Peter Wilson shares with People Matters his take on the need to redefine talent management for greater value to business

What are the key people strategies for companies, given the increasing talent challenges and complex business scenarios?

Firstly, companies need to start by looking at their leadership styles and corporate culture. Today’s top talent is very choosy, and they would not work for the old command and control style leadership, nor for an organization, which puts low value on people through its practices. So, the first strategy is to ensure you know what these two are like, and then have plans to improve them to the ‘employer of choice’ levels. If an employer is unsure – they should look on Twitter and Facebook and see what the younger generation is saying about them. That is the best place to find a wake up call.

The second strategy is to have a clear set of plans to develop your top talent, and ensure that the customers of these plans understand, accept, and are committed to. Otherwise, they will not be staying for very long with you. Implied in this answer, is that you need to have talent buy-in to their development plans. They will not be committed to unknown surprises. They are only fun on your birthday.

What should companies define as their talent priorities?

The key issue now is known as talent segmentation. Companies need to know the major drivers of business value and success. Talent then gets segmented against each of these drivers and the ‘highest value talent members’ are those people who can contribute the best to the most significant business drivers and outcomes. In short, today, talent means a capability to produce on the things that matter. A few years ago, long term potential was seen as important. These days the competition does not allow you that luxury. Top talent means today, not tomorrow.

How will HR’s role evolve in the backdrop of the changes happening in how the function contributes to business and the bottom-line?

HR is no longer a back room function. If HR hides in the back room, they will soon find themselves holding a cardboard box and standing next to the trash. HR is a business function and it needs to talk the language of business, and in order to produce business value in the plans and strategies, HR must prepare the organization’s people.

Best practices research shows that a firm’s intangible value comes from its people. Having well-selected, trained, and developed people to perform at their best is the job of HR. HR is about preparing capability to enable operational management that drives performance.

A recent People Matters-Monster.com study showed that CEOs spend up to 40 percent of their time on talent concerns. What are your comments on talent management increasingly finding its place in the CEO’s agenda?

Jack Welch of GE was the first global CEO to define this in the early 1990s, as about the time necessary for the top executive to be spending on his people. That was over 20 years ago and, if anything it has become more important.

Most CEOs understand, after a few days in the job, that they cannot do things directly. They must work through their people. If they are not happy with what they have got relative to what they need, they have to rework the organization’s human capital model and practices. Smart HR is always at the table to drive this. If not, the CEO will find an HR Director , and hand the incumbent a cardboard box to pack up and leave.

In your report, people@work/2020, you have correlated globalization and next-generation attitudes. How will this impact talent management and therefore business?

It is critical. Baby boomers are now at an average age of 60. Gen X will soon hit their 50s. Gen Y is in the engine room already, and they are becoming the dominant labor cohort. So, talent management without them is an oxymoron. My research on people@work/2020 showed that the psychological wiring of Gen Y as humans is the same as it has always been. But there are some subtle differences – they like their tech devices and want to manage their work and life through them; they want to work with socially responsible companies, and will give up salary to move to one that is, from one that is not; they are looking for strong observable styles of servant leadership, that is both ethical and inspiring; they want to improve themselves, and talk about it with their friends.

All these features change the direction finders in the talent management process. HR must adjust to these expectations and needs, or it will be working on the wrong things and handing top management data on talent abilities and needs, which is misleading.

Having held non-directorial roles on the Boards of many companies, what are the talent challenge facing companies across industries?

All of the above and also, as Chairman of two companies, I know that there are very powerful IT systems to measure business potential and growth, organizational and leadership culture, and also how to assess talent potential. So, I ask my top management, questions to find out what they have and what it tells us about the people we have, and how the organization believes it is performing.

If we do not have enough of the core data, I ensure my CEO is exposed to the work of best practice role models that do. If he or she does not get it after that, the exposure necessary may be to new career opportunities elsewhere, because a neglect of talent is a very material risk to organizational welfare, health and growth, and you cannot have a CEO who does not know what he needs to, and expects your company to either survive or grow. My boards review our progress on these issues quarterly, or as required, for example with major appointments due. We also take a direct part in selection and career development processes for senior and emerging high potential people, so that we can get our own ready talent.

 Peter Wilson AM is National President of the Australian Human Resource Institute