The competition to attract and retain top talent in any industry is fierce, and gaps exist from the bottom of the pipeline to the top. On the other hand, a talented, engaged workforce is one of the most effective competitive advantages any organization can have. Identifying and developing the shining stars and high-potential individuals was once relegated to the HR department. Today’s successful organizations have found that intentional and focused plans to identify and develop the talent needed for the future needs a much broader and more inclusive approach.
The Cost of Getting it Wrong
Most organizations probably understand that a poorly chosen hire or promotion or a bad fit costs them money, but do they know the depth and potential magnitude of these choices? According to the U.S. Department of Labor, the price of a bad hire is at least 30 percent of that employee’s first-year earnings. While they do not compile similar statistics for inappropriate promotions, it’s probably safe to assume that the number is in the same ballpark.
The Less Quantifiable Losses
There are also implications of poor decisions beyond the dollars associated with them as problems in the workforce tend to spread and snowball. The absence of a strong pipeline can create a challenge in finding the right people for the right positions. This in turn increases the potential of moving ineffective people into leadership positions or requiring a lengthy hiring process to acquire leaders from the outside. While these problems all cost money, a bad apple can also cost the organization in terms of an increase of conflict, poor communication, and difficulty cooperating.
The rate of change is high in terms of technology, the skills needed to be successful in a position, and what the demands of the future will be for an organization. For that reason, combined with all the evidence of the impact of low engagement, leaders in every organization need to be agile: they must be able to think quickly, develop healthy relationships, and have an ability to coach others while bringing a deep sense of integrity to a company. All of these moving pieces drive the need to engage in the identification and development of top talent as an entire organization. Let’s take a look at how businesses are evolving this process.
Determination of Talent Needed
Performance levels against job descriptions and profiles is a common way for organizations to identify top talent. The concern with this method though is that the focus is on the current state – what is needed to be successful in the job today.
In determining what talent to look for, organizations need to go beyond today and look at what will be needed for it to be successful in the future. Take for example a manager role today. Skills and talents needed may include budgeting, team building, process management, and efficiency. In looking to the changing world we live in today and what the future is expected to be, skills like change resiliency, high impact communication, and collaboration might be necessary. As technology changes on a continual basis and market needs shift rapidly, a skillset that is a must-have today may be obsolete in a few months or years.
Tools to Use in Talent Identification
Historically, organizations approach the identification of talent through performance evaluations that are done in a formal way with standard documents and semiannual or annual conversations. While the information discussed in those meetings should not be a surprise to the employee, often times it is. This is a result of the leader not engaging in conversations with and giving feedback to employees throughout the year. Things are starting to change, however.
Smart organizations are moving toward expecting their leaders to interact with employees on a regular basis to discuss current performance, goals, career aspirations, etc. This approach enables both leaders and employees to take immediate action on necessary changes and development or learning opportunities. It also encourages a coaching leadership approach that enables employees to take the lead on their future development and contribution to the organization.
Different data points and how they are used in talent identification has also changed. Predictive analytics has become more popular as a tool to identify risk related to the retention of talent in organizations. Leadership assessments are used to determine an individual’s strengths and potential derailers. Common assessments used include Hogan, Caliper, 360 Degree Feedback Surveys, the DiSC, and the MBTI. There are two keys though to using data as a talent identifier; one is that it not be used as a standalone input and second, that the analysis and interpretation of the data be shared with the employee and used to create an action plan for moving forward. This helps create a partnership in learning, behavior change, and both individual and organizational success.
Considerations When Assessing Talent
When discussing quality of talent, many different perceptions of the same person will come forward. While this is common due to the type of interactions required and the nature of the work, perceptions can also differ because of the misuse of words. Often times, the terms capability, ability, and capacity are used when talking about an individual’s talents. While subtle, there are important differences between these terms.
When looking at an employee, capability should be in reference to whether or not someone is able to do something; ability should refer to someone currently performing as needed, and capacity should be used in reference to volume or workload. “Billy is capable of doing those things but hasn’t had to for quite a while” indicates that at one time Billy knew how to do the work but that does not automatically mean he still can perform those requirements today. “Billy is able to do those things, as you saw in the meeting this morning,” confirms a current demonstration of the skills. “Right now, Billy has capacity to attend the leadership development series,” speaks to available space in his workload to take on additional tasks or responsibilities.
This differentiation is worth seeking clarification on. If someone is going to be given additional responsibilities for example, because of their previous capability, that can lead to frustration, lack of support, and lack of engagement in a role. If available capacity is not considered, a well-intended growth and development plan may be set aside and forgotten about due to responsibilities that are perceived to be a higher priority.
The Impact on Your Talent Pipeline
Traditional succession management plans are built on vertical ladders and rely strongly on seniority and who’s “next in line” rather than a broader, systematic approach to identifying and developing talent. The problem with the old system is that it leaves many opportunities for rising stars to be overlooked simply because they’re on the wrong ladder or perhaps on no ladder at all. This then leaves potential gaps should a key player leave the organization.
A more inclusive approach involves a well thought out intentional focus on what is needed for the organization to be successful in the future, the identification of talent using the outcome of that future focus, assessment against and development aligned with the future state, and ongoing coaching, feedback, goal setting, and acknowledgement conversations. When top talent is spotted and given the tools, support, and growth opportunities to grow within the organization, they are more likely to stick around resulting in the organization having a more robust pipeline and being more prepared to fill roles when vacated.
Head in the Right Direction
Organizations that are successfully identifying, hiring, and retaining the best talent in their industries are doing so by taking a holistic approach to managing their workforce. By keeping an eye on the future and ensuring that workforce decisions are tightly aligned to the long-term goals and strategies of the organization, the entire company stands to gain in every direction, from employee satisfaction to profitability.