In the face of the economic downturn, talent is emerging as a priority on companies' agendas. Business leaders are worried about the scarce supply of critical employees, how to develop and retain the people they have, and the quality of their leadership bench strength.
Despite this, employer organisations are not doing enough to address the talent-related challenges confronting them.
It's tempting right now for companies to jump in and start interventions focused on head-count reduction and cost control, cutting discretionary expenditure for the sake of short-term earnings. Since investments in talent intangibles are expensed rather than capitalised, this transactional thinking may have self-fulfilling consequences.
A lack of key talent detracts from the growth of an organisation, creating additional pressure on business performance, which further diverts the attention and mind-set needed to build capability over the long term. Unless business leaders begin to recognise talent management as an integral component of a long-term business strategy, affording it the appropriate executive level support and investment, the crisis is likely to grow.
A key element of any effective talent strategy is to identify critical workforce segments - those high-value employees who can be especially difficult to replace and who drive a disproportionate share of business value relative to other workforce segments.
It may seem counter intuitive to argue that organisations should be more concerned with critical talent during a downturn but talent-savvy leaders realise that the best and brightest talent can give the organisation a competitive advantage no matter what the context. Critical talent always have options and continually assess the attractiveness of their employer relative to others.
For companies, complacency regarding their level of engagement and connectedness during an economic downturn is not wise. They must upgrade their workforce analytics and business intelligence capabilities. They need to excel at data mining, statistical analysis and predictive modelling to thoroughly understand current and future recruitment, retention and deployment challenges.
Economic and demographic data can be used to enhance existing knowledge of external talent markets - not just in the local market or industry context, but also on a regional, national and even global basis.
Furthermore, a rigorous business case should be built for any investment in talent, and the return on investment tracked continually. Business leaders should not settle for anecdotal evidence or rely on wishful thinking.
For all the hype today about the importance of listening as part of the employee engagement process, few companies are doing it well, especially when it comes to talent management. It's not just about asking questions, it's also about listening for opportunities.
Well-managed dialogue with critical talent and business leaders is the only way to get the insights needed to build a sustainable talent strategy, particularly in a market characterised by economic uncertainty and fears of job and career security. Talent dialogue should become integral to how companies do business.
A growing number of organisations have successfully differentiated themselves from their competitors by developing strong employer brand eminence - just as they have used the power of their product and service brands to communicate their value to customers. Claiming to be an employer of choice is one thing, but being recognised as one is entirely dependent upon the extent to which the overall employment experience of employees supports this. Companies therefore need to focus on delivering consistently against their employee value propositions, actively soliciting employee feedback on how they are doing in this regard and introducing changes where necessary.
The actions they take in economically challenging times must align with the commitments made in times of growth.
Any business strategy will be shaped by workforce challenges, particularly in an economic downturn. Unless companies understand exactly how things are evolving they will struggle to attract and retain the talent they need.
The need for innovative approaches that link talent strategies to the business has never been greater. Those companies that find the right formula will be well positioned to drive sustainable competitive differentiation.
- Conradie is a director with Deloitte Consulting
