Talent management in the downturn

Training budgets are usually among the first to be slashed in times of recession, but this is not the case at recruitment firm Hays. In fact, despite the economic conditions, global HR director James Cullens recently received sign-off to double the company’s annual spend on learning and development.

He says the extra funding will go towards the roll-out of an e-learning system for the company’s 8,000-strong workforce worldwide. The investment is part of a wider talent management strategy, which also involves planning career paths for employees and collating data on skills within the organisation.

“Our business depends on our people being engaged,” says Cullens.

“If they aren’t, then we give a bad service to our clients and our business suffers.”

A bold move

Cullens, who is also an adviser to the Open University Business School, admits his is a bold move at a time when the number of advertised job vacancies is falling. However, just because we are in a climate where most people feel lucky to be in a job, Cullens refutes any notion that employers no longer have to concern themselves with retaining and developing talent. In fact, he says, it’s an issue that is more relevant than ever.

“At the moment it’s all hands to the pump. We should be doing more talent management rather than less. For me, talent management is about more than just going out and attracting the right people; it’s about doing something with the talent you have.

“If you treat people badly during a recession just because you can, they will soon leave you when things improve.”

A winning argument

It’s an argument that appears to have won over the majority of today’s organisations, according to academics who follow trends in this area.

Tim Osborn Jones, leader in personnel development at Henley Business School, thinks there’s a lot of “froth” talked about talent management. However, he also acknowledges that managing people in a way that “keeps them engaged and prepared to go the extra mile” will be important for employers during the downturn.

Dr Peter Samuel, a lecturer in human resource management at Nottingham University Business School, says he has seen talent management creep into HR textbooks and become essential management practice over the past decade or so. But he feels it is not a new concept, and does not use the term in his lectures.

“While I know talent management is a hot topic these days, it’s simply a fusion of old ideas that haven’t been modified to fit a more strategic approach to human resource management,” he argues.

“I lecture the ‘old’ ideas, such as recruitment, selection, appraisal, development, reward, flexibility, and so on. Every year, here and abroad, I ask students to critically consider whether this relabelling is anything new – such as employee involvement morphing to employee engagement; internal PR relaunched as employee branding; mentoring as coaching.

“The response of postgraduate students to this broad question, especially MBAs with senior management experience, is invariably ‘no’,” he says.

Mark Wilcox, a former director of people and organisational development at Sony Europe and now a director of HR consultancy Redthread Consulting, agrees that much of this “froth” is down to the fact that talent management is a trendy 21st century label for the kind of things good HR people should be carrying out as a matter of course – namely developing people, recruitment and retention.

But, he says, what has been missing from the process in many organisations is performance management and, even more importantly, deployment.

“In the current climate these two elements are critical – using the talent you have to make the business perform well when times are tough,” he says.

“If this is not part of the mix, the company has missed out and misunderstood the nature of integrated talent management.”

But it would seem the economic uncertainty is forcing many organisations to strive to understand what skills and competencies they have in-house.

Requests for information

At business process outsourcing giant Logica, head of HR services Patricia Taylor says that whereas historically many of her 600 customers – most of them HR directors – have asked for tools to help them attract and retain staff, today she is seeing a lot of requests for “information that will enable them to better understand the nature of their workforce and how to evolve in a flexible, rapid response way.”

Further evidence that the value of people is high on the agenda for companies at the moment comes from Alison Gill, CEO at HR consultancy Crelos.

She recently headed up a seminar for the Chartered Institute of Accountants that was aimed at helping finance-orientated people, who are typically comfortable with numbers, find “factual ways of proving the capability of people in their organisation”.

This, she says, suggests more employers are taking a methodical approach to restructuring during the recession, looking at which talent can be used where rather than the kneejerk headcount-cutting that characterised the downturn of the late 1980s and early 1990s.

In-house skills

Gill says the organisations best placed to make decisions about whether they have the right skills in-house to help work through these difficult times – such as operational excellence and cost control – are those who have been collecting data on their employees for some time.

Those employers that have no formalised database for this information should look to use the best information they have available, which tends to be payroll, according to Taylor.

Ali Gill, chief executive of HR consultancy Crelos, outlines three recommendations for managing talent in a downturn.

“Payroll information will give you starter details and information on increases in pay and compensation, as well as on those you have recruited or promoted from within and to what level,” she says.

“From this data you can start to cascade to get a picture of how the organisation is moving.”

But, as everyone is all too aware, some job losses are inevitable in this climate – and any talent management strategy should also offer solutions for dealing with the breakdown in morale that often exists among those workers who remain after a round of redundancies.

According to Andrew Hill, director of talent management at HR consultancy Chiumento, potential approaches include dealing with feelings of denial and resistance to change, as well as “fostering new behaviours that encourage energy and resilience”.

But, say Wilcox, job losses from larger companies may offer opportunities for small and medium-sized businesses, which previously may not have been able to compete with the blue chips in the war for talent.

“It may be a chance to get some great talent as new blood to their organisation, particularly if they can offer some real role challenge.” he says.

“Talent thrives on challenge.”


Case study – AXA

According to Martin Parrott, head of executive resourcing at financial services company AXA, the recession hasn’t changed the firm’s approach to talent management. But he admits: “It’s brought everything we do into stark relief.”

“We get challenged a lot more about our spend and whether our talent identification processes are robust and will ensure return on investment.”

Talent among the organisation’s 13,000 UK employees is detected using a matrix that is moderated by senior HR and management, who look at potential skills gaps coming up in the short, medium and long-term and where internal development is required.

Parrott says around 40% of staff – those deemed to have the potential to “move to the next level” – are on the talent management programme at any one time. Among these, an elite 1% to 3% are ring-fenced as future leaders and benefit from the majority of development, which includes attendance at a two-day assessment centre event and invitations to a range of business events.

Employees on the standard talent management programme have the option to attend career development workshops.
Parrott says AXA also successfully introduced a trusted line manager programme in 2008

“We see line managers as vital in AXA. We put them all through a workshop dealing with areas such as performance management, coaching techniques and giving feedback,” he explains.


How will the recession affect the relationship between employers and Generation Y?

This is the first downturn experienced by young adults under the age of 30, who during their short working lives have enjoyed a healthy job market. To a certain extent they have been able to pick and choose employers, who have been focused on attracting the best talent from this privileged cohort.

Compared with previous generations, Generation Y employees are said to want greater flexibility in their work, access to the latest technologies, and to work for an ethically sound employer who takes a progressive stance when it comes to corporate social responsibility.

But will they now have to adjust their demands in this challenging climate? According to Fred van der Tang, managing director of recruitment giant Randstad, young jobseekers today should be thinking less about their ideal working environment and more about what they can offer any employer.

He says: “There is a wave of no-nonsense in the workplace today. Employers are demanding more and expecting employees to put in that extra mile. For many young people this will be a new phenomenon.

“Employers will be stricter on new recruits and will want them to be productive quickly. They will be monitored more closely and be less likely to get a free picnic for a month or so while they find their feet.” 

But even in the current market the best companies will want to hire young talent to keep their “pipeline primed”, which means, says Mark Wilcox at Redthread Consulting, good people will still have choices.

“What we are seeing is a larger number of seekers, fewer roles to go round and therefore a greater role for astute recruitment professionals, whether consultants or internal corporate HR people,” he says.

But, according to Patricia Logan at Logica, employers should still seek to understand and attract Generation Y because in the mid to long-term these are the people who will drive organisations.

She says: “Looking at the demographics, Generation Y will become a large proportion of the workforce in the next decade. They can bring new ideas and freshness that take businesses forward.”

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