Workforce Advisory: Superior talent = tomorrow's competitive advantage

It is no surprise that one of the hottest topics in business today is 'talent management', in attraction, retention and sourcing strategies. Our recent research suggests - and is duly supported by a multitude of studies conducted over the last 10 or more years - that it is increasingly common in organisations today to experience a shortage of capability at a range of levels. This is driven by a number of factors including rapid growth and change, a rise in retrenchments due to changing role requirements, key people being 'poached' by the competition and a difficulty in retaining talented people. The rise of the economy out of the global financial crisis (GFC) is a further factor that continues to accelerate these challenges.

With these external realities in the employment market, organisations need to carefully examine its choices on how best to respond. Our experience dictates that the most desirable option is for organisations to tap into the quality people already in the organisation and develop this talent so they can confidently compete in an increasingly difficult business environment. Establishing the right mindset, crafting a powerful employee value proposition (EVP), sourcing, developing and retaining talent all makes for an enormous challenge.

Companies that managed their physical and financial assets with rigor during the GFC have generally not made their people a priority in the same way. Fundamentally, there are three main arguments in support of effective talent management (the better an organisation is at talent management, the better its return for shareholders):

1. Recurring costs are reduced
2. Economic outputs improve
3. Enterprise value is maximised

Acquiring new talent

Instilling a new talent mindset and developing a powerful EVP will operate as a compelling advertisement for your company, but on their own, they are simply not enough of an attraction. A robust sourcing strategy is crucial. Attracting, sourcing and selecting the right talent addresses part of the talent imperative.

Clearly this application has greatest impact where two conditions are met:

1. Talent required does not exist internally; and
2. Talent required could be acquired at a reasonable premium.

The difficulty in finding IT professionals at the peak of the technology boom well illustrates this. Provided these conditions can be met, focusing on talent attraction, sourcing and selection can derive the best outcomes.

Leveraging existing talent

Leveraging talent is a priority throughout the company; developing a sound EVP, and ensuring your sourcing strategy is a powerful one, will do much of what is needed to make your position in the talent market compelling.

There are also a number of specific steps to do with development that companies should implement to complete their talent program. We find when we start working with organisations, there is often little clarity about who should be developed, let alone how; senior people more often than not believe that moving people around is not worth the disruption; divisions hoard their best staff; and HR executives are often preoccupied with training and other auditable initiatives. The reality is that people learn by being put in situations that require skills they don't have - a truth poorly served when 'who can do this job best right now?' often dominates staffing decisions.

Rebuilding talent banks via natural attrition and replacement is not only likely to cost a lot of money, but it is also going to take a long time - between five and 20 years. The reality for most organisations is that they need to leverage the talent they already have.

Retaining talent

We find that companies generally recognise they could improve recruitment and development; few realise, however, that they have a retention problem. Paradoxically, it is the companies that have done the best job of recruitment and development that may be most at risk from poaching. But every company needs to understand why its high performers are leaving before they can engage in retention strategies. Keeping hold of your talent is not always easy where there are many employment opportunities for high performers.

Organisations' efforts to effectively retain talent need to be explored across a number of characteristics.

About the author

Craig McCallum is general manager marketing: specialist recruitment & consulting services at Chandler Macleod Group. For more information phone 02 9269 8879 or e-mail craig.mccallum@chandlermacleodgroup.com

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