Today virtually every organization faces the same combination of business challenges: competing in a recovering economy, the need for growth amidst multiple pressures and a workforce that is more disengaged than ever before. In terms of the latter, a research study conducted in 2011 and 2012 by Right Management, the talent management arm of ManpowerGroup, finds nearly all employees are burdened with heavier workloads, disengaged from everyday responsibilities, anxious about job security and open to prospective opportunities elsewhere. (Editor’s note: The author works for Right Management). Meanwhile, managers find they must constantly weigh their options and move forward despite uncertainty.
Right Management’s Trends in Talent Management study looks at how employers deal with these concerns during what many regard as the Human Age of business, where organizations’ success depends most on employees’ talent, skills and engagement. The study, completed in December, garnered input from 929 North American senior executives, human resource professionals and talent managers.
The research found employers will cut fewer staff members and may boost hiring during the next year. Further, they worry about losing top performers to competitors, failing to find and keep talented people, and as a consequence, missing their organization’s growth targets.
Alone, managers will not be able to generate the robust recovery needed. The changing world of work is forcing talent managers to rethink work models, people practices and talent sources. The talent management team is now in the driver’s seat. They can enable the organization’s talent to deliver on the needed results.
The research offered solutions that provide insight for those seeking to better understand the trends affecting both quality of and access to talent. The findings provide a barometer to compare recent trends to the dynamics within North American organizations, and to better understand the implications and subsequent actions required to achieve growth in an increasingly pressurized business environment.
Scarcity of Talent and Leader Readiness
A lack of leaders is the most pressing human resource challenge organizations expect to face in the near future. Twenty-nine percent of respondents cited their organization’s lack of high-potential leaders, while 26 percent indicated a shortage of talent at all levels (Figure 1).
After three years of organizational contraction and minimal internal investment, companies are taking a hard look at their talent and aren’t pleased with what they find. Lean times make it hard to recruit, retain or develop future leaders, and a competitive marketplace makes it necessary to hold onto and build leadership.
An accurate and reliable way to identify and then respond to talent who will grow through re-deployment, accelerated development and individual motivation can help. Talent managers, in partnership with the organization’s senior leaders, need to engage high-value talent in career planning discussions, tapping the individual motivators of each employee and aligning them with needs and opportunities in the organization. Use assessments to evaluate talent against the skills needed for success today, and conduct an audit to identify gaps in skills the organization will need in the future.
Defection of top talent is also a ranking concern for many employers. For nearly one in five respondents, losing strong performers to other companies that may be enticing individuals who feel stifled with their present employer is the main worry. This is the kind of concern talent managers lose sleep over. Again, this points to the importance of having meaningful career discussions with valued employees, ensuring that they understand their role and contribution to organizational success and then having management recognize and reward them for those contributions. Rewards and recognition need to reach far beyond pay for performance. Consider recognition incentives such as flexible schedules, bonus vacation days or even a hand-written note of appreciation.
Employers tend to have doubts about their management succession pipeline — only 4 percent said they have an ample leadership pipeline (Figure 2). They know their workforces are lean and internal development resources have been limited for some time. Talent managers need to bring this data to senior leaders’ attention and cite the cost and implications for the organization.
There are direct correlations available to those who collect and analyze engagement information to demonstrate the connections between leader behaviors, development and career opportunities, workforce engagement levels and the corresponding impact on organizational performance metrics. Build a case for development and career management initiatives by demonstrating return on investment and cost savings related to turnover reductions. Include intangible costs such as recruitment and training downtime, loss of team momentum and decreasing quality and customer defection rates.
Organizations with scarce talent management resources need a more comprehensive strategy to address changing workforce and workplace trends more holistically. This type of workforce strategy will be more effective short- and long-term because isolated tactics and initiatives no longer work to secure the right talent for key contributors and pivotal leadership positions. Without a dedicated focus and committed investment to develop, retain and engage key talent, an organization risks losing even more top performers because these positions typically have greater scope and influence over other positions within the firm.
Organizations that can evaluate what drives workforce engagement — or the lack of it — are in a better position to mitigate the risk of top talent flight to competitors. Understanding current workforce engagement levels is no longer a sufficient strategy to stem the tide of potential attrition. Organizations that can identify what drives engagement in actionable terms — so those drivers can be leveraged in an overall retention strategy — will be the winners in emerging talent migrations.
Drivers include how senior management and immediate managers behave and how this impacts employee engagement. This requires a data-driven understanding of how committed employees are to the organization and their roles within it. Engagement surveys are the recommended starting place for talent managers to wrap their heads around hard data and subsequent costs or benefits to the organization.
More Employers Find It Hard to Fill Key Jobs
While defection of key people is a ranking concern for talent managers, so is attracting and recruiting new people. Despite high unemployment rates, nine out of 10 North American employers find it hard to secure key talent. Twenty-nine percent of respondents reported difficulty filling certain jobs, and 60 percent indicated they have such difficulty on occasion (Figure 3).
Talent managers know it is usually a challenge to find and recruit people, whether the job market is weak or strong, and that it varies by level, industry and requisite skills. Further, the findings suggest some shortfall among internal candidates who might be qualified. As the business environment continues to change with ever-accelerating velocity, the skills, experiences and abilities needed for success become an ever-moving target, making it more difficult to find qualified talent amid a large population of available candidates.
The talent pool is flooded with people looking for work, making external hiring a bit like finding a needle in the haystack. Without a clear set of selection criteria and a highly efficient selection process, businesses risk spending too much time and resources to find the wrong person, while competitors who have invested in accurate, high-speed talent identification take the best talent off the market before other firms even see them. Be precise with selection criteria, keywords and requisite experience. Leverage networking to source the best talent available in the market.
Respondents were slightly more optimistic about hiring expectations for the year. One in five employers predict stepped-up hiring to drive strategic growth (Figure 4). The majority, 58 percent, predicts nominal hiring on an as-needed basis, and 21 percent predict more hiring to fill existing gaps.
Overall, organizational staffing trends will mirror U.S. and Canadian economic trends. Employers will continue to push for growth, but with fewer resources, trying to make do with what they have. This will continue to be a pressurized workplace, and management has to take into account the resulting stress. Organizations will need to be effective with their talent strategies to nurture employee engagement, productivity and performance with streamlined workforces. Managers should regularly meet with employees to discuss workloads and clarify priorities and deadlines. And remember, vacation is an earned benefit, not a privilege. Breaks are essential to maintain health and productivity.
Businesses across the board have successfully removed costs from their infrastructure through a variety of methods such as reducing head count, selling off non-core businesses and realigning functions. The challenge is rebuilding and growing the business with the talent left after cost cutting. This requires a committed effort to build a talent strategy that is aligned with the business strategy — one that is focused on employee engagement, productivity and leader development to create greater depth and the focused recruitment process needed to identify and secure top talent.
Michael Haid is senior vice president of talent management at Right Management, the talent and career management arm within ManpowerGroup. He can be reached at email@example.com.