Hamish McRae: How to get good people to work for you ... and keep them

Getting good people to work for you has now become the mission of most competent businesses. Naturally this has in part been a function of tight labour markets, but the fight for talent seems certain to survive the economic downturn. Indeed it may actually intensify, particularly for young workers.

Getting good people to work for you has now become the mission of most competent businesses. Naturally this has in part been a function of tight labour markets, but the fight for talent seems certain to survive the economic downturn. Indeed it may actually intensify, particularly for young workers.

As companies face tougher times, there is even more pressure on them to be nimble: to switch out of areas that are going down and get into those that are going up. But there is also pressure on people to do the same.

"Nobody's going to sit around wallowing in an economic downturn. Individuals are going to find ways to fend for themselves - learn new skills, find new jobs, work harder, faster and better. And organisations are going to be flexible enough to find new efficiencies, get even better at employing people, continue to improve productivity, and reap new profits."

The quote comes from Bruce Tulgan, the American author who has specialised in tracking the aspirations and desires of young workers - people in their twenties - and explaining these to the US business community. His new book Winning the Talent Wars is out this month.

The core of his argument is that the conventional management tools of US business do not work with young people. Fear of losing ones' job, still used in the US and I suppose in some businesses here, is ineffective if people know they can get a signing-on fee from the office across the road. (Here the tax-free redundancy package has been the seed capital for thousands of would-be entrepreneurs who want to start out on their own).

On the other hand, employers do not want to be caught in a bidding war. That is what seems frequently to happen in financial services, where the best people extract such a high proportion of their added-value that there is not much left for the shareholders. It also happens, even more dramatically, in football: players are wonderfully rewarded while the clubs struggle. So what do you do?

The great thing about Bruce is that he doesn't give pat answers, unlike, I am afraid, many US management writers. His view is that there is no single way to attract and retail young talented workers. What he does is to set out a number of principles that wise employers should follow.

The first is to identify peoples' aspirations and talents, and then be sure to fit the work that has to be done to the person concerned rather than the other way about. You don't try and cram people into jobs they are not good at because if you try you end up with disgruntled staff - or no staff.

Leading on from this, companies should focus on getting the work done rather than filling posts. It may be better to outsource a task. In fact, in his view it almost always is. But life is more complicated than simply outsourcing. Ideally you need to be sure you have a reserve army of people not on your payroll. These may be working for themselves, or they may have worked for you in the past. But one way or another they are people on whom you can rely to get a job done: a fluid-talent pool, from which you can draw resources as and when you need to.

Following on from this, you pay for performance and nothing else. But just paying with money is often not enough: non-financial rewards like special work hours are just as useful.

Other suggestions include mentoring and coaching young people. Bruce controversially suggests training should be for the mission rather than the long haul. And finally he says you should try to create as many career paths as you have employees.

This last point seems to me to be the really important idea. If you think about it, all individuals are special to themselves. So often company managers tend to look down salary lists, or speak to a sea of faces at employee meetings. There is, inevitably and properly, an element of cohesion about any corporation, particularly in the US. There has to be a set of core values to which employees have to subscribe. But if you turn the relationship around, every person's life is the crucial thing to them.

The young are even more individualistic than the preceding generation. So creating work structures that fit in with them is vital if they are to stay with you. People talk of fitting into the lifestyle of the young but actually it is more a question of fitting into the self-image of these people: their notion of self-worth. And every person is different.

So the job of anyone in a senior post in a company is to create the culture in which (a) the job gets done; and (b) the people who are needed to get the job done can advance towards their own preferred image of themselves.

This vision makes management more complicated. Not only do managers have to do all the normal functions but they have to become managers of talent too. It makes companies more fluid entities. In a sense they already are, for no firm, however large, is safe from take-over nowadays. And it makes individuals much more responsible for their own success. Choice is all.

If this is difficult for managers, it is more difficult for individuals. Instead of following a reasonably clearly defined career path, people have the opportunity to pick 'n' mix, adding to their skills here, deploying those skills there. For example, it almost certainly means people will have to spend part of their careers working for themselves and they have to plan for that.

But the prizes are worth it. Companies that can manage talent well will find that talented people beat a path to their door.

The key point here is that power now works the other way around: the people have the power, not the companies. And in tougher times the power may actually shift more to the people, because the best will be in even greater demand.