Convenience

Knowledge Worker Management and Labor Markets
Even though overall
demand for labor has slumped in recent years due to the economic downturn, the
demand for knowledge workers remains strong. As a result, organizations that need
these workers must introduce regular market adjustments (upward) to pay them enough
to keep them. This is especially critical in areas in which demand is growing, as even
entry-level salaries for these employees are high. Once an employee accepts a job with a
firm, the employer faces yet another dilemma. Once hired, workers are more subject to
the company’s internal labor market, which is not likely to be growing as quickly as the
external market for knowledge workers as a whole. Consequently, the longer an
employee remains with a firm, the further behind the market his or her pay falls—unless,
of course, it is regularly adjusted (upward).
It is no surprise that strong demand for these workers has inspired some fairly
extreme measures for attracting them in the first place.
47
High starting salaries and
sign-on bonuses are common. BP Exploration was recently paying starting petroleum
engineers with undersea platform-drilling knowledge—not experience, just knowledge—
salaries in the six figures, plus sign-on bonuses of over $50,000 and immediate profit
sharing. Even with these incentives, HR managers complained that, in the Gulf Coast
region, they cannot retain specialists because young engineers soon leave to accept sign-
on bonuses with competitors.
knowledge workers
Workers whose
contributions to an
organization are
based on what they
know
Chapter 8:
Managing Human Resources in Organizations
2 4 9
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