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14 Retaining Top Employees

are assembling and marketing pens. We’ll never know how to
run a plastics manufacturing plant correctly—it’s just not a
strategic fit with our skills.
Solution: Let’s sell the plastics division to somebody who’s in
the plastics business and then buy back the finished product
from them. They’ll make a better and cheaper product than we
can make. And, because we won’t have a plastics division, we
won’t have a turnover problem.
As a result of pruning and refocusing on core competencies,
many larger organizations were able to remove major employee
turnover issues with one stroke.
Now, many new companies, divisions, plants, product lines,
and other organizational units are adopting the core competency
model right at the outset, focusing on hiring employees only for
their core activities and purchasing non-core products and serv-
ices externally. This trend is very likely to continue in the future.
The Rise of the “Free Agent”
During the late ’90s and (only just) into the new millennium,
one event (temporarily) impacted the concept of employee
retention more than any other—the rise and fall of the dot-com
phenomenon.
As a result of a combination of factors—primarily the easy
availability of capital, the temporary suspension of the profit
principle, and the invasion of the workforce by Generation X—
the dot-com phenomenon caused two particular distortions in
thinking about what constituted employee retention.
The first of those distortions was somewhat superficial; we
can discuss and dismiss it in short order. The second distortion
had a greater impact on employee retention.
During the dot-com ascension, there was an overemphasis
on the perceived needs of one narrow group of employees—20-
to 30-year-old professionals. This in turn produced an emphasis
on those aspects of employee retention that could be purchased
with money—most commonly the following, in order of per-
ceived importance and impact: