Managing talent is the most crucial challenge facing HR, according to a survey across 17 EU countries by the Boston Consulting Group and the European Association for Personnel Management.
It’s a finding that is backed up time and time again. Andrew Hill, head of talent management at HR consultancy Chiumento, points to a survey by DDI in which 4,500 global leaders put leveraging talent second only to improving customer service relationships.
Managing talent is not only a key issue for competitive operations but one that is increasingly sapping time – the Economist Intelligence Unit reports that chief executives spend as much as half of their time on it.
What is talent?
So what do we mean by talent? In their talent management report, Rebecca Clake and Victoria Winkler, research and policy for the Chartered Institute of Personnel and Development (CIPD), offer the following definition: “Talent consists of those individuals who can make a difference to organisational performance, either through their immediate contribution or in the longer term by demonstrating the highest levels of potential.”
The art of talent management, however, is easier to define across sectors. The CIPD offers a helpful definition: “The systematic attraction, identification, development, engagement/retention and deployment of those individuals with high potential who are of particular value to an organisation.”
The business of talent management
Andy Baillie of Kenexa, a global recruitment and retention specialist, says that in his opinion there are three distinct stages of talent management – attraction, assessment and managing the talent or performance management: “The introduction of technology makes attracting the best people better, faster and cheaper. Most organisations will try and out compete each other. It speeds up the recruitment cycle, and talent management is then about how quickly and how well you do it.”
There are those who are doing it well and those, predictably, that aren’t. Baillie comments that investment banks are “good at it”, but adds, interestingly, that in his view they’re not so good at retaining talent: “Pharmaceuticals are also good at talent management – they take a long-term view of nurturing talent. BP has undergone a significant organisation re-structure and they’ve put talent management at the centre of that,” says Baillie.
The war for talent?
The ‘war for talent’ is a term that was first coined by McKinsey and, according to the experts, it is still as relevant today. Marques highlights the problem facing organisations of raw talent: “There’s a lack of graduates taking science and engineering degrees and the problem is that other sectors are also interested in these types of skills too.”
Hill agrees and adds a further dilemma is the number of graduates: “Around 15% of 18-year-olds used to go to university – now that’s 45%. This raises a broader question about talent.”
The problems continue the further up the talent tree you go. According to Hill, the single biggest factor constraining the growth of businesses such as HP and Cisco is keeping talented people.
The key, says Hill, is about competing on different levels such as the implementation of flexible ways of working and attracting certain demographics: “Look at the Fortune 500 – women leave at twice the rate of men in the US. Businesses are letting women down. Organisations have to focus on getting the culture right.”
The CIPD talks about the alterations to the demographic trends in the UK. By the year 2020, it is projected that the UK workforce aged 20-40 will decrease by 16 million and those aged between 45 and 65 will increase by 17 million. There is also less loyalty to one employer from individuals who self-manage their careers and development which, in turn, results in a workforce that are as transient as the customers when it comes to loyalty.
Although talent can be attracted and retained with carefully executed strategies, what is apparent is that taking a back-seat to talent management holds organisations back from realising their true potential.