Upgrading TALENT in Call Centers.

Interesting article about companies upgrading their talent in this tough economy. There are many people in the job market...perhaps some better than who we have today ? should you clean out the poor performers and bring in the right people ? This could help a lot in SALES and COLLECTIONS roles...

A battle for talent
By Rebecca Knight
Published: March 19 2009 20:44 Last updated: March 19 2009 20:44
It may be the worst job market since the Great Depression, but here is the good news: some companies are still hiring. But the reason they are hiring is because they are clearing out mediocre employees in the knowledge that they can hire better replacements.
In consultant-speak, it is called "up-skilling". Companies eager to take advantage of the surplus of talented workers looking for jobs are cutting more of their own employees to make room on the payroll for new hires with specialised skills.
"Organisations are taking this opportunity to upgrade their talent," says Seymour Adler, a senior vice-president in Aon Consulting’s human capital practice. "They recognise that there are better people out there so they ‘over-correct’ on the downside to take advantage."
Of course, companies that shed jobs do so to save money. But according to human resources experts like Mr Adler, they often reduce their headcount more than they necessarily need to in order to re-stock their pipeline of fresh talent.
Last year, US companies shed 2.6m jobs, the largest number in a calendar year since 1945. The unemployment rate in the US now stands at 8.1 per cent, according to the US Department of Labor, and many economists predict it could reach 10 per cent this year.
"Companies are talking about exploiting the environment," says Mr Adler. "There are some highly qualified people out there, and companies are taking the opportunity to assemble an A-team. They are taking the Draconian, Jack Welch approach of cutting the bottom 5 or 10 per cent, and replacing them with people who are going to be top performers."
Perhaps the biggest reason companies over-correct during tough economic times is that they can bring in new talent more easily – and often more cheaply – than they could in a good economy.
Mr Adler says this is particularly true of newly minted MBAs, or entry-level positions for recent college graduates. "They can be had for a starting salary of 10 to 20 per cent less than what the market would have demanded two or three years ago," he says.
The trend is evident in industries from finance to marketing to IT but is most pronounced at technology companies and consulting firms. "These companies are very attuned to the need for fresh blood, fresh ideas and innovation," Mr Adler says. "They realise they can bring in two bright people fresh out of school with the latest and greatest models for the price of one of their [current] employees."
Mr Adler says most companies use a rule of thumb of 5 per cent, meaning that if the organisation aims to decrease its payroll by 10 per cent, it downsizes by 15 per cent. "You do it in a way that it won’t make a material difference to meeting the needs of the business," he says.
‘Organisations recognise that there are better people out there so they "over-correct" on the downside to take advantage’
Simultaneous hiring and firing is standard business practice, but it has been exacerbated by the depth and severity of this recession, according to Emory Mulling, a consultant who runs an outplacement firm in Atlanta, Georgia.
Companies are not simply taking a hard look at their headcount but trying to think more strategically about their human capital: where they most need employees with specialised skills, and which departments are expendable. "There’s a saying that there’s nothing quite like a recession to get a company in order," says Mr Mulling.
Tough economic circumstances force companies to scrutinise employees – especially in the ranks of senior leadership – to determine whether they are the right candidate or whether there may be someone better, according to Elaine Eisenman, a former corporate human resources manager who runs the executive education programme at Babson’s business school just outside Boston. In a robust economy, poor performers tend to be shuffled into different jobs or moved to different locations; in a bad economy, they are let go.
"These are typically opportune times. Suddenly, you can get poor performers out with a lucrative [severance package]," she says.
Companies are also more likely to announce mass job losses today than they were 20 or 30 years ago, which also enables them to over-correct, says Detlev Suderow, a professor at Brandeis International Business School who specialises in international human resource management.
Shedding thousands of workers at a time is not a stain on a company’s record, and it does not damage its ability to recruit and retain workers. "Most companies realise there is no shame in laying people off. It’s normal, it’s accepted. Companies used to hire employees for life, but that’s not the case any more," he says.
Some companies, however, can go too far by mistake. Rather than a strategic, thoughtful restructuring of their workforce, they embark on a short-term cost-cutting exercise where they let workers go, but soon need to go on a hiring spree because there aren’t enough employees left to do all the work.
"There are some companies that have cut the number of people, but don’t reduce the work," says Eric Abrahamson, a professor at Columbia Business School who studies techniques for managing organisations and their employees. "That works for a while, but then the quality drops. There’s a reflex of cutting costs by getting rid of people, but you have to rationalise the work, too."