Managing the balance, managing polarities, managing paradox. The terminology varies but in today’s fast- moving environment, the requirement to manage a fully integrated but potentially conflicting set of issues and practices has become a critical determinant of organisational success.
This is particularly evident in the emerging HR field of talent management: the recruitment, retention, development and motivation of people who can deliver the organisation’s strategic goals.
The nomenclature itself is controversial. According to Dave Ulrich (“Seven up”, PM, 16 May 2002) it is HR’s “critical capability”: “Winning the war for talent means that the organisations with the most committed and competent employees will succeed over time.” Jonas Ridderstråle, a speaker at Harrogate, agrees. “Success is a question of capturing the emotions of core competents”, of “talent transfusion”.
Yet in a recent New Yorker article, “The Talent Myth”, Malcolm Gladwell attacks the concept as elitist, divisive, and immoral, epitomised by the “star” system at Enron with its inevitable, ultimate destruction.
We are in Charles Handy’s “Age of Paradox”. The Financial Times last month described the UK economy as “both piping hot and freezing cold – boom and bust side by side”. Under the traditional, cost-based view of labour, when “double-dip recession looms”, demand should decline and corporate downsizing and unemployment increase.
Yet the reality today is that the talent war is intensifying, with record numbers in employment and a demography of declining birth rates and a greying population. Three-quarters of the 700 organisations in this year’s CIPD “Annual Recruitment and Retention Survey” reported increasing difficulties, affecting a growing proportion of employees.
And the skills shortages are not just of IT workers, accountants and senior executives. The UK needs 25,000 more HGV drivers, 29,000 plumbers and 15,000 catering staff. “Creaking public sector struggles along on grey power” was The Times’ interpretation of a recent Audit Commission report. For Stephane Garelli (another Harrogate speaker), attracting and retaining skilled employees is a key differentiator in the competitiveness of nations.
But what is needed for successful talent management? The CIPD’s chief economist, John Philpott, says we need to manage the “3Rs: simultaneous reorganising, redundancy and recruitment”. Lastminute.com reported a 55 per cent growth in sales, yet will be outsourcing and making redundancies. GM Europe is taking on extra workers in Portugal, after making 4,000 redundancies within Europe this year. Seventy three per cent of companies who have downsized are continuing to hire and two-thirds of those in the CIPD survey have responded to recruitment and retention problems.
Seeking and developing new sources of talent is one common response. One investment bank estimates that its traditional labour pool in Europe will shrink by a third in the next five years. We will have to treat diversity as an opportunity to be exploited and celebrated. We cannot bemoan skills shortages while, for example, we retain a 20 per cent gap between average female and male earnings, and a rate of unemployment among ethnic minorities of double the national average. More flexible working opportunities and jobs are evident in our survey organisations.
Career management and succession planning systems, satirised by Handy, are enjoying renewed popularity.
Organisations such as Lloyds TSB, Allianz and TPG are taking advantage of new technology to develop a much wider internal “talent pool”, rather than focusing on a hand-picked elite. High turnover rates experienced with externally recruited executives are reinforcing this internal development.
Reward systems that recognise individual excellence and collective contribution are another ingredient. Financial rewards are only part of the attractive employment “brand” needed to win the talent war. An employee-researched and practical set of values is a vital component of Shell Internet Works’ approach. But there also needs to be individual choice in work and rewards, as evident in such companies as AstraZeneca and the Prudential.
Contradictory and confusing times, maybe, but as Ridderstråle points out, one certainty is that “in an economy where talent has more or less endless choice, success is a question of capturing the emotional human being. The time has come to stop re-engineering and start re-energising our organisations”.