It’s one of the most common gripes I hear managers, executives and CEOs alike complain about at industry events, conferences and my daily conversations across industries: they’re either struggling to find the right people for the role, or they’re having an existential crisis in terms of holding onto the right people. While this is anecdotal, I thought we’d look at some research published, gathered from thousands of respondents by the McKinsey & Company who have done most of the hard work in compiling survey results and crunching the data.
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How bad is the problem? According to the research published by McKinsey & Company, “there is a significant relationship between talent management – when done well – and organisational performance. Only 5 percent of respondents say their organisation’s talent management has been very effective at improving company performance. But those that do are much more likely to say they outperform their competitors. 99 percent of respondents reporting very effective talent management say so, compared with 56 percent of all other respondents.”
Speed is a key priority when we’re talking about effective talent management, with the results of the survey suggesting that a mere 39 percent of respondents stating that their organisation appears prepared when it comes to the reallocation of talent in the wake of strategic problems. “At public companies that quickly allocate talent, respondents are 1.5-times more likely than the slower allocators to report better TRS than competitors. The link between rapid allocation and effective talent management is also strong: nearly two-thirds of the fast allocators say their talent management efforts have improved overall performance, compared with just 29 percent of their slower-moving peers.”
McKinsey’s research shows that HR, or your people and culture teams have a key role to play in ensuring both the employee and employer have a positive experience in this context. “A driver of effective talent management,” they explain, “relates to employee experience – specifically, the HR function’s role in ensuring a positive experience across the employee life cycle. Only 37 percent of respondents say that their organisation’s HR functions to facilitate a positive employee experience. But those who do are 1.3-times more likely than other respondents to report organisational outperformance and 2.7 times more likely to report effective talent management, though our experience suggests that the HR function’s role is just one of the critical factors that support great employee experience.”
The paper notes that a mere 24 percent of organisations have, what they’d classify, as an ‘agile HR operating model. More importantly, the paper stated outright that one of the most important considerations in this context is “deploying talent and skills in a way that supports the organisation’s overall strategy. One-third of all respondents say their organisation’s HR business partners are effective at linking talent with strategy in this way, and those who do are over three-times more likely than other respondents to say the HR team facilitates positive employee experiences.”
“In summary,” the authors say, “effective talent management – and the practices that best support it – contributes to a company’s financial performance. No One approach works for every company, but the survey results confirm that rapid allocation of talent, the HR function’s involvement in fostering positive employee experiences and a strategic HR function have the greatest impact on a talent-management program’s effectiveness.”
As is plain to be seen in the research and survey responses published by McKinsey, traditional HR methods are becoming less effective in isolation, and their role can definitely be complimented by a 21st century approach to talent management.
This is where Best Practice Talent steps into the foray, which takes all the lessons learned from the most effective traditional strategies in the context of talent management, and injects it with a dose of 21st century data-driven systems. Throughout the process, we get a comprehensive understanding of both the job’s criteria and what the organisation is hoping to gain from that prospective employee, as well as get an in-depth understanding of that candidate’s strengths and weaknesses through the cutting-edge PXT Select platform. This both simplifies the process, as well as reduces the risk – and financial burden – of ‘bad hires’ that don’t add to the company’s profitability, nor that healthy working culture that you’re aiming for.
Get in contact with us today to find out how your organisation can really start to capitalise on winning its talent management strategy.