If you ask any leadership professional what his or her greatest challenge is in today’s business environment, on the top of almost everyone’s list is people: finding and retaining great employees.
Senior leadership spend hours working on strategy. They spend days off-site challenging each other to go beyond the status quo. They establish and share goals with the appropriate team members within the organization. They even seek to understand what they can do to help and grow their primary customers. But what about their own internal employees?
Here’s the reality of business today: As a company grows, the company business cycle will struggle in two areas. First, the company will outgrow its “homegrown” folks who worked well early on but have limited competencies to continue growth past a certain point. Second, the company will outgrow its process and procedures. This cycle continues over and over—first, the company outgrows people, then process, next people, again process—for the lifetime of the firm.
Anyone in charge of hiring or managing people has experienced this challenge. Rather than losing sleep over this daunting task, you should form a talent strategy that aligns with your business strategy. Doing so will allow you to determine just how much your early employees can grow and to plan for additional hires to take you to the next level. Forming a talent strategy can help you avoid “throwing the baby out with the bath water” as it relates to those employees who believed in you and your company early on.
What Is a Talent Strategy?
A talent strategy has many parts. It is a combination of a recruitment plan, key performance indicators (KPI) tracker, a compensation analysis (to be competitive) and a turnover analysis metric for retention of high performers. A talent strategy also has a component for succession planning for employees five or fewer years away from retirement to ensure knowledge transfer will occur before they leave.
Forming a talent strategy may sound easy, but more than 50 percent of firms in the U.S. lack any kind of formal talent plan. Most departments operate in silos when it comes to hiring and performance management.
Overcoming Challenges to Implementation
Why the lack of a talent strategy if hiring and retention are the biggest challenges in business today? For one, forming a talent strategy takes a serious amount of extra work. It requires constant due diligence from a person of influence within your firm, someone who will constantly be pushed by others to make people as big of a priority as customers or new business development. This is not an easy sell for those who forget that the internal customer is as important as the external one.
Much like a business strategy, a talent strategy contains information about company goals and what it will take to successfully execute those goals. A talent strategy defines the performance necessary as well as any training needed to find and develop great employees. It also points out any gaps in the talent available internally and if a new hire is necessary. Succession planning for key roles is also included. Having a company talent strategy is the ultimate in career mapping. Career mapping is a “spreadsheet” process in which you define where a person’s career begins and then “map” each subsequent step (promotion) along the way with education, training, etc. Statistics show that career mapping is the best tool for retention.
If this practice is what sets some organizations well above their competition, why isn’t everyone doing it? For some, the roadblock is buy-in from senior leadership. Are we adding an additional layer of metrics to an already complex strategic plan? Would these metrics on skill sets be beneficial over time, or are we trying to predict human nature? Communication can also be a pitfall. If we’re pointing out high-performers versus those who require training, what happens to the attitude of those whose performance fails to meet the target after they are made aware? Could we be facilitating our own retention issues?
Getting Started
What should a company do? The first step is to find someone to assist in the long-term talent strategy that involves all stakeholders. Review goals and opportunities yearly, develop a game plan for what people will need to do to hit your benchmarks, and/or offer the ability to expand markets and products or just provide exceptional service. Train or let go of poor-performers, but have a plan that clearly shows which option is best. Reward your superstars, if not monetarily, then through praise and leadership. Be flexible when hiring. As the talent pool gets tighter with the baby boomer generation retiring, be willing to hire for competency, not just industry or résumé experience. Our clients who followed this advice managed this past recession far better than those who dug in their heels.
Another important aspect of a talent strategy is having a culture of excellence. High-performers want to work in a high-performing culture. A culture of excellence encourages teamwork, outstanding service (both internally and externally) and creativity. A culture of excellence also promotes open communication among all team members. The leadership of a culture of excellence seek to continuously educate and improve themselves and their teams. They keep workplace politics to a minimum and the energy among team members high. Most importantly, leaders who operate in a culture of excellence care about their employees. In the best case scenario, high-performers actively participate in promoting this culture. Allowing high-performers to participate in driving success makes them feel significant and makes your company a firm that stands out among the best places to work.
People are a company’s most valuable asset. Firms that pay attention to this portion of their business and compile a plan that focuses on people will grow much faster, with a much stronger culture, than those who don’t. Companies spend so much time on strategy, capital improvements and equipment upgrades that they often forget about their most valuable asset. Forming a talent strategy and spending energy on people produces results that are well worth the time and effort.
