The GFC has left a lasting impact on talent management programs, says Peter Wood, principal, human capital at Mercer
Now that the dust has settled
following the global financial crisis,
talent management is back on the
business agenda. As the economic
recovery takes shape, growth is
again on the horizon and with that comes the
renewed challenge of attracting and retaining the
right people to support that growth.
Contrary to what some might have expected,
talent management hasn’t become easier since the
GFC. The downturn provided only temporary and
limited relief to the ongoing skills shortage and also
stopped many talent management programs in their
tracks. The quandary now is that simply picking up
where the music stopped isn’t enough, the talent
management song is now being sung to a very
While talent management has never been straightforward, the effect of the
global financial crisis has added a new dynamic. In contrast to previous
economic downturns, in the recent financial crisis many companies were able to
minimise the severity of work force cuts by using other methods to manage their
spend on human resources such as reducing hours and putting a freeze on new
hires and pay increases.
While these measures might have saved jobs, or even ensured company
survival, organisations shouldn’t underestimate the impact that they have had on
employee engagement and expectations. Employees, who’ve remained loyal
and endured the downturn, now have heightened expectations around pay
increases and promotions. However, these expectations are likely to run ahead
of HR budgets which are yet to recover to pre-crisis rates of growth as
companies seek to carefully manage their bottom line while the full extent of the
economic recovery plays out.
In the post-GFC environment organisations need to recalibrate their
approach to talent management to ensure that it is driven by business strategy
rather than just ‘investing in people’ across the board. As businesses seek to
change direction and reconfigure, there will be demands for changed roles and
different skill sets to support different customer value propositions. By focusing
on the implications of the business’s strategic plan, the people demands for
successfully implementing that strategy become apparent.
The business and HR will need to ask questions such as:
• What workforce do we need to support our strategy?
• Do we have the people and skills within the organisation or the talent
pipeline to meet these needs – now and in the future?
• What kind of talent pool will we have if we continue with current practices?
• How do we want to reshape the talent landscape in our organisation?
The next generation of talent management will support the development of the
specific organisational capabilities required to implement a particular business
strategy, rather than taking a blanket approach. Increasingly the effectiveness of a
talent management program will be measured by its ability to source and develop
talent that is required to deliver a business strategy, in other words ensuring the
business has the skills it needs on hand, rather than having to gap fill. Recruitment
and learning and development efforts will be much more targeted, and focused on
closing talent gaps and creating points of competitive advantage.
To achieve this, organisations will need to become more adept at integrating all
of the processes that make up a talent management strategy such as performance
management, compensation and mobilising employees across the organisation.
From the employee viewpoint, talent management will also begin to fulfil the
promise of many employee value propositions by making accessible the full
range of personal development options. On-line employee portals can be used
to illustrate career path options, and to help empower employees to take
ownership of their own development.
Organisations have a window of opportunity in which to critically analyse
their talent needs. Those who do so will avoid the risk of returning to the status
quo pre-GFC by simply replacing people who were cut or lost in the downturn.
These organisations will be able to realise the significant gains that can be
achieved with a new approach to talent management. They will be able to
achieve more with less and continue to attract the very best talent to their
organisations – and keep it.
To read The Great Debate on Talent Management see the next issue of HR Leader magazine – hitting desks 14 September.
Please contact Peter Wood on (02) 8864 6286 or firstname.lastname@example.org for more information on Mercer's consulting business.