HCI Blog

Anybody who has ever watched interviews with managers or coaches of professional sports teams will have heard plenty of discussion of the need for leaders throughout the team. The same thinking is also increasingly a preoccupation of business people. Indeed, the need for “leaders at all levels” is one of the 12 critical issues identified in the Global Human Capital Trends 2014 survey published earlier this month by Deloitte University Press, the publishing arm of the professional services firm’s leadership center.

In a paper examining the findings, Adam Canwell, Vishalli Dongrie, Neil Neveras and Heather Stockton – who work for Deloitte in a range of locations  – point out that leadership “remains the No. 1 talent issue facing organizations around the world,” with 86% of respondents to the survey rating it “urgent” or “important.” However, the fact that only 13% say they do an excellent job of developing leaders at all levels means that this area has the largest “readiness gap” in the survey.

Finding good leaders has, of course, always been a crucial issue for all sorts of organizations. This is why the armed forces, for instance, put so much effort into training their officers and why business schools and other providers of executive development have thrived. But the Deloitte team argues that “21st-century leadership is different”. Canwell and his colleagues write: “Companies face new leadership challenges, including developing Millenials and multiple generations of leaders, meeting the demand for leaders with global fluency and flexibility, building the ability to innovate and inspire others to perform, and acquiring new levels of understanding of rapidly changing technologies and new disciplines and fields.” No wonder organizations are coming up short.

Almost inevitably, the problem is felt to be especially acute today. This is a result of the strengthening of the global recovery, the desire on the part of the companies to expand in new markets and the growing numbers of older leaders choosing to retire.

A key part of the solution identified by the Deloitte team is for organizations to develop leadership pipelines at every level. At present, it says, companies are not only not developing enough leaders, they are also not equipping those they are creating with the critical capabilities and skills they need to succeed. “Today’s market environment places a premium on speed, flexibility and the ability to lead in uncertain situations. At the same time, the flattening of organizations has created an explosion in demand for leadership skills at every level.”

It appears that there is no avoiding spending money when it comes to dealing with this situation. The best performing companies already spend thousands of dollars each year developing each would-be leader on their staff, with the figure for senior leaders in the tens of thousands of dollars. Creating strong leadership programs for leaders at all levels – as advocated – requires sustained and substantial investment. At the early stages in the leadership pipeline, potential leaders need to acquire core skills in supervision and management, with frequent assignments to build on this base. Later on, they need to understand all the business functions before becoming executives, when business and product strategy will be central, along with experience of driving change within large teams. Companies need to understand that there are no shortcuts to building broad and deep leadership teams. New leaders typically need 18 months before feeling fully comfortable in a new role, while for those in the mid-level the period is more likely to be two to three years.

The paper also calls for companies to be more flexible in terms of leadership paths. Some leaders will move into senior roles relatively quickly because of a particular situation, while others will develop more slowly.

Above all, though, organizations need to realize that developing leaders amounts to more than having a selection of training programs. “Senior executives should create a culture that broadens the opportunity for leaders to develop in new ways,” writes the Deloitte team. “This means putting potential leaders in positions that stretch them beyond their current skill sets, and continuously coaching and supporting leaders so they can build their capabilities as rapidly as possible.” This is increasingly well recognised, say the authors, but it is “simply not widely adopted and practiced”.

Where should companies begin? A few starting points include:

Engaging top executives to develop leadership strategy and actively govern leadership development.

Aligning leadership strategies and development with evolving business goals

Focusing on three aspects of developing leaders – developing leaders at all levels, developing global leaders locally and developing a succession mindset

Implementing an effective – and unique – leadership program.

But there is no time to delay. The best-performing organizations are already on their way.

SOURCE: Forbes

Employee turnover is very much on the agenda this year. In fact, a report from OI partners has shown that 51 percent of employers surveyed in North America reported higher turnover compared to just 30 percent reporting higher turnover in 2012.

Unsurprisingly, the report also found that 78 percent of employers are concerned about losing high potential talent, and in fact, retaining talent was the number one priority this year, making it a higher priority than hiring new talent, which landed at number two.

