Times are tough. The economic downturn that has rolled across the globe is putting pressure on organisations of all sizes and shapes in all business sectors. Management teams need to cut costs while not impacting on corporate performance. This in turn means that the importance of managing talent is more important than ever, with one recent study finding that CEOs ranked talent management as more important on the CEO agenda than meeting financial objectives!
That said, this recession is slightly different from earlier slumps. According to global professional services firm Towers Perrin, while previous economic downturns focused on mass workforce reductions, the emphasis this time is on more targeted and strategic workforce reductions. In other words, companies want to make sure that any recession-driven lay-offs do not include key talent that will be needed to ensure survival into the eventual recovery. Getting through the slump into the upturn is all good and well, but you need to make sure you have the talent in place to thrive as well as survive.
Over half of organisations polled by Towers Perrin – 54% – say that they are concerned about turnover of their high-performing and business-critical employees as a consequence of the way their organisation handles the economic crisis. In the words of Ravin Jesuthasan, Managing Principal at Towers Perrin: “The commitment to the retention of key talent is a significant shift from past national recessionary periods, when a slash-and-burn mentality reigned. Companies are entering this period with leaner workforces and the knowledge that across-the-board mass layoffs can create significant long-term problems.
“Companies appear to have the experience, tools and skills to address these economic challenges in a responsible and rational way. The strategic and surgical approach to cost-cutting revealed in this survey indicates that organisations have learned from prior periods of economic crisis. They are poised to successfully work through this turbulent time, retain and reward their pivotal talent and top performers, and position themselves for future growth.”
The conclusion that talent management needs to remain a top level board room issue during the current downturn is mirrored in a second report – “Nurturing Talent” – by the Cranfield School of Management on behalf of learndirect. This predicts that organisations that invest in their staff are best placed to save money, improve staff motivation and increase employee retention.
Sarah Jones, Chief Executive of Ufi, the organisation responsible for learndirect, notes: “Nurturing staff is a vital strategy for employers, whatever the economic situation although, in tougher times it can become a challenge as other business demands take priority. Organisations do not just stop hiring during an economic downturn – they simply work harder to ensure their available resources are allocated more effectively. Organisations must focus on nurturing talent if they are to survive, grow and succeed. By focusing resources on nurturing existing talent, organisations can ensure they reap significant rewards.”
Next week in Paris, SuccessFactors will be hosting the first European SuccessConnect conference. The event has been heavily subscribed, reflecting perhaps the importance attached to performance and talent management in these uncertain times and the growing interest in the Software as a Service (SaaS) model as a delivery mechanism to achieve success and contain cost.
“It is critical for companies to retool and realign strategies and costs. It is more important now than ever, especially with downsizing pressures and operating efficiencies needed to drive results in this economic setting,” says Lars Dalgaard, CEO at SuccessFactors. “SuccessFactors provides the tools that enable all the key stakeholders within a company to strategically plan and execute from executives to the Board to managers to employees, to keepers to who is in the lower 10%. The search for talent is not over because high performers always have somewhere else they can go to.”
For information on SuccessConnect Europe, visit: www.successfactors.com/successconnect