THE WAR FOR TALENT

REVIEW

THE WAR FOR TALENT

In late 1990s the economy was burning white hot and companies were scrambling. Many companies had hundreds of vacancies couldn’t fill. It was easy to see the war for talent raging in recruiting and retention frenzy. The dot-com bubble burst, the Nasdaq crumbled, and fears of recession spread. As the economy cooled off the war for talent was over.

The war for talent is similar strategic inflection point, rose quietly from the ashes of Industrial Age 1980, jumped into headlines in 1990s, and will continue to reshape the workplace ahead. Talent is a critical driver of corporate performance and a company’s ability to attract, develop, and retain. The competitor is people and talent.

Talent is the people who can lead a company, division, or function; guide a new product team; supervise a shift in an industrial plant; or manage a store. Very critical to look and pay attention because retain talent will be a major competitive advantage for the future which some people didn’t notice it and many companies haven’t fully grasped it. The group of people is ‘high-potential’ because they are knowledgeable and strengths skills either in technical and managerial.

There are three fundamental forces fueling the war for talent, ie; the irreversible shift from Industrial Age to Information Age, intensifying demand for high-caliber managerial talent and the growing propensity for people to switch from one company to another. The war for talent began in 1980s with the birth of the Information Age. The important of hard assets declined relative to the important of intangible assets such as talent, brands, intellectual capital and proprietary networks. In 1900, only 17 percent of all jobs required knowledge workers and now over 60 percent.

Managing talent involves attracting, retaining, developing and motivating highly skilled employees and managers.  Managing talent is not easy and not the only type of talent that companies need to be successful, but it is a critical one and the most important challenges is developing existing employees for managerial positions and attracting and retaining top level managers in leadership positions. High-potential managers required to capitalize their skill strengths and develop new skill sets such as helping them to launch a new joint venture. The objective is to develop managers who are knowledgeable of the business operations and succeed in global market. Giving managers global experiences in operations in different countries and different functional experiences by moving them from marketing to sales and so forth.

 In this case, knowledge workers are very important. Knowledge workers – employees who own the intellectual means of producing a product or service. More knowledge workers more important to get great talented, since the differential value created by the most workers enormous. Eg. The best software developers can write ten times more usable lines of code than average developers, and yields five times more profit. Another eg. A world- class engineer with five peers can outproduce 200 regular engineers. Knowledge workers are intangible assets for future. Shifted from Industrial Age to Information Age, all jobs required knowledge worker. As economy becomes more knowledge-based, the differential value of highly talented people continues to mount.

 The demand for high-caliber managerial growing and the job becoming challenging as globalization, deregulation, and rapid advances in technology change. But the supply of managerial talent is limited. That why companies need managers who can respond to the challenges, risk takers, global entrepreneurs, and techno-savvy. Companies need leaders who can reconceive the business and inspire people. Because of limited supply, companies will be competing intensely of capable managers. The demand still strong, despite the slowing in the economy.

The war for talent create new business reality . We can see the comparison at the old reality and new reality. At the old reality; people need companies, machines, capital and geographic are the competitive advantages, better talent makes some difference, jobs are scarce, employees are loyal and job are secure, people accept the standard package they are offered whereas at the new reality; companies need people, talented people are the competitive advantage, better talent make a huge difference, talented people are scarce, people are mobile and their commitment is short term, people demand much more.

 The implication of the war talent can divided into two categories, i.e the first, the power shifted from corporation to individual. Talented individuals have the negotiating leverage to ratchet up their expectation for their careers and the price for talent is rising, and the second, excellent talent management becomes a crucial source of competitive advantage. Better talent management results in better performance.

Having more capable people isn’t the only thing companies will to win, but must have to set high aspirations and enact the right strategy and performance initiatives. They have to energize and align people deliver best performance. Leaders needed to make other performance drivers. As companies respond to the war for talent, they will develop more powerful and sophisticated approaches to talent management. The greatest challenge whether company can strengthen its talent pool dramatically enough and fast to stay ahead of the competition. That is the critical strategic inflection point that managers must reorganize and address

Most companies thought, have not managed talent effectively. People are the most important assets, but many don’t act that way. Most companies struggle with talent management. More than half managers believe their company does not develop people quickly, retain high performers, or remove underperformers. However, companies haven’t yet taken sufficient action. Only 9 percent are confident that the action taken will lead to a stronger talent pool.

Some companies realizing that their current approaches to talent management are inadequate. Everyone accountable for budget but no one accountable for the strength of the talent pool. Many have not consciously made the link between talent management and business performance. Many have failed to make talent-building a priority. Only 26 percent improving their talent pool is a top three priority in the company.

 The talent war is a strategic inflection point how to realize a stronger talent pool can be crucial source of competitive advantage. There are five imperatives companies needed to act if they are going to win for managerial talent, i.e ; embrace a talent mindset, craft a winning employee value proposition, rebuild recruiting strategy, weave development into organization and differentiate affirm people.

Performance and competitiveness are achieved with better talent. Without better talent, won’t outperform competitors. Building talent pool is a huge part of their job. Talent mindset is the passionate belief to achieve aspirations for the business and must have great talent. To have better talent, every leader must commit to the goal. HR can’t do the job alone. Effective talent management is not about better HR processes, but about a different mindset. Most of companies do not have this mindset, and talent is not a priority. People are HR’s responsibility. These companies need to fundamentally change. Accountability for talent-building is essential to operationalize the talent mindset. Leaders with a talent mindset make the companies’ performance.

 Every company has a customer value proposition. Companies need to apply the same rigor to people management as they do to customer management. Talented managers want exciting challenges and great development opportunities. They want to be in a great company with great leaders. They want an open, trusting, and performance-oriented culture. They want substantial wealth-creation opportunities.

Rebuild recruiting strategy. The recruiting game has changed. It’s no longer selecting best person of candidates, it’s about going out and find great candidates. However, most companies use same recruiting strategy, shop candidates at same college, search the same kinds of people and hire in at the same levels. They have started using Internet but haven’t changed much. Companies must fundamental rethink and rebuild recruiting strategies. Hire in at all levels, turn to new source of talent, identify intrinsic skills and look for new faces from new places, from outside industry and business.

Aggressive companies using new methods to find candidates. They hunting for talent all the time, not just when have vacant positions. They understand to woo people in today’s talent market. They make sure high-performance is the key recruiters.

Winning the war for talent requires more than just winning the recruiting battle. Companies have to make development a pervasive part of the company. Every company and every leader have to develop people to increase capabilities. Development is critical. Many managers think development is training, but training is only a small part of the solution. Development primary happens through a sequence of stretch jobs, coaching, and mentoring. Companies need to fundamentally change the way to develop people by accelerating development and making it happen every day.

 The better companies differentiate the pay, opportunities, and other investment that they make in people. They reward their best performers with fast-track growth and pay substantially more. They develop and affirm the solidly contributing middle performers, helping them rise, remove weak players. Most companies conduct a one-day succession-planning. The best companies have rigorous talent review in each division, they have action plan and plan to strengthen and then follow-up to make sure the action happen.

The war for talent is a challenge for all companies, but for those respond aggressively and early, enormous opportunity to gain competitive advantage. From many case studies the talent journey never ending. You can win the war for talent, double recruiting effectiveness, developed more people to fullest potential, cutting unwanted  attrition rate in half, having more top performers and fewer below-average performers. Competitive advantage achieved if truly had better talent throughout the ranks of organization and make a better leader as well.