There is a natural proclivity to reduce the organization’s investment in talent management strategies during tough economic times. That approach can have serious competitive consequences.
Human Resources (HR) executives participate in a strategic process responsible for ensuring the right people for available jobs are found and placed, and that the workforce has the right opportunities to develop skills and full capabilities. The implication is that the business is committed to integrating talent management into its operations and provides the resources necessary to follow through on that commitment. During tough economic times, the unfortunate fact is that many of the very activities ensuring a business will remain competitive in the future are the first ones that experience cutbacks – recruitment, training and development, networking events, mentoring programs, and so on.
In truth, the tough economic times have proven that Human Resources must be a strategic function because the intense global competitive environment leaves no room for slack. HR executives as talent managers must find the right person for the right job at the right time, in support of the organization’s mission and long-term success. HR must take a leadership role in finding the right staff and in the retention and development of hired talent. Simply placing workers into positions offering few opportunities to develop their skills will quickly lead to a disengaged workforce.
One of the critical issues HR executives must address during periods of cutbacks is the natural inclination of the business to cut workforce development budgets. Peter Drucker, a management consultant, author and educator, addressed this during a discussion of counter-productive organizational practices when he included the following: a concern with costs alone that “smothers opportunities.” He also included a concern with increased productivity at the expense of working smarter, an appraisal system that rewards routine work activities rather than innovative performance, and an inability to recognize that creative tension is not the same as conflict. It is the uniqueness of individuals that must be managed so that people are fully contributing. In fact, high potential employees can develop themselves to a large extent if the business gives them the opportunities through in-house workshops, funding training courses at the local educational institutions, allowing the talented to attend workshops offered by organizations promoting diversity, and so on.
HR executives must be prepared to make a case for the competitive advantage that talent management brings the company. Though Drucker wrote during a time when the information-based society was just emerging, he had an intuitive understanding of the importance of giving organizational members the tools to engage and motivate employees to perform at a higher level. Executives can be the most talented people in the industry, but if the people on their teams are unable to make use of the executive’s ideas, directions, vision, and contributions, then the organization becomes less competitive.
Another critical issue for talent management executives is ensuring that each employee feels respected and understands that innovative ideas are welcomed. This sounds nice on paper, but accomplishing this goal is much more difficult in reality. When people are concerned about their job security first, or are hanging on to jobs they would leave if the economic conditions were better, the entire team performance is degraded. When Proctor & Gamble (P&G) purchased Gillette in 2005, CEO A. G. Lafley was able to successfully integrate the two companies largely due to his ability to select and lead the right people. He learned within three months of the acquisition which of his team members were engaged and motivated and able to make tough decisions needed during the transition. One of the mistakes companies make is assuming that current leadership is right for the times, when it may not be. Talent management executives must be talented themselves, and have the skills to navigate tough economic times. Employees who see managers struggling to cope without consequences are less likely to see the point of excelling in their own jobs.
In the ensuing months, Lafley solidified P&G’s strategy of focusing on developing and profiting core capabilities, and a major piece of that was ...selecting, developing, training, teaching, and coaching the leadership team. P&G gave every employee a pamphlet describing the company’s values, its respect for the individual, and its belief that innovation is the key to success. From the core principles emanate the firm’s culture that promotes worker networks, gives employees access to company leadership, encourages unconventional problem solving, and offers employees opportunities to close their skill gaps and build on their talents.
Using Scarcer Resources Wisely
Instead of cutting back on the implementation of talent development and management strategies when budgets are being cut, businesses should use scarcer resources to ensure each employee is contributing in a productive and meaningful way. People must be aligned in the organization in a way that ensures they are in the right job and have ample opportunity to develop leadership skills. There are many ways to incentivize people other than through money. For example, they can assume stretch roles that enable them to showcase their abilities, or participate in a mentoring program, thus sending the message that personal development as a team member is important.
Finally, it has been shown over and over again that diverse workforces are more innovative and creative. Companies that significantly reduce their recruitment efforts through community outreach are stepping back into an old model of operation. Even as domestic economies struggle, the globalization of the market economy continues. The companies with the diverse workforces are the ones best aligned for the competitive future.
It is suggested that, rather than spending less on employee development during tight budget times, companies should be spending more, but in a highly strategic manner. Businesses must develop an employment brand that attracts talent and a culture and practices that retain and develop the talent. How the company’s leadership is perceived will play a large role in the success of the talent management efforts. Even in a job market conducive to employees staying put, the top performers will always have options.