In a tight job market, it's crucial that employers know as much as possible about their workers' strengths, competencies, and weaknesses
If you're seeing enough bright, talented, motivated workers—the future leaders of tomorrow's businesses—kicking down the doors to fill the most important jobs at your company, then you're extremely lucky. It has never been more difficult for employers to find good people to fill critical positions. The baby-boomer generation is now just beginning to retire and leave the workplace, and corporations are feeling the loss. They're not ready for the transition. There have never been more organizations looking to hire good people, and they're willing to pay more, give out more perks, and accommodate workers like never before. Combine that with all-time lows in loyalty to companies and relocation costs, and you've got a quadruple whammy.
In a survey SuccessFactors conducted with the Business Performance Management Forum and the Human Capital Institute, 98% of executives and human-resources professionals polled said that competition for talent was increasing in their industry. And nearly all stated it has become more expensive to lure quality talent in the past year. In fact, the study showed that the fight to hire and retain top talent is among the chief concerns of businesses today. (Click here to read a full report on the study.)
Talent management was rated as a high or very high strategic priority by 85% of poll respondents, with more than 60% identifying talent development, turnover, and retention as the top talent challenges for their organization in the coming year.
Neglect Talent at Your Risk
Clearly, surviving in today's talent war is getting tougher, but getting serious about talent management—leveraging technology, being willing to take risks, and most important, knowing exactly who you want as well as who you already have—is the key to getting the people you need to compete, flourish, and succeed, while still taking care of the bottom line.
Though more companies are beginning to realize the importance of talent management, many still see it as a hassle or don't put proper energy into developing a real plan. But this often neglected piece of the human-resources puzzle—which holds the key to a veritable treasure trove of information, insight, and ammunition—can be used to make your company the object of a future star's desire, or even help make one from scratch. It's a strategic gold mine that's simply ignored.
But what does managing talent take? What distinguishes a real plan for organizational change from lip service? First, a company has to know its workforce, and that doesn't mean just names, positions, salary history, and Social Security numbers. Employers have to know as much about their workers as possible and that means asking questions. What are they good at? Where can they improve? Are they in the right job? What are their goals? How does their performance affect the overall performance of the company?
In the study, nearly 90% of respondents said that the core competencies needed by their companies are changing, with half of those saying it was changing by a "high degree." This is clearly the beginning of a new era in human capital management, one where not knowing your workforce, and what skills and strengths it has or should develop, is simply unacceptable. And as the old saying goes, with knowledge comes power.
Once employers knows exactly who's working for them, they can start to put other pieces into place, including a proper succession plan that gauges worker talent against the company's needs. Once companies feel comfortable hiring from within, they can start to step back from the out-and-out war for talent, or at least only go to battle when it's absolutely necessary.
Technology is often the best place to start, and choosing a performance and talent management software system makes sense. It will slash the time HR managers spend administering and collecting performance reviews. But the right program will also track each employee's competencies, goals, and performance, giving managers a clear picture of what their workforce looks like and help them get to know their employees.
New Ideas and Approaches
Amazing as it seems, a lot of companies don't take the steps to put a solution in place. In SuccessFactors' survey, 75% of respondents wanted their company to concentrate on developing a real, useful talent management program, but only 57% said their companies had a real plan to identify, groom, and retain talent. This is a huge gap. Keeping positions filled with homegrown talent whenever possible is the single easiest way to avoid hemorrhaging money, and more than 40% of companies are barely giving it a nod.
At SuccessFactors, we've been in the performance and talent management software business for more than five years, and we've worked with and within some of the largest companies in the world. We're constantly amazed at how underdeveloped and insufficient the talent acquisition and development policies are at many companies. It goes far beyond hiring the top-tier graduates and hoping they do well for you. It's about being open to new ideas and approaches, and embracing technology to help you do it.
Forward-looking companies must start thinking outside of tradition and the accepted norm. For example, big businesses tend to value management capabilities rather than creativity, people skills, and intelligence. While management leadership is good for process and structure within a large company, overemphasizing its importance devalues the work everyday employees do and also stifles growth, happiness, and productivity. And those are precisely the factors that foster homegrown talent.
By reshaping a company's culture to revolve around getting the most from its people, using technology to add intelligence to the process, and throwing out any preconceived notions about talent management, companies can gain so much—keep turnover down, create better employees from within, and have a better picture of what exactly they need if they do have to go outside. These are all things that keep them out of the crossfire in the talent war.
Companies always like to say they know their enemy—but shouldn't they know themselves first? Self-knowledge should be part of a company's natural evolution, a byproduct a larger talent plan that lets management, workers, and the bottom line reap the benefits.