Post-Recession Challenges of Talent Management

Recovering Economies

After a year or so the news on recession is taking a U-turn (not a V-turn though). Officially, analysts are reporting that recession is over, including Google CEO. While it will take some time for recession to pave the way for prosperity and growth for business in general, the prosperity is already on its way to certain economies such as BRIC (Brazil, Russia, India and China).

HR May be Caught Off Guard

Although this is good news for business operations, including marketing and sales, it poses new challenges for human capital. Businesses would no longer run on the old rules, but new out-of-the-box solutions, more comprehensive efforts, innovative thinking, and new skills and competencies would be required to grow and prosper. Needless to say, the demand for both the quantity and the quality of talented employees will grow worldwide. Companies that have fired employees in the past are already feeling the pinch, as they do not have enough bandwidth to execute.

Bloggers like Jon Ingham, who champion the cause of Human Capital Management, are being invited to speak on performance management. The need for performance management is pressing.

Talent Scenario During Recession

The law of demand and supply mercilessly applies to human resources, also. During the economic downturn, companies were able to downsize by getting rid of redundant work force and dead wood. They also restructured the employee compensation (mostly by decreasing) to stave off financial losses. Only those employees were retained who proved their worth. The employees had to accept all kinds of compensation-related compromises while maintaining the same or even higher level of efficiency and productivity. They could thus survive the financial tsunami.

These survivors got the opportunity to handle a variety of tasks that further sharpened their skills and made them multi-skilled. Thus, overall quality of talent has increased. At the same time, those who were out of job lost this opportunity to hone their skills in a new challenging environment. Adding to our woes, slashing of training and development budgets has led to a depletion of the number of skilled employees within the companies.

And a Difficult Road Ahead

Such steps from companies have created an altogether tricky scenario: The quality of talent within the companies has increased (raising the bar of the talent), while the quality of skills available in job market has dwindled. Now, recruiters can hire the required quality talent not from outside but from inside their competitors’ workplace. 

While many have forgotten the term “War for Talent”, the phenomenon is slowly re-emerging. “A study by Accenture has found that more than two-thirds of executives are now deeply concerned about not being able to recruit and retain the best talent. In today’s global and highly competitive economy, the war for talent is now global, not local. The survey of more than 850 top executives from the U.S, UK, Italy, France, Germany, Spain, Japan and China found worries about talent management were growing, with 67 per cent this year putting it second only behind competition as the key threat, up from 60 per cent last year.” Read more.

It may be worth noting that great companies such as Infosys, responded to the downturn by investing more in training. Instead of fearing of financial losses, these corporates focused on improving the quality of their employees’ skills. And the effect is visible in their financial results. Member of Infosys’ board of directors and head of HRD and Education and Research, T V Mohandas Pai said, “In response to the economic crisis, we had stepped up our investment in training. This has made us more competitive in fulfilling clients’ needs today.”

The demand for talent in the market will never cease. Retention will always be a challenge.

New Definition of Talent

While war for talent continues, the bar for talent also goes up. Old skills and competencies may not work.  Companies now need salesman who does not sell products but does sell solutions; production managers no longer control the operations, they are expected to innovate and improve productivity; and quality managers need to study competitive products with more zeal and help develop better products and services. The employer’s expectations have changed and are set to grow:

1. Highly Productive: The talented employees needs to be highly productive. They should deliver much more than they are compensated for. If that happens, employers are willing to give larger share to them.
2. Multi-Skilled: Companies have discovered that one way to decrease recruitment cost is to have multi-skilled employees. Multi-skilled employees help reduce manpower dependence, and the overall sum of all the multi-skilled employees is greater than the same number of equal number of specialist.
3. Self-Managed and Self-Motivated: Self-managed and self-motivated employees reduce managerial efforts. This helps organizations to have less number of managers.
4. Innovative and Out-of-the-Box thinkers: As the rules of the business change and competition increases, the existing solutions no longer work. Companies need employees who constantly infuse new ideas and provide out-of-the-box solutions to meet customer needs that seems to have no end.

The Key to Retain Talent Lies in HR Policies and Practices

As organizations increase their expectations from employees, employers too have to significantly change the way they manage the talent. Talented employees continuously need new challenges and goals they can achieve, and a continuous supply of information and resources they can use to solve business problems. And needless to say, they will in return demand more lucrative and effective compensations, a great work culture and friendly HR policies.

“Even during the recession, companies are reviewing and revising their leadership development programs. Survey after survey indicates that people who quit their jobs do so because of their relationship with the boss, not because of dissatisfaction with their job. A recession is a perfect time to take a hard look at leadership style and training to increase employee satisfaction with management.” Read more.

Five Important Talent Retention Factors

Lets us consider five factors that can help organizations retain talent to meet the client and business requirements in post-recession era:

1. Clear Goals, Targets and Expectations: You need to tell them what exactly you expect from employees and what should they do to meet these expectations. A talented mind without a direction is most likely to pull the plug than a mediocre or a dead wood.
2. Balanced Work Environment: Talented employees have huge positive energy and they exhaust this energy to meet the deadlines. But often they need time to re-energize themselves. Organizations that want to retain talented employees need to provide a positive environment that allows them to re-energize themselves more often.
3. Track Performance Goals and Provide Analysis: Innovators and hard workers need constant motivation to perform better. They need to know whether they are producing desired results. Any suggestion of not being able to deliver throws them in doldrums. One way to let them know about their performance (whether improving or declining) is to point toward specific results, achievements or failures (which they can fix before it is tool late).
4. Fair Evaluation of Performance: At the end of the day, the high fliers want to get acknowledged for their work. The first acknowledgment of the hard work is a fair and formal appraisal of their performance. They should be specifically told where they met expectations and where they did not.
5. Compensation to Maintain a Decent Lifestyle: Employees who deliver quantity with quality also expect from employers fair compensation that is compatible with the market. If not first, compensation remains the second most important cause of brain-drain from organizations.

What Next: EmpXtrack Performance Management is a powerful package of tools to help you set SMART goals and targets, track goal achievement, evaluate performance at quarterly, half-yearly and annual intervals, and decide decent compensation for your talented workforce.

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