Six ways you can help your CEO understand talent management
Are you aware of the effects of talent on your organisation’s success? Is your CEO aware of what you need to ensure that you attract and retain the best talent (from designated groups) to meet your organisation’s critical skills demand? Despite fluctuating unemployment rates, the competition to source, hire and retain topnotch candidates has remained consistent and fierce across most industries.
As an HR professional, you have the day-to-day experience and knowledge it takes to create the ideal talent management strategy. What many HR departments fail to do is engage the CEO and secure executive backing for their strategic initiatives. By gaining executive level support, however, you can raise your profile—and that of HR as a whole—within your organisation.
Following are six key points that you can take to the executive table. They will not only help you think strategically; they’ll also provide some valuable approaches that every CEO should address in order to become a leading talent management organisation.
1. There’s a new "war for talent" on the horizon
You’ve heard the phrase before, and you probably have read a few articles about it. So why is it important to reconsider the notion of a "War for Talent"? Because it’s easy to get complacent in today’s economy, when hiring people doesn’t seem so urgent, staffing activity is relatively low, and there are plenty of resumes floating around. This basic disparity cuts through to all industries, all skill areas, and all professional fields. It’s a demographic reality, and there are things you can do now to prepare.
Your CEO should be aware of this looming talent shortage and should make talent a priority at all levels of the organization. You must be able to show that you are working in HR to create reasons for top talent to choose your company. A winning employment brand, a clear and efficient recruiting process, and the proper use of technology: these are the things that can help set you on the right path to the right people. Beyond attracting and hiring individuals, you must understand who your ‘A’ level performers are, understand the role they play in your organization, and be prepared to build career paths for them.
2. Effective talent management starts at the top
Attracting, developing, and retaining talented people is the stuff of competitive advantage. HR leaders have a strategic role to play in the years ahead, arguably one equal to that of any other executive leader in an organization. The impact of your decisions and the success of your strategies has as much of an effect on the bottom line as the activities of any other department—because without you, there wouldn’t be any other departments.
Set the course for strategic success by partnering with hiring managers. Seek to understand their needs and offer guidance in strengthening their talent pool. Take an active role in enforcing the quality of their selection decisions. You’re in a unique position, responsible for serving departments across the company, to have a lasting impact on the quality of people you hire.
You should also forge the link between business strategy and talent, serve as a thought leader in understanding what it takes to attract great talent, facilitate the talent review process and help leaders execute action plans, and become an architect of the development strategy for the company's top managers. Finally, take it to the top. Make sure your CEO understands the key points of what it takes to run a cutting-edge recruiting and staffing function. Show that you are capable of setting up the critical channels and pathways—and demand that you be given the authority to do so.
3. Talent management affects shareholder value
Surveys of 13,000 executives at more than 120 companies and case studies of 27 leading companies have revealed the following: those organisations that do a better job of attracting, developing, engaging, and retaining their talent, on average, experience a 22% greater shareholder return. It’ll be hard for any CEO to argue that this statistic doesn’t point to the strategic importance of talent.
The implementation of a talent-focused strategy must start at the top. In the same survey, among the highest-ranked companies, improving the strength of the talent pool was found to be among the top three priorities for senior executives. Just seven percent of the survey's respondents strongly agreed that their companies had enough talented managers to pursue all of their most promising business opportunities.
Talent management isn't the only driver of such performance, but it is clearly a powerful one. Talent management is a broad mandate. What does it mean for you? It means finding the best processes and systems that support the broad corporate objective of hiring and retaining only the best people. It’s a question of selecting and implementing software, identifying the most productive sourcing channels, and creating a feedback loop that links employee performance to the selection process. It’s about formulating a comprehensive hiring forecast and an analysis of how you can keep your workforce fully staffed. And ultimately, it’s about showing your CEO that you can do this with authority and a clear vision—not just for filling a requisition tomorrow, but for developing a lasting answer to a critical challenge.
4. Turnover costs money
Employee turnover has significant costs for every company. On the low end, the departure of someone earning wages equivalent to R30,000 per year costs a company R10,000. On the high end, turnover among white collar employees can cost companies up to 150% of base salary, when you count the costs of lost productivity, training, lost business, and sourcing a replacement.
Organisations can dramatically reduce employee turnover by improving the quality of their selection decisions, developing a strategic retention strategy, and implementing a competitive and creative salary and benefit structure. If you’re able to source, screen, and select better people in the first place, you will see benefits in the form of increased retention rates. As an HR professional, you have the data to show your CEO the linkage between turnover and cost—and make a clear business case for why you need the tools and systems to support your highly strategic efforts at retention.
5. The workforce is diversifying
It is increasingly evident that the appropriate management of a diverse workforce is critical for organisations seeking to improve and maintain competitive advantage. Beyond meeting regulatory requirements, having a diverse employee base means your products, your marketing, and your value will be more informed by diverse perspectives, and better aligned with your target market. Does your CEO recognise the importance of a diverse workplace?
One of the bigger budget items for every organisation is the amount it spends on headcount: salaries, benefits, training, development, and recruitment. It’s your investment in human capital. In order to get a healthy return on this investment you need to understand what it takes to foster a productive work environment. It’s called the "employee value proposition" (the EVP) – those things you offer to employees to make their employment engagement work for them. Beyond simply putting the right
people in place and compensating them, your CEO should be aware of the need to focus on the elements of an attractive EVP: nondiscriminatory, hostile-free workplaces, flexible schedules and benefits, childcare and family-friendly policies, and so on. Failing to do this can result in lost commitment and productivity, time wasted on conflicts and misunderstandings, and in the worst case, money spent on legal settlements. Seek an environment where all employees feel included and valued, where you maximise commitment and motivation, and where you spend fewer resources on training, turnover and grievances.
6. Workforce planning and development are critical
Virtually every business forecasts demand and then adjusts production or service delivery targets accordingly. You can guess with a high degree of certainty that air conditioning manufacturers scale back production when it’s cold out. So why don’t organisations do this with talent?
It may seem to be a perfectly logical step, but HR simply does not tend to create accurate workforce plans. Yet imagine how your job would change if you were able to behave proactively, rather than reactively? With a little bit of effort you can implement a plan that looks at all of the existing factors. Anticipating that a key position will open up between two and four times during the year… shouldn’t you build a pipeline to fill that position? Suspecting that a few of your top employees may receive promotions… wouldn’t it be smart to line up replacements to succeed them?
Employee development, too, is critical. Unfortunately, most companies don't do it well. Companies need to fundamentally change the way they develop people by accelerating development and making it happen every day. It means creating a better, more deliberate match between people and their jobs to optimise both development and performance. It means encouraging frequent and candid feedback and mentoring. Perhaps most importantly, it means conducting manager training. Again, it all comes
down to making the case. Show your CEO a well-reasoned workforce and development plan, and you will be given a "seat at the table".
Organisations that will succeed and move forward through demographic change and ongoing talent shortages will make talent management one of their top three priorities— because they understand the costly effects of failing to do so. You should spend time and energy on achieving your business goals and objectives effectively and efficiently. As this War for Talent becomes even more intense, the gap between those who will win and those who will lose will certainly widen and have a far-reaching impact. By gaining executive level support now and building the talent management strategy that best fits your goals, you can raise your competitive profile and rise to become a leading talent management organisation.
Source: Information compiled from War for Talent by McKinsey & Company
- The development of a talent management framework for the private sector
- Retention of women accountants: The interaction of job demands and job resources
- Facebook’s Amazing Talent Management Practices — and What You Must Learn From Them
- Regina Hartley: Why the best hire might not have the perfect resume
- What is employee engagement and is it the Elephant in the Room?