If you really want the best talent, do you have to always pay for it? What else is there?

Caty,

I would say that having to pay for it is nothing more than being competitive in your pay, but it's certainly much more than pay. Compensation is always an integral part of anyone's package, but as we've seen, heard or experienced before, it's just one small component.

There are many moving parts to retaining talent, often times organizations confuse their ability to attract talent with their ability to retain it, it's typically the later. I don't know how many times I've had a client tell me that they have a recruitment problem, when in essence they really have a retention challenge.
Like my good friend Jerry Seinfeld indicated on one episode when he went to pick up a car rental, you know how to take the reservation, but you don't know how to hold onto the reservation, and that's really the most important part.

There are several important pieces to the puzzle:

*Autonomy
*Culture-the right culture for you
*Ability to continue to develop and master your skills
*Ability for professional growth, no just promotions, but challenges and stretch projects
*Work life balance
*Being able to understand how you contribute to the organizations success
*Recognition
*Multiple solutions for internal organizational issues, you have 3-4 generations of workers in your organization, you have to be able to provide multiple solutions, it can't be one size fits all

These are probably several of the key components, I'm sure others will add to the list.

I’ll add to the excellent points already made.

You attract the best talent when you invest, not simply in salaries, but in your company’s success. Here are some of the factors top talent is attracted to.

• Companies recognized as innovators
• Globally conscious and involved companies
• Companies that attract customers willing to pay more for products/services because of the delightful experiences they receive
• Companies involved in work that allow talented workers to achieve breakthrough results

Aside from salary, here are five questions top talent considers before hiring on:

1. Will I learn and grow my talents?
(Continuously learning keeps the best the best.)
2. Am I able to contribute in a big way?
(They don’t want their talent wasted. They also need to be in alignment with your values and mission so their contributions are genuinely fulfilling.)
3. Will my efforts be recognized?
(Recognition and appreciation are big factors, though too often applied in a way that backfires.)
4. Will it be fun?
(Yes, fun is a factor for top talent and is a key to outstanding internal customer service.)
5. Will I grow my network of talented colleagues?
(Top talent knows that their network determines their net-worth in business.)

I agree with all of intangible benefits but I am surprised that no one has mentioned sweat equity for all or part of a salary. This is not an uncommon practice, particularly in start-up companies.

There are other options in the form of perks that can help keep salaries down such as a company car, no cost to the employee medical insurance, telecommuting, more vacation, time off for volunteering and opportunities for bonuses.

How do top performers get to be top performers, hint, they were hired by someone before they became top performers. Employers do not need to hire other employers' top performers and then pay them a boat load of cash, stock, benefits, etc. Employers that hire for competence and talent identify future top performers even though they are not currently top performers elsewhere. In other words, it is more cost effective to hire our own than to hire other employers' top performers. Top performers can be taken from one workforce and inserted into another workforce but will they be equally successful in both workforces? Maybe yes maybe no and the maybe no is a very expensive hiring mistake for both the employer and the new hire. Employers owe their new hires more than that.

@Bob

I'm not certain that in the long run what you are suggesting is true. There are other reasons for hiring top performers from other organizations, the need for diversity of thought. Depending on the organizational issues you currently face, it may be cheaper to hire a top performer than to wait to develop your own, it just all depends.

John, the question was "If you really want the best talent, do you have to 'always pay for it'?" The answer is no. We can hire our own best talent. The problem is too many managers think they can't identify top talent until they become top performers. It is not necessary to wait that long and it is very costly to wait that long since we will have to pay through the nose to hire away other employers' best talent.

"What else is there?”

Learn how to identify talent and then hire for talent. This seems to be well kept secret.

Seldom have I ever heard a manager say, "I need a diversity of thought even though all my employees exceed my expectations."

You are correct that, "it may be cheaper to hire a top performer than to wait to develop your own." However, that should be an exception not the rule/

Bob,

I missed the, have to always pay for it, part of the question, and I'd agree, no.

Sorry about that.

Hi John, not a problem.

@bob - I like how you pointed out the payscale / achievement issue. In many workplaces, 'conventional' creates a marketplace that overpays for certain attributes that may not directly correlate to desired outcomes. I have been thinking a lot about this since reading "Moneyball" about the process Billy Beane used to compete at the highest levels with 1/3 the salary budget of others.

The limitation forced him to select players who were not (yet) demonstrated top talent and also did not exhibit the traditional indicators of talent. He paired this with greater understanding of what did indicate a high degree of likelihood of success that was getting missed in the marketplace.

The result is the ability to field top talent and compete at the highest levels at a fraction of the cost.

Seems like he needed
1 real understanding of precursors to talent
2 willingness to buck the conventional wisdom and buy talent past over by others as 'odd' 'weird' 'ugly' etc.
3 build a farm system trained to identify players producing the stats importance
4 Rookie focused

Seems to indicate a focus on fixing bias in interviews, building / growing your own through rookie hires, going broader for non-traditional sources of talent overlooked or looked down upon (lower ranking schools, etc), real understanding of stats of cost efficient talent / cost per win All the while building on the other issues mentioned above regarding intrinsic motivation and organizational trust.

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