The truth about talent
BY RACHEL ZUPEK FAREL
Talent management has long been a concern at all levels of organizations, from the executive suite to individual team members. However, the harsh reality is that while organizations place high importance on developing their own talent, they don't always have the structures in place to adequately do so.
When talent crunches occur, companies tend to turn inward: Sixty-seven percent of respondents to PwC's 2012 Global CEO Survey plan to develop and promote most of their talent from within.
That's where the disconnect occurs: According to PMI's 2012 Pulse of the Profession report, only 47 percent of organizations have a formal talent development process for project managers, down from 52 percent in 2010.
Many organizations don't know what a robust talent program requires. Some believe talent development comprises retention and succession planning, while others assume they need only performance reviews and annual raises. “Deploying a talent program may have as many disadvantages as advantages if it is not executed well,” says John Thorpe, managing director of Arras People, a project and program recruitment firm in London, England. “In fact, a badly run program may do more harm than not having one at all.”
When formalized and done well, talent management translates directly to the bottom line. The Pulse of the Profession report found that organizations with career paths for project professionals see a 71 percent project success rate, versus a 64 percent overall average.
To clear up some of the confusion surrounding best practices, here are four talent management myths, debunked:
Nearly 60 percent of U.S. companies have trouble attracting critical-skill employees, a 13 percent increase over 2010.
Source: 2011/2012 North American Talent Management and Rewards Study, Towers Watson
Myth: Talent management reviews should be kept confidential to avoid hurting employee morale.
Reality: Some organizations want to avoid making team members feel bad if they aren't considered “top talent,” but transparency can increase legitimacy and trust.
Communicate openly with project staff about talent management processes, says Steve Boese, director of talent management strategy, Oracle, Rochester, New York, USA. “High-potential performers usually like to know that the organization has recognized them as such,” he says. “These employees can see more clearly how their hard work and talent will be rewarded, and be less likely to seek outside options.”
It's also important to make those not at the top of the list feel like there's still a place for them in the organization. When you're open with project staff members about both their strengths and shortcomings, it shows you're willing to help them develop, says Jorge Valdés Garciatorres, PMP, managing director for Spanish-speaking countries at TenStep, a global business consulting company in Mexico City, Mexico. “If the project professional isn't performing well, it is better to let them know why and how they can improve the gap,” he says.
Myth: When times are tight, talent management budgets are the first place to cut costs.
Reality: True, comprehensive talent management programs are expensive. But the costs of not having one are higher: Poor succession planning wipes an estimated US$8.4 billion from the stock market value of the top Fortune 1000 companies every year, according to outsourcing analyst inContact.
“By cutting your training and development budget, the skill set of your current employees could end up falling behind and impacting the ability of your organization to innovate,” says John Reed, senior executive director of IT staffing agency Robert Half Technology, Menlo Park, California, USA. “It also ends up being very discouraging to employees. Not only can this affect productivity, but it also impacts job satisfaction—and your top performers could end up looking for opportunities elsewhere.”
If you have no choice but to cut your training and development budget, make serious efforts to find low- and no-cost ways to help project talent learn new skills and advance in their careers, Mr. Reed says. That could include having an expert in the organization host an informational lunch, or sending project staff to inexpensive seminars or online training courses.
Myth: Only large organizations need formal talent development programs.
Reality: Smaller organizations may get overwhelmed because they assume a talent program requires significant resources, but they may have even more to lose if they don't find and retain high performers.
“Smaller companies need to develop talent in order not to lose them to larger organizations,” says Marci Schnapp, president of TeamQuest Systems, a human capital solutions provider in Toronto, Canada.
Because there are fewer successors at smaller organizations, one person leaving likely will create a bigger hole than at a large or mid-size company.
Smaller companies should understand that successful talent management programs don't have to be expensive. “Low-cost talent management includes having clear job descriptions, succession plans and mechanisms to assess competencies on a regular basis,” says Mr. Valdés. “By using these kinds of tools, you show your employees that you are interested in their development as professionals.”
Myth: Organizations should focus on talent management only when gaps open.
Reality: Too many organizations confuse human resources management with talent management. “If true talent management is being done, it is a strategy, not just resource management,” Mr. Thorpe says.
Three Essential Ingredients of a Successful Talent Program
Talent development programs vary across organizations based on culture, strategic goals, size and structure. But a few traits are essential to all programs:
1. Process: The talent process should be clearly defined and achievable for project staff. “Set development goals, and tie those benchmarks to the review and advancement process,” says John Reed, Robert Half Technology, Menlo Park, California, USA.
2. Understanding: Organizations need a solid and thorough understanding of the talent on hand, says Steve Boese, Oracle, Rochester, New York, USA. They must be able to answer, “What are we good at, and where are we struggling to meet business and customer demand?”
3. Alignment: Talent development programs must have strong ties to business and operational strategies and philosophies. “Once you have a good idea of how the business strategy will translate to the talent strategy, you can begin an assessment to determine the needs to hire new talent, train and develop existing talent, or leverage contingent and contract talent,” Mr. Boese says. “Your talent supply must meet your business demands.”
Organizations with career paths for project professionals see a 71 percent project success rate, versus a 64 percent overall average.
Source: PMI 2012 Pulse of the Profession report
Talent management is a long-term process that should contribute to the organization's well-being, he adds. An organization may be perfectly content with hiring practitioners at a certain level, investing in some training for a few years and accepting that these people will move on.
“Companies can make the most of where they are in the overall food chain,” he says. “As such, they can have a plan for managing their talent rather than high-worth individuals.”
Ultimately, a long-term, full-time program is the way to go, Mr. Boese says. “With robust talent systems and processes in place, organizations can understand more about internal talent, their career goals, the projects they are interested in and how that ultimately contributes to the overall health and success of the organization.” PM
OCTOBER 2012 PM NETWORK
PM NETWORK OCTOBER 2012 WWW.PMI.ORG