What if the war for talent ended and your company lost?
Pardon the hyperbole, but many companies are threatened with just that. Despite dire warnings, organizations across the business spectrum are seriously lagging in the competition for talent–something that will have dramatic implications in the years ahead.
How serious is this situation? And what can help you fare better?
The term War for Talent comes from a late-’90s warning from McKinsey & Co. that alerted business to a coming talent shortage and urged companies to prioritize talent strategies around recruiting, retaining, and developing key employees.
In the years since, organizations heeding the alert focused mostly on recruiting the best people vs. aggressively developing internal talent. But that was then and this is now.
Talent shortages are fast going from bad to worse: One estimate says that we are just seven years away from an unprecedented skills and experience gap. In fact, by 2020, employers in the world’s richest nations are forecast to be short as many as 18 million college-educated workers. And with baby boomers set to retire in record numbers over the next 10 to 20 years, the situation will likely worsen.
Most business leaders have known about the talent problem for a long time, which begs the question: Why have they done so little to address it?
In one annual survey of global CEOs, roughly three-quarters of those polled said they would change their talent management strategy in 2013. But CEO’s have made the same promise in that survey for the past six years. That means that what they’re doing isn’t working–or they haven’t changed much.
Among the most vexing issues is how many companies still prioritize going outside for talent. Faced with the dramatically shrinking talent pool, you might expect organizations to shift course in big numbers–realizing that the war for talent can’t be won by poaching from the outside, but in developing employees internally.
Not to be missed, of course, is the connection between employee engagement and retention–particularly among the most talented employees. Gallup’s annual pulse on the American workplace says seven in 10 U.S. workers are not engaged or are actively disengaged in their work, surely a very bad sign for any organization looking to win the talent war.
The core issue is this: Talent management is usually driven from the top, with little employee engagement. Winning the talent war requires a paradigm shift toward giving employees more control of their own development and unleashing the talent hidden in plain sight. Here are five ways to move forward:
The most effective learning occurs when it is most needed to deal with immediate circumstances and challenges. And yet, training is often treated as inventory that organizations push out to people en masse, which is counter to how people learn.
Instead, what if you shifted to a consumer model where development is tailored to each individual and available when it is most needed? Employees will feel valued as individuals and trusted to make informed choices that serve their best interests and the organization’s. Individualized development then becomes an investment, not a cost, in winning the talent war.
Another key to winning the talent war is to clarify what it takes to be successful. But first, let’s redefine success as being able to do your best in whatever path you choose–as an engineer, a sales professional, or an expert in finance or law–and not just moving up the corporate ladder to a senior executive position.
Redefine “talent” by shifting the discussion from “high potential” to “high value” employees. Get specific on where you most need talent to fill all “high value” jobs, not just those in senior leadership roles.
Most people don’t know what it really takes to progress in their careers. And most companies aren’t exactly clear on what’s necessary for employees to be ready for a promotion or other opportunity.
So why not enlist the help of best performers in those high-value jobs? Ask them about the knowledge, skills, experiences, and personal qualities needed to handle their most important responsibilities and challenges. Then make this information available to everyone. This will help employees and their managers to have fruitful discussions of what’s required to be successful today, as well as how to prepare for roles that fit the organization’s future talent needs.
Most of the attention these days is on identifying the next generation of leaders. The key challenge is how to mine the hidden leadership talent inside the organization beyond the obvious candidates that stand out. One way to do this is to tell everyone how to qualify to be on the “high potential” list and let employees who aspire to be on that list have the opportunity to prove themselves.
Some of the basics include an outstanding performance record, the willingness to take on bigger jobs, and the personal characteristics and behavior expected of a leader. Make it clear that being on the list doesn’t guarantee a promotion but gives employees a shot at one. And letting others in on what it takes to be there lets them decide to step up to the challenge if they want.
If change is the only constant, knowledge and skills will rapidly becoming obsolete; job requirements will be redefined, and technology and automation will continue to change the face of the workforce. Employee agility and versatility will therefore be more valuable than ever.
So instead of putting people on a career ladder where they develop deep expertise but not the versatility needed to handle jobs in different areas of the business, forward-thinking organizations give their best performers a variety of experiences and challenges early in their careers that push them out of their comfort zones. These experiences build their confidence to tackle bigger jobs and “first-time” assignments in other functions, businesses, and geographies.
You won’t win the war for talent overnight, nor will your competitors. But a less paternalistic, more bottom-up strategy is vital to making up for lost time.
Companies that are winning the talent war are giving more people the ability to take control of their destinies–with the right development opportunities at the right time–and a clear path forward to achieving their career aspirations.
—George Klemp, a partner at the Boston-based talent development firm Cambria Consulting, is a leading innovator in executive assessment, succession planning, and talent development.