I was reading Auren Hoffman's latest blog post on why finding A-players is harder in a down economy, and one point he makes really resonated with me:
Tough times often paint companies into a corner and force them into maintenance mode rather than continuing to innovate. Great players love to innovate and usually NEED to innovate. It's usually very hard to keep these type of A-players caged-up and thus this presents a big opportunity for recruiting.
For instance, in the past it was really hard to hire great software engineers out of financial behemoths like Goldman Sachs, Morgan Stanley, and JP Morgan Chase. These companies have outstanding people and pay these people really well (often 50% above the salary at a tech company). Nowadays, even if these people have not been laid off, the great people are going to be leaving in droves. Why? Because in the next two years, it is really doubtful they will be doing anything remotely innovative. Instead they will be maintaining current systems due to the understaffed and underfunded technology departments. No fun there so expect a big exodus out of these companies.
Many companies respond to an economic downturn by cutting things like employee perks, R&D, and training. You can readily provide data that justifies the reasoning behind every and every one of these cuts -- and most people will recognize the logic behind these difficult decisions -- but what is the real cost of making these cuts? Are you impacting those factors that could be the threads keeping your A-players intact? As Auren points out:
It's also worth noting that great people are often first to leave sinking ships. They don't feel they need to stick around for a severance because they are confident they can always get another job.
You can always rationalize your decisions by telling yourself they would have left anyway. Doing your homework and understanding the true implications of your decisions is harder than simply making the cuts, but if you do the hard work and make things visible to your people, you're more likely to build trust and keep those A-players around.
Just thinking out loud here....