CEOs passing the buck on talent management

Mar 05 2008 by Nic Paton Print This Article

Business leaders love to rant and rage at how poor HR is at identifying and grooming future talent. But according to a new study, the heart of the problem might be closer to home – staring them in the mirror, in fact.

Research by consultancy Development Dimensions International and the Economist Intelligence Unit has concluded that half of business leaders feel their organisations are only sub-par when it comes to developing leaders, with a similar proportion believing they are poor or, at best, only fair at identifying talent.

The poll of 412 senior leaders in Europe, North America, Asia and Australia plus eight C-suite executives also found that six out of 10 were worried their talent pipeline was not growing fast enough to meet their most critical business needs.

But the research also identified a serious disconnect between what senior leaders thought should be being done and what they themselves were doing.

While more than eight out of 10 of the chief executives polled readily agreed that talent management was as or more important than other business priorities, just a fifth admitted to spending time managing talent themselves, falling to a tenth who had reviewed the issue with their boards.

This "do as I say not as I do" approach to talent management by top executives is all the more worrying because of the wealth of evidence that has now emerged to show just how critical talent management is to performance, engagement, recruitment and retention.

Just last week two surveys highlighted the pivotal relationship between good talent management, job satisfaction and employee loyalty.

Research by the Kenexa Research Institute concluded that career path programmes, goal development and monitoring, regular feedback sessions with managers, tracking progress all had a demonstrable effect on employee execution and motivation.

Its poll across six countries also found that organisations which focused on talent management reported employees who were more engaged and satisfied with their jobs and companies overall.

Similarly, a poll by consultancy BlessingWhite of some 3,300 American workers found that a third would only "probably" still be with their employer by the end of the year, with one of the key reasons for moving being a general feeling of their talent not being used to the full.

Both studies also tally with British research by the think-tanks The Work Foundation and the Institute for Employment Studies last month arguing that firms with a comprehensive approach to people management tended to report higher profits per employee, profit margins and productivity.

"Leaders see the opportunity, they talk about it, they invest in it, but this is a job that requires their direct involvement, and most just aren't skilled or experienced at doing it themselves," said Matt Paese, vice president of executive solutions for DDI, of the latest study.

"It's astounding given the fact that they recognise the business impact of having the right people – yet they're outsourcing accountability for it," he added.

The disconnect between words and action was all the more surprising because the executives surveyed conceded that their greatest obstacle to executing business strategies well was not having the right person in the right job, said the DDI poll.

For some organisations, this meant not making the right promotion decisions and for others it was not having enough talent ready to move into critical roles.

"This suggests that while organisations fully recognise the criticality of talent management, they are often not prepared to replace leaders who are not executing effectively," said Paese.

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