The state of talent management |
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Companies today face formidable talent
challenges. The ability to sustain a steady
supply of critical talent is a challenge
facing all organizations - worldwide.
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Research highlights
Among the issues impacting the "next generation" workforce are
impending skill shortages, an increasingly cross-generational and
diverse workforce, the need for knowledge transfer from retiring baby
boomers, and significant leadership gaps.
Intense cost pressure from both traditional and emerging
competitors, new markets, and more demanding customers are
additional elements that give a new sense of urgency to the concept of
talent management.
At a time when organizations need to optimize their workforces,
most agree that talent management is of strategic importance.
To evaluate the extent to which companies act on that belief, Hewitt
Associates and the Human Capital Institute undertook a comprehensive
study seeking to assess the state of talent management practices in
companies today.
About the study
The research provides results from both a quantitative survey and
qualitative interviews.
The survey was designed to gauge the maturity level of a
comprehensive set of talent practices; that is, the extent to which an
organization's practices are sophisticated, progressive, practical, and
well executed.
This enabled us to identify strengths and challenges in talent
management and key areas of focus for the future.
Nearly 700 senior-level talent leaders (both HR and non-HR)
participated in the study.
Through supplemental in-depth interviews, we captured innovative
practices at select companies with more developed talent management
practices.
This combination of quantitative survey data and qualitative
interview results helped shape a better understanding of the complex
issues surrounding talent management today.
The growing recognition that quality talent is a sustainable
competitive advantage, coupled with a realistic view of the complexity
and scope of changes in the global workforce, has led to a renewed focus
and urgency around talent management.
Based on nearly 700 responses, human resources (HR) and business
leaders overwhelmingly identified "attracting and retaining skilled and
professional workers" as the workforce challenge most impacting their
organizational strategy. "Developing manager capability," "retaining
high performers," "developing succession pool depth," and "addressing
shortages of management or leadership talent" closely followed.
In today's uncertain economic environment, it's important that
organizations address talent issues promptly, and it's equally important
that they get them right - the first time.
There's little room for trial and error, as all initiatives are expected to
produce solid financial results.
Unfortunately, most companies are still struggling to institutionalize
effective talent management practices and programs.
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"The increased adoption of these
approaches to talent management
point to an evolutionary trend
toward better practices overall"
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Positive results
Based on the results of this research,
our collective experience, and prior
research findings, we believe that
organizations are indeed improving
their talent management capabilities.
The skills, performance,
engagement, adaptability, and
continuity of an organization's
workforce are indisputably a core
competitive advantage and prerequisite
for sustained financial success.
Increasingly, organization leaders,
starting with top officers, understand
the business payback of focusing on
getting these things right.
As a result, the advances being
made in talent management can be
attributed to the following:
• Senior leaders recognize superior
talent as a business advantage:
Senior leaders do "get it." In
nine out of 10 organizations, they
believe superior talent provides a
vital competitive advantage. They
increasingly recognize the critical
linkage between effective talent
management and business success.
• Focus on talent management:
The pressure to attract and retain
key talent has led organizations
to expend increased energy
and resources on talent-related
initiatives over the past half-decade.
Significant progress has been made
on a variety of talent management
fronts - from getting foundational
programs in place to creating and
deploying new programs, such
as high potential development,
leadership development, and
succession planning. However, most
of the progress has been made in
the executive ranks, with less focus
below the senior management levels.
Top Five Workforce Challenges
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Attracting and retaining skilled professional workers |
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Developing manager capability |
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Retaining high performers |
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Developing succession pool depth |
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| 5. |
Addressing shortages of management or leadership talent |
• Leadership involvement:
The need
for more leadership involvement
in talent management is driven
by the criticality of talent strategy
development, articulation, and
execution. Some business leaders
are starting to play an increasingly
visible and active role in talent
management, understanding that
their practices must be aligned with
these talent strategies in order to
have a direct impact on workforce
engagement and performance. |
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Opportunities for improvement
Although organizations have made
significant progress raising awareness
and attention to talent management
and implementing foundational
programs, these efforts generally
have not led to well-executed talent
management programs that are
aligned with business priorities.
Most organizations still lag in their
ability to integrate talent management
programs and evaluate the return on
their talent investments.
The reasons are many, including:
• Human capital is not sufficiently
aligned with business strategy:
While senior leaders clearly
recognize the importance of human
capital, a number of companies
struggle to connect their people
practices with their business
imperatives. Only 17 percent of
respondents say their workforce
strategy is consistently aligned
with their business strategy across
the organization, while even fewer
(seven percent) report consistently
utilizing a specific quantitative
framework in which investments in
talent management are aligned with
business results.
