Since McKinsey in 1998 published their article on “The War For Talents” it has been widely accepted that Talent Management should be a key priority for any HR department. Actually, make that for any top management team in the world. Indeed when surveyed “Talent Management” or “Attracting the right talent” always come up as one of the top three priorities for US and European CEO’s.
So, is that how it should be? Well, I think it is. But let’s look at the convincing case there actually is for why talent management is not that important. It goes something like this:
Between 1980-2000 the use of big Talent Management programs declined rapidly. This was mostly evident in companies well-known for their extensive programs such as AT&T, IBM, Citi Group etc. Why? There are many reasons for that. A few are:
Loyalty fell and therefore the turnover of key employees rose. When they leave they take the investment with them.
- Companies went through so many restructurings that talents were not so much in demand.
- Global competition made talent forecast very uncertain and long development programs either yielded too few or too many talents.
- The high unemployment rate in the 80’s meant that it was easy to buy cheap young talent – there were so many available talents around and it was therefore cheaper to buy than to make.
The first three points are still relevant now – perhaps more than ever. So consider the fourth. Look at the chart below. Unemployment rate in US is now at 9%-10% but the youth unemployment rates are sky high- almost at 20%! And many of these are well-educated. The same is true in Europe – in Spain the rate is above 40%!
Perhaps companies do not need to invest in expensive Talent Management programs. There is plenty of well-educated young people around who can be hired for less.
02/12/2011 at 12:01
I have just re-read the classic McKinsey article from 1998 called ‘The War For Talent’ (The McKinsey Quarterly, 1998, number 3). It is a great article and I will recommend you all to read or re-read it. It is great for many reasons. Firstly, it was the article that coined the now famous phrase ‘war for talent’ and thereby started the focused effort many large and multinational companies since have had. Talent Management has become a large focus area for many HR executives and a core HR activity. This was not the case in the beginning of the 1990’s.
A second reason why it is a great article is that it is very well researched. They interviewed 5,679 executives from 77 companies of which 359 were CEO and their direct reports as well as 72 senior HR executives. Impressive.
So what did the article conclude? Well a few conclusions are; 1) The war for talent can be won if – and only if – companies elevate talent management to a burning corporate priority. 2) You must create a strong employee value proposition [I like this]. 3) Many do focus on attraction, retention and development but their effort is way off the mark. 4) All talents care deeply about culture, values and autonomy. 5) Feedback and coaching works really well and 6) too few understand their retention problem. Many articles and White Papers have been written since concluding basically the same. These conclusions are worth remembering.
How have companies taken on this advice here 13 years after the article? Bersin & Associates surveyed in 2009 American companies’ talent management and concluded that 15% had no talent management strategy at all, 40% said it was at a ‘novice stage’, 40% was at a ‘intermediate stage’ with some mature processes and only 5% had a clear strategy with mature and integrated processes. Wow, that is not good enough.
It appears that the future winners of the War for Talent are almost identified…time to step up for the rest. Talent Management really isn’t a ‘nice to have’ anymore. It is a ‘must have’ in order to survive.
24/04/2011 at 19:46