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baseball free agency

Corporate talent adopts baseball free agent model

November 3, 2022

Freelance has changed the game

Note: A version of this piece was originally published in the Financial Post in 2006

By Mark Surrette, SeasonedPros.ca Advisor

In 1975, the professional baseball world adopted a free-agency model. It was a dramatic change for the game and its players. 

Free agency allows a player to move from one team to another after a single season. This shifted the power from owner to player. For talented players, it was a game-changer. 

This change was a portent for the corporate world. 

With recent developments like The Great Resignation, a generational exit from full-time work, and the rapid advance of technology, the free agency experience in baseball has much to tell us about what is happening with top talent in the corporate world.

The War for Talent inspired free agency 

Today, corporate Canada faces an interesting dilemma: How to deal with a shrinking pool of talent? The global consulting firm McKinsey dubbed this development as The War for Talent.

With talent shortages inside organizations and a burgeoning marketplace of freelance talent, recruitment and retention of workers have changed dramatically. Workers now have more control over how they work and where. 

This shift has forced leaders, human resource professionals and recruiters to rethink and retool their recruitment strategies.

Employers used to call the shots

In the old paradigm, there was an unwritten contract between employees and employers. A worker joined an organization after completing post-secondary education and gave the bulk of their working life to that company, or maybe two companies. 

The employer controlled just about everything about working life: pay grades, vacations, incentives, pensions, hours of work and location.

In return, employees were expected to be timely, productive and appreciative of the organization that provided them with work and benefits. Loyalty was valued and rewarded.

If an employee was transferred, they were expected to embrace it gratefully. Any unilateral change in a benefit or pay plan would be silently accepted. 

Any training offered was to be cherished. At 65, employees retired, drew a pension and enjoyed the golden years of post-employment. 

Simply put, it was a paternalistic model. Employees belonged to the organization and the organization was expected to look after them. This worked well for the corporate world and the baseball world before both were hit with tectonic change.

Recessions changed the game

The first sign of change came with the recession of the early 1980s. This heralded a wave of downsizing, restructuring and outplacement. 

Employees were unprepared for this and there was a sense of betrayal. How could 20 years of loyal service be dismissed so quickly, with a brief meeting and a severance cheque? What about retirement? What about being looked after? Wasn’t that the deal?

After the recession came explosive economic growth, which spawned a frenzy of mergers and acquisitions. Long-established firms were swallowed up by highly-leveraged opportunists. 

Financial engineering took centre stage and streams of employees in their 40s and 50s were shown the door. With this came shattered dreams and families disrupted, and some even torn apart – all in the name of profit.

Downsizing was part of the culture

And then came the recession of the early 1990s. By this time, downsizing was part of the corporate culture. Businesses were created to facilitate firing people. 

Words like “outplacement” became part of the vernacular and firing people became part of the managerial toolkits. 

Meanwhile, employee loyalty evaporated and job changing became an accepted and necessary practice.

The job-for-life disappeared

When I started in the recruiting business in the early 1980s, length of service was considered an asset. If someone had stayed with a company for many years, it showed loyalty, commitment and stability. 

By the late 1990s, things were different. Employers were looking for individuals experienced in multiple job roles. It was a sign of contemporary thinking and showed an ability to manage change, adapt, and think outside the box. 

Long-service employees were viewed less positively because they would be harder to retrain. Employees who were downsized faced an unwelcoming marketplace which considered them too ingrained with their organization’s manner of doing things.

The employer was calling the shots. They had their choice of employees and made decisions that advanced their corporate goals. For employees left out in the cold, there was resentment and an erosion of trust in the corporate model.

The oversupply of talented workers

There was an unintended consequence with these shifts, one the corporate world didn’t recognize:  the oversupply of talented workers.

Loyalty switched away from the firm and toward the individual. And something else happened too: The emerging workforce was upskilling to keep up with the changing economy and market. They were acquiring new skills their managers knew nothing about. 

All of a sudden, workers knew more than their bosses, and yet the bosses continued to manage them in a style learned in the 1960s and ’70s.

And something else happened too. For the first time in decades, there was more work than individuals to do the work. The talent shortage meant that employees suddenly had choices, thanks to technology. They could go to Toronto, New York or Paris, or they could stay home and work remotely. 

Talent now calling the shots

Corporate Canada was not ready for this. A free agency market emerged with employees who had skills and expertise suited to the demands of the contemporary workplace. Now the workers were calling the shots and controlling their working terms and destinies.

The concept of a sports-like free agency grew in corporate Canada with job boards and talent agencies springing up to place the freelance workforce in fractional and interim roles.

Leaders now had to look outside their organizations to find top-notch talent and expertise. 

Major league baseball players Andy Messersmith and Dave McNally challenged the reserve clause and brought about free agency in professional sports. 

Who would have guessed Canadian workers would have followed their lead?

Mark Surrette, is a senior advisor to SeasonedPros.ca. He is former President and Board Chair of Knightsbridge Robertson Surrette and brings 37 years of professional recruitment experience to the SeasonedPros.ca team.  

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