• Lack of accountability and
capability for talent development:
While most organizations hold
their executives and managers
accountable for achieving business
results, they are not being held
accountable for talent development.
Few organizations consistently hold
managers (seven percent) or senior
executives (10 percent) accountable
for developing their direct reports.
Furthermore, most managers lack
the basic capability to develop
talent effectively. Just five percent
of organizations say their managers
have the skills to grow people in their
jobs or to provide the constructive
feedback that supports and
encourages employee development
consistently across the organization.
• Inconsistent execution and
integration of talent programs:
The majority of companies report having
fundamental processes for talent
management in place, such as basic
workforce planning, development
programs for high potential
employees, and succession planning.
However, few consistently execute
these programs across the entire
organization.
While slightly more than two-thirds
(69 percent) of companies say they
conduct workforce planning across
all divisions and business units, less
than one-fifth (15 percent) do so
consistently.
Furthermore, only 21 percent of
companies consistently integrate
talent practices across the
organization (e.g., rewards are tied
to performance; performance is tied
to development). |
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• Limited Use of Meaningful Talent
Analytics:
Data and analysis have
long played a role in driving business
decisions; yet when it comes to
talent analytics, most organizations
have a long way to go. Mired in
tracking traditional workforce
measures, such as headcount,
turnover, and cost-based metrics,
few have graduated to tracking the
metrics that matter.
Fewer than 10 percent of
responding companies measure the
effectiveness of talent management
programs, track the quality of
talent, or use specific quantitative
frameworks to align human capital
investments with their business
strategy.
Select companies are leading
the way
There are exceptions, of course.
Despite the monumental challenges
facing organizations, a few select
companies have made significant
strides in managing talent.
What sets them apart is their
dedication and commitment to
talent management and the creative,
comprehensive approach they take
to developing their people in the
following ways:
• Depth and consistency of practices:
Talent management is given top
priority at these companies - and
it shows. Specific programs, such
as talent reviews and succession
planning, are institutionalized
throughout the organization,
ensuring they are implemented and integrated consistently across
businesses, geographies, and
employee segments.
Managers are taught how to develop
employees, and talent programs are
pushed deeper into the organization
to reach a broader group of
employees.
• Higher commitment and
accountability for talent
development:
Abandoning the belief that talent management is
solely HR's domain, these leading
organizations consider it a shared
business and HR responsibility
requiring active engagement,
commitment, and accountability
from leaders and managers.
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From the CEO down, these business
leaders not only emphasize the
importance of talent management,
but are engaged in the processes.
Additionally, they hold themselves
responsible and accountable in
tangible ways for developing the
next generation of talent across the
entire organization - not just at the
leadership level.
• Progressive and innovative
practices:
Never satisfied with the
status quo, these organizations are
consistently investing in new ways to
manage talent.
Approaches vary widely, but
examples include progressive
approaches to workforce planning,
innovative employer branding
strategies, and more comprehensive
efforts related to on-boarding and
development of high potential
employees.
Some leading organizations are
using sophisticated predictive
analytics to help drive strategic
human capital decisions and ensure
that those decisions are aligned with
the business strategy.
While most organizations still struggle
to manage their talent effectively, select
employers are leading the way.
They serve as role models to those
who are struggling to build core talent
management capability by holding
leaders and managers accountable
for talent initiatives, driving greater
consistency in talent programs globally,
and continually seeking new and
progressive ways to manage talent.
The increased adoption of these
approaches to talent management point
to an evolutionary trend toward better
practices overall.
Understanding where the leading
edge of best practices lies is crucial
for organizations today. It provides
organizations with a critical reference
point as they navigate their way through
today's challenging economic and talent
management environment. |
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Hewitt's recent report identifies the talent
challenges that exist today, summarizes key
findings from the research, and draws examples of
innovative talent practices from select companies.
Recommendations based on the research provide a foundation upon which
companies can build and strengthen their talent management capability to
meet the business challenges of the future.
To receive a fully copy of this report, please send an email
request to: humancapitalconsulting@hewitt.com |
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Hewitt Quarterly Asia Pacific
is made possible through the combined skills and experience of Hewitt consultants from across the Asia-Pacific region.
For further information please contact:
Hewitt Associates
2601-05 Shell Tower
Times Square
Causeway Bay
Hong Kong
Tel: (852) 2877-8600
Fax: (852) 2877-2701
editor-hqap@hewitt.com |
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