During times of robust economic growth, suggesting we face a “War for Talent” and arguing for the importance of strong talent management practices and solutions are fairly uncontroversial claims. But doing so during slow-growth, or even recessionary, economic times require a bit more explanation. So with apologies to Charles Dickens, I thought now — as we transition from a volatile 2011 to an uncertain 2012 — would be a good time to dive into this subject.
It seems a day doesn’t go by that we aren’t given new macroeconomic data that gives us pause. One day we see glimmers of hope, such as a solitary unemployment or growth number that exceed forecasts. The next day (or several) we are given negative revisions to previous numbers, are reminded of significant debts held by all levels of government, or are hit with major headlines such as debt rating downgrades or major stock market selloffs. Recent Taleo Research blog posts by David Wilkins, such as “What’s Really Going On With Unemployment” and “Unemployment and Jobs By the Numbers,” have analyzed some of the recent unemployment data and headlines.
Unfortunately, it seems that talk that was common earlier this year – of an improving economy, of recovering from the recession, and so on – was premature in the sense that we in the US seem saddled for the foreseeable future with slow economic growth at best. And that assumes that a possible recession in Europe doesn’t drive our economy back to zero growth or another recession ourselves.
The core of talent management’s value is its power to drive organizational performance. This is a fact that transcends macro-economic business climate, and is important to individual organizations whether they are growing, treading water, or in decline. Taleo Research has made this case in the past, e.g., see the 2008 research papers “Talent Management in a Down Economy” and “Economic Downturn does not equal Talent Management Downturn” from Human Capital Institute and Taleo Research.
In April this year, Dave wrote a blog post titled “The US Economic Recovery and Dysfunctional Turnover,” wherein he asked several key questions that talent leaders need to be asking if/when the economy starts to grow rapidly again. In this post, I’ll re-examine these same questions, and show the flip-side of each – their relevance in a world of slow-at-best growth.
Do you know who your top performers and high potentials are?
Do you know who might already be a “flight risk”?
Not knowing who your top performers, high potentials, and flight risks are is a recipe for losing them no matter what state the economy is in. Even in poor macroeconomic times, jobs are still available. Josh Bersin of Bersin and Associates recently noted that “even in a recession approximately 22% of all workers change jobs every year.” We are even seeing an increasing drumbeat of organizations reporting a hard time filling critical positions.
The major cost cutting measures (i.e., layoffs) from 2008 and 2009 did not primarily affect top-performers and high potentials – so organizations are attempting to attract and recruit such passive candidates by tapping their LinkedIn profiles and so on. Organizations need to identify and then hold onto these key people as if the life of the organization depended on it – because in these rough times, it very well might.
Have you identified the critical roles and skills you need to meet your 2011 and 2012 objectives?
What’s your bench strength as it relates to these roles and these people?
Even in slow economic times, organizations still have short-term and long-term objectives. The most critical objectives are possibly even more important now, because for some companies their very existence could be on the line. Finding, retaining, and developing leaders and top-performers is vital, as is developing bench strength to guarantee continued execution against objectives in the future – both of which are arguably more important now because there is so little room for error.
Do you have a talent mobility strategy so that you can easily reallocate talent rather than lose it?
When economic conditions deteriorate or become volatile, a key requirement of business is to become more flexible, more agile. A strong talent mobility strategy is critical to business agility under such conditions, because you’ll find strategic directions will shift quickly to stave off disasters and seize opportunities arising from ailing competitors. But without the ability to locate and shift talent to support those changes, they will be just empty words in the board room or C-suite. Strong talent management practices and systems provide the talent mobility tools an organization needs to retain and deploy the right people at the right time to the right positions.
An often overlooked yet critical aspect of talent mobility is the fostering of a strong learning culture in the organization, one supported by strong learning tools and a learning and development strategy that blends formal, informal, and social learning approaches. Only with such a development focus can organizations effectively move people from one position to another (vertically, horizontally, or geographically) and then backfill as necessary, thereby achieving the promise of robust talent mobility.
Have you established strategic reward and compensation programs?
Traditionally, many pay-for-performance programs were presented as being about increasing engagement and productivity for particular job roles. While there is some truth to this, in tough and uncertain economic times another – perhaps more fundamental – driver of such programs becomes clearer. Pay-for-performance programs are effectively a risk-hedge mechanism, whereby an organization only pays the top-dollar amount in the event that business objectives are met (and the individual’s objectives are met). If the numbers are missed, then the organization’s cost structure remains lower – but if the organization outperforms relative to the weak overall economy, then everyone shares in that success.
Performance management practices also need to evolve to match economic realities. If an organization has fewer funds available for bonuses or raises, then without effective performance management, organizations will tend to spread those fewer funds across a larger number of people – trying to reward everyone instead of only or disproportionately the top performers. As a result, it is only natural that unsatisfied top performers, whose talent is always in demand, may look elsewhere.
What’s your learning and development strategy for 2011 and 2012?
Have you linked skills, competencies, and training so that you can reduce time-to-competency?
What are you doing to mine the expertise and best practices from the talent you have today?
These are all related questions, and they speak to the need for the traditional Training or L&D department to mature in various ways to become a Performance Improvement department. In order to remain relevant, CLOs and training leaders need to provide strong proof of their value. For example, in addition to traditional quantitative metrics, value can be shown from impactful stories and counterfactual analyses of what will happen if the organization doesn’t have a well-trained workforce, and doesn’t protect institutional knowledge by increasing informal and social learning in a searchable, archived way. Fighting brain-drain is all the more painful when the organization is dealing with the pressures of tough economic times. Similarly, organizations today simply don’t have time to waste with slow onboarding schemes and long time-to-competency periods: to survive, not to mention flourish, in such times the organization must link skills, competencies, and training to keep the organization as productive as possible.
In the event that you face losses, how efficient are your recruiting and onboarding processes?
Do you know the best geographies, profiles, and job histories for ideal candidates in specific job roles?
Are you tapping the social networks to source candidates and new hires?
Even if you focus on keeping your top performers as described above, you will inevitably lose some of them. So efficient recruiting and onboarding processes remain critical, even if you are not in growth mode and significantly increasing the size of your workforce. As we have seen over the past several years, innovation in these areas, e.g., social recruiting, continues even when the pace of business growth is slow – so you need to stay on top of these developments and build out your capabilities to stay relevant. The best new hires will be very discriminating – choosy in who they want to work for – even with unemployment rates high.
Even when the macro-economic conditions average out to “slow growth” or “recession”, the growth rates for any individual organization will vary widely. As you’ve seen, whether your organization is moving forward at the pace of the hare or the tortoise, the same critical talent management questions remain.
