The most common phrasing of the Golden Rule is “Do unto others as you would have them do unto you.”

I recently heard a sarcastic alternative definition: “He who has the gold gets to make the rules.”

While there are obvious problems with this viewpoint, it does offer an interesting perspective when we apply it to the knowledge workforce.

Many experts believe that the war for talent will heat up as we approach the bottom of the recession and begin a period of recovery and growth.

In a similar vein to the “alternative” Golden Rule above, we could postulate a Talent Golden Rule: “Those who have the talent will win.”

What do I mean by this?

Business success is no longer just about capital and natural resources, but rather about brainpower and the ability to execute. Quite simply, knowledge and expertise are the new coin of the realm.

This means that knowledge workers, and the skills, insights, experience, they bring to bear on problems are highly sought after assets. And it also means that those organizations who can attract and retain this talent will win in the marketplace.

This dynamic will become even more important as we emerge from the recession. In past economic downturns it was normal to focus on financials rather than employees. The logic was that when unemployment rose and the markets sank it was a buyer’s market for talent. Employee engagement, talent management and other employee concerns took a back seat to cost and risk management.

Most business executives now recognize the risks involved with this antiquated view of talent. They understand that a time of economic turmoil is precisely when they have the most to gain from focusing on employees. If employees are distracted, anxious, disengaged or believe they’ve stalled in their careers (especially top performers), they aren’t likely to do what’s required to keep the enterprise moving forward or deal with problems.

Unfortunately, there is still a large chasm between recognizing this issue and actually doing something about it. In a negative business climate when company leaders face an unprecedented number of challenges, talent management can drop far down the list of priorities, despite the best of intentions.

So with this talent-centric thought in mind, what are some strategies companies can consider to optimize their workforce and come out ahead when the war for talent heats up?

A few suggestions that will benefit both the organization and the workforce:

1. Lead by example: Business leaders need to present a thoughtful, calm and genuine “public face” to their people in a period of crisis. It’s the right time for straight talk, reassurance, empathy, and a clear vision and plan to move forward. Those companies which emerge from a crisis most successfully are inevitably those that commit to frequent, open, and honest communications with employees and their other constituents.
2. Think creatively about employees: The most common reaction to an economic downturn is to control costs tightly. But even if companywide staffing reductions meet cost cutting targets, they are rarely the best answer. A better solution is to carefully consider how you can deploy employees in creative and more productive ways to help reduce costs or increase revenues. For example, are your best performers doing the highest-value work? Can underutilized workers move to other areas of the organization? By looking at new ways to align the workforce with both short-term opportunities for efficiency and long-term strategies for growth, companies may be able to minimize staff cuts.
3. Take advantage of the opportunity to upgrade talent: With widespread layoffs the available pool of talented professionals is growing. This will be a short-term phenomenon, so smart companies will see this as a time to add new skill sets or increase bench strength. For example, the deep cuts at financial services firms represents a unique opportunity to pluck out talent from an unusually wide and deep pool.
4. Stay close to key talent: In the current environment it’s more crucial than ever to keep vital staff engaged, motivated, and productive. The good news, especially given budgetary pressures, is that pay itself has little to do with fostering engagement. Research consistently shows that engagement builds from emotional connections to the company and the nature of the work experience and environment. While it doesn’t require a big financial expenditure, it does involve a significant investment of time and attention, especially from senior leadership.
5. Embrace the flexible workforce: Increasingly companies have begun to identify the need for flexibility in all Human Capital expenditures, including professional and management talent. A flexible workforce strategy can accommodate volume fluctuations while maintaining a leaner permanent professional staff. Companies that embrace “lean” methodologies recognize the value and cost savings of adding management staff in increments as needed versus FTE. Instead of staffing for the peak, firms can now staff for average levels and use the flexible workforce to satisfy peak, special, or “one-off” needs. Companies are also able to match their special talent requirements with specialized resources.

By deploying independent experts, such as the consultants found in the M Squared Talent Network, companies can get work done in tough times without adding to their fixed cost headcount base. These seasoned knowledge workers are savvy business professionals who have extensive experience delivering results for their clients.

Flexibility, cost-control, and results will be the three primary corporate drivers for the growing flexible workforce. Executive teams need to take a holistic view of their total workforce. New talent deployment models and solution providers like M Squared Consulting are emerging that leverage the flexible workforce to deliver exceptional client value.

