TALENT MANAGEMENT SHOULD BE AGILE

The rate of change in what organizations need to do, how well they need to do it, and how fast they need to do it is continuing to increase. The only way to respond to this is to have an organization that is agile. The only way to create an agile organization is to have talent management practices that create talent agility.

What does talent agility require? It takes having talent management systems that are able to respond quickly and strategically to constantly changing labor markets and business strategy conditions. It is not a matter of having one or two agility practices; it requires a totality of management practices that allow organizations to adjust the kind and the amount of talent they have and the behavior of their talent on a continuous and rapidly changing basis.

There are a variety of types and degrees of performance change that organizations need to make in a rapidly changing environment. As a result, no single approach to creating an agile talent management system exists that is ideal for all organizations. Organizations may be able to develop a sufficient level of agility simply by constantly training and developing the employees they have. For decades this was adequate in the automotive and telecommunications sectors, but today it is unlikely to be sufficient because it cannot produce the rate of change and amount of change that is needed. It also may be very costly because of training costs and lost work time. To change more rapidly and at a lower cost, these sectors and others need to change their talent by hiring individuals who already have the skills they need or using talent that is not employee based.

The best approach for an organization to take depends on the nature of the business it is in, the labor market conditions it faces, and the rate and kind of change that is needed. What is clear is that an organization’s talent management policies and practices need to be driven by the kind of change that it faces and by the specific needs that it has for talent and performance. Once those are established, it is a matter of putting in place the types of reward systems, career development programs, selection programs, employment arrangements, and other talent management policies and practices that will lead to the levels and kinds of agility that the organization needs to respond to its environment.

Historically, organizations including General Electric and IBM were admired for their career approaches to talent and for the kind of development programs they had for their talent. They provided careers, not jobs, and offered extensive development and training experiences. Many rewards were based on seniority and hierarchy, and employees might receive gold watches after twenty-five years of work for the company. Today’s rapidly changing environment has made many of those approaches obsolete. As already noted, in most cases organizations simply cannot change rapidly enough by using training and development programs to change talent. Because of this, they cannot promise their employees a career, much less a job.

What an organization can promise is information about what its current business and talent needs are and updated timely information about how those needs are changing. Further, they can make themselves an attractive place to work for individuals who have the skills and capabilities needed at a given point in time. They also can adopt what Netflix does with respect to severance: the company promises its employees high pay while they work there, and a generous severance package if they are no longer needed; but what it cannot (and does not) do is promise everyone long-term job security. The reason for this is obvious: like many organizations, Netflix cannot predict with a high level of certainty where the business environment will go and what its future talent needs will be.

All that most organizations are able to do is control what happens today and put in place agile talent practices that will enable change. They know their staffing needs will change in ways they cannot predict. Thus, instead of talking about job security, they need to promise to fully inform individuals about what they think the organization’s future will hold and to treat people appropriately given the business situation.

Creating an agile talent management culture in an organization is not a matter of simply changing one part of its talent management system. Every part needs to be changed, starting with the attraction and selection process and continuing through the performance management process. The emphasis needs to be low on long-term commitments and high on communicating what the talent management situation is and what the organization will do to help individuals adjust to any changes that may occur.

The most difficult talent management agility issue is balancing retention and realistic promises about what the future holds. Putting great emphasis on promising a future for individuals whose skills may be outdated can lead to short-term retention but serious long-term problems for an organization, including wrongful discharge lawsuits and a culture of mistrust and deception. On the other hand, not retaining talent can lead to recruiting problems, extremely high levels of turnover, and all the costs and dysfunctions that are associated with turnover. Organizations must create talent management practices that do not over-promise with respect to the future and underdeliver with respect to the present. They must deliver a workplace experience and culture that attracts, retains, and motivates the kind of talented individuals that are needed to operate an agile organization. Talent management cannot be based on seniority and security.