Monday, March 31, 2008

Getting the right people

Dear all,

We are all struggling to get the right kind of candidate for our requirements.

There are people who actually fit into the role which your company wants to hire, but is the candidate ready to take on the assignment which your company has ??

Here is a wonderful article on the topic and hope you enjoy reading it.

RaghavFounder HRinIndia Biggest HR Networkraghav@hrinindia.in9880080321


Getting the right people
- Peter Capelli -

Earlier this year, my colleagues and I completed a study based on interviews with the CEOs of 100 of the most important companies in India. What was most important to me about these interviews is the importance and attention they gave to talent management in their companies. I've spent a large part of the past three years trying to understand what was going on in talent management around the world. While we know a lot more about what is happening in US companies and some interesting examples are coming from them, the US may no longer be the leader in this field. If any business community can lay claim to being the most interested and sophisticated in their thinking about talent management issues, it is India.

The phrase "talent management" is used to describe literally everything that happens under the broad umbrella of human resources. It does have a core meaning, however: anticipating human capital needs and setting about meeting them. "Getting the right people with the right skills into the right jobs at the right time" is a common description of the end result of a good talent management outcome. To that outcome, one needs to anticipate needs and have a plan to meet them. That's the process of talent management. The problem we are hoping to avoid with good talent management is to avoid talent crunches, where business growth suffers because we can't find employees with the right competencies to get the work done, and talent surpluses, where we have to layoff and restructure.

Talent management is at the top of the human resources agenda because it is at the top of the CEO and executive's list of concerns. For example, McKinsey interviewed CEOs and other business leaders around the world and found half worrying that their talent management practices were not aligned with business outcomes. More than half felt that there was insufficient commitment to developing talent among line managers and insufficient time spent on talent management in general. A 2007 survey by SEI's Center for Corporate Futures found that concern about "difficulties in finding, retaining, and growing talent" ranked top in importance for international business respondents out of a list of business challenges.

At the moment, talent management practices, especially in the US, fall into two distinct and equally dysfunctional camps. The first and by far the most common is to do nothing, no anticipation of needs, no plans for addressing them. A recent survey reported that roughly two-thirds of US employers do no planning of any kind for their talent needs. Every new need for talent presents a serious disruption, every employee who quits is a calamity. A company that does no planning, does no management of their talent, basically waits for a need to develop or current employees to leave and then hunts around for a solution, which is almost always to hire from the outside. Complaints about talent and skill shortages in the economy are driven by the fact that so many employers now are trying to meet their talent needs by hiring from each other, something that was a rarity a generation ago. The problem especially in India is that there is simply not enough "talent" in the outside market to go around when we define it as those who are ready to step immediately into a job. Internal development has got to be part of the solution.

The second approach relies on complex and bureaucratic models of forecasting and succession planning from the 1950s to develop all talent from within. These are legacy systems that grew up in an era when business was highly predictable. The marker for this approach is a focus on long-term succession planning, which is designed to match individual candidates to individual jobs. The assumption behind this model is that we can meet the talent management challenge with long-term planning.

The problem with this second approach is with that assumption. With remarkably few exceptions, long-term planning in business is so inaccurate that relying on it is a mistake. The reason is that product markets are no longer predictable. The idea that a company could predict accurately what it would be doing 10 years out or more has largely disappeared. When business forecasts and plans shrunk from 10 years to five years to, in most cases now one year, the ability to predict the demand for talent has to be scaled back as well. Programmes for developing talent that go out many years create a false sense of accuracy and no longer make sense.

Another problem with this approach is that the supply of internal talent is equally uncertain because of retention problems. Simply predicting what percentage of candidates who begin a development programme will remain when it ends is now difficult. A company that has a modest 10% turnover rate among its managerial ranks will lose half of its managers in five years: Does it still make sense to call that arrangement a "pipeline", or is it better thought of as a sieve?

The big challenge for talent management stems from the main challenge facing contemporary business, and that is to manage uncertainty. The demand for talent is uncertain. Relying entirely on a just-in-time workforce based on outside hiring cannot work, especially in India. Relying on traditional models of internal development based on long-term forecasts cannot work, either, as they are too expensive and too unpredictable. As we've already seen in the field of business strategy, the answer is going to point us away from planning and toward adaptability and responsiveness as a means for addressing uncertainty on both the supply and demand sides of the talent management equation.

About the author -
Cappelli is the George W Taylor Professor of Management and Director of the Center for Human Resources at the Wharton School of Business. His book, Talent on Demand: Managing Talent in an Age of Uncertainty, appears in April

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