‘Houston, We’ve Got A Problem!’
TALENT MANAGEMENT TRENDS & THE NEW NORMAL: PART-1
“If businesses managed their money as carelessly as they manage their people, most would be bankrupt.”
Ram Charan & Bill Conaty
The New War For Talent: ‘The Times They Are A-Changin’
”Come mothers and fathers / Throughout the land / And don’t criticize what you can’t understand…/ For the times they are a-changin’.”
Bob Dylan
Bob Dylan had it right . The times they are a-changing. The times are changing fast and this change is not going to stop anytime soon!
It’s called ‘The New Normal’. So, welcome to the future, people, it’s just that the future is already happening — we’re living it today!
We’re all feeling the pace of the change and disruption being caused by The New Normal. We’re feeling it in both our personal and professional lives. The New Normal is disrupting: how consumers behave, communicate and make buying decisions; how businesses must service and sell to their customers and clients; how employers need to attract and engage and retain top talent in the labour market — locally and globally. For HR professionals, The New Normal’s global and mega macro-trends are changing how they do their job at a micro-level and how they provide talent management solutions for their organisation.
In a series of articles, of which this article is PART-1, we’re going to look at some key strategic trends and challenges facing talent management that result from the changes wrought by the The New Normal, as well as some strategies and solutions for navigating and traversing them. In this article, we’re going to look at the case for why the practice of talent management (and HR) is at a tipping point, between traditional models that are no longer working well and the need to adapt for meeting the trends of The New Normal. From time to time, we reach for some our favourite singer-song writer’s lyrics to help make a talent management point more eloquently (so see if you can recognise the song).
The Talent Problem: “Old ways, can be your ball & chain”
Most HR practitioners and business leaders believe that their people, especially their most talented people, are their organisation’s biggest competitive advantage (or, at the very least, they acknowldge that their people are a critical area of the busines for ensuring continued strategic and financial success).
Most HR practitioners and business leaders acknowldge that there’s a ‘war for talent’ and a ‘skills shortage’ in the labour market.
Most HR practitioners and business leaders acknowledge that the traditional ways by which companies have been attracting, engaging and retaining talent no longer works as well as it used to; nor are these traditional methodologies proving a sustainable approach for talent management in today’s business environment (let alone alone for tomorrow’s business needs). At the same time, most HR practitioners and business leaders believe that they’re not on-track to make the changes needed to fix these critical strategic organisational challenges in talent management.
Instead, many HR practitioners tend to stick to doing what they already know and trying to do twice as much of it to get the same results as before, but even this approach isn’t giving them the ROI that justifies the investment.
People don’t like change and HR practitioners are no different. Like Neil Young sang, “Old ways, it sure is hard to change ’em / Come what may / It’s hard to teach a dinosaur a new trick / Lately I’ve been finding out / I’m set in my ways / Old ways, can be your ball and chain.”
Talent Matters: “And Nothing Else Matters!”
According to most industry surveys, business leaders now believe what HR practitioners have long known: that an organisation’s people (AKA: human capital) really matter for a brand’s performance and bottom-line. While it’s true that your people matter, it’s your organisation’s top talent really matters!
Happily, this paradigm is no longer just a fuzzy notion that is too often ignored, because it’s now supported by hard data (as well as case studies).
In a 2013 survey analyzing top global companies performance, Ernest & Young found that a majority (84%) of business executives said that their organization’s ability to develop and manage teams is essential for future competitiveness. The executives who rated their company as ‘excellent’ at building diverse teams were more likely to have achieved their target earnings, as well as their organizations having managed business growth of greater than 10% in 2012.
This recognition of the value that talent can bring to a company is reflected in a 2011 survey by the Chartered Institute Of Professional Development (CIPD), a UK professional body, which found that:
- 77% of companies with more than 5,000 employees have talent management programs in place.
- SMEs (with less than 250 employees) use talent management initiatives more than corporates companies to attract new hires (41% of SMEs versus 20% of corporates), as well as for retaining their key employees (50% of SMEs versus 35% of corporates).
