Don’t Manage Talent Too Tightly

In her 2013 book, Talent Wants to Be Free, Orly Lobel presents what may sound like a counterintuitive approach to talent management or, as her subtitle indicates, Why We Should Learn to Love Leaks, Raids, and Free Riding. Lobel, Herzog Professor of Law and founding member of the Center for Intellectual Property Law and Markets at the University of San Diego, asserts that employee creativity, which ultimately enhances your organization’s bottom line, is best achieved by training talent and letting it be free—including free to leave.
How in the world does that work?
Using examples from Facebook, Google, Microsoft, Motorola, and other major companies, Lobel reveals that holding too tightly to talented employees and their ideas in order to “protect” the organization’s interests may, in the long run, hurt the organization and the industry. In her exhaustively researched book (she includes extensive endnotes and an index), Lobel discusses the latest research and current events involving “trade secrets, patents, copyright ownership, economic espionage, nondisclosure and noncompete agreements, duties of loyalty, and corporate reward systems.”

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Regarding training specifically, Lobel notes that most organizations understandably become frustrated if they make a considerable investment in training an employee only to then see he or she get lured away to another company, thereby taking all the new knowledge and skills to a competitor. As she states it:
For a long time now economists have assumed that the objectives of labor mobility and human capital investment [i.e., training] are fundamentally at odds: why invest in something (or someone) that will be leaving you? The bottom line has been that employers would be discouraged from investing in the training of mobile workers. But new hard evidence and a fresh intuition suggest otherwise.

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Lobel goes on to report at length on her own and others’ studies of the marketplace in certain industries—most notably, the high-tech industry centered in the so-called silicon valley of California—and concludes that:
What we find clearly at every turn is that control is a double-edged sword. The first edge is unsurprising: information leakage and job hopping by talented workers provide competitors with an advantage. The second edge, however, is revolutionary: over the long run information leaks and talent spillovers foster new levels of creativity and innovation that benefit not only the best and most fearless companies but also the economy as a whole.
These big picture realities regarding talent management and mobile employees is truer than ever with the workforce of the twenty-first century. As Baby Boomers retire and younger generations take over, these new employees will have entered the workforce with a very mobile mindset from the beginning and they will want to be free to excel wherever they can.
That doesn’t have to hurt your organization, however. On the contrary, the intense competition for recruiting, nurturing, and retaining top talent provides great incentive for you to be continuously improving your own processes, products, and people. While you may lose some employees to competitors, you will recruit others from your competitors. And some employees will decide to come back as you continue to innovate. Lobel asserts that this constant flow of ideas and skills can make your industry as a whole thrive and prosper.