The War for Talent

44 THE McKINSEY QUARTERLY 1998 NUMBER 3

HUMAN RESOURCES

Elizabeth G. Chambers, Mark Foulon,

Helen HandÞeld-Jones, Steven M. Hankin,

and Edward G. Michaels III

WAR

THE

FOR TALENT

THE McKINSEY QUARTERLY 1998 NUMBER 3 45

Libby Chambers is a principal in McKinseyÕs

New York oÄÞce, Mark Foulon is a former

consultant in the Washington, DC oÄÞce,

Helen HandÞeld-Jones is a consultant in the

Toronto oÄÞce, Steve Hankin is a principal in

the Charlotte, North Carolina oÄÞce, and Ed

Michaels is a director in the Atlanta oÄÞce.

Copyright © 1998 McKinsey & Company.

All rights reserved.

In addition to the Þve authors, a team consisting

of Stephanie Durr, Larry Kanarek,

Nikitas Koutoupes, Bill Kunze, Mathias

Lingnau, and Drew Scielzo worked extensively

on this research. Jude Rich of Sibson &

Company, a human resource and compensation

consulting Þrm, also made a considerable

contribution.

Tell me again: Why would someone really good want to join

your company?

And how will you keep them for more than a few years?

Yes, money does matter

BETTER TALENT IS WORTH FIGHTING FOR. At senior levels of an

organization, the ability to adapt, to make decisions quickly in

situations of high uncertainty, and to steer through wrenching

change is critical. But at a time when the need for superior talent is

increasing, big US companies are Þnding it diÄÞcult to attract and retain

good people. Executives and experts point to a severe and worsening

shortage of the people needed to run divisions and manage critical functions,

let alone lead companies. Everyone knows organizations where

key jobs go begging, business objectives languish, and compensation

packages skyrocket.

In an eÄfort to understand the magnitude of thiswar for talent,we researched

77 large US companies in a variety of industries (see text panel).We worked

with their human resources departments to understand their talent-building

philosophies, practices, and challenges.And to gain a linemanager...