Some other anecdotal sources of the value of top talent as an organisation’s competitive advantage by people who’d know are:
- “People aren’t your greatest resources, the right people are your greatest resources.” Jim Collins.
- “A great employee isn’t just better than a good employee, they’re one hundred times better.” Mark Zuckerberg.
- “There’s a huge difference between our very best performers and everyone else. If you take a hard look at productivity, you’re seeing what easily amounts to a 300 percent difference. In fact, it’s probably a five-to-one gap!” George Anders.
By definition, top talent is not something that is demonstrated by the majority of the population (otherwise, it wouldn’t be exceptional). Nor is it evident in the majority of any one organisation’s workforce. But, if talented people can make a 100% to 500% difference on an organization’s productivity, then it’s easy to see why the McKinsey concept of ‘the war for talent’ has become a globally accepted mantra.
Very few other factors in an organisation provide such clear and sustained differentiation with your competitors, as can that of the talent pool.
In their book, The War for Talent, McKinsey make the case that globally for the last 35 years there is an ongoing strategic inflection point at play:
“Talent is now a critical driver of corporate performance and that a company’s ability to attract, develop, and retain talent will be a major competitive advantage far into the future.”
In their study, McKinsey focus on the war for talent at a managerial level, which they acknowledge isn’t the only type of talent that matters to companies — but they assert that talent at the managerial level “is a critical one and it is at the epicenter of the war for talent.” We think that we can all agree with this premise and how the focus on managerial talent speaks to the 80/20 ‘Rule Of Effectiveness’, but –at the same time- it’s important that we not ignore the need for talent at other levels of an organisation.
The Talent Gap: “You Need Me, I Don’t Need You”
The ‘war for talent’ proper began quite a while back, but the global economic uncertainty of 2007–10 led companies to become a little complacent about the challenge in attracting and retaining talent.
This complacent attitude to talent was due to a number of factors, including: a curtailing of many discretionary programmes at many businesses as a result of cost cutting during the recession, a drop in labour market movement, as well as a flattening of wage growth trends and a lack of job security — all resulting in making employees feel keen to ‘job hop’ less.
Emily Lawson, McKinsey’s Head of Global Human Capital Practice division, supports this view: “In the wake of the 2008 downturn, companies stopped undertaking a lot of the discretionary activities in areas like career planning and mentoring that plays such an important part in the process [of talent management].”
After 4 years of a bull market from 2003–2007 where talent was scarce and mobile, when the Great Recession hit in 2007–2008 (and, for many companies and sectors, lasting until 2010) companies began to feel that they ‘held all the cards’ again when it came to the relationship between employer and employees (and where the power lay between them). Only now are companies starting to appreciate this is no longer the case (and, actually, it never really was the case where top talent is concerned!), because employees turnover and labour market movement has been picking steadily again since 2010.
As evidence of these changing dynamics in the labour market, in 2013 ManpowerGroup conducted a survey, with participants from 40,000 employers around the world. They found the following talent trends:
- 35% of all employers are struggling to fill their vacancies
- 1 in 3 employers in the USA are experiencing a skills shortage when hiring for their vacancies
- While this is 1 in 4 skills shortage for European employers hiring for their vacancies
- The reason that 73% of employers gave as the main reason for being unable to fill their vanacies is: a lack of people with the right mix and level of skills, experience, and knowledge for the job
- The jobs that employers are finding hardest to fill with the right people are in: leadership and senior management roles, engineers, technicians, accounting, finance, ICT, and sales. [This is supported by the findings in a UK talent planning survey, by Hays & the CIPD of 462 HR professionals, which found that 52% of employers said that managerial and professional roles are hardest to fill, while 46% found it difficult to fill technical specialist roles]
- And this skills shortage is getting worse not better! Most of the employers in the survey report their inability to fill their vacacncies is at its highest since 2008
- 54% of these employers believe that this skills and talent shortage will have a medium to high impact on their organisation’s competiveness in the marketplace. [This is up from 42% in 2012]
The ‘war for talent’ is increasingly a global challenge as well as a local one, with more and more multinational companies looking for top talent to support their emerging market footprints (and vice versa as emerging market multinationals start to create footprints in the developed economies).
