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Playing talent
management catch-up
Global business is ill-prepared
for a complex talent market
Copyright © 2007 Christine Leonardi
Used with permission of the publisher:
Author:
Christine Leonardi
As it first appeared in The
GIBS Review June 2007, Volume 06
04 December 2007
Companies say talent management is
becoming a key strategic imperative. They are increasingly focusing
on developing, maintaining and evolving their existing workforces
to better achieve their business goals, stay competitive and be
global.
However,
in reality, most companies are playing talent management catch-up.
This
is according to the Business Performance Management (BPM)
Forum’s 2007 Performance and Talent Management Trend Survey,
which polled more than 700, primarily North American, HR and
performance professionals, executives and talent management
experts.
Though
internal talent development is seen as a critical step, only 50%
of respondents to BPM’s survey have formal plans to identify,
grow and retain talent.
Despite
the need for better talent development, acquisition strategies and
talent management processes, the survey found that two out of
three organisations do not have talent scorecards in place.
Effective
talent optimisation relies heavily on the ability to measure
success. However, more than 70% of respondents to the survey do
not know if or how they measure staff performance and
productivity.
The BPM
Forum says the situation for small businesses is even worse. More
than 80% of small businesses do not have any kind of talent
management scorecard.
In
addition, 60% of small businesses do not have formal plans to grow
and retain talent.
The BPM
Forum says, “This is a shocking figure,” considering that
nearly all of the small businesses polled are in service-related
industries where people are critical to the success of the
business.
“These
figures paint a frightening picture of companies ill-prepared to
manage a more complex talent market,” the BPM Forum notes.
“Most
organisations are terribly unsophisticated in managing and
measuring talent against business needs. Multi-billion dollar
firms know this is an issue they need to deal with,” comments
BPM Forum advisory board member Paul Tiffany.
Though
larger companies have taken the lead in embracing formal talent
management practices, processes and systems, they have a long way
to go.
“Even
the most sophisticated organisations are just scratching the
surface in the quest to optimise their workforces,” the survey
says.
Deloitte
estimates that an average company in the United States (US) spends
nearly 50 times more to acquire a $100 000 professional than it
spends on training that individual once employed.
“The overarching message is clear: ….companies must
employ better ways to find and cultivate a new set of skills
required in today’s dynamic global business
environment,” the 2007 Performance and Talent Management
Trend Survey notes.
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The global talent landscape is more competitive, demanding and
expensive than ever.
According
to the 2007 Performance and Talent Management Trend Survey,
increased competition for talent impacts business in the
following ways:
- 77.5%
of respondents say it takes longer to find talent
- 67.8%
of respondents say it increases the need for internal
talent development
- 54.8%
of respondents say it increases salaries
- 32.2%
of respondents say it increases need for recruitment
services
- 21%
of respondents say it creates competitive advantage
through better talent management practices
- 19.9%
of respondents say it limits business flexibility and
expansion
To
avoid key positions remaining unfilled for extended periods of
time, survey respondents say they settle for unsuitable
employees, less flexible business models and poor customer
service levels.
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Talent management
offers tangible results
The BPM
Forum says, “Advanced talent management systems and programmes go
beyond just producing more motivated and better performing
people.”
The
benefits and potential for talent management are real. Recent
research conducted by human capital expert Dr. Jac Fitz-enz shows
that smarter human capital management leads to better financial
performance.
The study
showed that 66% of companies with stronger financial performance
manage all managers and others with performance management systems.
In addition, 63% of high-growth companies review performance more
than once a year.
The BPM
Forum notes that companies that adopt advanced talent management
solutions dramatically reduce staff turnover, improve goal alignment
and have better engaged and performing employees in as little as a
month.
Rapid corporate
growth and change drive talent acquisition needs
Surprisingly,
the BPM Forum’s survey found that a new set of drivers replaced
the traditional need for acquiring new talent.
Company
growth (50%), evolving cultures (40%) and changing market demands
(33%) topped the list.
Things
like employee retirement (24%), less loyal, more change-orientated
employees (19.6%) and poor employee performance (17%) were much less
prominent.
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The
2007 Performance and Talent Management Trend survey identifies
the changing skills and competency requirement of today’s
business environment as a key talent management driver.
Survey
participants say their organisations value these competencies
most:
| Management
leadership |
62.2%
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| Technical
knowledge |
44.8%
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| People
skills |
43.2%
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| Organisational
and project management skills |
41.1%
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| Operational
ability |
41%
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| Market
industry knowledge |
36.1%
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| Sales
effectiveness |
29.9%
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| Intelligence |
16.1%
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| Creativity |
6.9%
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Growing talent
management challenges
According
to the 2007 Performance and Talent Management Trend Survey,
“Growing technical demands, new global business models, growth
opportunities, shifting market requirements and new management
practices amplify the need to retain and redeploy executives and
staff members.”
Survey
participants ranked the following, as the top talent management
hurdles for 2007:
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Talent
development
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63.3%
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Talent
retention and turnover
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60%
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Talent
acquisition
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49.4%
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Employee
engagement
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41.2%
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Performance
evaluation
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27.7%
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Morale
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21.7%
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Compensation
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19.6%
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Productivity
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17.5%
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Identifying/integrating
talent as a result of a merger
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7.3%
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Talent shortages
impact global labour markets
“As
businesses become increasingly knowledge and service orientated, the
nature of work will increasingly require people with higher skills
sets,” says senior lecturer at the University of Pretoria’s
Gordon Institute of Business Science (GIBS) Greg Fisher.
“This
means that globally, low skilled workers will come under increasing
pressure.”
