How to beat the talent · PDF file...

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  • How to beat the talent shortage and improve your profits

    (C) Copyright 2011, Pearl Talent Management www.PearlTalentManagement.com

    1

    How to beat the talent shortage and improve your profits by Sara Lord, Dec 2010

  • How to beat the talent shortage and improve your profits

    (C) Copyright 2011, Pearl Talent Management www.PearlTalentManagement.com

    2

    Contents: Title Page

    No Introduction

    3

    Why is there a talent shortage?

    3

    So why should you care in terms of your own organization?

    4

    What’s the benefit of talent management?

    4-5

    What is talent management?

    5-6

    Is talent management still a priority in an uncertain economy?

    6-8

    What happens if I ignore it?

    8-9

    How does talent management work?

    9-12

    Benchmark your organization

    11

    How to devise a talent management strategy that will beat the talent shortage

    11-12

    How to use your talent strategy in a buoyant economy

    12

    What “best practice” leadership development and executive coaching supports effective talent management?

    13

    In summary…..

    14

    Next steps

    14

  • How to beat the talent shortage and improve your profits

    (C) Copyright 2011, Pearl Talent Management www.PearlTalentManagement.com

    3

    Introduction Your number one leadership priority right now and going forward should be talent management!

    I’d like to present a very compelling business case for organisations to make talent management their number one leadership priority if they are to survive the growing talent shortage. This should be your CEO’s number one challenge going forward. Boston Consulting Group and PWC (2009) Why is there a talent shortage? We live in a world where developing countries have a declining birth and death rate, for which the implications on organisations are enormous. This concept is more commonly known as the “demographic time bomb”. This means that, as baby boomers are retiring, we do not have enough younger people to replace them in the workplace and are therefore losing the opportunity to transfer a wealth of knowledge from one generation to another. Who is going to replace them? McKinsey first coined the phrase “the war for talent” in 1997 when there was a realization that organisations would all compete for the best talent.

  • How to beat the talent shortage and improve your profits

    (C) Copyright 2011, Pearl Talent Management www.PearlTalentManagement.com

    4

    So why should you care in terms of your own organization? Australia is currently experiencing an uncertain economy. Some would argue we are heavily influenced by the global financial crisis and others would say Australia is experiencing a boom economy due to the thriving mining and resources industry. What’s interesting to note is that, whatever your opinion, when it comes to recruiting talented employees most organisations are frustrated at the lack of available talent in Australia. The alternatives are to recruit from abroad, but this can be high risk and expensive. What’s the benefit of talent management?

    It’s very simple: companies with excellent talent management systems have higher profits than their competitors! 2006 DDI Leadership Forecast Companies with the best talent management systems have ten- fold higher shareholder value than those companies who have poor or no talent management system (War for talent 2000) According to Bersin & Associates (July 2009), the return on investment for having a good talent management strategy is:

  • How to beat the talent shortage and improve your profits

    (C) Copyright 2011, Pearl Talent Management www.PearlTalentManagement.com

    5

     40% lower turnover for high performers

     26% higher revenue per employee

     1.5 times more likely to develop great leaders

     94% more likely to have the right people in the right jobs

    The bigger question is, why wouldn’t you use talent management? What is talent management? Talent drives performance via

    • Right people • Right jobs • Right time

    = Why is it that in many other walks of life, so much trouble is taken to identify and nurture talent, such as the music, sports and TV and film industries? Why do we make do in corporate world when so much is at stake financially? Nowadays, organisations spend on average around 70% of their budget on employees. Therefore it makes sense to ensure there is a mechanism put in place to ensure a return on investment. Many people misuse the phrase talent management. It often refers to recruitment but it is so much more than this. In fact, talent management refers to the whole end-to-end process of

  • How to beat the talent shortage and improve your profits

    (C) Copyright 2011, Pearl Talent Management www.PearlTalentManagement.com

    6

    how we recruit, develop, retain and succession plan people by the most efficient means possible so that we have a strong leadership pipeline. Talent management done well will transform your organisation. It is being recognised as the way forward, so why not embrace it now rather than get left behind? Is talent management still a priority in an uncertain economy?

    In a talent shortage, the key focus is to retain and nurture your best employees so that you minimise the need for recruiting. According to recent engagement research by Hudson, the main reason why your best talent will stay or jump ship is the extent to which they feel supported by their line managers and whether they are offered meaningful career development. The worrying aspect for Australia is that employees are not that engaged and the ones most likely to jump ship will be your best talent. Ironically the least engaged employees are in WA, where potentially the best job prospects are located. Clearly one can assume that the quality of line managers and career development in Australia is not good enough.

  • How to beat the talent shortage and improve your profits

    (C) Copyright 2011, Pearl Talent Management www.PearlTalentManagement.com

    7

    With good talent practices, your organisation can provide effective leadership and career development so that your employees (in particular you most talented employees) will be more productive and will want to stay with your organisation. This becomes even more important as Generation Y are moving into the workplace, it is clear they want meaningful work and are less loyal than their predecessors, Generation X and the Baby Boomers. We assume all’s well for Australia and we are weathering the storm of the global financial crisis, particularly in the WA mining and resources industry. Whatever the state of the economy may be, your highest talent management priorities, at all times are to hold onto the employees you already have:

     retention: boost morale and retain talent in the most critical roles

     build a talent leadership pipeline: so that you are ready for tougher times and to drive performance now

    If you have to recruit, consider the following priorities:

     work-force planning: in preparation for an up-turn or down-turn be first off the block. Keep a talent pool not a talent puddle or it will come back to haunt you.

     a great recruitment strategy to fill your talent gaps: - ensure your interviewers are fully trained to use competency- based interview questions - don’t just rely on interviewing. Consider other options, such as ability tests, to increase your chances of success - have a great employee value proposition and give candidates/new hires a great employee experience - always hire for future potential, to nurture your talent pipeline.

  • How to beat the talent shortage and improve your profits

    (C) Copyright 2011, Pearl Talent Management www.PearlTalentManagement.com

    8

    It’s not just about “hitting the ground running.”

     Exit poor performers and don’t carry casualties.

    What happens if I ignore it? You’ve survived this long without talent management, so why do you need to do anything?

    Failing to make the most of your organisation‘s talent can have terrible ramifications on your organisation’s success, particularly if all of your competitors are getting on board already. The results of not doing anything about talent management going forward could mean that:

     engagement levels drop (productivity declines and talented employees leave)

     opportunities for business growth are missed due to lack of talent in the business

     your competition overtakes you Do something about talent management sooner rather than later as, like cancer, if you catch it early there is possibly a cure, but if you leave it too late it might be incurable.

  • How to beat the talent shortage and improve your profits

    (C) Copyright 2011, Pearl Talent Management www.PearlTalentManagement.com

    9

    If the rate of change inside your organisation is less than the rate of change outside – your end is in sight! (Jack Welch former CEO of General Electric)

    How does talent manage