Talent Management and the Talent Crunch

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Talent Management and the Talent Crunch Talat
Naseer Head of Human Resources Abraaj Capital
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What Organizations need to do now

• Cash is king
• Protect your core
• Avoid getting into the gutter
• Look for opportunities
• Model the black swans
• Dont waste a good recession
• Manage your risks
• Innovate Your Business Model
• Introduce Dynamic decision making
• Communicate Communicate Communicate

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Great People Decisions can be the most important
source of company value
In some markets, the leader effect accounts for
up to 40 of the variance in value
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Year effect
Company value
The choice of chief executives has as much
impact in profitability as the decision by a
company as to whether it will remain in the
current industry or move to a new one.
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Leadereffect
Industryeffect
Companyeffect
Source When Does Leadership Matter?,
Wasserman, Nohria and Anand, Harvard Busines
School working paper no. 01-063, April 2001
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Great People Decisions are even more critical in
downturns
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... and, much harder
Short-term pressure todeliver
Moving targets
Evolving competency requirements
Intrinsic Complexity of Making Great People
Decisions
FiringPeople
HiringPeople
Keeping People

• Hiring Freeze
• Hiring for short-term tasks
• Hiring wrong competencies
• Misrepresentation by job- seekers for their
  competence, fit motivation
• Losing good candidates due to inadequate or wrong
  incentives
• Snap judgment

• Not differentiating top performers and others,
  therefore de-motivating employees by keeping
  wrong people
• Over-promising or over-promoting to retain
  performers
• Dropping the training development programs

• Cutting Staff across the board
• Procrastinating
• Underestimating the Survivor Syndrome
• Lacking restructuring experience
• Management (being viewed as) Not sharing the
  pain with employees

Potential risks
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Great People Decisions in a downturn require a
systematic process
Hire
(Re)definition Of Downturn Competences
Strategic Review
People Business Performance Review
TalentAudit
Keep/ Develop
Fire/ Reassign
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Need to know whom to retain and how
Assessment of Retention Risk

• Top talent has options, even in a downturn
• It is not how much you pay that matters, it is
  how you pay, and even more importantly, whom you
  pay and whom you dont pay
• People join because of a company, but leave
  because of their bossMentors matter in retention
  program
• Understand their hot buttons and tailor the
  incentives for their needs

High
Med.
Low
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Strategic and selective hiring should continue
in downturn

• It can strengthen your image and staff morale
• General quality of hires increase in a downturn
• You have chance to scoop up bargain talent in
  the market

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Bad economy might be a good time for talent
bargain

• Average Pay Rise Per Job Switchfor Senior
  Executives (2001 2008)

Note Study based on job switch histories of
about 200 senior executives in Greater
China Source Egon Zehnder International
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Firing should be the last option for cost
reduction

• Downside of downsizing
• Demotivation increase in political behaviors,
  anger, fear
• Violation of psychological contract leads to
  cynicism, lowered work commitment, fewer random
  acts of good will
• Survivor Syndrome more stress due to longer
  work hours with re-designed jobs, and increased
  uncertainty regarding future downsizings
• Many senior employees departures from early
  retirement result in loss of institutional memory
• The use of voluntary workforce reductions
  (buyouts) results in departures of the stars
  (the most marketable managers)
• Early retirements voluntary reductions often
  result in too many people quitting, and some are
  hired back as consultants at higher cost to firm

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Talent Crunch or Talent Abundance

• Review your talent model if you dont have one
  create one.
• Talent inventory
• Upskilling Be Brutal
• Keep them engaged
• Give them newer challenges
• Spend time with them
• Great time to hire good talent

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Talent Management Identification Grid
Pillar Average Performance High Potential
Under Performer Low performance High potential
Under Performer Low performance Average potential
Partner Average Performance Low Potential
Pillar High Performance Low Potential
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6 Ways of Making It Work

• The line must lead it, with discipline.
• Integrate it with the business leadership agenda
• Agree on a simple, transparent model of what good
  looks like.
• Assess and develop executives rigorously.
• Manage the risk proactively (on boarding)
• Measure the impact of Talent management on
  results comprehensively.

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Strategy or People

• Leaders of great companies first focus on
  getting the right people on the bus and then
  decide where to take it
• Jim Collins, Good To Great, 2001