So, for the purposes of this article, excuse my way of talking about people as if they are real estate, but it will serve the analogy well.
- PRICE: Right now in Western Australia, some talent is at an all-time low price and there are some serious bargains to be had!
- STOCK: Stocks of talent are high still, compared to the amount of stock on the market a few years back. As such, prices have come down and will remain there until stock depletes. Our sense is that the stock has started to reduce (unemployment down in WA for the last 3 months to 6%, from a high of 6.9% in late 2016).
- CYCLE: We are at the end of the downturn by all the looks of it, and whilst I don’t expect a talent boom in the next 12-18 months, it is an interesting time to look at picking up high-value, low priced talent.
- NEW STYLE TALENT: There is talent which looked great when everything was in demand, but now at the bottom of the market is difficult to derive value from. Some have renovated (trained), demolished (emigrated or returned to country of origin) and others have sub-divided (gone part time, or multiple job)
- ROI: The right talent in a professional services firm for example, can return 300% of their annual cost (in fact, 3 times your salary is expected in fee generation as a norm in this sector). Some people’s worth in a company should be at least 2-4 times their hourly rate. 300% is an excellent return on investment to say the least
- TIMING: As the market (as it is doing right now) awakes from the slumber of the downturn, the best talent in the market gets snapped up first. The more shrewd investors will chase and procure this talent before the mass market figures it out and reacts, most likely too slowly.
- FEAR: Be careful that you don’t just buy a piece of talent because you had “F.O.M.O.”(Fear of Missing Out); it needs to suit your overall strategy and match what you are wanting to build in your talent portfolio.
As Warren Buffet is often credited with, “When everyone else gets fearful, get greedy”. Is your company ready to take an educated risk and procure some excellent talent at the right time from a price and stock availability perspective? If you look at it as a learned real estate investor may, you should be able to see the pitfalls and opportunity for what is the most important asset in your business.