Supply and retention of talent remains a top priority even amongst the most successful organisations. Martyn Sakol explores what the heavy weights are doing to attract, develop and retain talent, and offers a methodology that could not only work for your organisation, but turn yours into a source of competitive advantage

Reading the financial press at the moment one would be forgiven for concluding that these are heady days for many companies. Profits are up, the markets are awash with capital and trades unions are becoming aligned to company objectives. India and China are adding billions of new inexpensive workers and consumers to the world economy. Just recently, the Dow Jones Industrial Average hit a new high, and the FTSE 100 sailed over the 6000 mark.

However, talk to many CEOs and you discover an ongoing worry - the supply and retention of talent. 'Talent' is one of those irritating words that has been hijacked by management consultants. It used to mean innate ability, but in modern business it has become a synonym for 'the beautiful mind' or 'brainpower' both natural and trained, and especially the ability to think creatively, engage with a range of stakeholders, and demonstrate leadership.

Securing talent
There is nothing new about companies wanting to secure talent. General Electric (GE) carefully ranks its employees, with the best groomed for leading positions and the weakest eased out. Jack Welch, the company's legendary boss, spent half his time on 'people development' and visited Crontonville (GE's corporate university) every two weeks. Investment banks, management consultancies, consulting engineers, architects, legal firms and accountancies are obsessive about talent: Of course they are. What else are they selling?

However, currently we are witnessing a seismic shift in the emphasis and importance of securing, retaining and developing talent. Thanks to a hyper competitive labour market, professional service firms have become more preoccupied with talent than ever before. Goldman Sachs, for example, following an internal review in 1999, increased its emphasis on formal training, setting up the

Goldman Sachs University, and encouraged senior partners to put more effort into securing talent. McKinsey has reportedly boosted its training budget to $100m, realigned its recruitment strategy, and changed its internal organization to attract and retain well qualified young people. And WS Atkins, the engineering consultancy, report less than 2% staff turnover amongst the high potentials that it has invested in through their management development centres. ERM, the environmental consultancy, has invested in the development of the partners, with the specific aim of  developing and retaining talent.

Managing talent has become more important to a much wider range of companies than it used to be and this has resulted in a significant increase in the status of human resources departments. A survey by consultancy Aon, identified 172 HR executives who were among the five best-paid managers in their companies.

Interestingly, the biggest earners worked for Black & Decker, Home Depot, Viacom and Timberland. In addition, the development of talent management technologies has gathered significant momentum. The US-based market research consultancy, Yankee Group, estimates that last year over 2,300 companies worldwide adopted some form of talent management technology, and estimates that the market for such technology will nearly double by 2009.

I presented a slide, showing a business women and two male colleagues at a meeting, to the senior managers of a midcap professional services plc at their annual conference recently. I asked half of a group of 100 or so, to reflect on what they thought she was thinking, and to write down three possibilities ranked in order of likelihood.

The results were interesting. "When is this presentation going to end " and "I wonder if the bar is open yet?" were popular choices. However the most common theme was a reflection about which competitor the man on her right was going to, and, should she join him.

I asked the other 50 to reflect on what she would be thinking if the business strategy was realised. The most common theme was a reflection that this was the business consultancy of choice for employee and customer and that he (the man on her right) was one of many talented new recruits joining the team.

This example starkly illustrates both the fears and aspirations of our business leaders at the moment, and suggests that if you are not doing something now to get and keep the best brainpower, you should do something soon.

So what might you do to attract, develop and retain your talent for sustainable competitive advantage? At ER Consultants, we help organisations think about talent, plan ahead and plan for succession, develop an attraction, recruitment and retention strategy, and create an internal market for talent. See box below.

Talent management
Is there a consensus about a methodology for managing talent? Unfortunately not. Part of the problem is that Human Resources as a discipline has lacked the sophistication and the power position to really make a difference. Not surprisingly, the more valuable the talent, the more difficult it is to manage. But try you must, and companies will continue try to find ways to attract retain and develop their talent.

They are motivated by fear and hope; fear of talent shortages, and hope that these can be turned into a source of competitive advantage. I recently met with Martin Seligman, Professor of Psychology at the University of Pennsylvania, who is the world's expert in positive psychology and the psychology of happiness, and its application to corporate life. After 10 years of substantial research across many countries and involving thousands of people, he is clear that what makes top talent happy is engagement and meaning, and the opportunity to use their 'brainpower' to the benefit of the organisation, its customers and themselves. Whatever methodologies you use, this should be the goal you have in mind, and your talent will come, stay and flourish - and so will your organisation.


ER CONSULTANTS METHODOLOGY FOR RETAINING AND DEVELOPING BRAIN POWER
How do you attract, develop and retain your talent for sustainable competitive advantage?

1. Think about your talent
The first thing to do is to think carefully about your critical talent, and then act accordingly. EDS, the giant technology company, has built a global inventory of its 100,000+ workforce, compared current skills with future needs, and set about filling the gaps by encouraging and developing their workers to acquire the relevant skills.

2. Plan ahead-plan for succession
Shlumberger, the oil services group, is preparing for an expected skills shortage in the next few years by asking its managers to identify, cultivate and develop succession plans. Shlumberger also hold rigorous exit interviews if key talent leaves.

3. Develop an attraction, recruitment and retention strategy
Companies need to be more imaginative about attracting recruiting and retaining talent. High attrition rates early after recruitment have persuaded companies to pay more attention to keeping new recruits on board. American Express in the 1990s found that far too many of its managers were leaving within the first two years, and now provides them with management coaching in this early stage to help them integrate into the American Express culture.

4. Create and excite an internal market for talent
Many companies instinctively look outside. Deloitte calculated that the typical western company spends 50 times more recruiting a professional earning £75k, than it spends on his or her training every year. New recruits can also take a year to learn a job. Establish an internal market, and encourage and inspire workers to apply for jobs across the company.


For more information please contact:  Martyn Sakol

(c) er consultants Topics Issue 1, 2007