New York
listed Manpower Inc’s 2007 Talent Shortage Survey, which polled
nearly 37 000 employers in 27 countries in January this year,
revealed that 41% of employers across the globe have difficulty
filling a number of positions as a result of skills shortages:
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Global
ranking
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Position
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1
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Sales
Representatives |
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2
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Skilled Manual Trades*
* Skilled manual
trades’ refers to a broad range of job titles that require
workers to possess specialised skills, traditionally learned
over a period of time as an apprentice.
Examples of skilled
trades include electricians, bricklayers, carpenters,
cabinetmakers, masons, plumbers and welders.
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3
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Technicians
(primarily production/operations, engineering or
maintenance) |
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4
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Engineers |
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5
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Accounting
& Finance Staff |
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6
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Labourers |
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7
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Production
operators |
|
8
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Drivers |
|
9
|
Management/Executives |
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10
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Machinists/Machine
operators |
According
to Manpower Inc’s survey, employers in Costa Rica (93%), Mexico
(82%), New Zealand (62%), Australia (61%) and Japan (61%) have the
most difficulty finding the right people for specific jobs.
The talent
shortage appears to be least problematic in India (9%), Ireland
(17%), the Netherlands (17%) and China (19%).
The
2007 Talent Shortage Survey found that only 19% of the almost 3 000
Chinese employers polled had difficulty filling certain positions:
|
Chinese
Ranking
|
Position
|
|
1
|
Technicians
|
|
2
|
Labourers
|
|
3
|
Sales
representatives
|
|
4
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Management/executives
|
|
5
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Engineers
|
|
6
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Customer
service representatives/customer support
|
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7
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Researchers
(R&D)
|
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8
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Sales
managers
|
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9
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Supervisors
|
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10
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Designers
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Of the almost 2 500
American employers polled in the 2007 Talent Shortage Survey, 41%
indicated they had difficulty filling these positions:
|
American
Ranking
|
Position
|
|
1
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Sales
representatives
|
|
2
|
Teachers
|
|
3
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Mechanics
|
|
4
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Technicians
|
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5
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Management
|
|
6
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Freight
truck drivers
|
|
7
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Delivery
truck drivers
|
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8
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Accountants
|
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9
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Labourers
|
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10
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Machine
operators
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Of the almost 800 South
African employers polled in the 2007 Talent Shortage Survey, 39%
indicated that they had most difficulty filling the following
positions:
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SA
ranking
|
Position
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|
1
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Engineers
|
|
2
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Skilled
manual trades (primarily electricians, welders or
carpenters)
|
|
3
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Technicians
|
|
4
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Accounting
& finance staff
|
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5
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Management/executives
|
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6
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Teachers
|
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7
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Sales
representatives
|
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8
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Insurance
staff (primarily qualified brokers and clerks)
|
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9
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IT
staff
|
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10
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Restaurant
& hotel staff
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Commenting
on a major concern that skilled people were leaving South Africa in
droves, senior lecturer at the Gordon Institute of Business Science
(GIBS) Greg Fisher says, “Some argue that it is more of a ‘brain
exchange’ rather than a ‘brain drain’.”
“South
Africa is successfully attracting skilled professionals from other
African countries, including Zimbabwe, Nigeria and Kenya.”
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Common
barriers to communication include:
Skills
shortages require a 180-degree shift in employers’ mindsets
According
to international recruitment consultancy Express Personnel,
employers need to have an accurate picture of the required
skills that they are recruiting.
This
can only be obtained if they prepare for the recruitment
process, starting with the compilation of an up-to-date job
specification.
The
first and most important aspect of the recruitment function is
to establish what skills and knowledge you need to recruit.
"This
does not mean adding a few specifications on experience and
qualifications, followed by a list of highly desirable
personal attributes of ideal employees to the standard job
description,” Express Personnel notes.
“It
requires that everybody involved in the recruitment process
should have a real understanding of what in essence is needed
to get the job done. More important, all decision-makers or
influencers must be on the same page regarding the human
qualities required.”
Express
Personnel says companies should avoid the following:
- Do not
request written responses and CVs – instead your
objective should be to get face-to-face with as many
candidates as you possibly can
- Do not
procrastinate with arranging second and third interviews -
talented and skilled employees need to be moved through
the recruitment process quickly
- Do not
attempt to recruit the exact required skills set - be
prepared to train candidates who meet other key
requirements.
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Useful links:
- Take
the neXt
step - For further details on taking charge of your life and
career, gaining valuable self-insight through self-reflection
and identifying your skills requirements in a global
knowledge-based economy, visit neXt
today.
Publishers, companies and individuals
are free to use the material contained in The GIBS Review as long
as:
- Credit is given to the University
of Pretoria’s Gordon Institute of Business Science; and
- A link to www.gibsreview.co.za is
provided.
Christine Leonardi is a freelance
writer, communications practitioner and the editor of The
Gordon Institute of Business Science's online journal, The
GIBS Review (www.gibsreview.co.za).
Short summary
Organisations worldwide are trying to understand and implement
measures needed to retain and recruit skilled employees with
specific skills sets, as talent management plays a growing role in
profitability.. Keywords
and relevant phrases
acquisition, benefits, brain drain, business goals, business needs, change
management, compensation, competitiveness, customer service, development, engagement,
financial performance, flexibility, globalisation, goal alignment, job
specifications, knowledge, maintain, management leadership, measurement,
morale, motivation, objectives, performance evaluation, performance
management, productivity, recruitment, remuneration, retention, scorecard,
skills, skills sets, skills shortage, staff turnover, strategy, suitability,
talent management, workforce strategy,
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