Understanding your workforce and its potential capabilities is never more important than at a time of recession. The need for a highly efficient and flexible workforce is paramount, and managing recruitment and turnover costs is also important.
Being able to make the most of your current team by redeploying talent within the business, and moving people into different roles as the demands and the pressures on your business are changing, can be key to future success and in some cases even survival.
You will need to commit to developing their current workforce and ensuring that talent is placed where it can be most effective. Management insight is an absolutely vital element of this. Without a high level of visibility into each employee’s skills, HR and management’s ability to effect business change is likely to be severely compromised.
Our recent survey, conducted by Loudhouse Research, found that companies are prioritising employee development over hiring for the year ahead, as they look to improve staff retention and develop talent within the business.
The vast majority (82%) of HR professionals surveyed considered employee development to be a bigger priority for their organisation in 2011, compared to just 18% who felt that recruitment was going to be more important.
In addition, 56% of respondents reported that employee development and training was perceived as an essential business enabler within their organisation.
The benefits of focussing on employee development are two-fold. As well as allowing a company to maximise their talent mobility opportunities and make the most of their current team and its skill sets, it can also improve employee satisfaction, thereby increasing retention and reducing recruitment costs.
Visibility access to talent intelligence
To make the most of employee development, companies must be confident that they can correctly identify the talent they have and what they need to do to improve it.
When asked what would help their organisation to develop its talent better, more than a quarter (27%) of people felt that better visibility of skills gaps would greatly assist them in developing employee talent, while almost as many (25%) would like better visibility of their employees existing skills.
However, a worrying number of companies do not have access to reliable information regarding employee skill sets. Without successfully identifying these skills gaps, a company cannot create and implement the necessary training a development plans to up-skill their workforce.
Having accurate and accessible information on employees within a business is a vital part of developing the talent intelligence, which supports the company’s wider goals.
While HR directors obviously recognise the need for up-to-date information on all aspects of their workforce, including experience, ambitions and performance levels, this information is often not available within their business.
It’s important to understand that this type of data cannot be collected as an afterthought or a separate process. It must be captured as part of a business’ ongoing talent management processes.
Training investing in employees
It is only once skill gaps have been identified successfully that an effective training program can be implemented. It is vital that companies continue to invest in employee development so it is encouraging that our recent research found that 65% of HR professionals were not expecting to see any changes to their employee development and training budgets for 2011.
This suggests that while the economic climate is leading to tightened spending across the board, most companies still consider employee development an important area for investment.
However, training should not stand alone. It should be linked tightly with goals management, performance reviews, career plans and succession plans to form part of a wider development program. This linkage ensures that development plans are continually revisited and improved in real-time throughout the employment lifecycle, and helps employees develop naturally.
Training and development should not be seen as a ‘once a year review meeting’ but as an ongoing development plan, which is continually evolving.
Talent mobility challenges & opportunities
As businesses expand globally, talent mobility requirements make the ability to develop skills from within your existing workforce an imperative in any successful business strategy.
Talent mobility encompasses a number of different initiatives which all lead to the same business objective: make the best match of existing employees to other roles in the organisation. Internal mobility can include promotions and demotions, lateral moves, transfers and redeployments.
The rewards can come from reduced expenses or increased revenue. Companies that fill open positions through internal redeployment can reduce recruitment costs and time to productivity while increasing retention and employee engagement.
An optimised talent mobility programme can deliver payback in three major areas: lower turnover costs, faster time to productivity, and better employee engagement. Each area of benefit overlaps as talent mobility is not a stand-alone practice.
Internal talent redeployment connects to many aspects of overall talent management, especially talent acquisition and succession management. Understanding and quantifying the returns from talent mobility should be framed in that overall context.
Cost of turnover
Internal mobility programs can help to achieve high retention rates among top performers and low employee turnover. Costs associated with turnover typically occur in three areas: separation costs, replacement costs and productivity losses. A lack of opportunity and career development is a key driver of voluntary separation, with costly consequences. On top of this there are costs associated with recruiting and filling vacancies, lost productivity from vacant jobs, and the costs of training new employees which can increase operating costs, reduce output, and essentially cut into profits.
Time to productivity
New hires require training before they become contributors and boost output, but internal hires have a dramatically lower time to productivity. One study found a 50 per cent faster time to productivity on average.
Career development and internal career opportunities are key drivers for increasing employee engagement. In fact, a lack of internal opportunities can trigger voluntary turnover. As we come out of the recession, there is a risk of increased employee turnover in many organisations, as employees who have been “sitting tight” start to think about career development, in many cases looking outside their current organisation at the opportunities available.
The loss of high-performance employees can be especially detrimental to a company, resulting in loss of business and relationships. In addition, employee turnover – especially of good employees – can lead to decreased innovation, delays in services, lethargic implementation of new programmes, and reduced productivity. The loss of good employees can also have a negative impact on morale across the organisation, often triggering the departure of other good employees, so it is vital that organisations take steps to mitigate this now.
Get your business back to growth
Meeting your organisation’s goals and objectives depends largely on the people that will achieve these results for you. Talent mobility, visibility of available skills and employee development all go hand in hand and must form part of the organisation’s wider strategy.
As we begin the economic recovery, there is no doubt that you will need to get the most from your workforce, ensuring that talent is best placed to drive business growth. This is simply not possible without a high level of visibility into each employee’s skills, performance and aspirations. This ‘talent intelligence’ is an absolutely vital element of managing an organisation out of the recession and back to growth, while supporting an engaged and motivated workforce.