Sharon Mattingly, a leader in HR consulting at Hewitt
Over the coming years, demographic, socio-political, technological and economic changes will lead to a dramatic shift in the make-up of the workforce.
Trends that will influence the way organisations recruit and retain key talent in the future include:
- a smaller pool of talent from which to recruit for key positions
- an increasingly global market for new talent
- an increasingly virtual workplace
- a vastly diverse workforce – in terms of age, race and culture
- a workforce with independent access to information about their own and other organisations.
There is a risk that, faced with short-term issues, employers will fail to recognise these factors or take control of their next-generation talent management. Unless employers take action, the impact of trends such as increased diversity may lead to increased disengagement,
while leaders must identify and coach next-generation leaders who will be working in this radically different, globally dispersed, virtually connected and more authoritative workforce.
Organisations must anticipate and plan for these changes to ensure that they manage their talent effectively.
Chris Watkin, practice leader, talent management, Hay Group
With succession management top of the agenda for organisations from M&S and J Sainsbury to the Conservative Party, talent management has become a boardroom issue. Identifying and exploiting potential is now part of ‘business as usual’ – with line managers working in partnership with the HR function to predict future star players and route them through the organisation.
Promoting someone to the point of their incompetence can destroy both short-term performance and longer-term shareholder value, and organisations are now realising that past performance alone is no predictor of future delivery.
There is also a growing recognition that different types of talent are required for different types of role. For instance, if you move an employee from an operational to a strategic role with no ‘stepping stone’ experience, it may be a leap too far. Organisations are now becoming more adept at designing non-linear career routes so talented individuals can pick up ‘horizontal’ competencies along the way.
There is a marked shift away from relying purely on competencies to identify high potential. Those organisations at the leading edge of this shift – GE and Intel, for example – are fast-tracking future leaders who unlock the potential of those they lead, display EQ as well as IQ, and have the ability to perform outside their technical and cultural comfort zones.”
James Taylor, head of recruitment atrecruitment and research consultancy FreshMinds
Increasingly, top talent will approach the job market in the same way it currently approaches the consumer market. These days people expect a personalised shopping experience and the most successful retailers are those who can treat even a massive customer base as individuals, understanding their preferences and targeting them accordingly. Equally, the most successful companies at attracting and retaining talent will be those that can treat their top people as individuals, and provide them with a personalised recruitment and development experience.
That means ‘mass customisation’ will become the major challenge for big companies – how to provide individualised talent management on a large scale. As the market for top graduate talent gets more competitive,with smaller companies becoming at least as attractive an optionas larger ones in terms of opportunities,relying on a ‘one size fits all’ approach won’t be enough. The best graduates will be attracted to the companies that treat them as individuals – that go out of their way to accommodate, understand and develop them. So companies will need to take a more flexible, customer-focused approach to the recruitment and management of top talent (something we’re already starting to see with the move to year-round graduate recruiting). This will require the commitment of people from all across the business.
Jim Osler, partner, The Talent Based Organisation
There is a growing recognition of the central importance of talent in creating organisational value – unlike the empty ‘our people are our most important asset’ platitudes of the 1980s and ’90s. This is causing a significant shift in power from the organisation to those whose major contribution is their judgement in the application of their knowledge. This has in turn driven up pay. This can be seen in professions where results are relatively easy to measure, such as<2002>investment fund managers.
With this recognition of individual power comes:
- greater interest in measuring the added value created by individual professionals – including those whose performance is measured in more than simply financial terms
- more attention to individual differences in performance and ways to improve professional productivity
- attempts to simplify work traditionally performed by professionals, so that it can be done by technicians.
The demand for good professionals will continue to exceed supply and the process of attracting and keeping good staff will become more demanding, with professionals seeking to work with organisations that represent their values and respect their personal preferences.
Ashley Unwin, partner in consulting at Deloitte
Impending baby boomer retirements, a widening skills gap, and outdated approaches to talent management are combining to produce a ‘perfect storm’ that threatens the global business economy.
The confluence of these trends will leave behind companies that do not begin to rethink their approach to managing human capital.
Traditional approaches to managing ‘your best asset’ frequently focus on acquisition and retention. When the talent pool tightened in the 1990s, companies responded by offering rich compensation packages. The end result, however, was often disappointing – recruiting costs soared while investments in training languished.
Going forward, employers need to identify which skills will make or break their business, where those skilled individuals will come from, and how to keep those workers engaged and committed within the organisation.
Talent-savvy organisations build strategies around what matters most to their critical talent – their personal growth or development, their need to be deployed in positions and assignments that engage their interests, and their connection to others in ways that drive performance for the company as a whole.
Dr Wesley Payne McClendon, principal, Mercer Human Resource Consulting
Not surprisingly, managing talent has become a key potential competitive advantage for organisations. Companies that effectively navigate the arduous terrain of identifying, developing and retaining high performers continuously differentiate themselves from the rest.
The long-term value of managing talent far exceeds the short-term efficiency savings gained from administrative tasks, such as the standardisation of policies and practices. Therefore, the challenge for HR professionals is to adopt and deploy a talent management strategy that is focused on business objectives, responsive to change and linked to measurable outcomes.
The following three talent management strategies provide the most compelling opportunities for HR professionals to become strategic business partners:
- Know your business and your competitors, and how to align incumbent and incoming talent with strategic business objectives
- Develop a talent management strategy that can adapt to market, labour and structural changes
- Measure people impact through performance outcomes that can be linked directly to driving the business forward.