According to our research, a majority of UK employees have more respect for leaders who have worked their way up through an organization, and two-thirds consider them good or very good leaders. Despite this, the majority of UK companies hire externally for leadership positions. Only 38% have leaders in their companies who are promoted internally, with just 35% of future leaders identified and nurtured through leadership programs.

The new Taleo Research study Grow Your Own CEO examines the attitudes and preferences of UK workers in regard to internally developed and externally recruited leaders, their expectations about leadership and career development programs, and experience in their own organizations. Key findings include:

• Internal promotion is the most effective leadership development strategy. 66% of companies who recruit from inside have leaders regarded as good or very good compared with 51% who generally recruit from outside.

• Mobility and feedback drive engagement. 76% of employees say they will be more committed to their company if they have a clear view of promotion and job opportunities, while 74% say regular appraisals will drive up their level of commitment.

The study uncovers large gaps between leadership development best practices and organizational behavior. The findings show that companies investing in internal talent, mobility, and development programs can maximize their talent assets, improve retention, increase productivity and engagement, and put leadership succession plans in place. A robust talent and performance management strategy enables leaders to be identified, developed, and retained.

The US Federal Reserve announcement and many leading economists recently have provided hints of consensus that the worldwide recession is over. However, there are disturbing talent trends emerging that deserve detailed observation and action.

Two admonitions that fall squarely within the realm of talent management strategy and practices are included in The Corporate Executive Board’s Executive Guidance for 2010 “Confronting Six Enemies of Post-Recession Performance”:

• Productivity Losses Due to Top Talent Disengagement and Flight

• Productivity Losses Due to Misplaced Leaders

In an outstanding teleconference—available in replay—these and four other perils for future organizational performance are described. Among the research findings:

The average organization faces an imminent 7% productivity loss from the combination of departing top talent and undermanaged recruiting pipelines.

Surprisingly, 25% of high-potential employees are looking for a new employer, up dramatically over pre-recession levels.

• Only 21% of employees are fully productive; the rest are not fully mobilized against the right goals.

The analysis supports the caveat: Recoveries are not restorations. Pre-recession plans and assumptions may no longer be relevant in the “new normal”; failure to distinguish between cyclical and structural shifts may permanently derail growth.

At Taleo we concur and explain further in New Solutions for a New Economy.

Talent management in a volatile world economy requires immediate organizational visibility into talent information beyond name, address, and benefits. Without visible promotional slots, who might leave? And who is skilled and interested to fill that role? Which of your employees are looking for new opportunities? How many top performers were lost during kneejerk reductions in force and could be rehired? These are all questions you need to answer.

In A Reluctance to Retire Means Fewer Openings, The New York Times reports that lacking a safety net, many US workers are delaying retirement plans. That means there are fewer openings to fill from Baby Boomer attrition. But in Europe, more comprehensive retirement plans are not affecting the retirement rate in the same way.

An Association of Graduate Recruiters (AGR) study in the UK says that almost 70% of recently hired graduates will consider new opportunities when the economy rebounds. That bodes poorly for return on investment and shows a lack of engagement.

And a survey of North American employers says that 40% plan to rehire laid off former workers to boost their skill and talent pool.

To know about and impact the actions of your talent, you need a unified view of talent information. Talent analytics around career aspirations and mobility, performance and succession provides a view into which employees you want to stay, go, or return.

Booz & Company’s Autumn 2009 strategy+business issue featured a compelling article on business innovation titled The Talent Innovation Imperative. The ideas stress engagement and employment brand as dynamics that can create momentum in building an organic talent culture.

What’s the business benefit? The future of talent management offers competitive advantage through unified talent management with a holistic approach to recruiting, performance management, development, and compensation.

Companies are now valued by the talent that operates the business, drives innovation, and meets customer needs. But most companies know more about the physical assets they own than the people they manage. Our new economy requires outstanding talent management solutions to drive business performance.

“It doesn’t make any difference if you’re operating a business in Mumbai, Beijing or New York — the No. 1 challenge facing every organization is finding and growing skilled talent.”
- SHRM CEO and President Laurence O’Neil

New Solutions for a New Economy published by Taleo Research outlines the shift from the industrial age to the talent age. Companies must balance IT spend and resources to align with talent initiatives or risk losing ground in the new economy.

Topics covered include:
• People-centric Approach to Managing Talent
• Flexibility to Keep Pace with Change
• Ability to Influence Talent Across Complex Work Environments
• Talent Management and the Future of Work

After a stimulating week at Taleo World in Las Vegas with record attendance in the face of a tough economy, we were struck by just how much innovation and value our customers are generating for their business.

Hundreds of HR leaders representing nearly all industries, geographies, and philosophies met to network and discuss talent management. Dozens of companies presented real-world talent strategies that produced significant results. Our 2009 Customer Innovation Award winner North Shore – Long Island Jewish Health System drove $25 million in operating margin improvement!

These are the kinds of success stories that happen when HR sets the table by showing the money and quantifying the financial impact of talent management.

BusinessWeek’s Gap To Employees: Work Wherever, Whenever You Want describes how companies have increased engagement and performance by placing workplace before marketplace. And it’s especially interesting to read that these cutting edge people programs are not lumped under HR and human capital. People are called talent and the programs are called talent management:

“In our business, merchandisers spend years developing expertise and the gut instinct to predict fashion trends,” added Severson. “To see that knowledge and talent walk out the door is devastating.”

“There are very few talent management programs that don’t create a sense of entitlement,” he said. “This is an agreement between the employees and the company that in exchange for the most incredible freedom to do your job in a way that makes sense for you, you will perform highly.”

So now if it's administrative, it's called HR like HRMS. And if it's performance enhancing or business effective, it's talent management. This is a subtle but very powerful distinction. Advantage: talent management.