Too many businesses are relying on the recession to keep staff from moving on.
Many companies are falling short of what needs to be done to develop their talent pipeline of emerging leaders, and shore up their workforce for the future. Effectively, they are still using the recession as their talent-retention strategy, suggests a study by Deloitte.
"A lot of organisations give lip service that they help employees with new and innovative approaches, but we are not seeing a lot of evidence of it," says Richard Kleinert, Deloitte's human capital practice leader for New Zealand and Asia-Pacific.
Last year, a survey - Managing Talent in a Turbulent Economy - took the pulse of business and the talent marketplace throughout Asia-Pacific, the Americas, Europe and the Middle East. Organisations were asked what were they doing about talent. And to what degree was it defence, and to what degree offence?
The answer: Not a lot of offence. "For most organisations, their talent strategy was the recession," says Kleinert, who recently moved to Auckland from Los Angeles. "Early 2009 saw the pendulum swing to defence mode, it started to come back in late 2009 - most were saying the worst of the storm had gone ... but there was a disconnect between what they say and do."
The results have been summarised in this year's Deloitte report titled: Has the great recession changed the talent game? Six guideposts to managing talent out of a turbulent economy.
"Most organisations have done nothing in the talent space to innovate," said Kleinert, who was part of the global group that prepared the report. The Deloitte research found only 39 per cent of executives surveyed reported their companies had a talent plan aimed at innovation.
Advances in technology have led to ever-more sophisticated and robust workforce planning and analytic tools. "Those that continue to look to the pre-recession playbook are failing to use new tools, including the extensive use of workforce planning and modelling," said the report.
The figures are damning. Two out of three executives surveyed acknowledged workforce planning was not being integrated when it came to their annual business planning or their contingency planning, or even being updated as economic conditions changed. The Deloitte survey notes a "paradox of scarcity amidst plenty".
"There will be certain skills shortages as the economy improves and that situation gets worse as baby boomers age and retire," says Kleinert. "Employers need to examine how attractive they are to experienced hires as well as to new employees entering the workforce and ensure they are pro-actively enhancing their employer brand," he said in the report.
Kleinert and his team predict a "resume tsunami" as employees look around for employers who can do more for them. "Most global executives don't anticipate a big turnover, yet employees are saying they are looking now - there's a disconnect," says Kleinert.
Deloitte's research last year on employee attitudes suggests the tsunami may be building now. "Among employees surveyed, nearly one in three (30 per cent) were actively working the job market and nearly half (49 per cent) were at least considering leaving their current jobs."
Sinking morale brought on by layoffs and other cost cutting measures were an early warning sign, said Deloitte. Of employees surveyed, 62 per cent said morale had decreased due to cost cutting. More than three-quarters of the employees who were intending to leave their current jobs reported lower morale in their companies.
What are the tools for keeping people happy? Open discussion of job advancement and the opportunity to have what Kleinert calls a "career lattice" are a good start.
While most firms can't promise a promotion every year, they can demonstrate how they planned to increase their staff's skills, he says. "Life is not linear and careers are not linear," says Kleinert. "Sometimes it can be having kids, having outside interests, elderly care responsibilities, most people, male and female, go through times where there is a need to adjust."
At Deloitte, Kleinert uses what he calls mass career customisation. "Twice a year, we sit down with every employee and ask: do you want to be on standard career model, or do you want to dial up or dial down? We've institutionalised this dialogue - it's not just about reduces work hours, it might be, 'with kids at this point in my life I can't travel' for instance." Mass career customisation inspires increased productivity, greater loyalty and reduced the costs of turnover, says Kleinert.
So what are the success stories of companies using offence rather than defence to survive? Of those who have updated their retention plans to take account of current economic conditions, 50 per cent are stepping up leadership and management development compared to 38 per cent without updated retention plans. Meanwhile, 41 per are implementing new talent programmes compared with 19 per cent without updated retention plans. And 35 per cent are creating career path opportunities compared to 20 per cent without updated plans.
Show me the money - and the love
* The market has changed significantly since the end of the last recession in 2001-2002 and now demands new approaches and focus.
* There is a paradox of scarcity amid plenty. Today's high unemployment rate does not mean the talent will be there when you need it.
* Companies using recession as their retention strategy do so at their own risk. Employers who believe their employees have nowhere else to go may lose out in the talent marketplace as the economy improves.
* Understanding your people is as critical as understanding your customers. Executives and employees appear to have dramatically different views about which strategies are most effective when it comes to retaining key talent.
* Show me the money - but show me the love, too. Money is an important part of any retention strategy but non-financial incentives are critical to employees and offer opportunities for companies to differentiate themselves in the talent market place.
Source: Deloitte - Has the great recession changed the talent game? Six guideposts to managing talent out of a turbulent economy
Gill South is an Auckland freelance writer.
