The New Year is an opportune time to “raise the bar” by doing something strategic in talent management. In many corporations, new plans and budgets take effect at the first of the year, so the holiday period preceding the New Year is an ideal time to review the potential strategic actions to put in front of your team. Unfortunately, many talent management leaders are risk adverse, and although they constantly talk about the need to “be more strategic” they all-too-frequently find excuses that indefinitely postpone those dramatic and strategic actions.
The leadership set aside at least half the day for the team to identify upcoming problems and opportunities and the resulting strategic moves that need to be made. This article is merely a checklist of the strategic talent management actions that I have found that the very best corporations should have on their potential to-do list.
The Top 15 Potential Strategic Actions to Consider in Talent Management
If you’ve decided to stop fighting fires and to do something major with a strategic impact, here is a list of possible programs and actions that you should consider.
- Increase the productivity of your workforce — workforce productivity is merely comparing the output of your entire workforce (the total value of the products and services they produce) with the cost of your workforce (total labor and talent management costs). Many talent management departments measure engagement (a precursor to productivity) but they don’t measure workforce productivity. Even fewer take proactive actions to directly increase it. Increasing productivity requires talent management to identify the barriers that restrict productivity and then to proactively provide the consulting advice, best practices, and tools that have been proven to increase a team’s productivity.
- Increase employee innovation — fierce marketplace competition requires firms to accelerate innovation in product and service areas, despite having fewer resources. Rather than targeting a few departments, talent management must increase innovation in all areas of the business. Typically, innovation can be increased tough the targeted hiring of innovators, retaining innovators, and minimizing the barriers that innovators face within the corporation. Talent management must help shape the culture so that the expectation of continuous innovation permeates every business area.
- Reward great people management — Most managers simply don’t spend enough time on talent management activities. The primary reason is that managers are not directly measured or rewarded based on how well they manage their talent. This is true even though talent management “owns” all of the key components related to measuring and rewarding (performance management, performance appraisal, competencies, and reward systems). The key action step is to develop a “people management scorecard” for each individual manager and reward them based on their performance against those standards.
- Identify and fix bad managers — research by Google has shown that in most cases, an employee’s or a team’s manager is the single-highest impact factor on the hiring, retention, innovation, productivity, and the development of employees. Yet most organizations have no formal program for identifying weak managers. Strategic actions would include implementing surveys and metrics to identify with managers and to provide general lists with proven tools and approaches to improve a manager’s people management performance.
- Convert talent management metrics into their dollar impact — unfortunately, most traditional talent management metrics fail to impress executives because they are not expressed in “the language of business,” which is dollars. Saying we have a 12% turnover rate, a 54% engagement rate, or an 87-day time to fill generally won’t impress senior managers because the metrics are not expressed in their dollar impact on corporate revenue. In contrast, stating that every percentage point increase in regrettable employee turnover costs us $7.2 million gets an immediate reaction. Work with the CFO’s office to credibly calculate the impacts.
- Calculate the risks of weak talent management — shifting from the positive business impact to the possible negative impacts requires a risk management manager. Risk management is an increasingly important function throughout the business, but unfortunately, few talent management functions have put anyone charge of risk management. Risk managers identify and quantify the risks associated with potential talent problems (its probability and likely costs). Underfunding important talent programs can create tremendous economic risks such as losing key innovators to competitors, failing to have enough developed leaders, and a weak employer brand that drives top candidates away.
- You need to prepare for a leadership gap — the combination of increased growth and higher turnover rates will mean that most corporations will begin to suffer because of a lack of leadership bench strength. In addition, because the type of leaders who will be needed will also change, the entire leadership and succession program will have to be re-examined and new social media and project rotation tools will need to be developed and implemented.
- Speed up internal movement through proactive internal placement — very few things increased productivity, retention, and employee development faster than periodic internal movement. Unfortunately, most corporate programs require the employee to initiate the movement and to find the “correct” placement area. A more strategic approach is a proactive one where recruiters periodically identify employees and then help to correctly place these individuals who should be moved both for their own and for the corporate good.
- Improve internal best-practice sharing — most talent management leaders spend most of their time and resources on developing new programs and approaches. Surprisingly, the data indicates that you can have a higher impact faster and at lower cost by simply identifying and sharing “hidden” existing best practices. Rather than relying on this best-practice sharing occurring organically, a superior approach is a proactive one that seeks out these affected practices wherever they might be in the organization. And once identified, they are shared in such a manner that managers easily understand their value and implement them.
- Update your retention approach — just like employer branding, retention programs have been allowed to atrophy because the economy has reduced most turnover to a trickle. Unfortunately, turnover is about to dramatically increase, so processes to prioritize key individuals, processes for identifying who is at risk, and retention toolkits need to be reinvigorated before it is too late.
- Employee referral programs need to be reinvigorated — as the rate of hiring and competition for talent increases throughout the year, stagnant employee referral programs need to be re-examined. Because they produce the highest quality and volume of hires, referrals as the percentage of all hires should begin to reach over 40%. Employee referral programs must be closely integrated with the developing social media approaches.
