After nearly a year, the news on recession is taking a U-turn as analysts are officially reporting that the recession is over. While it will take some time for recession to pave the way for prosperity and growth for business in general, prosperity is already on its way in certain economies such as Brazil, Russia, India and China (BRIC nations). This two blog series will discuss the imperatives for talent management in times of economic recovery.
HR may be caught off guard
Although this is good news for business operations, including marketing and sales, it poses new challenges for human capital. Businesses would no longer run on the old rules, but new out-of-the-box solutions, more comprehensive efforts, innovative thinking, and new skills and competencies would be required to grow and prosper. Needless to say, the demand for both quantity and quality of talented employees will grow worldwide. Companies that fired employees in the past are already feeling the pinch, as they do not have enough bandwidth to execute upcoming projects.
Bloggers like Jon Ingham, who champion the cause of human capital management, are being invited to speak on performance management, the need for which is pressing..
Talent scenario during recession
The law of demand and supply mercilessly applies to human resources, also. During the economic downturn, companies were able to downsize by getting rid of redundant workforce. They also restructured the employee compensation processes (mostly by decreasing) to stave off financial losses.
Employees who stayed got the opportunity to handle a variety of tasks that further sharpened their skills and made them multi-skilled. However, those who were out of job, lost this opportunity to hone their skills in a new challenging environment. Adding to our woes, slashing of training and development budgets has reduced the number of skilled employees.
These survivors got the opportunity to handle a variety of tasks that further sharpened their skills and made them multi-skilled. Thus, overall quality of talent has increased. At the same time, those who were out of job lost this opportunity to hone their skills in a new challenging environment. Adding to our woes, slashing of training and development budgets has led to a depletion of the number of skilled employees within the companies.
And, a difficult road ahead
Such steps taken by companies have created an altogether tricky scenario: the quality of talent within the companies has increased (raising the bar of the talent), while the quality of skills available in job market has dwindled. Now, recruiters find the required quality talent in the competitors’ workplace.
Corroborating this trend is a study by Accenture that has found that “more than two-thirds of executives are now deeply concerned about not being able to recruit and retain the best talent. In today’s global and highly competitive economy, the war for talent is now global, not local. The survey of more than 850 top executives from the U.S, UK, Italy, France, Germany, Spain, Japan and China found worries about talent management were growing, with 67 per cent this year putting it second only behind competition as the key threat, up from 60 per cent last year.”
It may be worth noting that companies such as Infosys responded to the downturn by investing more in training. Instead of fearing financial losses, these corporates focus on improving the quality of their employees’ skills. And the effect is visible in their financial results. Member of Infosys’ board of directors and head of HRD and Education and Research, T V Mohandas Pai said, “In response to the economic crisis, we had stepped up our investment in training. This has made us more competitive in fulfilling clients’ needs today.”
New Definition of Talent
While the war for talent continues, the bar for talent also goes up. Old skills and competencies may not work. Companies now need salesmen that not only sell products but also sells solutions; production managers no longer control just operations, but are expected to innovate and improve productivity; and quality managers need to study competitive products with more zeal and help develop better products and services. The employer’s expectations have changed and are set to grow:
- High productivity: Employees should deliver much more than they are compensated for. If that happens, employers are willing to offer a larger share to them.
- Multi-skill: Companies have discovered that one way to decrease recruitment costs is to use multi-skilled employees as they help reduce manpower dependence.
- Self-managed and self-motivated: Such employees reduce managerial efforts, which help organizations to have less number of managers.
- Innovative and out-of-the-box thinkers: As the rules of the business change and competition increases, existing solutions no longer work. Companies need employees who constantly infuse new ideas and provide out-of-the-box solutions to meet customer needs.
The key to retain talent lies in HR policies and practices
As organizations’ expectations from employees increase, employers too have to evolve accordingly. Talented employees continuously need new challenges and goals they can achieve, and a continuous supply of information and resources they can use to solve business problems. Needless to say, they will in return, demand more lucrative and effective compensations, a great work culture and friendly HR policies.
“Even during the recession, companies are reviewing and revising their leadership development programs. Survey after survey indicates that people who quit their jobs did so because of their relationship with the boss, not because of dissatisfaction with their job. Recession is a perfect time to take a hard look at the leadership style and training to increase employee satisfaction with management.”
Five important talent retention factors
Consider the following five factors that can help organizations retain talent in the post-recession era:
- Clear goals, targets and expectations: Organizations need to outline what exactly they expect from employees and what should they do to meet these expectations. A talented mind without a direction is most likely to falter off course.
- Balanced work environment: Talented employees have huge caches of energy and they are willing to do what it takes to meet deadlines. But often, they need time to re-energize themselves. Organizations that want to retain talented employees need to provide a positive environment that allows them to re-energize themselves more often.
- Track performance goals and provide analysis: Innovators and hard workers need constant motivation to perform better. They need to know whether they are producing the desired results. One way to let them know about their performance is to point toward specific results, achievements or failures (which they can fix before it is too late).
- Fair performance evaluation: At the end of the day, the high fliers want to get acknowledged for their work. The first acknowledgment is a fair and formal performance appraisal. Employees should be specifically told where they met expectations and where they did not.
- Compensation to maintain a decent lifestyle: Employees who deliver quantity with quality also expect fair compensation that is compatible with the market.
What Next: EmpXtrack Performance Management is a powerful package of tools to help you set SMART goals and targets, track goal achievement, evaluate performance at quarterly, half-yearly and annual intervals, and decide decent compensation for your talented workforce.