Also, the ‘war for talent’ has spread beyond competition for leadership and senior managers. It now includes a ‘war for talent’ for highly skilled professionals and other specialist roles, while even middle and junior management talent is contested for between companies even more than ever before.
For top talent the choice of going to work for another company is always there for them, especially when they’re unhappy with how you might be treating them. And when it comes to your top organization’s top talented people, they know that they have options in the terms of employment! For your top employees in terms of what they want from an employer-of-choice, it’s like Ed Sheeran sings: “I’m not you, now that would be disastrous / Let me sing and do my thing and move to greener pastures / See, I’m real, I do it all, it’s all me / I’m not fake, don’t ever call me lazy / I won’t stay put, give me the chance to be free.”
Talent Management Practices That No Longer Work: “I Know What’s Coming, I’m Not Working”
Even though talent management still is a relatively recent addition to HR and business — it has only been a recognised formal practise for the last 10 to 15 years — a number of best practice methodologies have been established already.
However, these methodologies are now starting to look outdated and ineffective. Evidence that existing talent management best practice is increasingly outdated and ineffective shows in the employer dissatisfaction expressed in the 2013 ManpowerGroup survey, mentioned above.
What are these talent management traditional methodologies and approaches (that are now becoming outdated)? They include:
- Talent Identification Hiring Practices: These often involve a mix of psychology / psychometirc tests, numeracy and literacy and analytic test, interviews, and case study tests, etc, all of which are run through some form of assessment-centre (one that is in-house or outsourced or a combination of both)
- Graduate Programmes: Companies establish relationships with academic institutions and hire new graduates in graduate-training programmes
- Early Recognition Of Top Talent: Early in an employee’s career at a company, they might be identified as ‘high potential’ (or not) and marked accordingly. Many thus remain classifed as ‘high potential’ and treated accordingly, despite changing circumstances and standards in the industry, the organisation, the work or in the employee
- Career Planning, Development & Support: Once identified as ‘high potential’, an employee may be provided with some form of structured support and ‘coaching’ for their career-path within the organisation. This is usually delivered either by the line manager or HR. Also, it can include further training or sponsored studies, either in-house training or at a business school / tertiary institution. However, when this sort of intervention does happen, it’s for a very targeted and small number of employees — usually senior management only.
- Succession Planning: What most companies call their talent management and career-pathing programmes are really succession planning programmes, which have a narrower purpose than ‘talent management’ so they can be quite limited in scope and often they are ‘one-dimensional’. As a result, these programmes are often formal and driven through HR and talent review committees. The result is they are transactional and more focussed on the organisation’s ‘talent pipeline’ needs, rather than speaking to any individual employee’s career needs and passions more broadly
- Mentoring & Exposure To Senior Management: Those identified as ‘high potential’ and within the succession planning programmes will be given exposure to senior management and the work such senior managers attend to. This can be done through a combination of formal and informal interactions. Naturally, these initiatives are hard to scale up in an organisation, as there’s only so many people in senior management and they only have a finite amount of time
If you’re reading these methodologies and thinking that they sound pretty good (or that they reflect your organisation’s current HR and talent management practices) then the bad news is that these approaches to talent management are no longer providing the talent ROI that an organisation needs in order to win the ‘war for talent’ today and tomorrow! If you want to know why, then we touch on some reasons for this in our next article — see: I Got 99 Problems
Is The Talent Gap Real? “Do You Believe in…”
There are some economists, business leaders and HR executives who question whether the skills and talent shortages are real or if it’s all really just a psuedo-problem masking bad HR practice!
For some economists, the reason for their skepticism is that a basic principle of economics is when demand exceeds supply it should result in the following equation: scarcity of supply = cost of supply increases dramatically.
For talent and skills the form that ‘increased costs’ usually takes = wage rises.
