Talent Management

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NOVEMBER 2009

PULSE SURVEY REPORT: MANAGING TALENT IN TOUGH TIMES
A TIPPING POINT FOR TALENT MANAGEMENT?

EXECUTIVE SUMMARY As the global economy moves toward recovery, companies face some tough challenges and complex choices about how best to retool for growth. In the year since the financial markets collapsed, most organizations have streamlined, downsized and restructured to varying degrees, trying to stay on an even keel until the economy stabilized. The well-worn phrase “lean and mean” took on particular resonance — a badge of honour for many in reacting swiftly to market conditions. Now, however, a different set of questions are emerging. Have organizations cut too far too fast — beyond “fat” and into “muscle”? If so, have they inadvertently slowed a fast return to growth? How easily can they correct course and close emerging gaps in capacity and capability? Are we on the brink of a new round of “talent wars”?

To begin exploring these issues, we recently surveyed over 400 HR and business executives across a broad range of midsize and large companies in the U.S. and Canada on emerging talent management priorities and strategies. We wanted to understand how organizations are defining talent and talent management, what activities they’re focusing on, how effective they think their processes are, and the degree of alignment between their talent management approach and their overall strategic goals. (See page 15 for more details about this study.) Overall, we found that companies are inching toward a tipping point in how they deal with talent. Both our data and our experience confirm that organizations have awakened to the importance of having skilled and engaged people at all levels delivering results. Companies know that high performers, high potentials and pivotal talent are a critical resource (and source of competitive advantage) to which both business and HR leaders need to pay special attention. And they’ve made efforts over the last decade to bring science to the art of talent management, introducing more structured processes, better metrics and enhanced technology.

Still, our findings suggest that progress to date has been incremental rather than transformational — at a time when there have been sweeping changes in the global economy, in industry sectors and in individual organizations. Two points stand out: Integrated talent management remains more aspiration than reality. About a quarter of respondents (22% in Canada and 25% in the U.S.) report their current talent management systems are mostly or fully integrated, meaning there are explicit connections both to business needs and across key processes, from sourcing, onboarding and development to deployment, performance management and measurement. Yet our data also confirm that integration makes a measurable difference in all facets of effective talent management. Across our survey sample, those organizations with integrated systems put more time and attention into a wider array of practices, were more advanced in having implemented more programs, and believed they did a better job of executing on those practices and programs than their less integrated brethren (often by a substantial margin).

A Tipping Point for Talent Management? | 2

Economic recovery will be the fulcrum that tips the talent management balance.

Current talent management practices are insufficiently forward-looking. For the most part, our respondents appear to be staying in their comfort zone, putting their energies into what they know and believe they’re good at, but not venturing too far outside those boundaries. Only a quarter or fewer of our respondents have implemented a number of processes arguably essential in a competitive global environment. Less than a quarter (just 22% in Canada and 23% in the U.S.), for instance, have a formal governance structure and process for their talent management activities. And only 14% in both countries are using metrics to analyze and track...
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