Over the past few years small businesses have been caught up in the "war for talent". But currently there seems to be a "war on talent." The CIPD wanted to find out how important organisations consider talent to be when times get tough and focus on some of the positive measures that can be taken to make the best of the situation.
In February 2009 we launched 'The war on talent? Talent management under threat in uncertain times', highlighting some of the practical steps that chief executives, HR professionals and all people managers can implement to fight against the likely war on talent and ultimately contribute to the long-term success and sustainability of their organisations.
The impact of the downturn
A key objective of this research was to find out whether the current economic climate had affected organisational talent management approaches and strategies. It found that just over a quarter of respondents have been forced to change their approach as a result of the economic climate. The results showed some significant differences across the sectors, with private-sector service organisations especially likely to be affected.
The findings revealed two different experiences: those whose approach has been affected by the downturn - for better or worse - and those who felt their strategies have remained the same regardless. Interestingly, respondents from both groups believe that talent management has become more important.
For those organisations whose talent management strategies have been affected, this has resulted in both positive and negative practices. Positively, for some, the current economic circumstances have further prioritised the need for effective talent management processes. Organisations also seem to be focusing their efforts on the retention of high performers and reviewing systems to ensure their effectiveness to maximise return on investment.
Smaller business should play to their strengths and talk directly to talent
On the downside, many are experiencing cuts to learning and development budgets, some are initiating recruitment freezes and others are frustrated because talent management programmes have either been put on hold or cancelled altogether.
Budgets cuts
Almost a quarter of respondents worked for organisations that have had their overall talent management budget reduced because of the economic downturn. A similar number maintained that the downturn had affected their general approach to reward both across the business and for those specifically identified as talent.
There were significant differences across the sectors, with private-sector service organisations' approach to reward most likely to be affected (30%) and public-sector organisations' least likely (14%). Additionally, larger organisations' (5,000+ employees) approach to reward was less likely to be affected across the board than smaller organisations' (fewer than 250 staff).
Silver lining
However, overall, organisations appear to be adopting a number of positive practices in response to the downturn (see graph, below). The key points include:
- Over half (55%) of organisations are developing more talent in-house. Companies are also thinking about essential development activities, with 45% adopting a more targeted approach
- Organisations are still engaged in recruiting key talent (43%), although over a third (34%) are more likely to recruit in-house and 22% are using new media as a cost-effective approach. However, 23% have initiated a blanket recruitment freeze.
- There is a greater focus on the retention of existing employees (35%). A quarter of respondents (25%) have had to downsize but have consciously preserved key talent.
- Private-sector organisations are more likely to recruit talent discarded by competitors, with 11% undertaking this strategy. Surprisingly, those from the private sector are more likely to be recruiting from competitors than those in the public and not-for-profit sectors.
- Talent management practices remained unaffected for 30% of respondents
The findings suggest that more rather than less emphasis should be placed on talent management. Smaller business should to play to their strengths and talk directly to talent about their current business performance and how individual contributions can make a difference. Make sure they can see a future with your business and have clarity around development opportunities and career paths.
As larger organisations cut back on costly marketing and recruitment activity, you can gain valuable ground in attracting key talent into the business or recruiting talent discarded by larger competitors. Emphasise the opportunities that working for smaller organisations can bring such as greater autonomy, work variety and roles that have a real impact in the business.
For more information visit www.cipd.co.uk/default.cipd