However, this principle and dynamic (of dramatic wage inflation correlated to the talent shortage) isn’t reflected in the trends occuring in labour markets around the world.
Globally, apart from in the USA and the UK which only have recently moved out of this category, unemployment is high — especially youth unemployment. Also, across the world wages have been flat since 2008, including for the USA and the UK too.
There have been some positive indicators in both employment numbers and for wage raises over the last 2 years, but these remain indicators and not the sort of level of change that would be consistent with employers’ claims of a talent and skills shortage (and that is consistent with the demand-supply economic principles mentioned above).
Unemployment is still high relative to the number of employers who claim they face a talent shortage and cannot fill vacancies; while for many employed people, wages in real terms have been flat for decades. (However, it’s worth noting that for some of the highest valued skills, like computer developers and top executives, wages have risen a great deal indeed over the last few decades.)
For data on just how flat wage trends have been for the last several decades, see:
And:
All this contradictory data, has led some economists and business leaders to question whether there really is a skills or talent shortage in the labour market.
Mark Price, a labour economist at Keystone Research Centre, argues: “If there’s a skills shortage, there have to be rises in wages. It’s basic economics.”
Yet, as seen in the graphs above for the USA, in many countries the vast majority of people in the labour market have not seen real wage increases since 2008 (and one can argue that real wages have been almost flat since the late 1970s — instead of wage risese, the middle and working classes have been subsidised for this lack of real wage growth by being able to access more easily available credit; while this ‘loose’ credit arrangement contributed to the dynamics of the 2008 Great Recession).
Rather than there being a skills or talent shortage crises, such critics believe that the contradictory data between the demand and supply of labour is explained by other factors.
For example, Peter Cappelli (a Professor of Management at the Wharton School) wrote a book in 2012 called Why Good People Cannot Get Jobs, in which he argues:
“The skills gap story is [the employers’] diagnosis. It’s basically saying there’s nobody out there, when in fact, it turns out it’s typically the case that employers’ requirements are crazy, they’re not paying enough or their applicant screening is so rigid that nobody gets through. Searching forever for somebody — that purple squirrel, as they say in IT, that somebody who is so unique and so unusual, so perfect that you never find them — that’s not a good idea.”
Critics of the notion that there’s a skills and talent shortage in the labour market, like Peter Cappelli, believe instead that there are systemic business practices (especially by HR professionals) that create the illusion of the symptoms of an apparent skills and talent crisis. They argue instead that these symptoms have other real causes, which include:
- Ranstad (a multinational HR consultancy) who’s research shows that in the UK many businesses’ recruitment processes for recruiting external candidates are far longer and more involved than they used to be, with 29% of surveyed employers now using psychometric tests, technical and/or aptitiude testing. (This is up from 14% in 2008.)
- The same Randstad research shows that successful senior candidates now have an average of 3.4 interviews, up from 2.6 in 2008; while junior candidates now have 2.4 interviews, up from 1.6 in 2008. Added to this, the previous employment references-checks and other vetting processes pre-hiring candidates is an average of 15.2 days.
- [In short, a common sense extrapolation from these findings is that this means that the hiring process per candidate now is on average between 2 to 4 months, compared with it being less than a month to about 1.5 months only a decade ago.]
- Mark Bull, CEO for Ranstad UK, says: “Prospective employees have to jump through many more hiring hoops today than they did before the [2008] recession. A skill set that was satisfactory 5 years ago might not be now, as employers look towards the long-term potential of new hires. It’s not enough to demonstrate you can do the job being advertised — you need to show you can develop in the role and bring something valuable to that organisation in the future.”
- If these stats by Randstad paint an accurate picture, then there seems a BIG disconnect between this sort approach to hiring for the long-term and the actual reality of hiring evident in the trends of the decreasing length of tenure of the average employee at any one company. The average employee is no longer staying with the company for more than 2.5 years, so this focus on the candidate’s ‘long-term’ potential seems wasted as a criteria for the majority of hires that a company makes! At the same time it prevents companies from filling the current vacancy quickly and effectively with the actual available skills and talent in the local labour market.
