A new research study by Hewitt Associates, a global human resources consulting and outsourcing company, and the Human Capital Institute (HCI), reveals that while a growing number of companies have made significant progress in managing talent, most are still struggling to build the capabilities necessary to consistently execute their talent management programs.
“The State of Talent Management: Today’s Challenges, Tomorrow’s Opportunities,” a comprehensive study of 700 senior-level talent leaders, reveals that 92 percent of business leaders recognize superior talent as providing a vital competitive advantage. Despite this, the study shows a key gap in talent management execution, particularly around lack of accountability. In fact, few organizations consistently hold managers (7 percent) or senior executives (10 percent) accountable for developing their direct reports through performance management processes.
“Today’s uncertain economic environment has created an even stronger sense of urgency among companies to address talent issues quickly and effectively,” said Bob Campbell, leader of Hewitt’s North American Talent Management practice. “To be successful, organizations need to make talent management a shared business and HR responsibility, where business leaders consistently emphasize the importance of talent management, are actively engaged in the process and hold themselves accountable in tangible ways for developing talent beyond the leadership levels.”
Lack of accountability is just one of the hurdles to today’s talent management efforts. The study identifies four additional challenges to well-executed talent management programs:
- Gaps in talent development capabilities: Only 5 percent of organizations report having the managerial capability to grow people in their jobs or provide feedback to support employee development consistently across the organization.
- Lack of alignment between human capital and business strategy: While human capital is viewed as important, only 17 percent of respondents indicate their workforce strategy is consistently aligned with their business strategy across the organization.
- Inconsistent execution of talent programs: Most companies have fundamental talent management processes in place, such as workforce planning, high-potential development programs and succession planning. However, few consistently execute these programs across the entire organization.
- Limited use of meaningful analytics: Most organizations track traditional workforce measures, such as headcount, turnover and cost-based metrics, but few have graduated to tracking the metrics that matter. A mere 10 percent of companies consistently measure the effectiveness of talent management programs and even fewer (7 percent) consistently use quantitative frameworks to align human capital investments with their business strategy.
Despite these challenges, Hewitt and HCI found that some organizations are making significant strides in managing talent and have differentiated themselves in the following ways:
- Depth and consistency of practices: These companies have effectively institutionalized specific talent management programs—such as conducting talent reviews, performing succession planning, and improving manager ability to develop employees—and are applying these programs more deeply and broadly into their organizations.
- Higher commitment for talent development: Successful companies view talent management as a shared business and HR responsibility and require active engagement, commitment and accountability from leaders and managers.
- Progressive and innovative practices: Some organizations are introducing new and innovative ways of managing talent, including progressive approaches to workforce planning and more effective employer branding strategies. While still an emerging trend, a growing number of companies are also using predictive analytics to guide human capital decision-making and business alignment.
“Organizations striving to improve their talent management practices have to start by acknowledging challenges,” says Allan Schweyer, Executive Director of HCI. “This report will help companies understand those challenges, and re-prioritize their human capital initiatives accordingly.”
A full copy of “The State of Talent Management: Today’s Challenges, Tomorrow’s Opportunities” is available to interested members of the media.
ABOUT HEWITT ASSOCIATES
For more than 65 years, Hewitt Associates (NYSE: HEW) has provided clients with best-in-class human resources consulting and outsourcing services. Hewitt consults with more than 3,000 large and mid-size companies around the globe to develop and implement HR business strategies covering retirement, financial and health management; compensation and total rewards; and performance, talent and change management. As a market leader in benefits administration, Hewitt delivers health care and retirement programs to millions of participants and retirees, on behalf of more than 300 organizations worldwide. In addition, more than 30 clients rely on Hewitt to provide a broader range of human resources business process outsourcing services to nearly a million client employees. Located in 33 countries, Hewitt employs approximately 23,000 associates. For more information, please visit www.hewitt.com
ABOUT THE HUMAN CAPITAL INSTITUTE
Human Capital Institute (HCI) is a catalyst for innovative new thinking in talent acquisition, development, and deployment. Through research and collaboration, our programs collect original, creative ideas from a field of executives, HR practitioners, and the brightest thought leaders in strategic talent management. Those ideas are then transformed into measurable, real-world strategies that help our members attract and retain the best talent, build a diverse, inclusive workplace, and leverage individual and team performance throughout the enterprise. www.humancapitalinstitute.org