Talent hoarding

Companies have long recognised that hiring talented people off the job market is an important aspect in market competition since the labour market became much more open and knowledge workers became much more mobile. In the past when most employment were seen as lifelong, companies really only had to focus on competing on getting their products and services out.

Labour was previously seen as largely rather ‘fungible’; it was probably more important to get cheap workers than good workers because in the traditional labour economics, quality of labour wasn’t so much a quantifiable parameter.

No longer, but there are two ways to think about this competition. We can hire talents to make better products, perform better services for customers; and at the same time, it takes these talents off the market for our competitors and thereby strengthening our position. For those with monopoly power, the second objective might be more important than the first.

This is because the monopolies tend to have the power to pay for these talents through the market power they weld on both ends: both the labour market as well as the market for their customers. They are big enough to be able to squeeze the more commoditised labour while paying big bucks for their ‘talents’, and also pass on some of the costs to customers.

There is a price to pay however, for talents who are in these hoarding entities; (1) they may end up being unfulfilled or unsatisfied; (2) they tend to end up being disempowered rather than empowered in these environments; (3) they are conditioned to take less risks.

(2) and (3) contributes to (1) but the dissatisfaction can come from the bureaucracy and continued need to keep up with appearances rather than practice genuine innovation. (2) happens partly because monopolies are great businesses or entities that can survive poor management thanks to their power. Finally, (3) is a result of these environment that tends towards status quo and entrenched power structures.

And sometimes, just sometimes, the biggest monopoly out there is the state.