The GFC has left a lasting impact on talent management programs, says Peter Wood, principal, human capital at Mercer
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 different tune.
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 [email protected] for more information on Mercer's consulting business.
