The challenges of Talent Management in the twenty-first century

Apr 30, 06

This Month

“I am convinced that nothing we do is more important than hiring and developing people. At the end of the day you bet on people, not on strategies.”
– Larry Bossidy, Former CEO, Allied Digital

The above quote is on the home page of Jigyasa and it is something that I fervently believe that all organizations should recognize.

“Talent Management” is again becoming a major focus for organizations. The challenges in recent times have increased. The global opportunities and shifts that are altering the landscape of work are increasing the stakes in this ‘war for talent’.

I do hope practitioners of HR and Leaders in organizations will reflect on how ‘Talent Management’ can have an impact in organizations and how does your organization compare to the leaders, the ‘most admired companies.’

As always I look forward to your views and feedback.

Happy reading and warm wishes,


The challenges of Talent Management in the twenty-first century

The search for talent seems as relentless as ever, continuing to be one of the foremost challenges for senior leadership in all leading organizations even though it has been almost a decade since “War for Talent”, coined by McKinsey figured in the corporate lexicon.

Today the challenges to attract and retain talent seem daunting. In a DDI survey conducted last year, one-third of all employees expected to leave for another job within the next year while 20% estimated their chances of leaving to be greater than 50%. Several studies also indicate that attracting and retaining talented staff is the single biggest challenge for HR and senior managers.

The following are some of the major shifts that are altering the landscape of the workplace.

Demographic shifts: Where are the workers (knowledge or otherwise) of tomorrow going to come from? The developed nations are facing the problem of ageing workforce. Almost 20% of the population in Japan is already over 65, the highest group in the world. About 35% of Deere & Company’s 46,000 employees are over 50 and a number of them are in their 70s. A new word, describing those ‘returning to the work force after an absence’ has already been coined- “boomerangs”. At Ernst & Young, about 25% of its “experienced” new recruits are boomerangs.

What is the age profile of your organization? How much of knowledge is going to walk out of the door due to retirement in the following 3 -5 years? Do you have plans to accommodate an older workforce?

Shortage of skills: The ‘shortage of skills’ debate is not just a concern in developed nations. Countries like India with a relatively young work force too are facing a skills shortage like never before. The skills shortage faced by IT industry in India has spread to services (Airlines, Retail) and even manufacturing (Larsen and Toubro Ltd has started advertising in the Straits Times, Singapore for positions).

What happens if your organization requires people who need to anticipate emerging trends? For example, 90% of the products that Intel delivers on December 31 did not even exist of January 01 of the same year! What kind of people do you need who can deliver such results for you.

The changes in Lifestyle: Today, more and more people are opting out of being ‘corporate warriors’. The quest for leading meaningful lives, importance of work-life balance and opportunities and reduction of barriers in starting one’s own firm has introduced fresh challenges for organizations. Job hopping has become a norm. For example, ‘those who graduated from college in 2001 are projected to hold an average of 11 jobs in their working lifetimes.’
Yet given above challenges, why do some organizations rise better to the occasion than others? What are the things that ‘talent rich’ organizations do right? What makes the likes of P&G, GE, Google, FedEx, Star Bucks feature in the ‘Fortune’s Most admired companies’. Some of them consistently over the years continue to be exceptions of the various surveys results that indicate high employee turnover, low employee engagement and poor morale.

Here are some of the steps that you would need to follow to enable your organization to become ‘talent rich’.

1. Top Management Support: The will and desire to develop and build talent has to start at the top. Is it a top priority in your organization? CEO’s are spending significant time on attracting and managing talent. For example, if a high potential employee in Colgate resigns anywhere in the world, the CEO, the COO and the President are alerted and steps are taken to retain the person. 31% of the organizations surveyed by Deliotte in 2005 said that retirement or impending skills shortage are talked about at Board level.

Some key questions to check if you have top management support:

How often are issues such as Talent management and deployment discussed?
What is the senior management’s response when an identified star performer leaves the organization?
Is Retention a top Business priority?
Has the Board been discussing skill shortages?

2. Development of overall framework, systems and processes: Do you have in place the processes to identify, attract and retain talent? IBM is spending about $750 million a year on employee education and $400 million out of that is for ‘hot; skills. The list of ‘hot’ skills includes expertise in the life sciences, wireless networks, digital media databases and Linux programming.

What are the talent building and nurturing programmes that you have built into place in the following areas?

a. Attracting the right talent
b. Identifying and rewarding talent
c. Developing and providing suitable opportunities
d. Performance management
e. Succession planning

How systemically are you addressing the various issues and how are they linked to each other and the organization’s goals?

3. HR as a strategic driver of Business: HR people have to be talking the language of Business. Talent Management allows HR to drive organization performance, drive change and to align itself to the overall business objectives. There is enough empirical evidence to show a high correlation between good ‘talent management’ practices and high shareholder returns.

What are the measurement systems that you have in place? Do you measure activities such as training hours, costs per hire or do you talk of ROI on high performers, productivity, and organization’s ability to meet with the changes in the market place. How does your organization enable your employees to connect, contribute and grow?

4. Planning for the Future: How is your organization planning to deal with an ageing workforce? Toyota for example, is making changes in the shop floor to accommodate the needs of older employees. Talent rich organizations have policies that allow for alternate work styles such as reduced schedules, flexi-time, work sharing, arrangements that allow for a person to work in multiple locations in various months. Such policies are a result of recognizing the emerging shifts that are taking place and the need to retain people who have priorities and aspirations outside of their work.

‘Talent Management’ is recognized as strategic imperative in large organizations. Yet this is critical; whatever the size of the organization. If HR needs its place in the table, it needs to push this agenda of ‘Talent Management’ to ensure that the organizations sees value.

As Jeff Katz, founding chief executive officer of Orbitz had this advice to give aspiring entrepreneurs in a talk at Kellogg, “Surround yourself with the best and smartest people, even if that means overspending to cover payroll at first. It’s really important to have the right people in the right role. It’s tough to put a price on talent. When I’m on boards now, I’m just terrible about talent, but it’s everything.”

Further Reading

An article from the Economist:
On the ageing workforce, “Turning boomers into boomerangs”
An article from Business Week:
“India: Desperately seeking Talent”
An article from the New York Times:
“A New Game at the Office: Many Young Workers Accept Fewer Guarantees”


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