Talent Strategy: Important but Where to Start?
Every effective talent strategy supports and reflects the business strategy.
Without question, talent is a top concern for today’s CEOs. They worry about skills gaps, labour shortages and the adaptability of their staff to the ever changing marketplace. Many CEOs have lost faith in HR to properly manage talent strategy and have taken matters into their own hands.
Frequently, we talk about talent strategy and talent management without taking the broader business context into account. There are a myriad of talent best practices, case studies and fads that pull our attention in various directions but away from the business context.
In every successful organisation, the business strategy takes priority over all else and drives talent strategy.
To secure its seat at the table, HR must start and end with business strategy.
This helps foster accountability and alignment, measure the right things and inform continuous refinement of the talent strategy to achieve ever increasing returns. To help think through these challenges for your organisation, a talent strategy model is presented here. This model emphasises the linkages between business strategy at the beginning of the process and business results at the end.
Bersin by Deloitte’s High-Impact Talent Management Framework®
Start with Business Strategy
In every successful organisation, the business strategy takes priority over all else and drives talent strategy. Every effective talent strategy supports and reflects the business strategy. Thus, it is imperative that HR professionals understand the businesses in which they operate.
Formulate Talent Strategy
Next, we begin to formulate our talent strategy and ensure its alignment with the business strategy. As experts of broad workforce trends, we must ask ourselves and our executive stakeholders several key questions to inform alignment of the talent strategy.
Initially, we must ask, “What segments of our workforce are critical to accomplishing the goal?” For example, if I am opening a high-tech design and manufacturing facility, I would determine a need for electrical engineers, computer scientists, operations staff, etc.
Based on our talent challenges (identified gaps), we can research which interventions would be most effective in addressing the challenges. Notice the sequence of these actions. Many HR professionals focus on finding unique and innovative solutions (the latest HR trends from Google) and implementing them without a tangible business goal in mind. Clearly, the talent solutions must be derived based on the business problem – not the other way around.
Plan Talent Investments
Talent solutions will require financial and people resources to implement. Depending on the business challenges, HR should present and validate the associated talent solutions with business leaders and other stakeholders.
There will usually be more work than the organisation can take on and HR will need to work with the business to determine which initiatives should be prioritised. Justifying talent investments at this point should be more straightforward because they have been tightly tied to business strategy and prioritised by business leaders.
As organisations realise that talent strategy is a key strategic business priority, HR will become a vital partner in driving value and results in the business. In this role, HR will need to stay agile and allow changing business priorities to guide its agenda.
For priority projects, we can then create a business case for investment.
Based on our example above, of opening a new high tech facility, we can estimate how unfilled talent gaps impact the business financially and operationally. For instance, how would leaving staff positions unfilled reduce production output and increase overtime costs? Could a lack of talent increase product time to market? What does longer time to market cost the company?
At this stage, HR should also begin to look for synergies or conflicts among various programmes. We should evaluate ways to save by sharing resources across business units and be on the lookout for initiatives which may send mixed messages to the workforce or create too great a strain on the organisation’s ability to deal with change.
Deliver Talent Strategy
While the implementation will look different from different talent needs (and we will cover several in subsequent articles), there are some high level guidelines to accelerate quick wins and raise the probability of success.
First of all, include business leaders in developing the implementation roadmap. One of my previous clients required that all initiatives go through a “nuts and bolts” committee to ensure that the details were all in order and various projects from different departments were scheduled to reduce conflict and strain on the core business.
This process ensured that the various initiatives from different departments (e.g., IT, HR, Finance, Marketing) were coordinated and that the field could deal with the administrative demands while still keeping up with their core work.
Within HR, we must anticipate measurement of progress and results on the talent strategy scorecard. It’s at this stage that we line up the resources (e.g., people, financial) for implementation and define the governance model to manage, deliver and evaluate the talent strategy during implementation and on a long-term basis.
Of course, we must also ensure that we manage change by communicating the change story and training those affected by the changes. Throughout the design and implementation, HR should continue to engage stakeholders to ensure alignment meetings on the talent strategy roadmap.
As organisations realise that talent strategy is a key strategic business priority, HR will become a vital partner in driving value and results in the business. In this role, HR will need to stay agile and allow changing business priorities to guide its agenda. Some examples include:
- Setting up a new business unit or introducing an entirely new product line may require aggressive investments into Talent Acquisition and Learning & Capability Management to meet the need for new skills;
- Shifting the focus from cost efficiency to customer experience may necessitate new ways of conducting Leadership Development and Performance Management to drive a shift in organisational culture and behaviour; and
- Entry of international players into a previously strongly regulated local market could be met by investing in Succession Management, Career Management and Total Rewards to pre-emptively reduce flight risk of key talent.
Regardless of the specific strategy requirements, HR must learn how to converse with key executives in the language of business value and be able to translate business objectives into talent management investments.
This article was written by both Daniel Russell and Janne Asmala.
Janne Asmala is a Senior Consultant in Deloitte’s Human Capital Consulting Practice based in Kuala Lumpur, Malaysia. He has worked for more than six years in human capital and strategy & operations with both public and private sector clients across Finland, Netherlands, Malaysia, Indonesia and Singapore. He has broad experience with leadership development, L&D, talent strategy, entrepreneurship, agile project management, training and facilitation.
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