Detroit’s Talent Problem

16Mar10

There was an interesting news item in this morning’s Detroit News concerning the difficulties the three domestic automakers are having attracting talent. (http://detnews.com/article/20100316/AUTO01/3160378/Auto-industry-struggles-to-lure-best–brightest) The conclusions were that high tech and the financial industry were attracting the best and the brightest away from the auto makers. The primary issue was seen to be the lower compensation in the auto industry because of the salary caps imposed as part of the agreement to accept federal bailout monies.

There is certainly truth that money matters. These economic times highlight how important a good and stable income have become. The pattern of rewarding those at the top while reducing the income of those at the front lines of producing the goods and services sends a clear message to the most talented. You need to find a path to become one of the haves, and stay away from jobs that may find you in the have not’s group. The quicker top talent can climb the ladder to the top tier (where the “haves” reside), the more attractive the employer.

One problem with the auto industry is that they have not broken the historic pattern of entitlement. Longevity plays an inordinate role in determining how far up the ladder a person gets. Check the biographies of the executives at the tops of these companies. An employee that meets his/her goals, or can make a compelling argument that circumstances beyond their control caused them to miss the targets, can count on step increases and incremental moves up the ladder. You need to pay your dues. The question becomes whether top talent is patient enough to go that route, or even whether the organization will be viable when it is your turn. You can increase the speed of how fast you move up that ladder by building relationships with the right people. The old boys network still exists.

Contrast that with the project oriented working life of financial firms or the consulting industry. Professional service firms have a much clearer defined path to the top of the ladder. You may start on a project as a junior member executing a contract or project a senior member has secured. Your work on that project will be far more visible than an engineer at the big three hidden in an archaic bureaucratic structure. You begin to build a portfolio, a project at a time. It doesn’t matter how long you have been with the firm, it is more a “what have you done for me today?” culture. When top talent performs, they are rewarded. Typically top performers end up working for top performers, not just the most senior. You can make partner far quicker than you can make VP in the auto industry and it is more likely to be merit based. Top talent wants to play in the game and prefer a high risk high reward environment.

There is another difficulty for our domestic auto makers. Sadly, the truth is that relocating to the Detroit area is not attractive. The city is broken, crime is off the charts, the school systems are the worst in the country and there is little visible effort to change that. It feels like a dying community. Top talent wants a vibrant, youthful, exciting place to work and learn.

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