As you can see, retaining and/or reinvigorating a superstar is seen as a more effective strategy than finding new talent to fill a gap left by a superstar. This resonates with other studies, which show that promoted individuals tend to outperform external recruits.

So talent management professionals should be focusing on staff retention and one of the ways to do this is to understand the psychology of why employees decide to quit, i.e. what is the psychological process of quitting?

I recently found some research called the unfolding model of voluntary turnover, which seeks to explain the run up to the decision leading to an employee quitting. The research, by Mitchell and Lee, identified five pathways to voluntary turnover, as shown in the image below.

Pathways, 1, 2 and 3

Pathways, 1, 2 and 3 to quitting, which account for around 65 percent of voluntary turnover, start with an initial jarring shock which prompts thoughts of quitting. This shock could result from occurrences such as being passed over for a promotion, an enforced pay cut, a new bad boss, a lower than expected pay rise, etc. In the majority of cases, the decision to leave is largely based around one event/reason.

In pathway 1 and 2, followed by just 10 percent of voluntary leavers, employees leave without another job in place in a short to very short period of time. These employees may be unreachable.

In pathway 3, followed by around 55 percent of all voluntary leavers, employees find a job before leaving meaning there is a relatively long period between the shock event and decision to quit, giving your business time to react.

Pathway 4A and 4B

In pathway 4A and 4B to quitting, followed by around 35 percent of voluntary leavers, the decision to leave follows after a long period of accumulated dissatisfaction resulting from a range of small negative events which accumulate in a ‘drip drip’ capacity. Most voluntary leavers who go down this path get an alternative job offer in hand; so, the time period between deciding to quit and actually quitting can be very long, once again giving your business time to react.

So, what’s the takeaway here? In general, the time between an employee deciding to quit and actually quitting is usually very long, meaning there should be ample time for businesses to turn the employee around assuming they have the appropriate systems in place to spot and remedy employee disengagement.

In fact, I believe that employers wanting to compete effectively in the war for talent should have systems in place to both identify and address disengagement before it becomes critical.

SOURCE: Recruiter.com

This is according to the Deloitte Touche Tohmatsu Limited (DTTL) Resetting Horizons: Human Capital Trends 2013 report.

The survey of over 1,300 organizations in 59 countries outlines 13 global trends that are driving critical business and human capital decisions. The report explores new approaches in HR, spanning from next generation leadership strategies and open talent economy to focusing on improving the execution of critical HR priorities.

Below you can find the top 5 global trends in talent management

1. Next generation leadership; The majority of organizations (84 percent) say that developing future leaders is relevant now and in the next three years, but organizations must seek a new leadership model for the age of agility. “Although there is clear focus on developing the next generation of leaders globally, HR executives still need to develop a different approach around development. These strategies must be specific to the business. It’s pervasive and organizations must commit to getting the best results.”
2. Accelerating organizational change; Eighty-seven percent of respondents see the way in which organizations view change as a top trend. “In today’s fast-paced environment, organizations need to adopt a new way of looking at change and become more results-orientated.”
3. The war to develop talent Eighty-six percent of respondents reported the shift to development and upgrading skills as a critical trend. “As businesses struggle to fill critical positions at many levels, companies are putting renewed focus on building capabilities, not just finding them.”
4. Boards are changing the HR game Eighty-two percent of respondents say a growing number of boards are focusing on the role and impact of talent on business performance and risk. This is a step away from the previous focus of boards which was centered on CEO succession and setting compensation for the most senior executives. “Today, organizations know that developing a strategy without considering the talent dimensions creates risks. Boards are recognizing that a business strategy often is a talent strategy.”
5. Transforming HR to meet new business priorities Eighty-five percent of respondents indicated that organizations are developing HR capabilities that will not only support the business, but enable business strategy. “To fulfill its new role in accelerating business growth, organizations are using HR transformation to design HR and talent systems that can work across geographic boundaries, creating a framework that is flexible enough to support different business models.”

To read the report in full, please click here.

SOURCE: Global Talent Strategy