The semiconductor industry has undergone many boom and bust cycles. Yet regardless of whether times are good or bad, chip-makers have managed to deliver higher levels of product sophistication and processing power in shorter product cycles.

Decades of brutal market competition have forced perennial leaders like Intel, Qualcomm, and Texas Instruments to learn not just how to survive, but how to thrive under the harshest of business conditions.

How have they done it? There is no single answer.

However, there are a number of management tools and philosophies that the industry shares. These are techniques that can transfer across industries and smart management teams should carefully consider how they might apply in today’s tumultuous business environment.

The Semiconductor Industry Survival Model

1. Zero-Based Budgeting. This proven method of budgeting forces management to prioritize and justify projects based on projected costs and return-on-investment. The discipline here is that every budget is set at zero and built from the ground up based on a forecast return.
2. Product (or service) focus and execution. Periodic reviews between development, marketing, sales and operations keep projects on track and on budget. Disciplined companies always pull sales into the discussion to make sure they’re getting a true market view and have the customer perspective.
3. Product (and service) diversification. Markets naturally cycle at different times and rates. Diversification provides a buffer from the marketplace dynamics of supply and demand.
4. Forecast end-user markets. Monitoring and forecasting end-user markets (like computing and communications) provides an early indicator of upcoming market conditions and transitions.
5. Keep resources lean and mean. You’ll never find a department or a project team with enough headcount in the semiconductor business. Outsourcing, contractors, and consultants (all of whom can be easily ramped up or down) are often used to manage the peaks and valleys of business cycles.
6. Use market volatility to grab market share. Turmoil can present opportunities to gain market share or displace the leader. Practitioners constantly assess risk versus reward tradeoffs, even in down markets.
7. Embrace “lean” methodologies like supply chain management and just-in-time manufacturing. Industry leaders use these methodologies as a competitive advantage to minimize their inventory, improve process efficiencies, and maximize profits.
8. Adapt with lightening speed. Advance planning, decisive action, and flawless execution ensure rapid responses to market changes and efficient operations.

In spite of economic turmoil, increased global competition, and political upheaval, the semiconductor industry has managed to maintain a long-term growth trajectory and relatively consistent profitability. It’s a great example of what smart strategy, disciplined management, and engaged employees can accomplish.

The above list is by no means complete. I’m sure there are many other proven methods or strategies to mitigate the effects of our current economic climate. There are certain to be some of them that are relevant to your business or industry.

Over the past 20 years M Squared Consulting has helped thousands of clients to evaluate and implement strategies like these, across many industries. The thing that continues to impress me most about the M Squared Consulting business model is that we can truly help any company solve almost any problem. The wealth of talent found in our Consultant Network enables us to quickly deploy proven experts who will cost-effectively deliver results for our clients. In challenging times like this the ability to bring in outside resources who can make an immediate contribution to the bottom line may just be the best management tool of all.

I’ve written often about the War for Talent and how, in the long term, this will drive the growth of the flexible workforce. This discussion has more recently taken a back seat to the recession, but will once again come to the forefront in an economic recovery. As a precursor to this trend, witness the results of several recent executive surveys.

Besides the monumental task of keeping their companies afloat through the recession, a survey of 222 senior executives conducted by CT Partners reveals that 35 percent of them believe the retention of talent is the most challenging issue facing CEOs.

Respondents to a recent survey cited the following challenges:

• Retention of talent (35%)
• Relationship with investors (20%)
• Preserving or improving company reputation (18%)
• Globalization (16%)
• Fair and equitable employee compensation (6%)
• Relationship with board (3%)
• Fair and equitable executive compensation (2%)

Another survey, this one by ExecuNet, of more than 3,600 senior-level executives found that 60 percent believe their companies are concerned about retention. Staffing firm Robert Half International finds that 39 percent of senior executives cite retention as their most pressing workforce challenge. And a recent poll by the New York chapter of the Human Resource Planning Society reveals more HR leaders are concerned about engagement and productivity.

So what does it all mean?

A well known aspect of economic downturns is that top talent tends to stay put. The makes sense for it is safer to stay in a current role (even if it is less than perfect) than it is to jump ship in uncertain times. In a recovery most executive search experts expect voluntary separations to increase. The survey data above would seem to support this.

