A fresh approach to the competitive landscape
Linda Holbeche, Chartered Institute of Personnel and Development’s (CIPD) director of Research and Policy, argues that talent management strategists need to look beyond the tired old formulas
The wobbles emanating from the UK’s financial services sector as a result of the credit crunch and the Northern Rock story continue to reverberate, causing many large corporations to stall recruitment or cut back on staff. But the underlying strength of the economy suggests the current ‘little local difficulties’ do not tell the full story: that real talent is in short supply and is more vital than ever to the success of organisations.
In today’s fast-changing context organisations of every type aim to do more than just survive – they want to thrive. The competitive landscape is rapidly changing. Technology, globalisation, customer preference are all driving the need for speed, customisation and higher value products and services. Work is becoming polarised through technology, which is leading to very different skill requirements and definitions of talent.
The service economy has burgeoned and is labour-hungry. Short-term expedients for filling skills gaps, including migrant labour, are merely plugging the hole in the dyke. Talent shortages are widely reported at both high and low ends of the skills spectrum, particularly in Europe, and of high skills globally. In some sectors such as pharmaceuticals, construction and IT, the shortages of expert talent are so acute that work is migrating to where staff are located, rather than the other way round.
Talent – finding it, developing it, making the most of it – has become a strategic priority, especially for those organisations aspiring to build sustainable high performance. When highly skilled talent is in short supply and employees have choice, organisations have to compete for the best – hence the plethora of employer branding and engagement initiatives. Workforce planning, building talent pools and creating career pathways are just some of the basic elements of a talent strategy.
Yet fresh approaches to talent management are needed. Conventionally focused on those employees considered most valuable to organisations because of their current performance or their future potential, talent management approaches can no longer be restricted to the favoured few or just follow the tired old formulas of ‘fast track’ development and conventional succession planning. HR needs to own the talent agenda and add value, carry out risk assessments around talent and create talent strategies to alleviate risk. They should monitor turnover data and draw inferences, and they must take action.
Changes in the workforce due to an increasingly global labour market, demographic trends and greater workforce diversity have significant implications for how work will be delivered, and what future leaders look like. For example, UK employees can now anticipate longer working lives, due in part to demographics. By 2020 it is projected that the UK workforce aged 20-40 will decrease by 16 million and those aged 45-65 will increase by
17 million. People who might once have retired at or before sixty, will
want new development opportunities rather than retire, and may need to move to other roles allowing younger workers to progress.
Similarly, the continuing growth in the numbers of women in the
workforce and issues of their representation in senior roles remain high on the government’s agenda. More flexible ways of working, combined
with a growth in the virtual workplace and the growing priority given by individuals to work-life balance, mean new models of management are needed to make the most of the talents of individuals not working in full-time roles. This is producing a shift in emphasis to the quality of contribution made while at work, rather than the hours spent there. So who will tomorrow’s leaders be, how will they be identified and developed?
Understanding the needs, aspirations and motivations of key employee segments will be critical to managing talent. Strategies such as building and embedding the employer brand, better tailoring packages –including development – will increasingly be used both to source scarce talent
and create win-win for individuals and organisations. Because organisations
are not in the driving seat when it comes to retaining talented individuals who self-manage their careers and development – these people tend to
have less loyalty to one employer.
In the long run, developing people will prove much less costly than recruitment when talent is scarce. Investing in employees even at junior levels, such as the development of employer-based qualifications – for example, the McDonalds ‘A’ Level opportunities – sends strong positive signals to employees about the company’s priorities. Developing line managers as coach, building career tracks/development opportunities, providing innovative career management, tools for self-assessment and holistic succession planning are just some of the weapons in this new war for talent.
