Close those talent shortage gaps
While many developing nations in world are adopting strategies of growth and fast forwarding their cultural and business philosophies they are not even aware that a major demographic shift is about to convert their societies and their businesses drastically. And, they are not ready for such a colossal change. The statistics are undeniable. In most developed economies in world, the workforce is progressively aging. Do you know the declining birth rates and the aging of the baby boom generation (workforce between the ages of 55 and 64), are growing faster than any other age group? The desertion of this experienced, talented and mature workforce is challenging organizations to fill their critical leadership positions.
Almost 65% of organizations in the developing countries are struggling to fill the top positions, which include positions in research & development, sales, marketing, HR, IT, logistics, law and finance. In fact, one in three organizations world-wide is struggling to fill key positions.
The skill gaps for the higher positions are large and wide. Because most oganizations have become terribly focused on growth they have ignored the future leadership crisis. Organizations are lacking the ability or let me put it this way: organizations are ignoring investment in training and developing the future – the next generation of executives. According to Booz & Company’s (the publisher of strategy+business) recent report based on in-depth analysis of India’s top 500 companies, by 2017, 15 to 18 percent of leadership positions in some big companies will be vacant. The fact is they might be filled by people who are unfit for those jobs. This implies that companies will be missing almost one of every five leaders they need. In the absence of proper leadership, those companies can go off track and might lose out on several growth opportunities.
The Tata Group is giving its flagship leadership programme, TAS, a makeover. The group has started focusing on ’employee life cycle’ which studies the employee’s progression in the organization from joining date. The group now centers on developing, mentoring and managing the career of every manager listed under the programme. At Hindustan Unilever, the FMCG giant, the managers at all levels are occupied in identifying talent among their subordinates.
At Vodafone, sensing the need to develop talent for senior roles, the firm has extended its cross-functional induction program to 45 days which earlier was shorter. Across India Inc, companies are waking up to the need of developing leadership pipeline; they are building and harnessing in-house talent for critical roles. While organizations like Hindustan Unilever and the Tata Group have long been cited as models of good internal grooming, those like Sapient, Vodafone and HCL been known for their exuberant HR policies for leadership development are tweaking existing strategies to make their internal processes more vigorous. Some dynamic companies are waking up to the forthcoming disaster of leadership crisis. It’s becoming need of the hour for business organizations for building internal talent for significant roles.
Job rotation is a method adopted by many successful organizations in the world, as technique of developing skills of employees in a variety of jobs. When employees perform the same job functions every day without any change, they experience a feeling of fatigue, lethargy, monotony, and carelessness. They get a feeling of burnout, which decrease their productivity, increases absenteeism, and the bored employees start looking out for new jobs. This all leads to organizational dysfunction. However, when employees rotate across different positions regularly, they experience freshness in their employment.
This gives a change to the employees by helping them to learn new skills. It allows the employees to work closely with new departmental heads, peers and subordinates. By job rotation both the organization and employees can find their “fit” in a particular position; a person might be just the appropriate candidate for a position, which is not known because of his wrong posting. Often organizations have found the right candidate for various positions by adopting job ration policy. Organizations have experienced better understanding and cooperation among the employees by rotating individuals between dissimilar or contrasting business units. Increased movement helps to break down hierarchical perplexity and misinterpretations if any; this in turn reduces grapevine and politics besides talent hoarding by some business units. For example, when a sales worker is relocated in purchasing department, he understand implications and problems faced by the purchasing department staff, the guidelines under which they need to work, also how the quality of purchases influence the final product which the sales person is required to sell.
It is difficult to retain the anxious and hasty generation Y workforce in organizations. They want novelty and challenge in their job profiles and they want the best from the jobs immediately compared to their older counterparts. The new generation is in search of an “ideal” profile, fatter pay packets and quick promotions. They don’t mind changing jobs often. Many organizations are therefore experiencing challenges in employee retention.
Some leading organizations like IBM, P&G and HUL use job rotation policy moderately for retaining a mix pool of experienced along with freshly recruited talent pool. Some seasoned employees who are well versed with the company’s policies and culture befall useful to replace personnel who may leave or move up in the organization. The existing employee’s strengths and weaknesses are known and therefore, staffing becomes easier.
For a good number of years, organizations across sectors have neglected the scouting process of leadership either due to a poor practice of succession planning or insecurity among the senior leadership. According to a KPMG report, nearly a fourth of organizations have filled less than 25% of critical roles with candidates who are not fully prepared for the role. Majority of companies are most worried about having an insufficient pipeline of young leaders and a lack depth of internal candidates for critical roles. And, some companies are not even sure about the efficacy of their leadership pipeline-building mechanisms. Organizations are having a tough time to the constantly led talent fight. Post the global financial crisis, companies have been focusing on their survival rather than talent management. This critical matter might bounce back any moment.
But this is where company like HUL stands apart. Managers in the junior and mid-stages of their careers have gone on to assume leadership positions across sales, media, IT, finance and infrastructure. Under its ‘post graduate scheme’, young professionals are trained over 15 months in different functions like customer development, finance, marketing and supply chain. HUL believes in the job rotation in its global MBA recruitment channel. The job rotation gives a feel about the candidates; each exposure tests the capability of the candidates in each functional area.
In its cross-function induction, Vodafone has included elements like market visits, peer investigation, cultural assimilation and select classroom sessions. At HCL, one of the talent harnessing programs is designed around Dr Michael Watkin’s ‘First 90 days’ principle. During the five-month programme, called ‘HCL Certified Leader’, leaders learn to diagnose situations and apply skills developed through real-time experiences. Their ‘Top Gun’ programme enables high performers to work on real business situations with the senior leadership team. Through such innovative programs HCL has over 1,000 positions with a named list of potential successors across all levels of responsibility. Now, that’s really noticeable move!
Smaller companies are also working on improving leadership processes. Over the past few years, there has been a big shift in how the company looks at talent reviews and succession planning. To conclude, organizations must understand the reality; that is – there are no “ideal” candidates and there is a highly limited supply overall. They can adopt “boomerang” hiring. Former employees who left the organization can be invited back. They will bring fresh viewpoints back into the business which might give a push to the expansion. They may have left as mid-level managers but they can return at senior-level.
It’s better to set the basic requirements for senior positions, what minimum standards are and what “nice to have elements” the company is looking for. I think organizations can compromise a bit. They need to determine how important qualifications are. They must resist the haste of defining ‘qualified candidate’ made without careful inputs and without taking the business environment into account. Most importantly, if organizations refuse to adapt to reality the challenge of shortage of talent will blow out of proportion.