Last week I introduced this series by talking about how general business changes have rendered what many might consider traditional strategy development in talent management more of a hindrance to organizations than a benefit.
I did not say that strategy is not important, or that delivering a strategic impact is not important, but rather implied that how most organizations are approaching talent strategy today is out of touch with the times.
As the general business environment has become more turbulent, and technology combined with consumer demand has driven significant shortening of most product lifecycles, the complexities of delivering really strategic impact through talent management have ballooned. While competency management systems, career path planning, and multi-year development cycles may have made sense decades ago, that simply is not the case today.
Organizational agility is something the majority of human resource functions are not designed to enable or support. In fact, most traditional HR systems, including those in talent acquisition, hinder agility by imposing rigid control structures with process cycles that take months and even years to execute.
You can’t hit a moving target that changes location unpredictably every six months using processes that take 18 months to execute!
In this installment, I expand beyond the six capabilities of agile talent management introduced in Part I by talking about the critical elements of such a strategy.
However, before launching into the elements, let’s first take a look at a few examples of agile talent management in action.
Examples of Agile Talent Management
A key characteristic of organizational agility is the ability to rapidly shift idle resources. Like most airlines, Southwest Airlines was affected significantly by the most recent downturn in the U.S. economy. While competitors were busy slashing payrolls, Southwest instead cut back on hiring and temporally redeployed idle recruiters (more than 80 of them) into other areas of the business where work needed to get done, in line with the recruiter’s abilities. The shift enabled Southwest to maintain access to the talent it would need when hiring demand ticked up and simultaneously enabled the organization to catch up on project work elsewhere that added value in the current economic state.
Along similar lines, Corning once used idle recruiters to manage the outplacement of surplus employees in place of a third-party vendor. The refocusing of resources again preserved access to a resource Corning would need months later as new opportunities emerged that required staffing increases.
While using idle recruiters to accomplish work elsewhere in the organization was a new trend this downturn, it by no means is a stellar example of organizational agility.
Enterprise-wide efforts that are emerging include:
- Temporary redeployment of top performers into development roles where the primary mandate is knowledge-sharing and collaborative solution development to emerging issues (Numerous companies)
- Creation of flexible talent pools that grant temporary project-based access to top talent by managers without budget or need for permanent hires (Coors)
- Business unit/team prioritization schemas that enable simultaneous investment/cost-containment efforts across the enterprise (HP)
- Counter-cyclical process execution, i.e. taking advantage of economic cycles by executing growth-mode processes during downturns and vice versa (Slide-College Hiring)
- Redefinition of labor needs to allow for extensive use of contingent and alternative labor types that aide real time increases/decreases in labor cost (Google)
The unifying themes in all of these different examples is that firms need a strategy that allows them to respond rapidly with a customized solution, whenever something in the business environment changes.
Critical Elements of an Agile Talent Management Strategy
Some individuals think that an agile talent management strategy is little more than a focus on using contingent labor whenever and wherever possible, but that is much too narrow of a view. An agile talent management strategy is really more about making a bevy of talent management solutions available to the enterprise that enables organizational flexibility in a timeframe consistent with evolving business lifecycles.
An agile talent management strategy differs from a traditional talent management strategy in many ways:
- A broader range of more specific goals, including:
— To increase the overall labor productivity and ROI
— To increase the capacity of the workforce
— To increase the capability of the workforce
— To improve rates of innovation and adaptation
— To provide a competitive advantage through labor deployment
- An acceptance of a need for alternative paths: an agile strategy must predict a possible range of paths possible and offer relevant solutions regardless of whatever path environmental conditions dictate taking.
- Core business strategy integration: to ensure that talent management solutions are truly relative versus reactive, talent management planning must become a component of core business strategy development versus being cascaded from it.
- Data-driven decision making: one of the most difficult elements to enable is diverging from past practice. In an agile talent management strategy, decisions are made much more quickly using all available data and facts, and then reevaluated frequently rather than following a path dictated by tradition.
