Talent Management: Too Important to Delegate to HR

Talent Management is a Business Problem, not an HR Problem

As we complete our High Impact Talent Management® research (to be launched this May), we are uncovering some very important issues.  One in particular is the critical need to understand that talent management is not an “HR process ” but rather a “business process” which must be implemented through line of business executive leadership.  This article highlights this critical issue and previews our upcoming High Impact Talent Management findings in this area.

The Linkage between Business Issues and Talent Issues

Underlying this finding is the obvious but often subtle issue that in today’s tight labor markets almost every major business challenge has an underlying talent challenge.  Talent management strategies, then, should not be developed except in the context of your particular business strategy.

For example, in our research we found that the two biggest challenges facing US corporations today are a combination of growing markets (a need to expand globally or into new products and services) coupled with a need to hold back costs.  While the economy is expanding, business executives remain afraid of committing large sums of cash to growth – a problem well documented in the business press.

What this has done is create a talent squeeze.  Organizations are finding skills gaps, headcount gaps, and leadership gaps in their workforce which they must fill to grow – yet they do not have the resources to dramatically increase salaries to compete for labor.  As a result, we are seeing a tremendous focus on sourcing and recruiting strategies, internal career development, and leadership development.

These problems are very business and organization-specific. In some cases the challenges involve a shortage of critical skills which create shortages in particular job roles.  This takes the form of shortages of production engineers in the oil and gas industry (Hess Petroleum, Shell, Chevon), regional managers in the retail industry (Starbucks, The Gap), nurses in the healthcare and insurance industries (HealthNet, Intermountain HealthCare), or mid-level managers in manufacturing and most industries(GM).

While these problems are similar, the solutions vary widely from company to company and industry to industry.   The solution to a shortage of mid-level regional Starbucks managers, for example, is very different from the solution to a shortage of petroleum production engineers.

Creating a Business-Driven Talent Strategy

What this means, then, is that you cannot buy “the book on talent management.”  You must develop a talent management strategy unique to your business, using best-practices, tools, research, and principles of HR and L&D.  In fact, the approach we have developed from our research is shown below:

Figure 1: High Impact Talent Management Strategy Process

This process, which is described in detail in our research, starts with your organization’s business plans and overall business strategy.  If you are expanding into Eastern Europe, for example, you will find a series of talent gaps required to implement that strategy.  Your sourcing, staffing, training, and performance management processes must be designed to solve that problem.

(Notice also, that this methodology places the system selection at the bottom.  Our research has shown that HR software, while important, has far less impact than careful process design and implementation.  More on this in a future article.)

Therefore the Business must Lead the Solution

Therefore, if you want the talent management solution to be effective and well-adopted throughout your organization, it must be led by a line executive (not HR).  While HR is clearly the subject-matter and process expert (we think of HR as the “steward,” not the “owner”), an HR-driven approach usually creates a high level of compliance but a low level of true adoption.

Consider the following data: this data, taken from our High Impact Talent Management research (which analyzed more than 1 million different elements of strategy and impact) clearly shows that business-driven solutions have much greater impact than HR-driven initiatives.

Figure 2: Impact of Governance in Talent Management

Is Talent Management too Important to Delegate to HR?

In a sense, the answer is yes.  It is too important to be “left” to HR – while HR must steward the process and implement much of the solution elements, ultimately talent management solutions must be business-driven.  Our research details the process for developing and governing these solutions, and also helps you identify the best-practices for such solutions.

Not Sure How to Define your Talent Management Strategy?

In our Talent Management Framework, we describe how organizations can integrate their people processes (sourcing & recruiting, performance management, succession planning, leadership development, learning & development, and succession planning) to address their urgent talent challenges.  Read and listen to us describe this framework to help you get started.

Bottom Line:  Key Thoughts to Remember