The C-suite as the talent strategy spearhead – why and how
May 07, 2021
That talent is critical for the modern organization is not in dispute. If a company is to thrive, it is essential to align the talent strategies with those for business. And this alignment is not a one-time matter, but in fact needs constant calibration in line with regular strategic shifts coming from ongoing disinvestments, digital transformation, M&A, and other events.
Align business and talent strategies, and you are sorted!
In truth, though, how well aligned are enterprise talent processes in support of the business direction? Sample the following:
Clearly, there is much to address. And it is important to involve executives when it comes to creating effective strategies and practices to for recruitment, onboarding, development, and retention of talent.
Is it really necessary to involve senior leaders?
When it comes to the human capital strategy, it is too big to be left to HR alone, and top executives must be involved. This is happening in practice, as seen in the results of a survey by the Economist Intelligence Unit:
7 of 20 corporate leaders spend 30-50% of their time on talent management
Another 7 of 20 commit 20% of their time to talent management
- The rest spent up to 15% of their time on talent management
Executives and business heads drive the effectiveness of the talent management strategy of an organization. The HR team itself consults on, manages, and owns the tactical execution of talent management processes. However, these very processes are very likely to be underestimated and hence not executed very well by managers if there is no commitment from those at the top. This commitment is vital to keep talent management at the heart of business strategy such that users adopt it and managers are engaged. HR can inform about and make a case for the best systems and workflows but their implementation requires approval from the decision-makers.
CEOs concur on this matter:
What has brought about the need for higher executive involvement?
Traditionally the domain of HR, talent management strategy only saw intermittent involvement from senior executives. This, though, changed in recent years due to two factors:
A definitive shift in focus toward talent and other intangible assets
Ethics and performance coming under higher scrutiny from boards
Both factors have meant executives must stay on top of integrated talent strategies at their firms, along with plotting their own strategies and owning the associated talent initiatives.
Leaders must address key talent questions.
In the matter of managing how organizational strategy and its talent are related, there are several high-stakes questions that senior executives must tackle head on:
Are talent resources being allocated such that they support the chosen direction of the business?
Are the talent processes of the enterprise aligned suitably in pursuit of the business direction?
What talent development initiatives were taken in the previous year, and how were these measured and evaluated?
What implications do shifting labor and market demographics have on talent and strategy execution, and what are the associated risks?
How effective is the onboarding process as well as external hiring vs internal promotion?
How is engagement measured and analyzed, and who has accountability for it?
How much of the turnover is from top performers, high potentials, and critical or hard-to-fill roles?
It is time for leaders to reorient the direction of talent management.
Addressing the aforementioned questions requires a deeper involvement and more focus from senior leaders. Moving talent development strategies in the right direction requires a focus on the following themes:
Using talent to deliver value for shareholders: Labor accounts for up to 70 percent of total business costs – it is expensive! Clearly, talent is an asset for growth and development, not a cost to be cut down. For instance, bringing in a “digital first” mindset requires involvement from not just HR but IT as well. An integrated strategic approach can work wonders and create a lasting impact that offers benefits for shareholders of the company too.
Tracking talent risk and increasing management accountability: Study talent gaps and understand how they could affect organizational success. Look at readiness not just for the C-suite but also down to at least the manager level as well as mission-critical roles. Develop and evaluate skill- and competency-based strategies, and make plans for the growth of high-potential employees.
Rethinking compensation: Align pay practices with long-term, strategic thinking. Create a balance between short- and long-term incentives, tying them to business goals and building collaboration and teamwork. Align reward and recognition systems with corporate strategies and values.
What specific actions can leaders take?
Aligning organizational strategies with integrated talent strategies is critical for senior leaders in an organization. This requires involvement from not just the CEO or CHRO, but also the executive team, business-line leaders, and the board. The actions are seemingly clear and simple, yet uncommon in many organizations, as they are often tripped up by organizational habits and tendencies.
Here are the three steps to align talent strategy with business strategy:
Understand talent requirements as per business strategy: Look at the building blocks required, such as performance metrics, organization culture, talent pools, and others. Study where the company stands when comparing its business strategy to each of these, and accordingly reorganize pivotal roles, and identify success-critical competencies and their urgency.
Compare current talent capabilities with strategic needs: After organizing roles and capabilities into specific competencies and traits, compare the talent baseline to talent needs. Identify individuals performing strongly, study the strength of the talent pipeline, and look at the merits of the culture and reward and recognition systems. Ensure clear evaluation criteria based on proper data.
Create strategies to close the gaps between capabilities and needs: Identify roles that can be filled in internally vs those requiring external hiring, basis individual and organizational data. Balance the immediacy of needing external talent with the need to develop internal talent. Create a clear vision of the changes required, and make the requisite changes in key talent management processes.
To sum it up…
If a company wants its employees to be inspired and motivated to reach and consistently deliver peak performance, the C-suite needs to be actively involved in looking for, hiring, developing, and retaining the best talent. Senior executives must oversee integrated talent strategies, which need proper support from and execution by HR. Delay these actions, and strategy execution at the firm comes under great risk!