- Intra-enterprise prioritization: to maximize labor ROI, an agile talent management strategy focuses resources on the highest impact business units, jobs, regions, individuals, and critical skills. This is a direct contrast to most strategies that advocate equal treatment across the enterprise and make customization or delivery of one-size-fits-one solutions nearly impossible.
- Holistic focus: unlike the majority of talent-management strategies that focus solely on permanent employees, an agile strategy looks at coordinating talent management activities across all segments of the labor force, including numerous alternative labor types such as part-time workers, seasonal workers, outsource service providers, contract labor, strategic partner labor, and project-based deployment of retirees/interns/alumni/customers.
- Aggressive perspective: An agile talent management strategy doesn’t aim at enabling organizational survival, it aims at total domination of the industry by employing talent management tools and approaches that provide the organization significant influence over the talent marketplace.
- Consistently revised business case: as a result of a dynamns/business environment, the business case for talent management activities must be consistently revised. However, due to better alignment of deliverables with business need that proves a consistent positive impact, many agile strategies seek multi-cycle funding to enable greater resource usage flexibility.
- Extensive use of existing proven business tools/approaches: another major break from traditional talent management strategy is an increased focus on using non-HR tools and approaches to support talent management activities. Agile strategies borrow concepts often related to inventory management, quality control, adaptive manufacturing, CRM, and supply chain management. It is from these models that we get talent management terms such as “talent pipeline” and “talent inventory.”
- Comprehensive planning: delivering organizational agility requires that every activity that influences the organization’s ability to execute business strategy, including every talent management activity, incorporate a need for enabling agility into tactical and operational planning. To ensure that roadblocks to agility to do not occur, all plans should be analyzed using if/then scenarios prior to approval.
While not elements of the strategy itself, executing an agile talent management strategy requires two management practices that are not found in many organizations. Those practices include:
- Extensive use of recognition and rewards for delivering agility
- An organizational preference for agile individuals
Without management practices that focus on these two things, executing an agile strategy is nearly impossible.
Factors Influencing Talent Management Strategy Shifts
Many factors affect an organization’s ability to be successful, but when it comes to talent management the five key factors that should trigger a possible change in strategy include:
- Changing internal business needs: need to cut labor costs, need to rapidly add talent or to change skills, need to meet expanding business goals, need to accelerate product development, or a need to increase the rate of innovation.
- Changes in external economic factors: when external economic factors like the unemployment rate, interest rates, or labor quality change.
- Changes in the relative “power” of talent: changes in the supply and demand of labor. As talent becomes more powerful, organizations must become more talent-centric.
- As talent interests change: whenever what talent expects or demands in a job or work environment changes, so must the talent management approach change.
- Changes in a competitor’s talent management strategy: unlike most traditional talent management strategies, an agile strategy must monitor and react to the talent-management-related actions of organizations you compete with for talent.
Talent Management Functions That Must Be Agile
As mentioned previously, all talent management activities need to allow for agility, but those most likely to shift as a result of a change in the factors highlighted above include:
- sourcing/recruiting approaches
- emphasis on development/training
- rate of internal movement and redeployment
- use of rewards and motivators
- scope of retention/blocking strategies
- contingent labor utilization ratios
- emphasis on innovation
- leverage of external resources for ideation/innovation
- change in skill/competency profiles
- release of surplus/poor performers
- employment branding
- candidate experience
- new-hire/transfer onboarding
Firms that have adopted some aspects of the agile talent management include:
The U.S. military
City of Sunnyvale, CA
Like it or not, many of the old stalwarts of business strategy such as long-term forecasting, continuous improvement, long-range planning, and best practice benchmarking may already be on their way to becoming obsolete in this new, dynamic environment.
Even if the world of business were to slowdown, you would still have to ask yourself, “is it ever a bad thing to be too agile and nimble?” In fact, it may be that agility, along with continuous learning, might turn out to be the two primary competencies for both successful individuals and thriving businesses in the future.