Current events analysis and research

Management Theory From the Wall Street Journal Article Review

Descriptive Summary

According to Carol Hymowitz of the Wall Street Journal, a fundamental paradigmatic shift is being forced upon human resource departments in terms of the way they operate during economic slowdowns. Her January 28, 2008 article "They Ponder Layoffs, but Executives Still Face Gaps in Talent" states that companies are experiencing a dearth of talented people to fill vacant positions because aging top managers are retiring in record numbers. To cut costs during economic slowdowns, traditionally companies let go even some promotable employees, and did not look for new or additional workers. But in 2008, despite the fact that recession seems on the horizon, many companies are embarking upon job searches to fill critical management positions because of inadequate training of current employees.

In the past, top managers would plan far ahead to fill a position. Today, every vacancy seems to be treated as unique -- and even as a surprise, despite the long-term trend of frequent job changes by employees" (Hymowitz 2008). These external job hunts are thus not reflective of a positive trend. It highlights how companies lack employees in-house with necessary skills, and have frustrated current employees in the past who feel they have been inadequately prepared and mentored to fill top positions they have been eyeing for a long time. These desperate job hunts are symptoms of poor strategic planning.

General Analysis

This current trend indicates a problem with company training and development. It shows that companies have "dropped the ball on talent development. Some 60% of companies have no succession planning of any kind...nearly half of 20,000 employees surveyed at 100 large global companies...said they don't receive enough feedback from their managers to help them improve their performance [and] employees who lack guidance and opportunities to advance are more likely to quit and look for jobs elsewhere, even during shaky economic times when as the last hired they may be the first fired (Hymowitz 2008). When employees leave, companies must divert valuable revenue to head-hunting and orientation of new hires. Under-training and under-promoting of in-house staff can actually cost the company more in the long -- and short run. This is exactly what companies do not want during a recession, when companies want to focus their finances on remaining economically afloat. Companies want current employees familiar with operations to give advice on how to begin cutting costs in other areas.

Critical/Comparative Analysis

The phenomena described in the article highlights what management theorists have always counseled -- that financial compensation alone is not enough to ensure that individuals stay at a company. The company must invest in the employee's future by taking worker suggestions, and giving future managers exposure to a variety of new educational and training experiences. Employees of today know that they must be constantly sharpening their skills.

Keeping people "excited" and "nimble" through continued training ensures that companies will have an extensive stock of in-house talent to promote during crunch times, and that employees will put in the extra hour at the office to show they are working hard (Hymowitz 2008). Some companies have attempted to foster worker loyalty with flexible scheduling, retirement planning and other financial services, better benefit packages, employee gyms equipped with personal trainers and extensive subsidized cafeterias (Lanzoni 2001:1). However, employees that are truly the managers of tomorrow will not simply want a more ambient workplace, or even more extensive benefits packages -- they want to know that the company regards their input as an asset, and they are being groomed for new positions that will open up in the future.

Management Application