Why is it that as soon as the economy enters a recession CEOs across the UK are suddenly worried about 'talent'? These newly-important staff have always been there, yet suddenly they become critical. Such is the hype that surrounds the topic of talent management in a recession that research demands something different be done about it; only 32% of bosses have adapted their talent management policy to take account of the present economic context, according to a new poll by TalentQ. But has anyone asked whether a recession should make any difference? Does it really change things so much?
HR magazine decided to answer these, and many more questions by convening a special round-table event, sponsored by talent management system provider SumTotal. With directors of talent from a variety of industries, (including food, transport, banking and media), it was a discussion that had the panellists vying to get their opinions heard.
"I don't think any of our strategic goals have changed," said Tim Walker-Jones, director of talent, United Biscuits. "We still need to think about the identification, selection, development, progression and retention of key performers. These goals don't suddenly change, but the remedial things you need to do and the importance of these actions does become more acute."
Royal Mail's head of leadership and talent development, Simon Haben, called these things "looking at the external environment and the internal environment and seeing how to match the two", and agreed there was "a lot of value to be had in maintaining consistency throughout upturns and downturns". But all panellists concurred with former UBS head of global talent Chris Roebuck, who argued that "more is having to be done with less budget" - something that will throw up specific recession-based challenges. "You have to put even more effort into retaining people," he said, "because contrary to what people are saying (that recruitment is being frozen), your competition is seeking to poach your staff."
Martin Nicholls, head of talent at AMEY, the transport infrastructure company, said holding onto graduates was his biggest headache ("I wonder about 18 months' time when grads who have been with us walk out the door"), while for Tim Jones, HR director of media company Aegis, the issue was hiring only for key positions while at the same time developing only high potentials. "We're feeling the impact of the recession acutely," he admitted.
The speed with which panellists were voicing their thoughts and expanding into areas such as the role leadership has in creating talent-valuing companies (Jones) - see the full transcript at www.hrmagazine.co.uk - was testament to the fact each contributor felt strongly about their responsibilities. The saving grace though, argued Roebuck, is that the recession is prioritising talent in leaders' minds.
"CEOs are starting to 'get' the talent concept, and the risks in avoiding planning for it," he said. "They probably still see it as a risk management process rather than a process by which people are happier and give more discretionary effort, but if it gets the system working from our perspective, so be it."
Stuart Taylor, senior executive at Accenture's talent and organisation performance practice, got nods of agreement when he said talent directors had become more visible in companies now. He noted the retail sector was particularly aware of the need to focus on talent. It also saw it as something that included everyone, not just the top tier. "As a business partner, our role at the table is much stronger now than it used to be," added Jones. But Taylor was also swift to say the importance of dealing with talent still varies much too widely and in finance, ironically, remains largely absent. But could there be light at the end of the tunnel?
"I've been somewhat overwhelmed," Taylor added, "by the number of HR directors recently who have stood up and said developing talent and growing it from within is a really critical agenda for them now. Recession or not, talent is back on the agenda."
Some 60% of FTSE CEOs have come from within the business, and attest to the benefit of developing talent from within. While some HRDs have specific targets for developing those from within (see HR's interview with DHL's Scott Northcutt, p24), it is not a route these talent directors want to go down. "I notice that the more progressive managers are the ones that are keen to develop their own talent," said Royal Mail's Haben. "But we don't link their reward to growing their own people. We're aware we have to make better judgment calls on internal and external talent and we have started to be more robust about how we understand and identify our talent."
What Haben did reveal was that the recession has focused attention on finding talent from within - people who might otherwise have been missed. "Over the past year we've identified talent we didn't know existed," he said. But while these heads of talent were delighted by this, it was not long before the topic of conversation turned to who really is responsible for talent in recessionary times - them or line managers.
"As HR, we can make sure managers have the right tools, knowledge and understanding. But we can't and shouldn't be doing talent management for them," said United Biscuit's Walker-Jones firmly. He added: "I think the current climate has focused attention on the quality of line managers."
It was evident our group believed line managers are not stepping up to the plate, but at the same time they agreed they could all be doing more. "In many organisations the division of responsibility - in terms of the development of talent - between the line manager, HR and the CEO is extremely blurred", argued Roebuck. "Everyone tends to think everyone else is doing it." Nicholls agreed: "I'm staggered that after 40 years of sound HR practice, we still exhibit the fundamental flaw of not telling a manager what his role is."
One of the last projects Roebuck organised at UBS was putting line managers through a basic leadership course on the psychological cost-benefit analysis of the line managing talent. "It sounds basic, but until then our high potentials were not doing as well as expected. It was amazing to see people came off the course saying: 'Now I understand what I'm supposed to be doing, and have the skills to do it'." Walker-Jones added: "It is about partnership. It's not about saying 'this is all about bad line managers' or 'HR can come and do this for you'. In business we create a lot of inconsistencies and confusion for line managers, but we can get better at that. But we shouldn't be doing it for them."
The panellists were particularly interested in a problem that developing talent pipelines could face in a recession - a lack of jobs to accelerate talent into.
"We've worked with one of the largest law firms in the world, where people in that organisation were being told by their line managers that they were rising stars, but the reality was that they weren't," said Andrew McLellan, business development manager, SumTotal. "There's a danger people will become very disappointed in their careers because the fast track will not appear for them."
Erik Finch, talent management specialist at SumTotal, said much of this was down to lack of consistency: "When you have each manager determining what a high potential is, you soon raise questions about how you get consistency at a regional or global level."
Finch said an approach one client - BP - takes is to map talent out differently. "What it does is map high potentials against the difficulty of the job they could inherit. It means it can look at a person and see if they are a high potential in a difficult job, versus a high potential in a very simple job."
This technique means everyone can be considered to be talent - something the panellists were keen to see happen in such gloomy economic times. "It's not just the top 10% you need to worry about in a recession, but the rest of the 70%-90% of the workforce, the stalwarts who keep things running," said Roebuck. "That's what we're looking at in United Biscuits," confirmed Walker-Jones. "We're rolling out a more holistic talent approach that is not just about high potentials, but asks what relationships and proprietary knowledge and skills all staff hold?"
"Information management is the key," said McLellan. "Many organisations have a lot of information about their people, but what they don't have is 'intelligence' about their people."
Everyone agreed with this and Taylor was clear that talent management must remain a long-term exercise, and not one deflected by upturns or downturns. "For an organisation to be effective and develop talent from within, we need to be looking much more towards the longer term. There needs to be a more effective, integrated talent management approach that enables us to spot talent earlier on."
"Integration is the linchpin," said Finch. "In the past 10 years many organisations have attempted to implement talent management strategies, but costs still haven't gone down because they are not being applied consistently across the business. Most of the businesses that are successful are those that want to enhance their employees' strengths. This is as good a message as any to adopt in these tough times."
Martin Nicholls - head of talent, AMEY
Chris Roebuck - former global head of talent management, UBS and founder of Transformation
Simon Haben - head of leadership and talent development, Royal Mail
Tim Jones, HR director, Aegis Media
Tim Walker-Jones - director of talent, United Biscuits
Stuart Taylor - senior executive, talent and organisation performance practice, Accenture
Andrew McLellan - business development manager, SumTotal
Erik Finch, talent management executive, SumTotal.