Purchasing vs HR in the "War for Talent"

This is a REAL story. The names (obviously) and the numbers have been changed "to protect the innocent." Share with us, at the end of the story, your thoughts, and comments? Is anything changing? Is Corporate America learning anything?

John & Brian are both Purchasing professionals. They are good at what they do and have been with their current company for 8- and 12-years respectively. They do have the overall best interests of the company in mind. But there are competing interests at hand.

John: Whoa, Brian. I don't know, but I think we just messed up?

Brian: What do you mean, John?

John: You know that great idea we had to outsource the Smart Buildings design engineering work to India which would enable us to downsize about 110 people here in the US and save the company close to $20 million a year?

Brian: Yeah! It's working great. We've let right at 90 people go now and the target is for the last 20 to be gone by the end of February. So, what's the problem?

John: The problem is that the branch offices are screaming that they are losing project after project now because the drawings are incomplete. Even though the specs are in the computer system, the language barrier is causing there to be design flaws when it gets down to the granular level and the jobs are either going to the competition or so much rework is having to be done all of the profits...and more...are gone."

Brian: That's their problem. We are hitting our target for cost reduction and should get our bonus at the end of March.

John: Correct. But, I just don't feel right about it.

Brian: The "big boss" signed off on it. They think we are heroes. And besides, if there are problems, those folks at the branch can hop into the system and make the corrections necessary, right?

John: I wish it was that easy. Our folks at the branch level offices are great at overseeing the install, programming, start-up, working with the commissioning agents, troubleshooting, training the customer, and doing the ongoing service work. But that's only if they get the project. I hate to say it, but if Kristine, the Director of Sales, is right, we've lost over $250 million in projects now. The lost profits are eating up the $20 million in savings.

Brian: Well, let's freeze the program and keep the 20 we have? We'll still have saved a lot of money and get most of our bonus.

John: We can try, Brian. But according to Tim in Human Resources, most are already looking for new jobs. And besides, Kristine says we really need to bring the number back up to 60. I believe if we have half the number we originally had and the India team, we'll do all right.

John continues: BUT, Brian, here's the rub...today's job's report shows that 467,000 new jobs were created in January. From what HR tells me, we can't fill even 25% of all of our own open positions right now. The demand for talent in the Smart Buildings market is unlike anything they have ever seen?

Brian: Why didn't someone know this when we proposed the downsizing?

John: I don't know. And I was talking to some of the folks we are now trying to keep. We were paying them, on average, $80k/year. They are getting offers of around $90k/year. We are going to have to up the ante to keep them. In the end, we are going to lose all of the savings we thought we were going to have.

Brian: Let's just hold out until the end of the month. Let the numbers come in and we will get our bonus. Then, we can let HR deal with the problem. We did our job.

What are the lessons learned here?

Hiring managers - how are you retaining and attracting talent?

Employees, how are you navigating this new talent short market yourselves? What lessons have you learned that you can share?