Unemployment has been high for far too long, and voluntary turnover has slowed to a crawl in just about every sector of the economy. So why are employers worried about a talent shortage?
That's the paradox Deloitte has been tracking since 2010 in its longitudinal survey series, "Talent Edge 2020." The latest report, released in January 2012, asked executives to list their three most pressing concerns about talent. The top concern for corporate leaders was brain drain—over 70% were highly concerned about retaining critical talent over the next year; two-thirds expressed the same concerns about high-potential employees.
These worries are well founded. Only about one-third of employees at larger companies expect to stay with their employers when the recession ends. Of course, employees with mission-critical leadership skills don't even need to wait for the economic tide to turn, and many are not.
And leadership is key. As Good to Great author Jim Collins has demonstrated, leadership drives great business performance; the absence of leadership doesn’t just invite poor performance, it actually creates risk.
People often describe certain individuals as "natural-born leaders," but the truth is that business leaders are made, not born—shaped through the assignments they receive and the experiences they have. That formation can happen by accident or by design. Leaving leadership development to chance can be chaotic and unpredictable; organizations that want to ensure that they have the leaders they need, now and in the future, would do well to embrace leadership development by design.
Most of the executives in the latest survey agreed that leadership development is a high priority at their companies, but few believe their organization’s capabilities are up to the challenge. And while over half the companies surveyed identified leadership development as an important priority, there remains a large disparity in how they put this into action.
Some companies remain reluctant to invest heavily in training because chances are that some of the people they’re investing in may eventually take their newly honed skills elsewhere. Turnover is a fact of life in business today, but by investing in employees, by demonstrating a genuine concern for their career development, by enhancing their skills, we can create and retain more high-performing, high-potential leaders.
Though some will inevitably leave, it is important that the investment in them is not seen as a loss. These individuals become valued alumni—some of whom may return in time—and potential clients, who can appreciate firsthand the benefits that accrued from the organizations where the focus was on education and development. It’s a strong value proposition for businesses, and it’s attracting a lot of attention.
At Deloitte, the centerpiece of our leadership development and retention strategy is Deloitte University in Westlake, Texas, where we help our people build the capabilities to better deliver valuable insights and to address our clients’ most critical and complex business challenges.
Not every organization is going to be willing or able to make such a massive investment—nor is it a quick fix, and the talent paradox is a challenge that must be addressed immediately. There are steps a business can take right now to prevent the impending brain drain.
Immediate Steps for Developing Tomorrow’s Leaders
If two out of three members of the workforce are considering leaving their jobs once the economy improves, it implies a deep reservoir of personal dissatisfaction across the entire corporate sector.
Here are a few thoughts businesses should take into consideration to ensure high-performing talent feels a combination of purpose, impact, and mastery in their current jobs—and are ready, willing, and able to serve as the leaders of the future.
1. Identify your next generation of leaders—and then ask them to step up. Leadership should not wait for the best talent to come to them—at that point, they may already be on the way out the door. Instead, prioritize and reach out to the people that demonstrate the most leadership potential. Create a plan together that aligns their goals and career satisfaction with the overall business strategy. Whether they are members of the Boomer generation, Gen X, or Gen Y, employees across the board say promotion and job advancement is the number one thing that would keep them with a company. Employees are eager to step up and lead, they just need the right support.
2. Align the work with the purpose. Just as companies must provide products or services that are needed and relevant in the marketplace or their client matrix, every person within an organization wants to feel that the work they are doing is meaningful, their role is important, and they have the power to affect the company, their community, and importantly, their own career.
3. Then, give them the capabilities to go do it. Once you’ve identified future leaders and ensured they feel satisfied with their position and future potential, empower them with the skills and tools to do their jobs well. That means providing training opportunities, mentoring, networking, stretch assignments, and on-the-job learning that will enhance their professional development. At Deloitte University, we’ve designed state-of-the-art classrooms for cutting-edge simulations that put our professionals in real-world client scenarios. Whether it’s in-person or virtual, learning is critical to attracting top talent and keeping them satisfied.
Yes, even in a recession—even with high unemployment—companies that rely on highly skilled leaders risk losing them. Practice leadership development by design, and become an organization that leaders seek out...and stay with.
Diana O'Brien and Alice Kwan of Deloitte Consulting are coauthors of this article. O'Brien is principal, Deloitte Consulting LLP, and Managing Principal, Deloitte University; Kwan is principal, Deloitte Consulting LLP, and U.S. Talent Services Leader.
[Image: Flickr user Jeff B]