The study revealed that half (55%) of organisations are anticipating increasing their investment in talent management in the year ahead, up 15% on last year’s 40% figure. This suggests increased confidence and positive initial steps after the impact of the downturn.

Of the larger organisations which responded to the survey, (those with 50,000+ employees) almost 50% still intend to proceed with headcount reduction during the coming months.

The Talent Q Talent Management Survey had two broad aims - to track movements in opinion since the 2009 survey and to examine how HR professionals have weathered the challenges of the past 12 months. It also looks ahead to the next 12 months and we have canvassed respondents’ views on how prepared they are to address the upcoming challenges in effective talent management.

There is no doubt that attitudes to HR strategy over the next 12 months are distinctly more positive when compared to results from 2009. Most respondents reported that they would be implementing changes to their talent management strategy, with only 26% reporting that strategy in this area would remain unchanged (compared to 38% in 2009).

Looking ahead to the next 12 months, organisations report their intention to adapt their talent management strategies in preparation for the economic upturn not only in increased investment for the development of their existing talent pool, but also in redefining what they look for in new employees, and a drop in intention to reduce headcount.

Even beleaguered financial services organisations appear, compared to 2009, to have begun re-investing in talent, with 71% planning to spend more, albeit this relates to a very low base last year. Similarly, investment in this area is also relatively high in the public sector (61%) and utilities organisations (58%). Other sectors, which may be more severely impacted by the recession, appear to be significantly less confident with regard to investment. Less than half (46%) of respondents in the retail/consumer and 42% of the professional services sector plan to up their investment.

The stated intention to increase expenditure on employee development is a welcome message, indicating a renewed focus on existing organisational talent. The intention to re-examine what is required in new hires is also a positive response, indicating that organisations are taking on board some of the lessons of the past few years.

But indications are that organisations, though keen to gear up expenditure in line with improving economic conditions, are not wholly ready to meet the challenges of this fluctuating business environment and may not spend newly available funds as wisely as they might. 

While compared to last year, more respondents indicated that they have updated their talent management strategy to meet prevailing economic challenges (39% favourable, up 7% from 2009), they still represent a minority within those surveyed as a whole. Respondents from the utilities and infrastructure sector were most positive on this question, with 52% expressing agreement, representing a significant increase on responses to the 2009 survey.

When asked if their talent management processes are fit for purpose to meet the challenges of the year ahead the figures were poor, suggesting real room for improvement. Only 13% described managing talent through change as a strength while just 14% are confident in developing high performance teams. Succession planning to deliver a robust internal pipeline of talent is another area of concern (17%) while only 23% are proficient at assessing the best talent to join the organisation.

Effective talent management is crucial for companies looking to emerge from the recession in a strong position and maximize improving climates, especially since the survey also highlights the toll which the recession has taken on both employee engagement and turnover, both key factors in the implementation of talent management strategies.

55% of respondents agreed that: “the economic downturn has had a measurable negative impact on employee engagement in this organisation” while the same percentage agreed that: “the economic downturn has reduced employee turnover in this organisation”.

The question must be asked, if engagement is down, but these disengaged employees remain due to lower turnover, will productivity and other engagement outcomes suffer as a result? In a similar sense, organisations should consider whether reduced turnover has resulted in retention of their most talented employees, or simply those less willing to take a chance in an uncertain job market. This has a number of implications for organisations once the economy experiences a sustained upturn. Firstly, increased recruitment will need to be focused on the future of the business, so as to avoid replicating the employee base that has opted to stay with the organisation.

Secondly, organisations will need to invest in re-engaging their existing workforce, recognising the contribution they made to organisational success during the difficulties of the downturn. These initiatives will need to sensitive to both the culture and operational constraints of the organisation to ensure acceptance by the employee population and avoiding any impact on productivity or operations.

In conclusion, while respondents have indicated their intention to re focus their talent management activities over the next 12 months, with an increased investment in the development of existing employees, they should be mindful of the need for maintaining flexibility and responsiveness in the face of an uncertain economic landscape.

Full details of the survey can be found at www.talentq.co.uk.