Talent Management Arrives in the Station
by Ron Thomas
In my home office the other day, I was looking for something and opened a drawer in my desk and came across some old electronics. There looking up at me was a CD player, Dell MP3 player and a mini CD player. It brought back memories of how each one of these items were state of the art at their given time. Now, as I looked over my stash of relics, I thought of how what is state of the art at one time are now just remnants of the past. Think VHS movies, cassettes and, God forbid, the 8-track tape. Over time everything evolves from the processes and strategies that were once cutting edge.
The current recession has wreaked havoc on businesses’ ability to survive. In turn, a shift in marketing, growth and overall strategic plans has occurred. Prior to the recession, few companies had what could be labeled as a true talent management program in the first place. Sure, they might have had a leadership development plan: a few courses here and there. Maybe it was designed based on best practices, which were state of the art at that time. Recruiting, well, was recruiting. Onboarding was HR based with all the appropriate paper forms driving the sessions. A few organizations had no metrics at all, and this climate is what I would call Talent Management 1.0. - first generation strategy. As a result of these fragmented operations and the poor economy, the Talent Management division, for the companies that had one in place, largely fell to the bottom of the priority list.
Every discipline with time will undergo a metamorphosis. What was state of the art years ago is now perceived as a relic from another era. We can tweak and adjust, but the profound aftershock of this economic tsunami has forced talent management strategy to evolve. Now, more than ever, how well companies manage, engage and inspire people determines whether a business will be successful.
A Shift in Talent Management
Two recent reports I read from leading research and consulting firms illustrate a renewed focus on talent management and explain how senior leaders are concerned about the impact that it will have on their companies.
A Mercer study entitled “Employers reshaping talent management programs as economy shifts toward growth” included responses from HR and talent management leaders at more than 400 organizations throughout the US. Jason Jeffay, a partner in Mercer’s Human Capital business and global leader of the firm’s talent management consulting practices, noted that, “The downturn forced organizations to make fairly dramatic changes to the workforces and talent programs.” Among the findings of this study:
Talent Management Priorities
- 51% rate Talent Management as a top priority
- 76% expect it to be a top priority within the next 3-5 years
- 97% expect competition for key talent
Measuring Talent Management
- Only 5% of respondents believe their organizations are effective in measuring the impact of talent decisions and investments
- 54% said their organizations are somewhat effective and 41% are not effective with respect to measurement
- 88% plan on making change to their leadership development training
- 68% plan to make changes to their career programs
Additionally, an Ernst & Young report entitled “Managing Today’s Global Workforce: Elevating Talent Management to Improve Business” was a survey of 340 C-Level and HR Vice Presidents at Fortune 1000 companies. Among its findings were:
Top three Talent Management initiatives
- 64% plan to build or rebuild talent pipeline
- 33% plan to better understand and coordinate global talent resources
- 31% plan to offer flexible work strategies
The conclusion of both of these dynamic studies reiterate the importance of Talent Management. I have always been amazed at the apparent unimportance of human capital strategy in companies when compared to marketing and finance functions. A company’s strategic plans are methodically constructed: marketing, finance, technology and all the key components of industry are always involved. In so many companies, HR used to be a passing shadow outside these conference rooms - never really a part of this process. Well, the train has arrived and HR will now take its rightful “seat at the table.”
An exceptional workforce will be the differentiator for success post-recession. Companies that want to remain competitive in this global economy will have to align with a crystal clear vision of development. And the same rigor used in building a business strategy must also be used when developing a people strategy.
It took an economic recession of this magnitude for companies to truly understand the importance of their workforce. Talent Management as we knew it before is gathering dust. Years from now, we may all look back on it and marvel at how far we have come.
Ron Thomas is a Principal at StrategyFocusedHR, a strategic HR consultancy. He has held senior leadership roles at Martha Stewart Living as VP of Human Resources and Organizational Development, and IBM Global Learning Services where he served as Regional Training Manager. His work has appeared in The Wall Street Journal, Chief Learning Officer Magazine, Workforce Management Magazine, and Crain's New York Business. Most recently, Ron has served as a contributing author for Creative Onboarding Programs from McGraw Hill, due out in October 2010.