In 1997, a ground-breaking study by global management consultants McKinsey & Company exposed the “war for talent” as a strategic business challenge and a critical driver of corporate performance. Then, when the dot-com bubble burst and the economy cooled, many assumed the war for talent was over. It is not.
Subsequently in 2001, the authors of the original study revealed that, because of enduring economic and social forces, the war for talent will persist for the next two decades.
McKinsey consultants Ed Michaels, Helen Handfield-Jones, and Beth Axelrod argued that winning the war for leadership talent is much more than frenzied recruiting tactics.
It is about the timeless principles of attracting, developing, and retaining highly talented managers — applied in bold new ways. And it is about recognising the strategic importance of human capital because of the enormous value that better talent creates.
The outcome of the study is applicable to Singaporean companies as it was fortified by five years of in-depth research on how companies manage leadership talent —including surveys of 13,000 executives at more than 120 companies and case studies of 27 leading companies. The authors propose a fundamentally new approach to talent management. They describe how to:
- Create a winning EVP (employee value proposition) that will make your company uniquely attractive to talent; move beyond recruiting hype to build a long-term recruiting strategy;
- Use job experiences, coaching and mentoring to cultivate the potential in managers; and
- Strengthen your talent pool by investing in A-players, developing B-players, and acting decisively on C-players.
Central to this approach is a deep conviction shared by leaders throughout the company that competitive advantage comes from having better talent at all levels.
Using practical examples from companies such as GE, The Home Depot, PerkinElmer, Amgen, and Enron, the authors outline five imperatives that every leader — from CEO to unit manager — must act on to build a stronger talent pool.
The Singapore context
In today’s tight labour market in Singapore, companies are facing intense competition for talent — and are giving increased attention to ways to retain talent rather than rely on costly replacement and retraining.
Retaining talent with critical skill sets is vital for achieving business growth and to build organisational competencies, which represent a competitive advantage.
The loss of talent is costly because of the higher market salaries needed to hire experienced replacements, the costs of recruiting and assimilating new talent, the lost investment in talent development, and the hidden costs of lost productivity, lost sales opportunities, and strained customer relationships.
Can companies win the “war for talent”? Will they be able to define and implement a retention strategy that will give them the stable, committed, capable workforce required to achieve a competitive business advantage?
Few, if any, organisations today have an adequate supply of talent. Gaps exist at the top of the organisation, in the first- to mid-level leadership ranks, and at the front lines.
Talent is an increasingly scarce resource, so it must be managed to the fullest effect. Experts see new pressures put on the talent running our organisations.
Are today’s leaders able to do more with less? The A-players can, and there should be a strategic emphasis on keeping those leaders — and developing their successors.
Many organisations are reducing their workforces, but they should not cut so deep that talent is scarce when the economy rebounds.
Article by Prof Sattar Bawany, CEO of the Centre for Executive Education (CEE) and Strategic Advisor of IPMA. For more information, visit www.ipma.com.sg/cee.php or e-mail firstname.lastname@example.org