- This relates back to Peter Capelli’s observation (and critique) of current employer hiring practices. He argues that employers are creating job descriptions and candidate-criteria that more resemble ‘wish lists’ for the ‘perfect’ candidate, rather than their being what they should be: namely, a realistic job description and a helpful hiring criteria.
- These ‘wish list’ job descriptions then get configured into candidate screening sotware that the erroneously ad auotmatically filters out lotsof suitable candidates for the role.
- Peter Drucker called these sorts of functions (and job descriptions) ‘widow makers’: basically, this describes any job that regularly defeats good people.
- [The name ’widow maker’ derives from the name New England captains gave to clipper ships 150 years ago when, no matter how well designed or constructed the boat, a lot of accidents and fatalities happened on them. In such instances, the owners couldn’t redesign or fix these ships; rather they broke them up and replaced the ship immediately).]
- Whenever a company finds it has a job that keeps defeating good people, Drucker argued that they shouldn’t keep looking to hire a universal genius to make the function work, rather they should abolish the job and break it into the key tasks that can be performed by the right number of ordinarily competent people.
- Drucker observed that it’s often companies in a period of rapid growth or undergoing a period of change whom create ‘widow maker’ jobs.
- An inverted version of this problem that Peter Capelli observes is when a vacant role remains vacant for a long period of time. Instead of speedily filling the this vacant role, the organisation parcels out the work to other current employees — in effect the organisation is doing the same amount of work but with less employees (and therefore less payroll costs) . However, in the medium to long-term this leads to staff burnout (in other words, in the long term it causes decreased productivity, lower employee engagement and higher staff turnover…again pushing up the organisation’s hiring costs).
- Another reason for psuedo-skills crisis, Cappelli believes, is that employers (in the USA, for example) are placing too much emphasis on previous work-experience and in so doing they’re turning away well qualified or trained candidates (but who might lack extensive previous work experience). Furthermore, employers are less willing than they used to be to provide well qualified or trained candidates with short-term training or skills learning that would ensure they succeed in the job. If implemented, such employer vocational training interventions would help alleviate the apparent skills shortage that those same employers complain of, argues Cappelli.
- In what can be seen as an alternative conclusion derived from similar employer-hiring trends that Peter Capelli’s observed, ManpowerGroup believe that a cause of the global skills and talent shortage is actually due to weaker demand from employers, especially since 2008. Simply put, there are less jobs, less vacancies and less movement between jobs within organisations (due to weaker business growth in a weaker economy) than there were pre-2008. This means that there’s a lot more candidates competing per job — internally and externally.
- Basically, people aren’t getting the same career and work-experience opportunities that they once did, so less people in the labour market have the experience, skills and competencies that employers want. This means that weak demand at employers is clogging up the system for people in the labour market, whether they’re employed or unemployed — creating a vicious circle. As ManpowerGroup puts it: “If demand for their products and services was more robust, employers would not have the same luxury of time — hence the apparent head–scratcher of listless jobs growth and greater skills shortages.”
You may or may not find these critiques compelling and persuasive for whether or not there’s a skills and talent shortage. Even if there is an actual skills and talent crises in local labour markets across the globe, it’s probably true that the organisational ineffeciencies highlighed by Capelli and others are true too. Addressing these will help organisations compete more effectively in the ‘war for talent’.
For more analysis on how traditional talent attraction and talent management practices are part of the problem that business is facing in fixing the skills shortage, then read more about this in our next article — see: I Got 99 Problems
However, despite (or, perhaps, in addition to) inefficent hiring and talent management practices at companies, it seems likely that there really is some sort of skills and talent shortage happening in many countries.
In a counter-argument to Mark Price’s observation on the nature of demand and supply in regard to a lack of wage rises, Hays and Oxford Economics assert that both wage inflation and unemployment rates are actually poor indicators for identifying whether there is a skills shortage (or a skills surplus) or not. In the next section of this article, below, we look at the factors that might be better indicators of a skills and talent shortage, as well as what the real causes of the current skills and talent shortage might be.
