It can be, in my experience, a tough-to-swallow fact that not all skill sets are equal in the eyes of the labor market.
It may not be a happy reality, it may not seem "fair" to some, but it's a reality we have to acknowledge and navigate through in defining and executing on our reward strategies. Organizational success in our fast moving, knowledge based, technology driven and disruptive world will require and become more dependent on certain types of human talent and competencies. Those who invest in attaining and developing those capabilities will command a premium price for their skills.
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 discussions on the concept of mission critical skill in presentations and client meetings usually generate a lot of questions. Some of these focus on the approach and process for figuring out which skills are critical for a particular organization; others reflect 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"?
I think this is an important talent management question going forward, particularly in the wake of our collective COVID experience. The market is going to keep doing what the market does: acting as our arena of exchange where supply and demand work to drive up the price of skills and competencies that are the 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 practices and opportunities. 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. We'd all love to hear from and about them!
Ann Bares is the Founder and Editor of Compensation Café, Author of Compensation Force and Managing Partner of Altura Consulting Group LLC, where she provides compensation consulting and survey administration 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.
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