With economic indicators pointing to a lingering recession and many businesses in regroup mode, it seems that building and adding to talent would be the last thing on the minds of managers and corporate executives.

But, according to Charles F. Goetz, distinguished lecturer in entrepreneurship and an adjunct professor of organization and management at Emory University's Goizueta Business School, ignoring the value of human capital, particularly when a company and the economy are in turmoil, can be a big mistake. Companies, large and small, must continually add to and work to retain talent, or they run the risk of damaging their bottom line, he says. Sharper corporate leaders are growing to understand the true value of the people in their organization, says Goetz.

In a recent study, global consulting firm Watson Wyatt Worldwide found that “four out of ten companies (40 percent) believe workforce planning has become more important to their organization’s business success since the economic slowdown, and almost a third (31 percent) have already begun to increase activity around it.” Conducted in October 2008, the survey included the responses of 129 North America-based employers across a variety of industries.

The study noted that the “most prevalent concern among employers is the scarcity of critical talent.” Despite the economic downturn, 50 percent of the employers surveyed said they would “respond by maintaining their status quo in terms of replacing talent,” while only one in three of those surveyed indicated they were scaling back replacing people across the organization. Of the companies interviewed for the report, “77 percent of respondents said attracting critical-skill employees is currently a challenge, and 60 percent said attracting top performers is a challenge.”

Russell Coff, associate professor of organization and management at Goizueta, says that “managing the talent base is a fundamental problem for employers.” For firms able to weather the current economic storm, they are finding that it is a buyer’s market for companies that can afford to add to staff, he says. “There are people looking for positions who may not have another choice, and they may take a salary and a position that they may not have considered before.”

However, Coff worries that the current downturn—deeper and possibly longer than most—just might leave other firms with critical holes in staff. “Right now, some companies just may go wanting for talent, as they may not have the capacity to fill needed spots.” Smaller businesses may need to structure more creative deals, in order to afford the talent they might need, says Coff. “The type of entrepreneurial people that smaller businesses require might be brought on board with a more commission-based type of setup,” he says. “This can shift some of the risk onto the employee. But if you share in the risk, you have to share in the profit. If you get someone who believes they can accomplish something new, then they might leap at this setup.”

Shifting the risk also helps address the real risk of landing the wrong person, says Coff. Businesses constantly face the costly problem of bringing people on staff, and then finding out that the person is simply not the right fit for the company. “Even research on the use of social networks to find good employees—considered a tried and true method—still only gets you so far,” he notes.

Goetz adds that it is certainly easier to assess sales or commission-based employees and executives. “People who work in a number-driven environment are easier to analyze,” he says. “You can ask about their previous earnings.” It’s a much more difficult process to assess one’s management, marketing or customer service ability. Ultimately, he says, success on the job is a complicated mix of talent, personality, and luck in hiring. “Often, personality issues are underestimated.”

Kevin P. Coyne, a senior teaching professor in organization and management at Goizueta and a partner at the Coyne Partnership, an Atlanta, Georgia-based strategy consulting firm, says businesses need to remember that hiring is a “value proposition. He notes, “Businesses simply cannot afford to stop grooming and growing their people.”

Part of the natural evolutionary process in a workforce means that some staff members will move up the ranks, as they should, and others will inevitably move on to other positions outside the firm, or they may need to be let go. “It’s not smart to upset the hiring process,” says Coyne. “It can’t be ignored. If you neglect staffing issues, it can haunt you for five to six years or more.”

The C-suite isn’t immune to turnover. Coyne notes that this is when workforce planning and succession issues become particularly key. Poaching talent from the top corporate spot of a more successful competitor is a common practice. Having talented and knowledgeable executives on board to provide continuity, or even to move up the ranks, is an important and constant consideration for companies today. Coyne cites the recent grab for Nigel Travis, former CEO and president of Papa John’s International. On January 6, Travis assumed the spot of CEO for Dunkin’ Brands, the parent company for Dunkin’ Donuts and Baskin-Robbins.

Coyne notes that more turnover does happen in the lower or middle level of the ranks, but the disruption it causes can be very problematic. “There are certainly ‘academy companies’ that are good for almost anyone to have on the resume—the investment banks or Fortune 500 companies, like Procter & Gamble,” he notes. Firms like these are especially mindful of having a constant influx of talent to replace those moving on from these “training grounds,” he says. Even firms with layoffs in one division of the organization, or in the chain of command, might be adding staff in another part of the company. Coyne concludes, “There will always be turnover, and you have to constantly work to replace people, or there will be a gap in the development of your organization along the way.”

Republished with permission from Knowledge@Emory, a service of Emory University's Goizueta Business School.