Today’s Top 10 Talent-Management Challenges

I had the pleasure last week of moderating a panel of senior talent development officers representing three very different industries and diverse geographies: Deb Wheelock of Mercer (a high-end professional services firm, recruiting highly educated knowledge workers), Pamela Stroko of The Gap (a retailer faced with the classic industry challenges of creating a differentiating employee proposition and enhancing retention of its large workforce), and Sujaya Banerjee of the Essar Group (a diversified India-based enterprise participating in a variety of industrial sectors, including steel, energy, and communications).

Interestingly, even with this diversity of perspectives, we found our views on today’s top talent challenges to be surprisingly aligned. I thought you might like to see our list – and would love to hear your thoughts on things you’re wrestling with that we missed.

Here goes:

1. Attracting and retaining enough employees at all levels to meet the needs of organic and inorganic growth. All three companies are facing a talent crunch. Essar, for example, has grown from 20 thousand employees to a staggering 60 thousand in the past 3 years. Fifty-five percent of their employees have less than two years of tenure.

2. Creating a value proposition that appeals to multiple generations. With four generations in today’s workplace, most companies are struggling to create an employee experience that appeals to individuals with diverse needs, preferences and assumptions. The Gap, for example, has 153,000 people in its workforce. The stores have a high percentage of Gen Y employees, while corporate roles and leadership ranks are primarily made up of Gen X’ers and Boomers. How does one create a compelling employee value proposition for the organization?

3. Developing a robust leadership pipeline. I believe one of the biggest potential threats to many corporations is a lack of a robust talent pool from which to select future leaders. This is in part a numbers issue – the Gen X cohort is small and therefore, as I like to say, precious. But it’s also an interest issue – many members of Gen X are simply not particularly excited about being considered for these roles. There was wide agreement among the panelists that a lack of individuals ready to move into senior client manager and leadership roles is a critical challenge.

4. Rounding out the capabilities of hires who lack the breadth of necessary for global leadership. It’s relatively straightforward to identify and assess experts in specific functional or technical arenas, but much more difficult to determine whether those individuals have the people skills, leadership capabilities, business breadth, and global diversity sensibilities required for the nature of leadership today. Increasingly, the challenge of developing these broader skill sets falls to the corporations. Essar has formed an academy specifically to develop and groom its own leaders.

5. Transferring key knowledge and relationships. The looming retirement of a significant portion of the workforce challenges all companies, but particularly those who are dependant on the strength of tacit knowledge, such as that embedded in customer relationships, a key to Mercer’s business success.

6. Stemming the exodus of Gen X’ers from corporate life. A big threat in many firms today is the exodus of mid-career talent – people in whom the organization has invested heavily and in whom it has pinned it hopes for future leadership. For example, developing talent management practices and programs calibrated to leverage technology and create greater work/life balance has been a priority for Mercer over recent years.

7. Redesigning talent management practices to attract and retain Gen Y’s. The challenge of calibrating talent management practices and programs to attract and engage our young entrants is critically important to all firms and particularly so for firms that depend on a strong flow of top talent, such professional service firms like Mercer. All three panelists agreed that making the business infrastructure more attractive to Gen Y is a high priority.

8. Creating a workplace that is open to Boomers in their “second careers.” Age prejudice still exists, but smart companies are looking for ways to incorporate the talents of Boomers and even older workers in the workforce. In many cases, this requires rethinking roles and work relationships.

9. Overcoming a “norm” of short tenure and frequent movement. Some industries, such as specialty retail, are known for having a very disposable view of talent. Companies intent on changing that norm, such as The Gap, must address both external influences in the marketplace and an internal mindset. The Gap believes retaining employees in roles for 3+ years will be a key to their future earnings growth.

10. Enlisting executives who don’t appreciate the challenge. Many talent executives complain that business leaders still believe that people are lined up outside the door because of the power of the company’s brand. The challenge of enlisting the support of all executives for the transition from a talent culture that has traditionally operated with a “buy” strategy to one that places more emphasis on “build” is widely shared.

What did we miss? What are your biggest talent challenges?

Comments

Your points are right on target. To the last one, enlisting executives, I would add the additional challenges posed by a faltering economy. In the rush to jettison non-critical expense, I fear too many companies will make one of two critical mistakes:
1. eliminate lower cost/experienced--but high potential--talent (problem: the long-term consquences in a web 2.0 world may be much more long run than companies realize)
or
2. urge higher cost, experienced boomers to retire early (problem: few companies have a sufficient knowledge/relationship transfer strategy in place)

Corbette Doyle
chief diversity office
Aon

- Posted by Corbette Doyle
June 20, 2008 7:01 PM

I take this opportunity to take part in to the discussion on Top Management Challenges :

1)It comes to my mind that the single most challenge facing towards selecting right men for right job at right place in right time.

The solution to this challange is upkeeping & retaining good people by virtue of comphrehensive appraisal system in the organisation.

Thanks & Regards,

- Posted by Yogesh Sharma
June 20, 2008 11:32 PM

In the book "Generations", a New York Times bestseller, William Strauss and Neil Howe write that Generation X (born 1961-1981) total 90 million people.

I'm curious as to why you say Gen Xers are a "small and therefore precious" group? See page 318. Thanks.

- Posted by Anonymous
June 21, 2008 1:11 PM

I think there are no surprises in this list. I will comment on the first item: "1. Attracting and retaining enough employees at all levels to meet the needs of organic and inorganic growth."

