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Good posting. So, what Ann states is unfortunately unsettling - but true. Our organization believes that without the emergence of the next big product/service here in the Third Industrial revolution, that labor will continue to exist in excess supply for the foreseeable future. While it seems like we can't and shouldn't simply yank our programs (and employees) around, we're wondering whether that's exactly what we may need to do - as we've been advocating a shift toward "keeping faith" only with that narrow (disciplinary, not high-performing) segment of our workforce which represents our true competitive advantage. We think that we'll just need to live with the outcomes, on the assumption that we can dip into the available labor supply in other areas whenever we need to - since that supply will (always) seem to be there.


Thanks for sharing your point of view and experience here. Again - not that I have the answers here - but it sounds like your organization is doing what I advocated at the end of the post ... filtering the data through the prism of what you must do to maintain competitive advantage. That may indeed be to protect that narrow segment of your most valuable players and leave the rest exposed to the vagaries of market turbulence.

If you want to talk about key skills coming and going --- remember Y2K? COBOL programmers were paid like kings as their numbers were scare and their skill was needed to avert computer meltdown when the clock clicked to 12:01am on Jan 1, 2000.

The difference between then and now is that we knew back then it was a short-term thing. Some companies hired them as contractors, some FT with same salary as other programmers + premium, etc. It was a pretty crappy ending though. Companies no longer needed them and well it got pretty messy.

This issue of not being so dependent on surveys/competition echoes what CEOs said in a Mercer survey --- that they didn't give a hoot what was competitive --- just don't let the key/critical people leave.

This is tough for HR who as a function is probably the most risk averse of all functions in a company. Very tough (and very uncomfortable) to let go of the "let's spread it around" viewpoint.

Some animals are more equal than others, said George Orwell. Likewise, smart outfits understand how to distinguish between vital and useful and easily replaced. Although the term has fallen into disrepute due to excessively limited use, "discrimination" is actually an important management tool.

As I posted here 4/16/13, everything that can happen IS happening, so you can pick any trend you want. Might as well pursue that one that meets your greatest need!

Ann I wonder if you are bugging my office. My team and I are updating salary structures and are unsettled by the market data. In addition to what you shared we are finding the delta between long-service incumbents are falling significantly behind new hires. In my career I have not seen such a difference. We know the average salary increase hovers around 3-5% but job changers are getting 12-15%. Wonder what your take is on this added dynamic.

Thanks Anne - great article and well pointed actually.
I personally don't think this is something new, at least in my industry (O&G) and certainly not in Technology.
But I agree that the "pace" of the market fluctuation is much faster than it was just a few years ago, perhaps due to the so called "globalization" and the pressure on organizations to reduce cost, maximize profits and keep sustainability swiftly trying to keep up with the market conditions. Highly Skilled Labor is shorter than it ever was – but core/critical skills have changed a lot, and this is putting a lot of pressure on leaders, specially HR to not only attract and develop the best, but to keep them from jumping ships – Our rewards policies will have to be as flexible as ever and bend-over-backwards to stay abreast and compliant.

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