've got today!

Ann Bares is the Editor of Compensation Café,  Author of Compensation Force and Managing Partner of Altura Consulting Group LLC, where she provides compensation consulting services to a wide range of client organizations.  She earned her M.B.A. at Northwestern University’s Kellogg School and enjoys reading in her spare time.  Follow her on Twitter at @annbares.

Comments

[E James (Jim) Brennan]

Your vision is accurate and has been pursued by numerous far-sighted enterprises for many decades. The original General Motors Institute was founded in the 1930s as an internal training and development arm of GM's HR department to do those very things. In the 1960s, they were on the cutting edge of such mutually-beneficial career planning and progression schemes and later morphed into a regular accredited university. Called the West Point of Industry, it still graduates more mechanical engineers than any other school.

Without mentioning more employer names, I'll just comment that more than a few long ago embraced that philosophy you outlined. It's so logical that myriad practicioners are bound to come to the same common conclusion, because it is the inevitable path to combine both individual and enterprise self-actualization. The problem is, was and remains one of persistence in the face of organizational and economic change: long-term investments in problematic categories like human talent which have no line-item entry on the balance sheet are difficult to maintain in an enduring, consistent and universally accepted manner in any one enterprise. Why? Because it's a constant in human organizations that short-term-itis will periodically throw out the baby with the bathwater, if you know what I mean.

But, a generation from today, that wholistic approach will be the routine in every surviving entity worth working for. One day, it will be normal for people to receive as much maintenace and get as much investment attention as the other more obvious equipment elements do... and every employee will have a personalized remuneration package customized to their unique self-selected value choices. We have a long way to go, but we already see the destination.

[Deb]

Nothing new here. We went through 2000K paying high prices for IT... now taking hits. We went through a period where Finance was constantly being bumped up and it has moderated. I don't see a replacement of the merit matrix, I see merit being necessarily associated with maintenance of skills and productivity as modernization is continually being ramped up by technology.

[Ann Bares]

Jim:

You're right. We know where we need to go, but we sure have a way of getting distracted on the way there. I can only hope that we are making incremental positive progress. Thanks for the thoughts!

Deb:

You're right - it is nothing new in one sense. It is our eternal struggle to adjust our organizations' pay structures to the leaps and bounds of the external environment and marketplace. What is different, though, is the pace at which those external changes take place. I don't think we have the luxury of the same reaction timeframe that we used to - we now know enormous companies, even entire industries, can fail at a breathtaking pace. Many elements of the game are (and will probably always be) constant, but the pace at which the game is played seems to be accelerating. That's my take, anyway. Thanks for the comment!

[Margaret O'Hanlon]

Hi Ann. I agree with the pacing issue, but I think it's not even the result of the recent year's activities. Why don't we place a higher priority on active skill and competency building (instead of churning employees)? It seems like good business sense to avoid serious capability lags. We do the same with IT equipment, for pete's sake.

I agree with Jim that there are large companies who do this relatively well, but I also think they are exceptional, and may start doing their own lagging in this economy. I agree with you that it's a great time for this discussion in our part of the business world, especially because we could all benefit if attention to skill and competency development could be accelerated.

[Ann Bares]

Margaret:

It does seem like good business sense, doesn't it? You're right, that our apparent reluctance to invest in this kind of capability building is not a new phenomenon. Thanks for the comment!

[Ann Bares]

Readers:

Here is an interesting case from Investment News (http://ow.ly/19Zvr)

...consider the action of Ahmad Chatila, president and chief executive of MEMC Electronic Materials Inc., a manufacturer of solar and semiconductor wafers based in St. Peters, Mo.

Two weeks ago, he announced plans to use his $500,000 bonus for 2009 to fund training programs for 450 employees who will be laid off through two planned plant closures this year and next, according to a -filing with the Securities and Exchange Commission.

This amount is in addition to the other training, severance, benefits and assistance, including one year of group medical and dental benefits, and supplemental educational expenses already offered to the affected workers, according to the regulatory filing.