Shifting business models, increased globalization, and changing demographics are among the forces fueling the battle to hire and retain skilled talent. In PwC’s most recent CEO survey, nearly 80 percent of U.S. CEOs expressed concern about the lack of key skills, an increase from 70 percent the previous year. While talent is top of mind for a large majority of business leaders, many fewer understand how to address this pressing concern. Yet making the effort to align business strategy with agile, innovative human capital initiatives can not only give your organization an edge in the talent wars, but also reap significant bottom-line gains.
What’s at Stake?
Strengthening your company’s relationship with its employees can unlock some of the greatest sources of talent value: engagement, productivity, creativity, and loyalty. When talent strategy drives business strategy, the numbers are impressive. For example, U.S. businesses lose $450 to $550 billion each year due to disengaged employees, while customer and employee engagement leads to an impressive 240 percent jump in performance-related business outcomes, according to Gallup’s 2013 State of the American Workplace Report.
Based on PwC’s own talent transformation and our work helping clients achieve similar gains, here are four key strategies for companies looking to create a strategic talent advantage:
1. Engage at the top. Leadership across the C-suite, including the chief human resources officer, needs to drive and deliver an organizational culture of innovation and high performance. Talent pipelines—including at senior levels—also need proactive management to provide for near- and longer-term succession. Organizational talent has a direct line to your balance sheet: It affects the ability to grow and remain competitive in your market and add real value to your customers. HR can play a significant role in making sure that the C-suite understands this and implements strategies that equip your people, and your organization, to win.
2. Cast wider nets. Identifying existing or potential talent pools, honing technical skills through continuous learning or mobility programs, and developing leadership experience are vital for growth. Data analytics, inorganic acquisitions, and organic development can get the right people to your organization at the right time. Faced with skills shortages, CEOs are becoming increasingly creative: 92 percent of the U.S. CEOs we surveyed told us they use multiple channels, including online platforms and social networks, and 85 percent actively search for talent in different geographies, industries, or demographic groups.
3. Strategically cultivate innovation. Collaboration is a great place to start to foster innovation. Close collaboration, particularly among chief information and HR officers, is crucial to fitting IT investments into a business and people strategy for the digital age. At PwC, we’ve increased innovation and efficiency, thanks to our adoption of a collaborative technology platform as part of our new alliance with Google. Two recent papers (The connected employee experience and The connected workforce is talking SMAC: Are you ready?) explore the many advantages of this.
Last but not least, organizations should encourage—or even require—collaboration between Producers (the what-if thinkers) and Performers (the what-works people). As our colleagues, John Sviokla and Mitch Cohen, explain in their new book, The Self-Made Billionaire Effect, every billion-dollar idea has one of these pairings at its heart.
4. Reset HR and talent operations. All too often, talent strategy is limited to incremental improvement in HR siloes such as recruiting, onboarding, and global mobility. By instead focusing holistically on business strategy and operational efficiency, you can connect and engage your employees. Fortunately, simplifying archaic talent processes does not require monumental technology shifts or spend. Transposing today’s consumer “app-experience” into your business setting saves significant hours on administrative processes, accelerates development through real-time analytics, and improves employee experience.
As our recent paper, The talent to win, explains, PwC’s own approach to talent transformation includes real-time data and analysis regarding individual performance and a culture of frequent, informal feedback. This means our people don’t need to wait for an annual review to build on their strengths or quickly close performance gaps.
People want to work the way they live: Mobility, agility, flexibility, and inclusion increasingly are the table stakes for attracting and retaining top talent. In an era of widespread innovation, it’s time for talent strategy to catch up.
Mary Lyons and Jeff Hesse are principals at PwC.
