As HR professionals will be well aware, development and retention of key talent is a business imperative. There are many examples of companies that have been left vulnerable by the loss of critical talent. Feeding and growing the Talent Pipeline is an obvious step to take in order to mitigate the risks of this kind of exposure.
Apple managed this effectively, appointing COO, Tim Cook, as the CEO following the death of Steve Jobs in October 2011. Cook was prepared for the role, having previously taken charge of day-to-day operations during Jobs’ medical leave of absence and was named by Jobs as his successor when he left in August 2011. Although the share price took an initial hit following Jobs’ death, this was followed by a huge spike that has remained high ever since.
However it’s concerning that, according to the results of a recent survey of over 200 Talent Management experts, 82% of organisations are not evaluating their high potential schemes. a&dc’s Talent Report also revealed that the main reason for staff turnover is, for the first time, ‘lack of career progression.’
These results highlight how many organisations may be losing talent unnecessarily because of ineffective processes and a lack of planning. Without attention this can easily become a long-term problem with businesses unable to hold onto professionals they had previously lined up as potential leaders. Having a clear Talent Strategy in which critical roles and risk areas are identified is essential.
This identification is best understood in the context of the business’ strategic imperatives, future needs and the competencies required of its leaders. A review of internal capability can then reveal the gaps and identify the rising stars that need to be nurtured, developed and retained. Such a process should be managed effectively and reviewed regularly to ensure that there’s no leak in the talent pipeline. High Potentials (HiPos) should be clear on what career paths are available and what steps they can take to fast track their development and progression within the organisation.
In some ways the survey results are understandable. We live in increasingly VUCA (Volatile, Uncertain, Complex and Ambiguous) times and this has meant a change in priorities for many organisations. For some time, HR teams have been in a situation where they’re required to do more for less, resulting in real constraints around talent strategy implementation. In fact, of those companies we surveyed, 72% reported that their main strategic priority was improving efficiency and operations, while a further 65% said that improving business processes was their primary concern. The third highest priority was cutting costs, with 63% saying this was a main objective.
While it’s unsurprising to see many organisations focusing on cost cutting over development, there’s no reason the two need to be mutually exclusive. It’s been reported by the Society for Human Resource Management that the cost of replacing a middle manager is 150% of their annual salary, rising to 400% for senior level talent. Therefore, surely, it makes sound commercial sense to invest in developing and evaluating processes that support existing talent?
Business leaders need to be aware that development shouldn’t suffer at the expense of cost cutting; a well-defined, monitored talent pipeline can benefit organisations enormously, not just in terms of talent, but also financially. In some cases, investment can be the best way to save money.
How do you develop future leaders in your organisation? Let us know by commenting below.