There’s been a lot of talk about talent recently — how to find it, how to manage it, and, perhaps most critically, how to retain it.
Of course, such discussions are not new.
HR professionals and managers alike have been concerned about talent retention at least since the 1990s, when McKinsey and Co popularised the concept of ‘Talent Wars,” creating a scare that is materializing in its fullness only now, in the wake of the financial crisis.
What does “talent” mean for your organization?
While traditional best practice guidelines recommend offering developmental opportunities to retain and engage “talented” employees, and creating internal “talent pools” for succession planning, how can you do this unless you have first decided what “talent'”actually means for your organization?
A number of basic questions beg to be answered, as first noted by Church and Silzer in 2009:
- How do we identify, measure, or predict potential if it ‘‘exists in possibility’’ and is not yet actual?
- Is “talent” a permanent and constant personality characteristic a person just “has” or “doesn’t have?”
- Can “talent” actually be developed over time, and if so, how?
The term talent is often used interchangeably with the term potential.
Potential implies an individual has the capability to take on future responsibilities that go beyond their current role. Yet potential implies something to be realized in the future, and it is foolhardy to assume that it equates to current or past performance in a substantially different role.
Wanted: a broader definition of talent
A recent corporate survey of 20 major corporations published in the Journal of Organizational and Industrial Psychology showed 85 percent of organizations defined “talent” based on the potential for vertical movement up the organizational ladder. Similar results were also reported by the Corporate Leadership Council, with 47 percent of organizations defining high potentials based on their ability to advance two to four levels, and another 26 percent intending to move in this direction soon.
Astonishingly, only 5 percent of organizations attempted to adjust their conception of what “talent” meant for their organization to align with strategic aims and coming business challenges.
This is incredibly short-sighted considering that the pitfalls of limiting your talent decisions to only the potential C-suite candidates are readily apparent!
By definition, only a small percentage of your workforce can be considered “high potential” talent (generally around 10 percent). As in many organizations desirable development opportunities are limited to talent pool candidates, you risk disengaging the largest remaining portion of your workforce.
By limiting your talent management efforts to those with supposed ‘leadership potential’, you fail to retain valuable “expert” and “hi-po” performers. Despite their lack of leadership ambitions, these individuals constitute approximately 60 percent of the workforce, are less likely to leave, and have real potential to add value on a daily basis.
A growing rate of talent failure
Our global career trends research here at Career Engagement Group attests to the importance of developing and retaining these valued contributors in light of critical talent shortages in specialist knowledge-based industries. One global bank we work with had over 65 percent of its’ workforce seeking to develop an “expert pathway.”
Finally, the statistics regarding senior leadership success are sobering. Two out of every five new CEOs failed in the first 18 months (Harvard Business Review, 2005), while less than 20 percent of employees have better than a 50 percent chance of succeeding at the next level (Corporate Leadership Council, 2005).
Narrow career management practices based on the creation of “high potential” talent pools appear futile in light of recent advances in career management research.
Career success depends on trait, state and capability considerations, as well as the ability to learn from experience, engage in active reflection processes, and identify potential derailers. Contextual variables such as career stage, prior experience, and organizational cultural fit are critical determinants of success, which are simply not accounted for in standardized mainstream talent management programs.
Perhaps the greatest shortcoming of talent management programs based on potential for vertical progression is that the whole concept of “corporate ladder” is now passe’. Leading organizations are now embracing a more agile “lattice'” structure that facilitates lateral career moves, and facilitating stretch assignments which provide invaluable opportunities for experiential learning (Benko, 2010).
The most innovative career management approaches now focus on enabling individuals to navigate their own unique career paths, in accordance with their individual preferences. In this manner, they take ownership for their own development, and work together with their manager to grow their strengths and answer the perennial question of “talent for what?” in a meaningful and personally defined way.