It’s ironic that, at the same exact time that CFOs are instituting hiring freezes and demanding that we add “no new headcount,” there happens to be an abundance of top talent available in the marketplace. Smart managers take advantage of this feast and famine situation by utilizing a strategy that I call “talent swapping” to take advantage of the abundant talent without adding headcount. What Is Talent Swapping? The concept of talent swapping is actually very simple. It’s like in sports, where it’s a common practice to seek out a superior player and trade an average player for them. After the “talent swap” has been completed, you still have the same number players (no additional headcount), but you have dramatically improved your team by replacing an average performer with a top performer. It might seem strange on the surface to hire someone while you are simultaneously laying off others, but it’s actually an intelligent strategy. The process of talent swapping starts with the continuous sourcing of potential candidates. Even though you have no openings (and you might even have a hiring freeze), you continue to search out top talent. Obviously you can’t hold a position open while waiting for talent to become available. But when top talent does become available you need to act quickly to recruit it. And because of your headcount limits you need to first “release” one of your bottom or average performers and replace them with this newly available top talent. Why Does Talent Swapping Work? Talent swapping works because it doesn’t force managers to release bottom performers. In contrast, it actually allows managers to postpone firing decisions until top talent in their position becomes available. And even though in today’s tough economic times there is a lot of talk about the need for more “performance management,” most managers are still reluctant to fire anyone. It’s just human nature for managers to be reluctant to act. It’s important for a manager not to release bottom performers too early, because if you release a bottom performer at a random time there may be no top talent available in the market to replace them. As a result you’re liable to replace the bottom performer with an average performer, or possibly even another below average person. The key element of talent swapping is to wait and until you have a star ‘bird in the hand” before you replace a bottom performer. The Steps in Talent Swapping Talent swapping is easy to institute. The basic steps include:
- When necessary, get the CFOs approval and buy in for the talent swapping strategy.
- Identify the key jobs where replacing average talent with top talent can make a significant impact upon the business. Talent swapping is not appropriate in every position.
- Begin building a “who’s who” database of the names of the top talent in your industry.
- From that list identify the ones you will target this year.
- Conduct “relationship recruiting” with these key individuals from the list. This might mean calling them occasionally, sending them an email newsletter or inviting them to your company’s events or training.
- Identify the criteria for selecting who to drop by conducting forced ranking, in order to identify the bottom and average performers who could become “eligible” for a swap.
- When you become aware that one of the targeted candidates is now available, recruit them and offer them a position. If they accept your offer, notify the specific poor or average performer who currently work’s in their position that they are being released.
- Next release the weak performer (generally with a severance package), and bring the new candidate on board.
- Continue the process until you have substituted top hires for each of your bottom performers.
Conclusion In sports, if you have a losing team and you want to become a winner, your first step generally is to change the players. Talent swapping happens in sports all the time, and smart managers need to learn to emulate that practice. We know that managers are reluctant (to say the least) to fire workers (even bottom performers). Talent swapping makes firing more palatable to managers because 1) it is easy for them to see the obvious advantage of a “one for one swap,” and 2) managers don’t need to let bottom performers go until top talent actually becomes available. The practice also makes CFOs happy because first there is no change in headcount. And he team gets better by replacing a “turkey” with an “eagle”!