We may be seeing the initial cracks in the talent foundation of corporate America. When we enter economic recovery then management retention and access to talent will become a key ingredient for business performance and success.

One outcome of the recession is that the already damaged employer-employee social contract has been further marginalized. Most talented executives, and those who employ them, now realize that loyalty is fleeting. To pursue greater work-life-balance and the ability to do the work they want to do, more knowledge workers will choose to become free agents.

Another factor is the talent supply and demand equation. As the economy recovers and Baby Boomers renew their interest in retirement, the resulting talent shortage among professional and executive ranks will create many new opportunities.

To gain access to the talent they need employers will have to become more talent-centric. Many strategic organizations are revisiting their traditional workforce models with an eye towards growing the contingent component. Why are they doing this? There are a number of reasons, including:

• Increased workforce flexibility
• Greater cost savings over traditional full-time employment
• Access to better talent and expertise
• The growth of project based work

At M Squared Consulting we believe all of these factors will contribute to the growth of the flexible workforce. Our cost-effective “talent-on-demand” business model has proven to be an enabler for those companies wanting to harness the expertise and power of seasoned project professionals to deliver results.

Relaxing the regulations around immigration is often cited as part of the long-term solution to the inevitable talent shortage. At the center of this discussion is the H-1B Visa program.

Applications for visas for highly skilled immigrants are expected to decline due to the current recession, but technology companies continue to maintain that foreign-born workers represent a crucial part of the talent pool they need in order to remain competitive.

The U.S. Citizenship and Immigration Service began accepting H-1B visa applications for the upcoming fiscal year 2010 on April 1^st.

This year there are 65,000 visas available for foreign workers who have the equivalent of a bachelor’s degree. There are an additional 20,000 available for those workers who have obtained an advanced degree from a U.S. university.

Last year, the USCIS received 163,000 applications during the first week of April. It was forced to use a lottery system to determine visa recipients. Although demand is expected to drop this year, most experts still predict that the visa demand will exceed supply.

The sour economic climate is also affecting the way many companies are using H-1B visas. Many of this years applications will be for employees who are currently working but were denied visas in previous lotteries, according to Robert Hoffman, vice president for government and public affairs for Oracle and co-chair of Compete America.

These workers are able to hold jobs by using an optional practical training designation, which provides a 12-month bridge between a student visa and an H-1B visa.

In other cases, companies like Microsoft are applying for H-1B visas for workers who are currently employed on L visas because they have transferred to the U.S. from a foreign location. “What you are seeing is the program being used to meet different needs this year than in previous years,” said Brad Smith, Microsoft general counsel.

As you would expect during this recession where millions of U.S. workers have lost their jobs, the H-1B visa program is under attack. For example, despite its enthusiasm for the H-1B visa program Microsoft plans to lay off as many as 5,000 employees, or 5 percent of its workforce. This only fuels the fire for critics. Similar cuts at many other companies are contributing to the backlash in Washington against H-1B visas, which detractors say deny opportunities to American workers and reduces salaries.

As part of the massive federal government stimulus package, Congress created additional H-1B visa rules for companies that receive federal bailout funding. These companies will be forced to meet a standard of proof showing that American workers are not available.

Although H-1B workers constitute a tiny portion of employees at U.S. companies, executives like Microsoft’s Smith fervently believe that their skills are critical to achieving product breakthroughs. At the root of the problem is the fact that the U.S. simply does not produce enough of its own scientists and engineers to meet the demand. For example, a 2006 study showed that 61 percent of computer science Ph.D. students in the U.S. were not citizens.

“We are going to need to continue to bring in that kind of extraordinary talent,” Microsoft’s Smith said. “We’re not talking quantitatively about a large number, but we are talking qualitatively about people who boost economic competitiveness.”

Most experts dispute the idea that a gain in H-1Bs is a loss for American workers. These are visas that work to complement the U.S. workforce. In fact, a study by the National Foundation for American Policy shows that for every H-1B position another five jobs are created.

