A number of organisations have already identified that the single biggest risk to their future is having the right talent in place as and when key people leave. However the demand and competition for talent will get even hotter over the next few years because of a number of factors:
- Companies are operating more and more on a global scale and can attract the best from around the world.
- Changing demographics means that an estimated one in four of the working population will be over 45 by 2008.
- A change in working culture and the choices people make mean that young people are more likely to move jobs.
The CIPD have estimated that in 1986 most people could expect to have a maximum of two different jobs by the age of 25 but by 2006, this figure had doubled to four jobs.
This provides a number of challenges for organisations who wish to find and retain talent. At first glance it may appear easier to hire talent from the outside, to bring in “fresh blood” or someone with a “different perspective”, but is this really the right thing to do?
Certainly with competition increasing, this will become a more time consuming and expensive process. It has been estimated that it “costs” between 1-2 times the salary before a new middle management recruit becomes effective. In other words, if you hire a manager on £60,000 p.a., it could cost the company between £60,000 -£120,000 before that person starts to be effective. Put another way, that is a lot of money that could be invested in developing “in house” talent.
The problem is most organisations don’t plan or develop their talent properly. So when a key manager leaves, there tends to be a knee jerk reaction to go and recruit externally. This is supported by the CIPD’s Learning and Development Survey last year which found that 74% of respondents believed their organisations did not have a well developed plan for talent management.
As the marketplace for talent becomes even more competitive, it is vital that organisations wake up to this challenge and establish their own talent management programme – after all you don’t have to scour the world for talent if the potential you need is right under your nose!