It would also apply that an organization that grows from 20k to 60k employees in 3 years has an additional "identity" challenge. What stories are being told by employees with 2 years of tenure that help define the culture of this organization? I'd imagine (since I've been in organizations with similar growth) that the employees are just holding onto their seats as the wild ride of expansion takes place - many of them probably have their eyes closed as well. If I were running this company I'd be concerned about what happens once the ride comes to a stop and everyone opens their eyes.

- Posted by Gary Rosenfeld
June 24, 2008 2:19 PM

I agree on your 10 challenges, however, having a mixed X/Y Gen a challenge we also have the challenge of The continuous need for a "Culture of engagement".

I believe this is a two way street and a big problem is that the market itself is making people careless of leaving a company that has invested on them. Besides, companies have become very impersonal, and they are the main role model for their employees, especially because of acquisitions and reorganizations.

And the second addicional challenge I would mention is in relation of "Employee Investment: How much of the company profit should return to the employees through benefits, rewards, etc."

Some benefits are becoming too expensive in terms of administration, for example, and sometimes are not good motivators, not until one is older or has left the company.

- Posted by Analive Hernández
June 24, 2008 3:33 PM

In your list of ten challenges, I do not see something about the disconnect between companies committing resources to retaining top talent while at the same time recruiting from the outside for mid- and top-level positions. Even today after having access to reams of available data about retention and talent management, companies continue to struggle with recognizing who is in-house and how they can be of value. I have personally witnessed in the same conversation senior HR leaders expressing concerns about talent retention and then moving on to discuss their recruitment strategy to fill open VP positions with external candidates. When individuals are perceived (and assessed) based on their current roles, career progression for them is only possible through exits.

- Posted by Margie Oleson
June 25, 2008 12:35 PM

I would have liked this article to also share the panel's thoughts on what the causal factors for these challenges seem to be. A more solutions-focused article would be far more constructive than a rehashing of concerns that a lot of companies have. With the braintrust that was present you had a unique opportunity to identify what was working in each organization (how they are tackling the root causes of each problem).

The Essar Group is clearly working through rapid growth issues, but they doing that in an environment where job-hopping is an accepted business practice due to the lack of skilled corporate staff. What is Essar Group's strategy and tactics that ensure that they are sourcing, attracting, and selecting the right people for each job? What are they doing to make sure that employees have great management (leaders that coach/develop direct reports, recognize them for great work, help them overcome external performance barriers, and prepare them for a future role inside the organization) and attractive comp/benefits so that they don't want to defect/leave? What is Essar Group's process for assessing, mapping, developing, and promoting near-term leadership, and does that practice cause internal strife and political competition or is it perceived as balanced and fair?

Most of those same questions could be asked of The Gap and Mercer as well as they relate to the root causes of these issues. While I agree that some of the issues are fairly global and wide-spread, a company that is not digging into the causal factors and tackling them proactively is going to be a victim of the problems because they are only focused on the after effects and side effects. I hope to see a solutions-focused article next, Tammy.

Darin Phillips
Sharing Talent Management Best Practices
Preventing Talent Management Blunders

- Posted by Darin Phillips
July 3, 2008 9:02 AM

Today’s Top 10 Talent-Management Challenges
Tammy
Without going further please read the Harvard Business Review where Bill Gates has been given three heads, Leader, Entrepreneur, Manager.
I think a fourth title given, a donor would be apt.
This is what is missed out and this is what we always do when we talk CRM.
Word may not hurt our bones, that was Dale Carnegie saying but word is the most powerful tool to raise and drop anyone.
I thank you
Firozali A. Mulla MBA PhD
P.O.Box 6044
Dar-Es-Salaam
Tanzania
East Africa

- Posted by Firozali A. Mulla MBA PhD
July 7, 2008 1:50 AM

I pass by here to read the challanges that the talent management is facing.. as you have siad no matter what demography are we live the same challanges are implying...

I am about to start to my PhD in this subject "Talent management"
I really need more help from those interested toguide me more ..

I have faced alot of difficulties regarding selecting my topic in this area , because there are not much articls and reseraches on this subject.

I have visited "emerald" but with less help ..

My first topic was:
"The relationship between talent management and motivation, opportunities and abilities. I couldnt continue doing it because i couldnt specify the measurment of my variables ...

I thought of putting the topic as follows:
"The challanges of Talent management in industrial sector"

the bottom line : i need help if anyone would guide me more..

my e-mail: saleh.rassam@hotmail.com

thanks
Saleh Al Rassam
Saudi Arabia

- Posted by Saleh
July 13, 2008 12:23 PM

Thanks for this summary Tammy, and it's interesting as you said that Deb, Pamela and Sujaya's challenges align.

However I wonder how much this is really an 'Gen X/Y' issue or whether that is simply where the thinking has stopped.

In my experience too many HR practitioners have been eager simply to dump all engagement issues into this box and leave it at that.

Instead I echo Analive's point that it's more to do with the impersonal nature of organisations themselves, and it may be this nature is the 'causal' factor Darin writes about.

in my view the Gen X/Y thing is the symptom, not the cause. Treating is as the cause if it is not is only likely to exacerbate the challenge.

Instead, companies need to get shot of the manifold processes they have that treat their people like robots and start listening, as well as backing managers to make the right hiring and talent management decisions.

Companies need to be run more on a local level and engagement surveys and interviews are essential for identifying root causes.

The problem is probably not that 'Gen X' types are in managerial roles, but the prevalence of Myers Briggs 'STJ' types in those positions for whom everything has to fit in a box whether it belongs in there or not.

Nick
talent-talk.com

- Posted by Nick
July 17, 2008 5:02 AM

pls provide me the talent management details.

- Posted by binay
July 28, 2008 3:58 PM

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