What is the war for talent costing your organization?

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Posted by Mindy Fineout

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March 28, 2011

With the tech market heating up, the war for talent is on, and A-list companies are bringing out the heavy artillery -- their wallets -- to hire the best.

Signing bonuses, inflated salaries, and bidding wars have returned to job seeker radars in full force. While it might seem like just the cost of doing business, there is a ripple effect that can be damaging to our job market and economy.

While inflation can be a good sign that the job market and economy are on the rise, overall results are better if salaries are proportional to what the market bears. In addition to adding to company costs in the long run, inflated salaries can potentially fuel an inflated economy.

With high tech companies throwing signing bonuses higher than what many people can earn in a lifetime, are we creating a world of employee and job seeker entitlement? And in the long run, will companies profit from it? After all, once the employee is in the door, retention becomes the focus, and with that, comes regular increases.

In addition, once an employee makes a certain amount, it's hard for them to take a step back in income. Then, those salaries become "market," forcing other companies to compete with already inflated rates.

That's not to say that some candidates aren't worth it, but before throwing money at the problem, just make sure it's the right plan of attack.

Topics: HR Strategies

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