You can view an introductory video on this topic here.
Creating a Talent Management Strategy has become a key method for organisations to combat shortages in human capital, reduce attrition, and manage the changing business landscape that is an increasingly globalised and competitive business environment under demographic pressure. There is a very real fear that once the baby boomer generation retires, businesses will face a knowledge drain that cannot be compensated for by the current influx of Millennials and Generation Z. There is a feeling among businesses that overcoming these challenges will be what will make or break their businesses in the medium to long term. Deloitte found that 86% of business leaders understand that the future success of their business relies on the effectiveness of their leadership pipeline, while 54% report damage to the business due to talent shortages (1).
The best way to ensure that business knowledge and skills are passed down the line, and that succession plans are in place, is to have a fully functioning Talent Management Strategy that ensures you are developing your staff to fill the gaps that will emerge in your organisation in the short, medium and long term. It is not enough to just have a talent strategy, it has to be effective, agile and proven. So how do you achieve this?
1. Align your Talent Management Strategy to your Business Strategy: There is no point developing talent for the needs of an old or outdated business model. Talent management works best when it doesn’t suffer from ‘tunnel vision’ and instead looks to build capacity for the future. The best Talent Management strategies are dynamic and encompass a continuous process to ensure that they ready to meet the future needs of your business, whether they be adding capacity to areas earmarked for growth, upskilling employees to adapt to changes in technology or industry developments, or cross skilling employees to manage role amalgamations and plans for future scaling back of legacy areas of the business. To maximise the potential gains Talent Strategy can provide to your organisation, you need to look into the future plans for your business, and determine what you are going to need in the way of human and knowledge capital to ensure success.
2. Decide who is going to take part in your Talent Development: Who will get to participate? Only the high flyers or do you see your entire organisation as your talent that deserves to be developed? The best and most effective Talent Management strategies lie somewhere in the middle. That means that you need to pay attention to all employees’ performance management and development, but that you need to give special focus to a core group or groups of employees to ensure that you have a pipeline to senior executive roles.
The truth is that not everyone in your organisation is going to get to the top, not everyone has the capacity, wants the level of responsibility, the long hours or the commitment it takes to get there. That doesn’t mean those people don’t deserve the opportunity to develop themselves so that they can move with the business and keep producing the work that makes the business run smoothly. In fact, 90.5% of workers responded that they would remain in a job if they were offered more training and development (2). There is a solution to employee retention right there.
In addition to providing opportunities for development to these staff members, you will need to locate and nurture high-flyers, give them the opportunity to interact with senior managers and the training necessary to allow them to achieve their potential, and finally to continue to support and mentor them as a part of wider succession planning, ensuring you can fill the gaps when senior staff move on or decide to retire.
3. Apply Fairness and Consistency when Determining who will Participate in High Flyer Programs: It is vital that Line Managers understand that their talent is not local but a corporate resource, and they must be on board and participating strongly in the talent identification process. Once you have management on board, you will need to ensure you have a structured selection process. Make the criteria to participate known and stringent to increase the desirability and willingness of staff to participate. To this end, HR must be a part of any successful Talent Strategy, to provide support and guidance when designing and developing approaches, and also to ensure that selection criteria are adhered to and applied consistently.
You should also ensure that any staff you have that measure or work to increase diversity in the workplace are a part of the selection process, after all businesses with a more diverse executive are proven to have a higher ROE (Return on Equity) and EBIT (Earnings Before Interest and Taxes) (3). You should also ensure that those who don’t make the cut are supported with well thought out feedback and encouragement to mitigate negative sentiments from their lack of participation in the higher levels of the program; HR can help here too.
4. Track and Evaluate your Talent Strategy, and then Tweak It: Don’t ‘set and forget’; if a Talent Strategy is about locating your future leaders, make sure you have a deep understanding of how successful your program is at motivating and developing your high flyers, or you might find that those high flyers leave for more effective pastures. Evaluation in L&D is difficult, it requires qualitative and quantitative data that is valid, reliable and robust. Whether you choose to use benchmarking data or data created to measure impact, you need to be measuring. 360-degree evaluations, collation of employee turnover and retention data for key groups such as senior management post holders or tracking the movement and retention of staff that participate in high-flyer programs can all help you to better understand how successful your strategy is. Once you have the data, use it. Find what is working and improve on it, find what is out of step and change it; a process that encourages continuous improvement can only work if it is continually improved.
If you are concerned that your Talent Management Strategy is lacking, then you are in good company. Only 13% of leaders believe they do an excellent job of developing leaders at all levels of an organisation (4). Lacking requisite leadership skills is a huge impediment to growth and future success, and the only way to overcome it is to commit to a talent strategy that focuses on developing your workforce, correctly identifying high flyers and then providing them with specific development that matches business strategy, and continually measuring and refining your talent offerings. To survive in an increasingly difficult business environment where access to talent dictates success, the ability to build a succession plan which ensures that your organisation is poised to move forward with its medium and long term business strategies should not just be on the wish list, it is a must have.
How do you ensure that your Talent Management Strategy is working for your business? How do you identify high-flyers for specialist programs?