In Australia, the war for talent is a high-stakes engagement. A recent study by the Society for Knowledge Economics found excellence in talent management was a key attribute of high-performing Australian workplaces. This supports the findings of a McKinsey 2001 study which reported that high-performing managers grew revenue and profits by 50 to 130 per cent (depending on their industry), while the lowest performing managers achieved no growth at all. As these statistics show, there is a bottom-line benefit of attracting the best talent.
Recently, I had the opportunity to lead a panel discussion with HR and talent leaders from three businesses we work with, all of whom are passionate about people: Patricia O’Connor, general manager of leadership development and talent management at Wesfarmers; Michael Vavakis, group head of human resources at Lend Lease; and Tony Fiddes, general manager, group people capability at Westpac. We discussed the challenges and opportunities for talent managers.
Four themes were top of mind:
Pragmatism – the importance of taking a commercial approach to talent.
Sustainability – recognising that it takes time to create leaders.
Connectivity – working with the CEO and board to ensure leadership is part of the strategy.
The next frontier – creating the edge in talent attraction through diversity, job design and flexibility.
O’Connor sums up her approach to talent in a single word – pragmatism. O’Connor says a talent strategy should be based around the needs of the business and address three leadership requirements – it must be commercial, deliver results and engage people. “We need to be more agnostic about some of our tools – ask ‘what does the business need?’ and then directly tie the strategy to that commercial need,” she says.
Vavakis believes a key challenge for HR managers is making time to think about talent. While it’s easy to become immersed in other activities in HR, a focus on talent can make a significant positive impact on the business. He believes that a review of people is now the responsibility of many CEOs is evidence that HR and talent management are now recognised as strategic imperatives for a business.
Fiddes concurs. Over a two-year period, Westpac has created a new talent and leadership program across the business and talent is recognised as one of the core ingredients that makes a bank successful, along with technology, funding and footprint. Westpac’s talent management strategy includes selection processes and cultural fit, leadership capabilities, talent identification and development.
While recognising that it takes time to create leaders, Fiddes says, “It’s rewarding to see individuals who have been through a leadership development program and have then re-committed to the organisation as a result.”
Advice for HR managers looking to build a business case for their talent strategy includes using real-life examples – such as the cost to the business if a key employee was to depart suddenly – or using a crisis as an impetus for change and an opportunity to put leadership ability on the table.
Vavakis says he is fortunate to have strong support from the Lend Lease executive team and board for the company’s talent strategy. However, he says if your management team and CEO or executive sponsor aren’t 100 per cent behind the talent strategy, don’t do it as it will be a waste of time. “Find the opportunity, start small and keep at it,” he advises.
The future of talent management
Measures used by the experts interviewed to evaluate talent management programs included asking managers involved if the programs made a difference and what their team would look like without the programs; tracking succession; and monitoring how many people who participated in programs were promoted or put into new positions.
As to the future of talent management? The three experts agree that flexibility and diversity are key. “Think about the next frontier – what will give you the edge? Job design and flexibility will be key components for the future,” says Vavakis. He believes we need to think differently about gender, age, and work practices.
According to O’Connor, diversity is simply smart business. “You want to appeal to as many people as possible, otherwise you will lose out to a competitor.” She pointed to Wesfarmers’ commitment to Aboriginal employment initiatives as well as to increasing the representation of women in leadership roles across the group.
Diversity of thought and having a ‘global mindset’ were critical to delivering a competitive advantage in terms of talent, according to the experts. With the war for talent continuing apace, it’s clear that talent management is no longer simply the icing on the cake – it’s a critical element of high-performing businesses.