4/5/07 7:15 AM

Leadership Gap Poses Biggest Talent Crisis, Executives Say

By Kathy Gurchiek

A gap in the leadership pipeline, not the pending retirement of key workers, is a leading challenge for organizations, according to a 12-month survey of 700 U.S. organizations that included interviews with 60 HR executives.

Bersin & Associates, an independent research and advisory service, touted its study, High-Impact Talent Management, as the first comprehensive analysis of the talent management market.

It discussed its findings on HR best practices, HR systems, business outcomes, organizational models and workforce issues in a March 28, 2007, webcast. The full results were to be published in May.

Among the findings:

• Gaps in the leadership pipeline (51 percent), creating a performance-driven culture (46 percent) and difficulty filling key positions (38 percent) are the top three talent challenges that respondents cited.

• Just over 80 percent said leadership development is the talent management process most needing improvement and the function that best defines talent management.

• Nearly 70 percent said talent management strategy is the responsibility of groups other than HR, such as the CEO, top management, and/or line-of-business executives.

• Only 23 percent said the pending retirement of key workers is a talent challenge.

Talent management is not just about the top talent, Bersin & Associates President Josh Bersin said during the webcast.

“Today that definition has completely changed and deals with the people all over the organization and the processes that touch most of the people across the organization.”

Most companies have dealt with the issue of the retirement of key workers, he noted.

“The baby boomers are continuing to work. … The reason for the gap in the leadership pipeline [is] … there just aren’t as many people available in the mid-level jobs.”

Clearly, the issue that emerges from the study, he said, is that organizations are realizing the urgency of treating talent as a corporate asset and managers are beginning to act on it.

Much of talent management, he said, will be based on figuring out which competencies are tied to your organization’s core values.

The need for a systematic approach to leadership development, such as the recruiting cycle, and identifying, developing, measuring and motivating an organization’s leaders, he added, “has become a high priority at senior levels throughout the organization, and not just within the HR function.”

Making That Happen

Seventy-seven percent of organizations have little or no view of talent gaps in their organization, their research found. That includes nearly half (49 percent) with only some view of their talent gaps and 28 percent with no real view of such gaps.

He advised five steps for action:

• Identify the business problem that will have the most impact on your organization. Best-practice organizations focus on a few high-value roles or positions, not the entire organization.

• Use that information to work with your business leaders to identify one or two of the critical talent gaps. Talent gap information is readily available from line-of-business managers during the annual planning process. If you’re the head of recruiting, and the head of engineering comes to you with a need to fill some positions, for example, ask what competencies you need to look for in applicants. It’s a simple question with profound consequences.

• Look at competencies in areas where you have identified critical talent gaps. Forecasting your needs for 12 to 24 months doesn’t have to be highly scientific. Don’t just do a headcount of employees; look at the nature of the headcount to learn where your talent gaps exist, Bersin advised. This is something most companies don’t do very well, he said,

• Develop one or two talent-driven programs. Savvy organizations design leadership development programs to target different levels—functional manager, business manager, group manager, enterprise manager—and to keep their pipeline filled, according to the findings. Leadership development best practices maintained strong executive engagement, defined tailored leadership competencies, was aligned with the business strategy, targeted all levels of leadership, applied comprehensive learning approaches and integrated with talent management, according to the research.

• Establish governance with the line-of-business executives. “HR plays an important role,” Bersin said, but ultimately it is the business leaders who need to drive talent management when it comes to owning the strategy and the governance models.

“If you don’t have business people involved,” such as the CEO or CFO, “you’ll have compliance but no adoption,” he said. “HR still has to take place,” Bersin said. What’s different, he added, is “these people are going to be the ones who are going to be working with the line managers” to develop these new initiatives.

Kathy Gurchiek is associate editor for HR News. She can be reached at kgurchiek@shrm.org.

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