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Will Hutton

Will Hutton

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

Tuesday 17 Sep 2013
The 5Cs of talent risk

The 5Cs of talent risk

Talent management continuously ranks as a top issue for business leaders. Yet, the current economic climate in which growth is hard to come by has put many organisations on the back foot when it comes to their talent. Many have taken a defensive posture when it comes to their talent management strategies, with a heavy focus on the cost and retention of critical talent. By not taking a broader look at their overall talent risks, however, organisations are missing opportunities to lay strong foundations for sustainable growth based on an agile and adaptable workforce whose profile is fully aligned to the business strategy and growth ambitions.

To get off the back foot it is necessary to survey in detail an organisation’s talent risk profile. Every organisation has one although it many cases it may not be assessed comprehensively. One question to prompt a review of the talent risk profile is the old adage: ‘what keeps you awake at night?’

Answering that will help, but a little more rigour can be put into this assessment by focusing on the 5 Cs of talent risk.

First off, there are capability risks – essentially all the risks associated with building the skills required to compete now, and in the future. These are followed by capacity risks that focus on succession, diversity and filling those roles critical to creating value in the organisation.

Costs risks, on the other hand, are all about the total cost of the workforce and its affordability. Compliance risks must also be considered to ensure the organisation adheres to relevant laws and regulations.

And lastly, there are connection risks; often overlooked, these should provide an indication about the extent to which staff and leadership are engaged and connected across the organisation and jointly working towards shared business goals.

On the basis of these 5 Cs, KPMG recently surveyed over 1,200 organisations gathering responses from business and HR leaders in 54 different countries to understand in more detail what is happening in the talent space. An early assessment of the survey data indicates quite strongly that the war on talent shows no sign of abating.  Organisations seem to be identifying insufficiencies in the pipeline of future leaders, a lack of depth of internal candidates for internal roles, and difficulties in recruiting top talent as critical talent risks that require focus. Another early indication is that there continues to be a disconnect between business leaders and HR on the perceptions of what constitutes a key talent risk, and indeed differences in perception of the extent to which these are adequately mitigated.

Talent risk has long been an issue. It seems, though that many organisations are no closer to closing the gaps it creates. This must change, or we risk economic recovery wavering on the unanswered questions around whether Britain really does have talent.

Robert Bolton (pictured), partner in KPMG Management Consulting and global chairman of the firm's HR centre of excellence