- Assess your external employer brand — during the economic downturn, the area of employer branding has been frequently ignored because very little hiring was going on. Unfortunately, during the same time, the reputation of many corporations has been tarnished as a result of layoffs, salary/promotion freezes and a reduction and development resources. In addition, corporate images in general and in some specific industries like banking, oil etc., have been damaged by recent events and “occupy” type movements. The growth of glassdoor.com, blogs, Twitter, and Facebook now make it much easier for negative messages to be spread. At the very least, the positive/negative aspects of your employer brand should be measured and monitored before an upturn in hiring begins.
- Re-examine your social media approach — although many talent managers have “done something” in the area of social media recruiting, realize that the potential for social media in talent management is much greater than almost everyone anticipated. Plans should be developed to determine how social media can positively impact training, employee development, learning, retention, collaboration, problem identification, crowdsourcing of answers, and best-practice sharing. The mobile platform should be examined in a similar manner because it is rapidly becoming the dominant communications platform for employees.
- College recruiting needs to be reengineered — communications and job seeking approaches have changed dramatically on college campuses but college recruiting programs have unfortunately been stagnant for years. Program features that need to be examined include remote college recruiting, social media approaches aimed at college students, mobile platform approaches and marketing research to better understand the needs and the actions of top grads.
- Improve non-monetary motivation — when compensation and reward resources are limited, nonmonetary motivators need to be emphasized. Unfortunately, the compensation function focuses almost exclusively on “expensive” salary, benefits, and bonuses … even though a significant percentage of employee motivation comes from … recognition, praise, and feedback. Talent management should develop non-monetary motivation tools for managers that are easy to use and that produce measurable results. They should also target key employees and server them in order to identify “how to best manage and motivate me” plans.
Benchmark Firms to Learn From
A key competency for any talent management leader is rapid self-directed learning, so it only makes sense to benchmark the firms that are aggressively making tremendous strides in talent management. My extensive research has identified some of the best firms to learn from. Many are from the Silicon Valley, which has already returned to a “war for talent” (Google, Facebook, Zynga all approach talent management using a more scientific approach).
Firms outside of technology have also taken some amazing steps so they should not be ignored (Zappos, Sodexo, CACI, DaVita, Deloitte, KPMG, PepsiCo, and the U.S. Army have all taken bold steps).
Additional Strategic Talent Management Actions to Consider
In addition to the top 15 major actions recommended above, some other strategic actions to consider include:
- Prepare for VUCA, the new normal — talent management plans, approaches, and processes need to be improved so that they can handle the new business environment that we face (VUCA = Volatility, Uncertainty, Complexity, Ambiguity)
- Increasing revenues — examining how talent management actions can directly increase individual employee revenue generation
- Integration of talent management functions – an almost-universal weakness is a lack of integration. Talent management functions must more closely cooperate, coordinate, and integrate so that they work seamlessly.
- Hire right before they do — if your firm doesn’t have the strongest employer brand, location or glamorous product, you must develop a plan to quickly initiate hiring immediately before your talent competitors. A rapid “explode out-of-the-box” plan is also required.
- Corporate headcount “fat” – setting up a process that ensures that the return to hiring doesn’t result in a surplus of employees (i.e. headcount fat).
- Competitive analysis — identifying the competitive advantage that your talent management practices provide compared to your talent competitors.
- Prioritizing — prioritizing jobs, managers, and talent management programs so that your limited resources provide the highest possible impact.
- SWAT team — creating a rapid response team that can respond to sudden talent management opportunities and problems.
- Alerts — providing a process that alerts managers about upcoming problems before they get out of hand.
- Lean or agile talent management — adapting lean, CRM, and agile business approaches and tools to the area of talent management.
- Remote work opportunities — as technology, communications, and social media tools improve, talent management must develop ways that allows top talent to work from anywhere.
- Forward-looking metrics — unfortunately, almost all current talent management and recruiting metrics are backward looking, in that they tell you what happened in the past. Instead, forward-looking and predictive-metrics that allow for improved decision-making need to replace them.
- Reengineer performance appraisals — this is an almost universally disliked process that requires tremendous amount of time but produces no measurable results. A completely new approach is required.
- Transparency — throughout the business world there is an increasing emphasis on transparency and openness. The time has come for talent management leaders to reassess their entire approach to secrecy, privacy, and the degree of openness with employees and applicants.
- Cloud talent management — HR and talent management cannot be exempt from the powerful trend to move everything to the cloud.
Final Thoughts
The period immediately before the beginning of the New Year is a great time to sit back and think of your accomplishments and your legacy. Unfortunately, rather than being strategic, too many talent leaders have been simply happy to survive the last few years with their sanity intact.
Now is the time to shake loose any lethargy, to take some risks, and do something bold before you retire or move on. You may have “earned a seat at the table” but you can’t be truly respected and admired unless you produce a measurable strategic business impact.