Organisations are facing a crucial question: Are they genuinely maximising the potential of their workforce, or are they inadvertently overlooking opportunities for growth and innovation? Recent studies by top consulting firms such as Gartner, McKinsey, Deloitte, and BCG suggest that many organisations, despite their best efforts, may not be fully capitalising on their talent strategy. Yet, talent management strategy should be a company-wide priority. In fact, according to McKinsey, whenever talent strategy is central to the company’s business strategy, total shareholder returns are higher than their competitors’.
With this article, we wish to assist HR leaders with a thoughtful, critical reassessment of their current practices.
Revisiting Your Talent Management Strategy and Systems
Talent strategy is a high-level plan for how an organisation will identify, attract, develop, and retain the talent it needs to execute its business strategy. AIHR suggests that companies with a strong talent management strategy are 2.2 times more likely to increase their revenue faster than their competitors, and their profits 1.5 times faster.
Do you have clarity about what your organisation’s strategy is and does your talent management strategy support it? For example, if your organisation is seeking to scale, are you recruiting and developing appropriate skills, while retaining high performers who model the required behaviours? Is your review comprehensive enough to identify gaps and misalignments? Does it challenge preconceived notions, reveal blind spots, and provide a clear picture of where your organisation stands?
The Role of Talent Audits: Revealing Your Existing Assets
Talent audits are widely recognized as essential, but how many organisations approach them with the depth and rigour needed to identify non-obvious talents and skills with a fine comb?
So, let us pose the following questions: Are you using a range of tools to uncover talent? Are you, for example, including psychometric testing as an objective way of identifying individual and collective strengths and growth areas? What range of development interventions are you providing that will address gaps? Are these integrated and part of an overall competency framework that drives your entire talent management process?
Workforce Planning: Your War Plan
Workforce planning is a core business process, according to the CIPD, that aligns changing organisational needs with people strategy. In addition, according to AIHR, “strategic workforce planning is a continual process of identifying gaps in the workforce and developing a methodical people plan to ensure an organisation has the employees, skills, and knowledge needed to meet current and future business goals”. Despite its importance, 86% of HR leaders have not implemented strategic workforce planning, despite it being a top priority on the HR agenda, says Gartner.
Your challenge: Is your strategic workforce planning based on the long-term business strategy, but also makes provision for unexpected events and changes? How often do you do workforce planning? How do you ensure it’s kept updated?
Talent Acquisition: Your Hiring Engine
Talent acquisition is considered a strategic approach to identifying, assessing, and acquiring new employees for a company and goes beyond ‘recruitment’. It is your hiring engine according to McKinsey.
How effective is your approach? Are your processes sufficiently transparent and timeous to defy any possible trust deficits, so prevalent among quality applicants? Does your EVP support your talent management strategy? Is it integrated with your internal mobility philosophy so that you can easily switch from external to internal recruitment? Are you using technology to enhance the recruitment experience and acquire skills more rapidly in a limited talent pool? Can you demonstrate the ROI of your talent acquisition processes? Could it be more effective to use external service providers, for example?
Psychometric Assessments: Enhancing Decision-Making with Data
Psychometric assessments are often cited as tools that can significantly improve hiring and development outcomes, however, many organisations hesitate to fully integrate them into their processes. Yet, according to Deloitte, organisations that use psychometric assessments report a 24% increase in performance and a 36% reduction in turnover.
This invites a critical examination: Are you incorporating psychometric assessments into your decision-making process so that you can rely on a more data-driven, objective approach, that offers insights into candidate capabilities and potential that may not be immediately apparent? Also, the question is not just whether these tools are being used, but how effectively they are being integrated into the broader talent strategy. For example, are you drawing from data obtained during the selection process to inform other aspects of the talent value chain, i.e. identifying leadership potential?
Internal Mobility: A Strategic Asset Often Overlooked
Internal mobility has been identified by BCG as one of the most underutilised components of talent management, with only 28% of companies reporting robust internal mobility programs. The benefits—improved retention, engagement, and succession planning—are clear, yet many organisations struggle to fully leverage the potential of their existing talent.