At its root, the problem is one of talent supply and demand. One of the challenges in an economy as large and diverse as that of the United States, is that regardless of the overall employment level, there will always be localized imbalances. In addition to H-1B’s, many companies are able to find the specific talent they need by embracing the flexible workforce. For example, M Squared Consulting clients benefit from the deep bench of talent in the M Squared Consultant Network - we are able to rapidly bring proven industry and functional expertise to client engagements. This allows companies to focus on their core business while we find and manage the talent that is focused on delivering client results.

Although the recession has likely delayed some of their retirement plans, there is no question that at some point in the future the Baby Boomers will retire. A number of experts are predicting that after they’ve retired from the workforce many will be looking to return for what’s now being called an “encore” career.

For the World War II generation (demographers often call them the “Traditionalists”) retirement was the happy end and the reward for a long working life. For the Baby Boomers, who have redefined pretty much everything in their lives, retirement may just be a transition to an all-new encore career or “a new stage of work after a midlife career,” says Phyllis Segal, vice president of Civic Ventures, a nonprofit focused on redefining the second half of life.

The recession, which has battered everyone’s retirement savings, has had a severe effect on those already out of the workforce. Many newly retired Boomers are now in the uncomfortable position of having to revisit their retirement plans and consider how to replenish their portfolios.

An obvious solution is to seek employment. An increasingly popular choice is to re-enter the workforce as a contingent worker. The growing acceptance and wisdom of the flexible workforce will be an enabler for encore careers.

Between 5.3 million and 8.4 million people ages 44 to 70 already are involved in encore careers, according to a new survey by Civic Ventures and the MetLife Foundation, a philanthropic arm of the insurance giant. A total of 3,585 people were interviewed by research firm Peter D. Hart Research Associates. Half of those in the survey who don’t have encore careers would like to pursue them. Yet they face a number of obstacles.

“The older workers and retirees I study would like to do something meaningful or just make connections with people,” says Phyllis Moen, the Endowed McKnight Presidential Chair in sociology at the University of Minnesota. “They can’t find flexible jobs, though, and they don’t want to work full time anymore. They don’t see the kinds of situations they want.”

Moen says retirees with non-disabling but chronic health problems want to work as much as those who are in good health. They also need flexibility so they can manage their health concerns, but can’t find it.

Most people already in encore careers, however, report sufficient flexibility, even among the 59 percent of survey respondents working 40-plus hours a week. Of those, 73 percent have the flexibility they desire, and 85 percent have enough time outside of work to pursue their interests.

“Flexibility is not just about the number of hours you work but about having control over your time,” Segal says. “The type of work you do and the organization you work in can increase that control, even if you’re working full time.”

Not many people today can sustain themselves on retirement income and Social Security. Segal also shared that, “Employers need good, experienced, passionate candidates. People in encore careers are a potential talent pool with ability, commitment and a passion to do the work.”

Laws that constrain post-retirement employment and corporate policies mandating traditional work schedules also pose obstacles to encore careers, but Segal thinks the necessary changes can be made.

For encore careers, “We need to help social sector employers, nonprofits, government and others become aware, create pathways and training programs for individuals and help individuals find ways to hook up with employers.”

Such pathways are being built. The federal Partnership for Public Service, aimed at bringing talent into government, makes a point of recruiting 50-year-old-plus workers. Several states, including Arizona, Maryland and California, are setting up offices and task forces to recruit older adults to fill vacant jobs and help their communities.

Two bills have been proposed that could help. The Incentives for Older Workers Act, introduced by Sens. Herb Kohl, D-Wisconsin, Gordon Smith, R-Oregon, and Kent Conrad, D-North Dakota, would remove barriers to phased retirement and help people return to work after their midlife careers have ended. For those who postpone receiving Social Security, the act would extend the retirement-delay credit from age 70 to 72.

In this far-reaching discussion there is one certainty: those nonprofits, government agencies, and for-profit businesses who figure out how to find and retain Baby Boomers coming out of retirement will be at a significant advantage when the war for talent heats up. These strategic organizations will greatly benefit from the knowledge and experience which the Baby Boomers can bring back into the workplace.

At M Squared Consulting our mission is to help clients solve critical business problems. Typically this involves getting clarity around the problem, defining a project, and then identifying the expert from our Consultant Network who can deliver the expected results. The M Squared Consultant Network, and the value we can deliver to clients, will likely grow as many Baby Boomers elect to re-enter the workforce as project-based professionals.