Talent Management and the Skilled Worker Shortage

The skilled worker shortage in Australia (plus Canada and New Zealand) is driving many organisations to create a formal talent management strategy. Executive focus and support has sharpened as businesses, government and not for profit organisations start to feel real pain from a lack of skilled workers. The pain often appears as :

1. Breaking continuity of service and program breakdown
A recent high profile government cover up in Western Australia highlights the urgent shortage of teachers in that state. The implication is that students are sitting around with no teachers to attend to them.

2. Reputational impact for the whole organisation
If the organisation is unable to deliver programs or products or services on a continuing basis, the customers and stakeholders of the organisation will lose faith in the brand itself. This has a long term impact on the whole business.

3. THE HR BUSINESS CASE - Much higher cost to replace key workers because management is only putting out fires
A workshop on HR Metrics run locally by AHRI suggests that office and blue collar workers cost the organisation six months of their annual wage (or about $20,000 each) before they become fully effective in their new role. The time frame becomes 12 months for managers (or about $150,000 each) and 18 months for executives (or about $350,000 each !). e.g. If your business is losing 100 shop assistants per year, that represents a $2,000,000 cost to your CFO. Has anyone told her ?

4. Project breakdowns resulting from a loss of organisational knowledge and experience
If a key project manager walks away from the business half way through a major project roll-out, all the history and accumulated subject knowledge in that project will walk out with her. It is very difficult to replace or re-discover this knowledge as it all belongs within the project itself.

A recent report from Aberdeen Research suggests that organisations with a deliberate talent management strategy, aligned to the overall organisation strategy, are much more effective at identifying, attracting and retaining talented workers. It is suggested that this comes about about because these organisations have also developed strong measures for identifying all of these factors and regularly use these measures to refine these talent management processes. The appropriate use of technology and engagement of line managers in these processes are also seen as key factors.

Wikipedia tells us "Companies that are engaged in talent management (human capital management) are strategic and deliberate in how they source, attract, select, train, develop, promote, and move employees through the organization." Wikipedia goes on to say "This term also incorporates how companies drive performance at the individual level (performance management)."

What is Talent Management ?
Different stakeholders have different definitions. Here is what Wikipedia has to say. Talent management "... refers to the process of developing and fostering new workers through onboarding, developing and keeping current workers and attracting highly skilled workers at other companies to come work for your company. Talent management in this context does not refer to the management of entertainers."

Where did it come from ?
"The term was coined by McKinsey & Company following a 1997 study and then it was the title of a book by Ed Michaels, Helen Handfield-Jones, and Beth Axelrod."
Source: http://en.wikipedia.org/wiki/Talent_management