Great at recruitment, poor at retention

2004

Britain’s financial services sector looks set for a renewed war for talent as new research reveals that eight out of ten City HR departments expect to see fiercer competition for talented executives.

However research by talent management consultancy TalentMax has found that many firms will only have themselves to blame if their best staff get poached by rivals.

A study involving HR directors from 56 financial services firms found that fewer than one in five (18 per cent) described themselves as ‘very successful at retaining talent’, something that they admitted means that key executives could be easy prey for competitors as the job-change merry-go-round gathers pace.

Six out of ten of the HR directors in investment banking, investment management, insurance, retail financial services and private banking also said that their firms failed to develop their talent. Only one in five (21 per cent) claimed to be very successful at assimilating new talent and one in ten very successful at engaging their talent.

Astonishingly, this damming assessment comes despite the fact that almost nine out of ten (88 per cent) of respondents believe that talent is an important contributory factor to business performance and nearly half of the forms interviewed have established a talent management programme, with many others planning to do so.

At the same time, however, most organisations are confident about their ability to attract top executives with two thirds describing themselves as ‘very successful’ at talent acquisition.

But TalentMax partner Susannah Pringle said that all this expensively-acquired talent was often neglected by being left to sink or swim in their new roles.

"There is rising awareness that money is a blunt tool for recruitment and retention that can too easily be beaten by competitors eager to lure talent away,” she said.

"Few firms are confident that they are genuinely engaging and motivating their talented executives."

And she warned that career development will become a very serious issue for financial services organisations as the still-benign recruitment climate of cherry-picking redundant executives is replaced by bitter talent bidding wars when the economy picks up.

TalentMax’s advice to firms is to focus their future development of talent on a number of key areas, notably giving line managers the skills and tools to manage, engage and develop staff; designing flexible career development frameworks; creating pools of multi-skilled executives to fill the leadership pipeline; developing tailored development and retention plans and accelerating the value contribution rate of new employees.

Talent should be an organisation-wide rather than resource hoarded by individual teams or units, Susannah Pringle added. And despite the failings the research exposed, she added that: It is encouraging to note that in financial services, a sector which is so notoriously talent-dependent, talent management has finally arrived and is becoming mainstream.”