So, assuming that there is a real skills shortage in many economies around the world, the question we’ll look at next is: what are the real causes of the global skills and talent crises being experienced by business?
The Talent Problem Re-Defined: “I said hey, what’s going on?”
There are a number of explanations for the ongoing global skills and talent shortage. In all likelihood, most of these causes form a part of the overall cause(s) of the current talent crisis. By looking at each of these factors, we can start to identify and define the nature of the problem(s) and then we can then start to work out ways of addressing them.
Like the Four Non Blondes asked in their 1990’s hit: “I scream from the top of my lungs / I said hey, what’s going on?”
So let’s see if we work out what’s going on in the labour market and how it’s affecting the way we find, engage, and keep the right skills and talent in our organisations.
Some factors that are affecting the availability of the right skills and talent in labour markets across the world are:
- Labour Market Participation: Since 2008, a larger proportion of the unemployed population has opted out of being active in the labour market. While some of these numbers are accounted for by retirement, a significant proportion are not of retirement age but have given up on looking for work. So, while unemployment has been falling as a share of the active labour market, the disenfranchised unemployed remains high and it means a certain amount of natural talent and manpower is locked out of the formal economy (and therefore remains unavailable to employers). Also, the 2008 Recession had a disproportionate impact on young people entering the labour market, resulting in many young people not benefitting from work experience after graduating (and it’s left them several years behind on the career curve previous generation took for granted). As a result, this has had a stunting effect on the available talent for employers. The World Economy Is Picking Up: Despite Anxieties, The Green Shoots Of Global Recovery Are Real, The Economist (March 2017)
- Greying Demographics: The single BIGGEST change-trend for society and business is the current demographic shift that is fast occuring across most of the world right now. This is the trend of the ageing/greying population. More and more people are living far longer, while birth rates are falling in most countries (especially in most developed economies, but even in many emerging economies too). This means that our socities are heading to a point where there are more older people (50+ years of age) than there are younger people (under 30 years of age), which is expected to be the state of affairs within the next 10–20 years! This demographic shift in the median age of the avergae person is unprecendeted in human history! We don’t know how this is going to affect almost all aspects of our lives and of our society, but it is going to create some BIG changes in how business and socities function. What it does mean is that companies (and socities) will lose ever more skills, talent and expertise as their older employees retire (especially in management and leadership roles). Also, it means that companies are going to have to get better at attracting and retaining older workers, as well as its younger workers. (And, probably, they’re going to have to find ways to attract and retain immigrant workers.)
- Labour Market Flexibility: The legal and regulatory framework of the geography that a company operates within will affect how it attracts, engages, and retains local skills and talent. Given the current uncertain and populist political climate in many parts of the world, it seems likely that labour market flexibility will be decreasing in many countries in the short-term (although the medium to long-term trends do suggest ever greater liberalising of labour markets, especially if immigrants become a necessary way to replace the ageing and retiring workers in the greying societies).
- Wage Pressure: There has been a long trend of real wage disparity between high-skilled professions and industries versus low-skilled professions and industries. Given the trends discussed in this article, it’s evident that high value skills and talent are in short supply in labour markets around the world. Germany is experiencing very high wage pressure due to the skills shortage for high-skill industries, with an estimated shortage of 76,400 engineers and 38,000 ICT professionals.
- Talent Mistmatches: This is when the skills that employers need are not matched by the available skills in the local labour market, which is evident in the disconnect of a high number of unfilled vacancies at employers and at the same time as there are a high number of long-term unemployed people in the local labour market. Talent mismatches can be the result of there being a gap between the skills available in the labour market, such as in the USA where there is an oversupply of entry level people when instead what employers need are experienced and high skilled workers. Talent mismatches also can be the result of skilled and qualified workers opting for jobs in specific sectors, like the financial services sector, when there are shortages in other high value professions like engineering and chemistry — as is the case in France (and the USA) at chronic levels.
