Companies struggle to invest strategically in talent management
Achieving superior financial results on a sustainable basis depends on making the right investments in talent.
It is critical for organizations to have the right talent in the right place.
Yet it is clear that companies remain reluctant to make this commitment.
Even among high performers, just 45% say their company is effective at investing adequately in talent management to meet financial targets; among low performers, this proportion falls to 36%.
This goes to the very heart of the expectations gap: companies still find it difficult to make an explicit link between their strategic objectives and the talent required to meet those goals.
Jeff Joerres, CEO of the HR consultancy ManpowerGroup, says, “When everyone is competing for the same kind of talent, you need a much clearer way of explaining how you will attract those people to your organization.”
“In a fiercely competitive global arena, it is critical for organizations to have the right talent in the right place,” says Dina Pyron, EY’s Global Director of Human Capital.
“Organizations have to focus on this as a priority. It’s not a choice any more. Otherwise, they could very likely lose their competitive edge, and it won’t take ten years – it could be gone in three to five years. If companies are not taking action now, they will lose this window of opportunity.”
As companies globalize, talent and geographic location don’t always match, Pyron points out. “An organization looking to expand needs to be able to find where the talent is and deploy it globally,” she says.
Companies in rapid-growth markets recognize the urgent need for talent on the ground, notes Pyron. Many companies in these markets develop local talent by sending managers to mature markets for obtaining global exposure and experience that they can later use back home.
At the same time, these businesses are bringing senior executives into rapid-growth economies to deal with immediate challenges in the local market. “As such, they are planning for both short- and long-term objectives,” says Pyron.
No matter where you base your organization, it cannot operate or grow revenue in isolation – its leaders and employees need to have a global mindset.
The term often refers to cultural awareness, but it means more than that, explains Pyron. “It’s also about having a business global mindset,” she says. “A business global mindset is about going beyond knowing how to do business in a local market."
Ultimately, it’s important to remember that talent is a top-level, strategic priority, Pyron emphasizes. “If CEOs are not thinking about retaining good talent, recruiting good talent, and how the definition of reward is changing – it’s no longer just about compensation but also about career and learning and development opportunities - They may not see their businesses expanding from a financial perspective. They are thinking short-term.”