How does the talent landscape look from the top?
Dealing successfully with new realities is perhaps the toughest challenge for CEOs.
Industry disruption, geopolitical uncertainty, market regulation and the changing face of tech can make executive life uncertain. To survive your organisation must be a leader in innovation, digital transformation, and change management.
To deliver you need talent and lots of it - but today 72% of CEOs name a lack of key talent as a significant business risk.
This number is troublesome but frankly it is also a little odd. Talent management is a controllable risk, so why are CEOs not mitigating this challenge more effectively?
The primary reason is that many CEOs tend to focus their talent management attention on succession planning for key leadership positions and often ignore the growing number of functional high-value creation roles. Yet it is these roles, requiring leading edge knowledge, that are central to the delivery of an innovation agenda and that will underpin business results. It is also an increasing trend that this expertise is typically only accessible on a contingent basis.
CEO’s must look at talent management through a different lens. They must become far more aware of the breadth and depth of the contingent landscape because their organisation is likely to be far more reliant on independent consultants, contractors or 3rd party service providers. No longer should contingent workers be regarded as ‘gap fillers’ – to many enterprises they are now a strategic asset.
Contingent Talent Knowledge is Vital – Surprised?
This shift in the talent landscape should be visible to any leader. Most organisations rely on a contingent workforce of between 30 and 40% of its total workforce. This means an organisation of 100,000 has an astonishing 30 to 40,000 contingent workers! These employees are vital not only in scale but also in terms of the expert knowledge and skill set they provide.
For CEOs, this means access to the right service providers and key contingent individuals is fundamentally important to their personal success and the success of their organisation. This need should form a crucial part of the board’s approach. Failure to acknowledge this need and plan for it will undermine an organisation’s ability to grow, change and compete.
Turning the talent risk to run green - Be the leading voice for talent in your organisation
At the very highest level, every board should understand the key skills their business needs and the rationale underpinning this need. They should also consider when these needs will arise, the investment required and how ROI will be measured and maximised on this investment. Understanding how business critical these skills are and the impact of their absence can help to focus the right amount of resource and investment on each area.
Practical Steps for CEOs on Talent
- Be a talent champion. Highlight the importance of a successful talent strategy and get it on the board agenda.
- Focus on strategic business outcomes and tie them to your talent strategy.
- Engage in effective and systematic future talent planning across your business.
- Identify skill sets that can be more successfully sourced from the contingent sector.
- Ensure your supply chain and talent providers are fit for purpose now and for the future.
- You should not only source great contingent talent but ensure this talent is optimised in your business.
- Create clear statements of work with measurable outcomes and deliverables.
Leverage Data Analytics to Measure and Manage Change - Are you close enough to the issue?
If you’re a CEO or business leader, you should consider your approach to talent challenges carefully, using the right data to make the right decisions.
Do you have access to the right data?
Educating your leadership team on metrics is key. A comprehensive set of crucial data can help your people make better choices. Some of these vital metrics are:
- Revenue Per Employee – What financial value are employees bringing to your business?
- Quality of Hire Improvement – What are new employees (contingent or permanent) adding to your performance?
- Turnover of Key Roles – Loss of your best people impacts your business – what is the financial and performance cost?
- Revenue lost to Vacancy Days – Slow recruiting leads to a loss of productivity and ultimately a loss of revenue.
Understanding these metrics can help you understand your business and its talent pinch points. Contingent talent could be the key to filling in difficult areas that are undermining performance.
How do you use this data?
Having the right metrics is one thing, knowing what to do with it quite another. Make sure your team uses data smartly to achieve the right results.
Create actionable plans and talent management strategies that go to the heart of your organisation’s talent needs. Use data to focus resources and build on key skill sets that will ultimately provide a return on investment. Continue to actively measure metrics to assess the success and suitability of your talent strategy.
Great talent is the foundation of any successful organisation. A productive talent supply chain aligned with wider business goals can transform results. Effective talent management should be the concern of everyone within an organisation from board level and beyond. In the next blog we will start to consider how functional c-suite leaders should be playing their part.