Talent Swapping: Hiring Without Impacting Headcount

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:

  1. When necessary, get the CFOs approval and buy in for the talent swapping strategy.
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  3. 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.
  4. Begin building a “who’s who” database of the names of the top talent in your industry.
  5. From that list identify the ones you will target this year.
  6. 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.
  7. 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.
  8. 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.
  9. Next release the weak performer (generally with a severance package), and bring the new candidate on board.
  10. 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”!

Dr. John Sullivan, professor, author, corporate speaker, and advisor, is an internationally known HR thought-leader from the Silicon Valley who specializes in providing bold and high-business-impact talent management solutions.

He’s a prolific author with over 900 articles and 10 books covering all areas of talent management. He has written over a dozen white papers, conducted over 50 webinars, dozens of workshops, and he has been featured in over 35 videos. He is an engaging corporate speaker who has excited audiences at over 300 corporations/ organizations in 30 countries on all six continents. His ideas have appeared in every major business source including the Wall Street Journal, Fortune, BusinessWeek, Fast Company, CFO, Inc., NY Times, SmartMoney, USA Today, HBR, and the Financial Times. In addition, he writes for the WSJ Experts column. He has been interviewed on CNN and the CBS and ABC nightly news, NPR, as well many local TV and radio outlets. Fast Company called him the "Michael Jordan of Hiring," Staffing.org called him “the father of HR metrics,” and SHRM called him “One of the industry's most respected strategists." He was selected among HR’s “Top 10 Leading Thinkers” and he was ranked No. 8 among the top 25 online influencers in talent management. He served as the Chief Talent Officer of Agilent Technologies, the HP spinoff with 43,000 employees, and he was the CEO of the Business Development Center, a minority business consulting firm in Bakersfield, California. He is currently a Professor of Management at San Francisco State (1982 – present). His articles can be found all over the Internet and on his popular website www.drjohnsullivan.com and on staging.ere.net. He lives in Pacifica, California.

 

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4 Comments on “Talent Swapping: Hiring Without Impacting Headcount

  1. Excellent thought. Letting go of the “lagger” is not so easy though given the litigious nature of our society. It calls for close monitoring and constant review of employees, and documentation of such. Once the organization takes these steps with a “lagger” employee, that employee may leave anyway, with no top talent in line to replace them. Still, an idea well worth pursuing.

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  2. Talent Swapping..Hmmm.Our Diversity candidates are all to familiar with talent swapping.In fact,some of my brothers and sisters are so swapped enabled we help out by resigning at the first opportunity.We don’t forget and we keep lists too.

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  3. William,

    If you’re willing, could you be a bit more specific with your comments for those of us who are not as well versed in the subject as you are?

    The reason I ask is that this article surprised me too. I thought replacing one employee with another for the exact same position (i.e., not a “reorganization”) and without documented evidence of poor performance for the outgoing employee would open up the company to potential liability for unfair termination practices.

    Is this what you’re driving at? Or is there something else to consider?

    Thanks for your insight.

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  4. The article by Dr.Sullivan is right on. One thing to remember when implementing this plan is that lower performers tend to be individuals who, when unemployed, collect unemployment for the full 30 weeks. This could increase your rating, or if you are a reimbursable employer, it could increase your costs substantially. Other considerations are: is the employee a member of a Union, that may govern how layoffs are implemented? and, did you sign a contract with the employee that would guarantee him/her a job for a specific period of time?

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