It’s standard operating procedure for marketers to segment customers according to their value to the organization, to ensure that those who are most vital to the growth and profitability of a company are well-cared-for and don’t disappear. The same needs to be done with regard to employees. Appearances can be deceiving.
For example, your largest customer measured by dollars generated could also be among your least profitable, if that customer consumes an inordinate amount of your time and other resources. In the same way, some employees at the high end of your compensation scale might not be nearly as valuable to you as some on the lower end. Higher-paying positions might have more to do with labor market traditions and preconceived assumptions about certain roles within a company than the actual value added to a company’s operations. In some businesses, the greatest draw for customers might be a friendly and knowledgeable receptionist, though he or she is likely to be among the lowest paid on staff.
Suppose, in your labor market, network IT professionals command a good salary. Your business needs an IT professional, so you pay the market price to recruit and keep one on board. But if you’re assuming that that employee is more vital to your success than an exceptional customer service representative simply because the former earns twice as much as the latter, you could be wrong.
Skills Quadrant Model
One insightful framework for taking a fresh look at your workforce, known as the Lepak & Snell model, is a four-quadrant, skills-based paradigm dividing employees by value of particular skills to your organization and the skills’ uniqueness in the labor market. The visual result is a box with the following four quadrants.
|High skill value, high skill uniqueness: these employees are considered the “criticals.”||High skill value, low skill uniqueness, these employees are the “professionals,” skilled and semi-skilled.|
|High skill uniqueness, low skill value: these employees are the “specialists.”||Low skill value, low skill uniqueness: these employees are the “doers.”|
You’ll probably assess your employees’ skills on the value spectrum based on criteria such as the ability to lower costs, increase revenue, strengthen customer relationships, foster team collaboration, offer creative ideas and solve problems.
The uniqueness-of-skills spectrum depicts the degree to which employees’ skills are narrowly applicable to your organization, and, thus, harder to find in the labor market. Let’s say you produce a unique, expensive and complex product. It takes years for employees involved in the production to develop the necessary talent. Those employees will be rated highly on the skill spectrum. The same principle is applicable to specialized services.
The purpose of the framework isn’t solely to categorize your current employees, but also to help you organize your workforce structure by job function. You can create a generic organizational chart by department or by division and assign job titles and functions to the four quadrants. For example, a sales manager position might require an employee who qualifies as a critical employee. Chances are you’ll need employees representing all four quadrants in most if not all departments.
After you’ve completed your generic organization chart, compare it to your actual one and analyze the inconsistencies: Are some departments understaffed in terms of skill? Overstaffed? If so, why? Is any action warranted, either in the short-term or over a longer period of time? What would be the operational consequence of having to fill vacancies in any of those positions?
Identify the Criticals
As previously noted, employees whose skills combine high value and uniqueness are known as the “criticals,” that is, critical to your success. Putting those criticals at the top of your retention priority list makes sense, though there are no guarantees that you can keep them on board in spite of your best efforts. Even if a competitor doesn’t lure these employees away, today’s society is increasingly mobile and people move away or seek new challenges or retire.
That’s why you need to think carefully about your talent pipeline and succession planning, so that when critical employees leave, you don’t want to be left in the lurch.
Employees who don’t fall into the “critical” quadrant, assuming they satisfy your performance criteria, can’t be taken for granted. Just because an employee isn’t critical doesn’t mean you would welcome the burden of finding a replacement. But by using this talent quadrant lens, you have a clearer view of how to prioritize your efforts to keep employees engaged and content with their jobs.
Finally, keep in mind that maximizing employee engagement and satisfaction — whether it be that of a critical employee, professional, specialist, or other — often requires a tailored approach, as opposed to one-size-fits-all. For example, emphasizing tangible forms of compensation could cause you to lose some of your criticals who find motivation in other ways.
The Lepak & Snell model isn’t the “be all and end all” of understanding your workforce. If it doesn’t seem applicable to your organization, find one that will allow you to consider other ways of looking at how effectively you’re leveraging your organization’s substantial investment in “human capital.” Expect to find a few surprises if you do.