We are now at a time when talent management is more important than ever. Global skills shortages, combined with the increased opportunities presented by the recovering economy, means that a business must engage with its workforce more effectively if they are to hold on to their best employees. However, while HR fully understands this, communicating it to their organisational boards has been more of a challenge.
It’s sometimes suggested that this is due to HR’s difficulties with the real language of business – the direct connection of specific initiatives to the bottom line. So while the department may be able to show some value in talent management, it is perhaps yet to provide a truly clear analysis which proves the exact return on investment. At our recent Cielo Talent Rising Summit, talent strategist and leadership coach, Gyan Nagpal suggested that the answer to this lies in what he calls ‘Talent Economics.’
In his new book Nagpal outlines the three key steps of Talent Economics:
1. Deep diagnoses – the establishment of the organisation’s current position in terms of talent – both internal and external – and commercial context, and then what it aims to achieve in the future.
2. Objective investment perspectives – HR must communicate clearly using numbers throughout.
3. The building of a coalition of leaders who genuinely understand talent imperatives.
It is clear that for any talent management strategy to work effectively, it must not simply be kept within the HR department, but owned by the senior management of a business. This means it must be clear, simple and communicated to company leaders in commercial terms. If the strategy is too vague or written in ‘HR’ language rather than business language, then the senior decision makers of the organisation may fail to understand its return on investment, as they have perhaps done in the past.
The essentials of Nagpal’s talent management strategy are consequently as follows:
1. Talent dynamics vary across companies, countries, disciplines and business units
2. Employment drivers are changing by the day and are not always what they appear to be
3. Skills shifts are being prompted by innovation rather than academia
4. Talent strategies should not just be about how to attract more employees, but how to get the best commercial result out of your workforce
5. Diagnostics need to be deep and relevant
6. Talent management is the responsibility of senior management and not just human resources
7. An organisation’s people strategy must be constantly evolving to keep up with the business landscape
8. Talent Economics must be as simple as possible so that leaders immediately grasp the return on investment
The key thing for talent management professionals to communicate to their boards is that this strategy is not just a ‘nice-to-have’ which will be of some vague benefit in the future – it is an absolute business imperative. Although companies are beginning to invest more in talent management strategies, few have yet come up with a genuinely successful solution. PwC’s international survey has found that 77% of CEOs plan to revise their talent strategies because they don’t believe their current ones will recruit and retain the best people. So as the war for talent looks set to intensify further in the future, now is the perfect time for Talent Economics to be put into place.
