Lack of Accountability, Capability Are Key Talent Management Challenges

By Theresa Minton-Eversole Nov 6, 2008
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Many companies are still struggling to execute effective talent management practices and programs consistently, according to a study released by global human resources consulting firm Hewitt Associates and the think tank Human Capital Institute (HCI).

Nearly 700 senior-level human resource and business leaders who participated in the study identified attracting and retaining skilled workers as the workforce issue that is most affecting their organizational strategy. Specifically they cited the need to address shortages of management or leadership talent and succession pool depth, develop manager capabilities and retain high performers.

There are advances being made in talent management, according to the report The State of Talent Management: Today’s Challenges, Tomorrow’s Opportunities. Improvements can be attributed in large part to more senior leaders recognizing superior talent as a business advantage and, therefore, getting more involved in their company’s talent management strategy.

Despite this, the study shows a key gap in talent management execution, particularly around accountability. In fact, few organizations hold managers (7 percent) or senior executives (10 percent) accountable consistently for developing their direct reports through performance management processes.

“Today’s uncertain economic environment has created an even stronger sense of urgency among companies to address talent issues quickly and effectively,” said Bob Campbell, leader of Hewitt’s North American talent management practice, in a press statement. “To be successful, organizations need to make talent management a shared business and HR responsibility, where business leaders consistently emphasize the importance of talent management, are actively engaged in the process and hold themselves accountable in tangible ways for developing talent beyond the leadership levels.”

Program Hurdles: Development, Alignment, Execution, Analysis

Lack of accountability is just one of the hurdles to today’s talent management efforts. The study identifies four additional challenges to well-executed talent management programs:

Gaps in talent development capabilities. Only 5 percent of organizations reported having the managerial capability to grow people in their jobs or provide feedback to support employee development consistently across the organization.

Lack of alignment between human capital and business strategy. While human capital is viewed as important, only 17 percent of respondents indicate their workforce strategy is consistently aligned with their business strategy across the organization.

Inconsistent execution of talent programs. Most companies have fundamental talent management processes in place, such as workforce planning, high-potential development programs and succession planning. However, few execute these programs consistently across the organization.

Limited use of meaningful analytics. Most organizations track traditional workforce measures, such as headcount, turnover and cost-based metrics. But few have graduated to tracking the metrics that matter. A mere 10 percent of companies measure the effectiveness of talent management programs consistently, and even fewer (7 percent) use quantitative frameworks consistently to align human capital investments with their business strategy.

Some Successes

Organizations that are making significant strides in managing talent are differentiating themselves in the following ways:

Depth and consistency of practices. These companies have been effective in institutionalizing specific talent management programs (e.g., talent reviews, succession planning and employee development) and are applying these programs more deeply and broadly in their organizations.

Higher commitment for talent development. They view talent management as a shared business and HR responsibility and require active engagement, commitment and accountability from leaders and managers.

Progressive and innovative practices. Some organizations are introducing new and innovative ways to manage talent, including progressive approaches to workforce planning and employer branding. A growing number of companies are using predictive analytics to guide human capital decision-making and business alignment.

“Successful companies embed their talent strategy into the overall strategic planning process, integrating individual programs and practices to ensure they are all driving toward the same set of objectives,” notes the report.

“Organizations striving to improve their talent management practices have to start by acknowledging challenges,” says Allan Schweyer, executive director of HCI. “This report will help companies understand those challenges, and reprioritize their human capital initiatives accordingly.”

Theresa Minton-Eversole is an editor/manager for SHRM Online.

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