- Educational Flexibility: The local/national education system’s ability to provide students with the vocational knowledge and skills that employers need and its ability to adapt to the changing/future needs of employers. This is especially true for students’ competence in numeracy, literacy, science and computer literacy (and analytic skills).
Hays and Oxford Economics observe that: “It is clear…that while many graduates are out of work, at the same time the world is chronically short of particular skills. There is a serious disconnect between higher educational bodies, employers and graduates about the skills now needed in the workplace. Some of the most important skills for driving growth are in shortage on a global basis!”
Conclusion: “Weeks Turn Into Months / Months Turn Into Years / Reaching The Same Conclusions”
Given the number of employers around the world complaining about a skills and talent shortage, it seems likely is that there is a skills and talent shortage of some sort across global labour markets.
There are many factors and trends causing the current skills and talent shortage. Some of these are cyclical, like the impact of technology disrupting what skills are still of value, and some of these are BIG new trends, like the greying demographics and falling birth rates.
But even the cyclical challenges, like technology, see to be operating on different timelines than in previous years — namely, they seem to be speeding up, therefore they now require different solutions than those we used to address them in the past.
Also, in addition to the global mega-trends affecting the skills shortage, it seems likely that some of the challenges being experienced by employers are of their own making.
These are due to the continued use of outdated (and ineffective) recruitment and talent management practices. While there’s always room for efficency and best practice improvements at most organisations, also it’s clear that many HR practitioners haven’t fully adpated their practices to make the most of the changes in digital and social media, mobile computing, apps and end-user content creation.
A significant part of the problem is that companies lack clear, integrated and up-to-date talent acquisition and talent management strategies.
This is aggravated by HR practitioners’ struggle to ensure they have a strong grasp of the current talent landscape and how to operate within it. Without a compass to help them navigate a ‘true north’ in the ‘war for talent’, then how can HR teams and employers hope to navigate the current talent and skills landscape?
Emily Lawson, of McKinsey, says: “I can count on the fingers of two hands the robust talent strategies that I have actually seen — where the numbers have been done robustly and are modelled 3 to 5 years out where it is clearly understood what it is going to take to compete in a particular market. I think it is very hard. Talent strategies take a long time to play out. There is still a misalignment between what goes on inside companies and what would strategically benefit them in terms of talent.”
The fast pace and uncertainties of the current business, cultural and political world do make it challenging for a business to understand the landscape, implement a talent strategy suited to it and then assess its effectiveness (and value).
In others words, The New Normal is a VUCA environment: Volatility, Uncertainty, Complexity, Ambiguity.
This now is ‘the new normal’ that all we have to learn how to operate within, including HR practitioners.
A 2012 study by McKinsey into human capital practices, across thousands of companies around the world, found that only 32% had “high confidence” in their organisation’s talent strategy and activities. The study also found that many HR professionals feel nearly “paraylsed” by the nature and size of the challenges facing them, especially for the talent management function. Many feel they are unable to keep up the pace of change in the business environment and in wider changes in society.
Given everything that’s happening in the world and the many disruptive changes we are all experiencing in our professional and personal lives, it’s not suprising that HR professionals (as well as most other people in management and leadership roles) feel daunted and overwhelmed by the scale of the challenge facing us all in talent management.
The good news: it’s often said that acknowledging that there is a problem is the first step in overcoming the problem. We hope that this article has eloquently expressed the problem, as well as that it’s made a compelling case that there is a problem (in case you had doubted it) and why it urgently needs addressing.
The other good news: we will be posting more articles and videos that map the landscape of talent management in today’s business environment, as well as looking at some strategic approaches to winning the ‘war for talent’ and at some success story (and case studies) of modern talent management best practice. We’ve done this because we’re nice like that and because we’re all about adding value to our clients by helping you work better together everyday! You can thank us with a high five:
Why not be a good friend to your fellow HR colleagues and contacts by SHARING this article with them (and HEART’ing it here on Medium) — we’ll appreciate too it if you do SHARE this article.
Further Reading, Info’ Sources & Bibliography:
Managing Talent: Recruiting, Retaining, and Getting the Most from Talented People (Economist Books)
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