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Playing talent management catch-up

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.

 


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.

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.

 

 

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%

Technical knowledge

44.8%

People skills

43.2%

Organisational and project management skills

41.1%

Operational ability

41%

Market industry knowledge

36.1%

Sales effectiveness

29.9%

Intelligence

16.1%

Creativity

6.9%

 

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:

Talent development

63.3%

Talent retention and turnover

60%

Talent acquisition

49.4%

Employee engagement

41.2%

Performance evaluation

27.7%

Morale

21.7%

Compensation

19.6%

Productivity

17.5%

Identifying/integrating talent as a result of a merger

7.3%

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:

Global ranking

Position

1

Sales Representatives

2

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.

3

Technicians (primarily production/operations, engineering or maintenance)

4

Engineers

5

Accounting & Finance Staff

6

Labourers

7

Production operators

8

Drivers

9

Management/Executives

10

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

Management/executives

5

Engineers

6

Customer service representatives/customer support

7

Researchers (R&D)

8

Sales managers

9

Supervisors

10

Designers

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

Sales representatives

2

Teachers

3

Mechanics

4

Technicians

5

Management

6

Freight truck drivers

7

Delivery truck drivers

8

Accountants

9

Labourers

10

Machine operators

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:

SA ranking

Position

1

Engineers

2

Skilled manual trades (primarily electricians, welders or carpenters)

3

Technicians

4

Accounting & finance staff

5

Management/executives

6

Teachers

7

Sales representatives

8

Insurance staff (primarily qualified brokers and clerks)

9

IT staff

10

Restaurant & hotel staff

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.”

 

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.

 


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:

  1. Credit is given to the University of Pretoria’s Gordon Institute of Business Science; and
  2. 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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