Talent Strategy: The New Must Have!October 8th, 2012
The recession may just have been the best thing that’s happened to talent management. The layoffs and cost-cutting were dramatic, but for many companies that reactive stage has come to an end; their expenses and employee base have been trimmed, and they are now putting in place the fundamentals for recovery. Never wanting to waste a perfectly good crisis, now more than ever is the time for HR to demonstrate their ability to provide strategic value. While tackling a talent strategy is no easy undertaking, if you get it right the results feed straight to the bottom-line.
In a survey by Hay Group only 19% of respondents agreed with the statement, “We treat our talent management processes as seriously as we treat our annual budgeting process.” That is a depressing number considering people can represent up to 80% of an organization’s budget. So getting talent to the top of the agenda requires talking in the language of the business and tying talent strategy directly to organizational strategy.
There is no blueprint for a talent strategy. Each organization must fit its approach to its immediate needs and organizational strategy. Solutions must be fit-for-purpose, rather than simply “best practice”. An effective talent strategy involves directly linking people to business strategy and operations and putting time, money and energies where they will matter most. It requires a clear understanding of talent needs in the context of business goals, and the capacity to design and implement practical, long-term plans to source, develop and retain talent where it’s needed when it’s needed.
The first step in aligning talent with business needs is developing an in-depth understanding of where the organization is currently, where it is going, and how it plans to get there. This entails reviewing the strategic plan with an eye toward what types of skills and abilities will be required; then segmenting current jobs by those that make a strategic contribution and which do not (differentiation). Strategic jobs are typically less than 15% of the organization’s positions, and can appear at any level. Next it is important to identify the specific employee competencies and behaviors needed in these strategic roles. You can then look closely at existing employees to identify how much talent you possess (or lack) to drive strategy and change.
Another key component of an effective talent strategy is utilizing human capital metrics that offer visibility into how talent decisions affect business results. The challenge is to identify those significant few that reflect how your talent strategy is supporting business success. This is substantially different than the metrics HR reports on today — organizational turnover, time to fill, headcount, etc. are transactional measures that do little to inform the business.
With the strategic roles identified and backed by insightful workforce data, HR and line executives can lead the organization in formulating an enterprise-level strategic talent plan that outlines what the organization must do to close any capability or talent gaps. Alignment and a clear line of sight to business objectives ensures that talent decisions in the areas of acquisition, development, compensation and succession planning become strategic and add value. Prioritizing talent actions and investments based on a clear business rationale increases the likelihood that the talent management programs that are critical to achieving the organization’s objectives are appropriately supported, funded and executed.
Looking for more on this topic? Check-out our elearning course “Accelerate Business Performance with a Winning People Strategy” and earn 15 Business HRCI credits.