Since recruiting costs stand at roughly 150 percent of an employee’s annual salary, companies are rightly and increasingly looking at promoting from within, particularly for highly paid Executive level and CEO level positions. By nurturing home-grown talent, HR is prudently choosing the organization as the pool in which they fish in for the next generation of leaders. This forward-thinking position of investing in leadership development and succession programmes allows emerging young talent to be appropriately prepared to take over when the time comes. As Anita Roddick once commented, “Leaders should encourage the next generation not just to follow but to overtake.”
HR’s two key roles in managing this process successfully
Firstly, HR needs to ensure that organizations continue to value and prioritize development and succession planning consistently and for the long term. The costs of getting it wrong are manifold: newly appointed young leaders without sufficient experience or the guiding hand of an experienced mentor can make costly mistakes. From side-stepping recruitment advertising costs, signing on bonuses and the fact that it takes an estimated 28 weeks for an external candidate to reach optimum productivity, the financial advantages of promoting from within over bringing in an external candidate are obvious. However, fishing for talent in shallow water is a pointless exercise. To identify and nurture candidates with the most future potential, HR’s second key role in this process is to ensure that emerging talent pools are constantly refreshed.
This so-called ‘race for talent’ could be better described as a marathon rather than a sprint. A major organization in the manufacturing sector across Germany and North America and Mainland Europe, has recently brought Acuity Global Development onboard to oversee a three year long CEO succession programme. From the five key candidates identified for the CEO position, assessment and CEO coaching over a prolonged time is being used to work out who is most suited to the role. Alongside this, the organization is running a benchmarking exercise, employing the services of a search firm to compare and contrast to high quality external resumes with internal candidates. HR has a lot to deal with, not only the need to nurture existing talent, but to justify this strategy by keeping an eye on the best of the rest.
Technology’s Impact on the ‘Agility’ of HR
Fortunately, the dawn of self-service HR and the edging out of paper-based HR practices has allowed HR to become more agile and strategically focussed. Today’s HRs now have the freedom to hand over previously time-consuming, administrative HR tasks directly to line managers. Technology has enabled HRs to delve into thorough research about candidates, the competition, outside perceptions of the company and keep up with best practice on securing engagement and retaining talent. Effective management of social media is also a key part of the HR tool-kit; organizations can’t afford to think for a minute that competitors aren’t going to use the cut and thrust of social media to lure away its best human assets.
This temptation for employees to check whether the grass is greener elsewhere is a fact that organizations have long had to face. In the case of senior executives, this may present particular challenges. Some of those who find their current position under-nourished (and under nourishing) may be looking for opportunities, new levels of responsibilities or a change of focus that their organization cannot easily provide. HR has two defences against this: firstly to have an ‘exit strategy’ in place so that succession can be handled without disruption not just to capacity and capability but to the working lives of others whose talents are valued, and secondly to strive to create a culture of honesty and openness in which the point of exit can be mutually identified before it’s too late.
The need for HR to ‘look over the fence’ to see clearly how the company is perceived, matters more now than ever. Estimates show that over 50 percent of the global workforce will be made up of tech-savvy Millennials this year (2014) and without a doubt, these individuals are researching and discussing companies online as actively as these same companies are using the internet to research, attract and retain talent. As research indicates that Millennials want to work for purpose, not just a paycheck, organizations must be seen to have higher principles beyond generating bigger profits. Winning this ‘popularity contest’ - and the hearts and loyalty of existing and future talent, is key to staying ahead of the game and also prevailing in the ‘race’ for talent. With reputations laid bare online, the blunt truth is there for all to see - if you want to be liked, be likeable.
About the author:
Dr. Anton Franckeiss, Global Business Development and Practice Director, Acuity Global Development. Spearheading the worldwide launch of the Acuity Global Development brand, Anton is an experienced leadership consultant who has worked at the most senior levels both in-house and in consultancy. Anton has more than 25 years’ hands-on experience of delivering change, leadership and talent management initiatives that underpin business growth.
Prior to his appointment at Acuity, Anton was MD & Global Practice Director at a number of other international leadership consultancies and has supported clients throughout Europe, North America, the Far East, the Middle East and Australasia.