If your organization doesn’t rethink its approach to talent management, it will forever lose its competitive edge in the race for growth.
Nearly five years after the financial crisis erupted, a sustained global economic recovery remains elusive. Nothing less than a fundamental change in thinking is required to tackle the talent shortfall.
Developed economies are struggling under mountains of debt and finding it difficult to ignite growth. Even emerging economies, thought to be the engines of recovery, are slowing.
As a result, unemployment has hit an all-time high in many markets. Yet organizations are finding that the talent they need is in short supply. The scarcity of talent is turning into the single biggest obstacle to growth.
Globally, companies are having trouble filling critical positions:
- In India, 51% more employers had difficulty filling positions in 2011 compared to 2010
- In 2012, 60% of organizations experienced a leadership shortage – an increase of 40% from the previous year
- 72% employers worldwide reported difficulty finding and keeping high-potential employees
Talent expectations gap
The talent expectations gap is the disparity between what companies expect from their workforce and the skills that are available in the marketplace.
Companies understand where they need to be in terms of talent but are struggling to get there. Although they recognize the need to obtain the best talent, very few are investing enough to do so.
Talent has a positive and quantifiable connection to a company’s financial performance. Our survey results bear this out. High-performing companies tend to manage their talent more effectively than their lower-performing counterparts.
The expectations gap stems from the fact that most global organizations operate under an outdated talent management model. Developed in the 1980s and 1990s, that model worked at a time when demand was predictable, workloads stable and markets and management competencies well understood.
To close the talent expectations gap, companies need to change and flatten traditional organizational structures and allow for a vast diversity of cultures, ages, backgrounds and geographical locations. They must adopt new and more inclusive leadership styles.
Five challenges of effective talent management
When it comes to reconstructing their talent management models, companies may have made some small, incremental changes around the margins, but few have done enough to adapt their approach to meet the complexities of the current economic and market environment.
These five challenges will force companies to rethink their approach to talent management:
- Corporate workforces are becoming more global, but talent management is not keeping pace
- Companies struggle to invest strategically in talent management
- Measuring the effectiveness of talent management remains a challenge
- The skills and competencies required by future business leaders are changing
- Companies lack robust succession plans to identify the next generation of leaders
EY – Growing Beyond
Building a new talent management model
to boost growth