Impending baby-boomer retirements, a widening skills gap and outdated approaches to talent management are combining forces with the potential to create a ‘perfect storm’ that threatens the global business economy. While scare stories are not new in the HR arena, the confluence of the above factors makes action necessary.
According to global research by consultancy Deloitte, talent-savvy organisations build strategies around what matters most to their key skilled workforce – their personal growth or development through experiences that stretch their capabilities, their need to be deployed in positions and assignments that engage their interests and curiosities, and their connection to others in ways that drive performance for the company.
By focusing on these areas, organisations can generate capability, commitment, and alignment of key workforce segments. When this occurs, the attraction and retention of skilled talent largely take care of themselves.
However, companies that do not adopt new talent management strategies will find themselves without the resources they need to operate successfully in an increasingly challenging environment.
Among the many threats affecting the global workforce over the next few years, the exit of ‘critical talent’ could be the most damaging, yet few organisations have processes in place to address this.
Critical talent does not necessarily refer to senior executives, but those individuals with developed skills and knowledge of how to make things happen within a company, such as the researchers and clinicians within drug companies involved in new drug development, or the couriers within package delivery companies who have daily client contact and direct knowledge of the supply chain.
Business leaders need a clear understanding of the skills that can make or break their business, and must focus on where these individuals come from and how to keep them engaged and committed within the organisation. Only those organisations that respond swiftly and plan effectively will stay on top of these new challenges.
Traditional approaches to talent management tend to focus on acquisition and retention. When the talent pool tightened in the 1990s, companies responded by offering more generous compensation packages. Recruitment costs spiralled, and compensation packages were often matched by competitors, leading to higher attrition.
While acquisition and retention strategies remain important, they only offer a quick fix to a long-term problem.
To survive the change in the labour landscape, organisations must employ more comprehensive talent management strategies that reflect the needs of critical workforce segments and satisfy the conditions those employees require to succeed.
Companies can avoid the looming talent crisis by rethinking their talent management processes, and utilising critical workers as a competitive advantage, and therefore, differentiating a company from its competitors.
John Connolly is chief executive and senior partner, Deloitte