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Will Hutton

Will Hutton

Principal, Hertford College, Oxford University and chair of the Big Innovation Centre

Friday 12 Apr 2013
Firms failing to focus on business needs in talent management strategy

Firms failing to focus on business needs in talent management strategy

A rigid attachment to ‘best practice’ in talent management, rather than a focus on business needs, is preventing many organisations from unearthing staff to drive their business forward. The danger of such an inflexible approach is also killing organisations’ ability to properly manage the talent they already have. No wonder boardroom confidence in HR tactics is low. 

It comes as little surprise that a recent study published by the Economist Intelligence Unit and KPMG revealed that just one in four CEOs and directors accepted that their HR department excels at ‘sourcing key talent’ or ‘preparing for a changing workforce’. 

In my view, the problem is that all too often, companies dive straight in, implementing the latest best practice recruitment, development or performance system or process. What they should be doing is standing back and asking some searching questions about what talent their particular business needs now and in the future. In other words, they need to analyse the data at their disposal. 

It’s true that most HR professionals are longing for a way to put some numbers and science to the art of people management – a longing driven by insecurities after years of unflattering comparisons with associates in finance and marketing, and a craving for respect from colleagues. 

At last they have something which may help as analytics holds out the promise of an instant credibility fix. Some of the newer cloud-based HR and talent analytics systems are even arriving with pre-packed analytics; in-built algorithms to help predict and manage the workforce, retain talent, and save money. It sounds good; it even sounds like progress. But the inevitable question that follows is how ethically will the data be used? 

In an ideal world, someone would take this data, together with other contextual information, and work out a plan. Presumably, if an individual is predicted to be a high performer and a high risk for leaving, the course of action is clear. Speak to their manager, speak to them, and try to find a way to change the predicted outcome. But what if it’s the other way around? What if low performance and a low risk of leaving is predicted? Do you stop investing in that person and remove them from the promotion list? Do you start looking for ways to make them more likely to leave? One hopes not, and that instead the prediction is used by a line manager to work out why their performance is predicted to be low and what might be done to turn this around. 

All of this leads to a conclusion that, in the wrong hands, data can be dangerous. Notwithstanding ethically questions about the use of data, I think HR professionals need to take a multi-pronged approach in relation to talent management. 

For starters, they need to use data to analyse the skills that can help the business succeed in the long-term. They should be focused on talent risks and, above all, they should be exploring what the business has learned about which kind of ‘talent interventions’ deliver the best return on investment and examining whether success is better achieved through growing talent or buying it. 

By fully understanding the current and future business context – by tuning in to talent – HR teams can assemble the right elements of a talent approach, and create a unique talent playlist: one which captures the character, culture and mood of their specific business. Then, and only then, will HR be seen by the rest of the business as excelling at sourcing key talent and making a difference to the bottom line. 

Robert Bolton, partner in KPMG Management Consulting