Original post: http://businessvalueexchange.com/brains-are-machines-series-blog-1-shifting-sands/ The industrial revolution saw the landscape of Britain transformed from rural & agricultural to urban & industrial. The mass exodus of people from the country into the city represented a fundamental shift in the social fabric of the country.
The companies themselves were able to recruit and retain low-skilled workers, working on high-cost machinery that required constant maintenance and investment. The machines had maintenance schedules, were constantly oiled, monitored, measured, and had parts regularly replaced because they were the core contributor to the profitability of a company.
A worker leaving the company had little impact on the capability of the business to create its product.
The information age has brought with it a shift in power toward the knowledge worker due to the nature of work. The information worker is a higher-cost resource, holds more tacit knowledge and intrinsically more value to a business, as their knowledge is part of the whole make-up and fabric of a company. Put bluntly “their brain is part of the machinery”. And therefore a business has more reliance on its people as resources, rather than its machinery (or infrastructure).
A worker leaving the company has a larger impact on the capability of the business to create its product or service. Tacit knowledge is leaving the business, a new worker is required and their induction into the collective takes far longer and costs a lot more.
So if brains are the machinery of your company, what kind of shape are they in?
How much are you investing in them, what does their maintenance schedule look like?
The software industry has a scarcity of resource, and this scarcity of resource has existed for a number of years. In the manpower survey of 2012, 25% of EMEA employers reported difficulty filling jobs due to a lack of available talent. It has led to you being in a talent war, having to pay c20% fees for recruitment of team members before they’ve walked through the door. Also, your best ‘machinery’ is at risk of being head-hunted by the competition.
So if you’re paying c20% to a 3rd party just to bring talent through the door, and your best talent is at risk of being pinched, how much should you be paying to develop and maintain that talent?
 Talent Shortage Survey 2012, Manpower Group