This raises a key consideration: Is your organisation effectively utilising the talent already within its ranks, thereby also enhancing career development opportunities? According to Gartner, only 52% of top performers are satisfied with the career development options and support they receive from their respective organisations. Are you already starting to move away from role-based to project-based mobility options, thus making provision for gigs and projects as part of a ‘talent marketplace’ approach?
Performance Management: Beyond Traditional Metrics
The traditional annual performance review has been widely criticised as outdated and ineffective for many years, yet many organisations continue to rely on it. Deloitte’s research indicates that companies that adopt continuous performance management see significant improvements in engagement and productivity. This suggests a need for HR leaders to rethink how performance is measured and managed.
Are your current performance management practices helping to drive continuous improvement, or are they merely fulfilling an administrative requirement? Moving beyond traditional metrics involves aligning performance management with broader business objectives, creating a culture of accountability, and fostering ongoing development. A critical evaluation of your current practices can reveal whether there is room for improvement.
Leadership Development and Succession Management: Strategic Investment for Long-Term Success
Leadership development and succession management are practices recognised as crucial for organisational success, yet they frequently suffer from underinvestment and misalignment with strategic goals. McKinsey’s findings show that companies investing in leadership development are 2.4 times more likely to achieve their performance targets, highlighting the importance of a well-executed leadership strategy.
This brings up an important question: Is your organisation making the necessary investments in leadership development and pipelines to ensure your business’ long-term success? Leadership development should not be seen as an optional or secondary concern but as a core component of your talent strategy. A critical review of your current leadership programs can help ensure that they are effectively aligned with your organisation’s strategic priorities. According to Gartner, what Boards want to see from their CHRO’s in this respect is, inter alia, reporting on the % of high potential employees and the leadership bench’s strengths, as well as the key development needs of talent pools. Are you able to deliver?
A Skills-Based Approach: Preparing for the Future
As technological advancements and market dynamics evolve, the skills needed to succeed today may not be the same as those required tomorrow. BCG’s research indicates that a skills-based approach to talent management significantly enhances an organisation’s ability to navigate future challenges. Gartner is of the opinion that traditional skills training does not provide skills solutions fast enough. More ‘agile’ approaches with multiplier effects are required, for example, through social learning. Companies should also distinguish between standard and company unique skills, not only at operational level, but also at the strategic level.
These questions should guide you: Are your talent management practices adequately preparing your workforce for the future? Adopting a skills-based approach involves not only identifying current skill gaps but also anticipating future needs. If not, you could be in trouble. According to Gartner, skill shortages are the #1 risk identified by Boards as potentially leading to business disruption.
Instead, a forward-looking strategy can help ensure that your organisation remains competitive in a rapidly changing environment, but not without caveats. Are your tactics for filling critical gaps co-ordinated? Are they driven by data? Do you utilise relevant generative AI capabilities by, for example, performing an analysis of communication and collaborative tools to do ‘skills sensing’ proactively and identify emerging skills gaps? Have you made the shift to hire skills rather than base recruitment on qualifications according to the emerging global norm?
Measuring What Matters: Aligning Metrics with Strategic Outcomes
Traditional HR metrics such as headcount and turnover rates, while useful, do not fully capture the effectiveness of a talent strategy. McKinsey’s research suggests that outcome-based metrics—those that directly correlate with business performance—are more indicative of a successful talent strategy.
Are the metrics you’re tracking truly reflective of your talent strategy’s impact on business performance? A critical evaluation of your measurement practices can help you identify which metrics are most meaningful and ensure that your talent strategy is aligned with your organisation’s broader goals. Are your metrics known to everyone for collaborative goal-setting? Are you seeing the shifts from your baseline data?
In conclusion: Re-assessing your Talent Strategy – A Strategic Imperative
A critical re-assessment of your talent management practices, supported by data-driven insights, best global practices and innovative approaches, can help you unlock the full potential of your workforce and position your organisation for future success.
Are you ready to take a fresh look at your talent management strategy? Let’s explore how we can help you raise the bar.
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