Talent acquisition clearly emerged as an artful skill of mapping available talent, communicating compelling employer value propositions and building an employer brand that was differentiated
What McKinsey described as the “War for Talent” in 1997 was experienced most severely about a decade ago when the power in the equation clearly favoured employees as organizations sought to attract the best talent considering there were more jobs and not enough qualified, suitable candidates in the market.
The Human Resources function swiftly shifted the reference point from ‘employee’, ‘workforce’ or ‘candidates’ to ‘talent’ because it was scarce and not easy to find. The right mix of skills, behaviors and exposures were rare and difficult to get on-board ‘talent’ that could hit the ground running.
As the complexities increased, the markets became global and customer expectations increased in a knowledge economy. What had become more and more apparent was that talent was indeed the only real differentiator. New models to attract/ retain talent were developed and consulting practices emerged to advise corporates on talent management, retention and engagement. New verticals within HR functions were setup to attract talent, deliver on the talent development proposition and manage workforce performance effectively.
Talent acquisition clearly emerged as an artful skill of mapping available talent, communicating compelling employer value propositions and building an employer brand that was differentiated. It was obviously presumed there was a science to the process of acquiring the most suitable talent, the “right fit” that most importantly minimized the development gap.
However, the research to validate the impact of talent management practices draws a gloomy picture. Leading recruitment consultants claim that more than 70 per cent of global companies use assessments for recruiting their talent1 and more than 90 per cent of these companies focus on measuring the potential employee’s skills and knowledge1. Yet two-thirds of hiring managers came to regret their hiring decisions2. About 70 per cent applicants and 28 per cent hiring managers indicate that they are dissatisfied with the hiring process3, and 46 per cent of new employees leave their jobs within the first year4.
In a separate survey, 50 per cent of employees mentioned they were actively seeking a new job5 and nearly 50 per cent of new executive hires quit or were fired within the first 18 months at a new employer6. Besides, 40 per cent of newly-promoted managers failed within the first 18 months of starting a new job7 and as if this wasn’t disheartening enough, another research confirms that 65 per cent candidates lie on their resumes8.
These startling facts beg the obvious questions on the rigour of talent acquisition practices and perhaps the lack of application of processes that are conceptually understood but not practiced leading to hiring that does not convert into retention of talent. Several organizations have adopted contemporary practices for goal setting, performance scorecards, performance coaching and other initiatives to bring more robustness and objectivity to the process of managing and assessing performances. Having said that, PMS processes have been the most difficult to get right given linkages to rewards, ever-changing roles in a complex business-environment and the growing aspirations of employees which it has failed to keep pace with.
A whopping 98 per cent employees finds performance reviews unnecessary9, 45 per cent of HR leaders themselves believe that annual performance reviews are not an accurate appraisal of the employee’s work or contributions10. About 42 per cent believe that employees are not rewarded fairly for their performance10.
In a separate survey, only 41 per cent of participating organizations actually looked at performance data to review performance11 and only 29 per cent used metrics or measures to assess performances11. To compound the problem, 84 per cent employers in Best-in-class organizations were rated “Meets” or “Exceeds Performance Expectations”12 begging the question of why the organization invested executive time, energy, money, resources in a process that did not differentiate performances.
Besides, given that over 55 per cent of most organizations employ GenY, an obvious theme that dominates discussions on employee engagement and retention is that of career planning and development. Identified across the globe as the No. 1 engagement driver13 – career planning and development appears to be one more area where companies offer only lip-service.
With careers being viewed more as a series of exposures - rather than extended assignments with a single organization, employers appear to have returned the favour by reducing or discontinuing their investment in key talent management and career planning and development programs. About 57 per cent of the employees believe their companies do a poor job of creating career paths and offering challenging job opportunities5.
Half the employees who depart a company believe that their organization is doing a poor job of retaining top performers5. 48 per cent of employees in a different survey believed their companies were doing a very poor job of training and development5. Only 21 per cent believed that their organization was developing leaders well through internal and external programs.
On Hi-Per/Hi-Po programs, a staggering 82 per cent of employers do not let employees know of their Hi-Per/Hi-Po status, thereby easily losing them to new challenges with a new employer5.
While succession planning efforts are still nascent across Indian organizations, 92 per cent respondents in a survey recognized the importance of investing in a succession planning and development program to ensure business continuity through grooming internal talent14.
In a separate survey, 83 per cent respondents identified succession planning as of utmost importance for their organization6. Companies with a succession plan that results in an internal hire are obviously less likely to experience the negative effects on employee morale. Yet only 23 per cent of organizations have a formal succession plan in place and the ones without a succession plan claim that more pressing issues have taken priority within their organizations15.
Only 40 per cent of privately held businesses have a succession plan16, 45 per cent of the world’s largest corporations have no meaningful approach in place for developing CEOs17 and only 24 per cent are confident of being able to staff Leadership positions internally over the next five years18. Hiring external Leadership talent also comes at its own peril as 66 per cent of senior hires from outside usually fail in the first 18 months19.
The purpose of this piece is not to cast a spell of doom but enable talent managers to reflect and go back to the drawing board. Buried under the jargons and titles are opportunities to bring in contemporary practices and models to life through greater rigor, opportunities to influence key stakeholders by making them the custodians of our talent processes and most importantly, bringing the concept to practice through greater commitment and perseverance.
While the intention of leaders to place talent centre stage and investing in talent management programs is a great starting point, these must now move beyond programs to actual value-adding practices that deliver on attraction, development, engagement and retention of talent in unison.
1 . Saville & Holdsworth Research, 2 . DDI Research, 3. Staffing.org Research, 4. eBullpen, LLC Rsearch, 5. Deloitte Research, 6. Corporate Leadership Council Research, 7. Manchester, Inc Research, 8. The Risk Advisory Group Research, 9. Achievers Revealed (USA), 10. SHRM/Globoforce Employee Recognition Survey 2013, 11. Ventana Research 2010, 12. Aberdeen Group Research, 2009, 13. AON Hewitt (2011-12), 14. 2012 In Advisor Succession Planning Study, 15. SHRM Research 2011, 16. Trip Bradden Research, 17. Cutting Edge Information Research, 18. Watson Wyatt Research, 19. Centre for Creative Leadership Research