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Harvard Business Online June 20, 2008, 3:40PM EST

Today's Top 10 Talent-Management

Challenges
Tammy Erickson on the dilemmas and problems
managers and companies must contend with
by Tammy Erickson

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Posted on Across the Ages: June 19, 2008 11:12 PM

I had the pleasure last week of moderating a panel of senior talent development officers
representing three very different industries and diverse geographies: Deb Wheelock of
Mercer (a high-end professional services firm, recruiting highly educated knowledge
workers), Pamela Stroko of The Gap (a retailer faced with the classic industry challenges of
creating a differentiating employee proposition and enhancing retention of its large
workforce), and Sujaya Banerjee of the Essar Group (a diversified India-based enterprise
participating in a variety of industrial sectors, including steel, energy, and communications).

Interestingly, even with this diversity of perspectives, we found our views on today's top
talent challenges to be surprisingly aligned. I thought you might like to see our list—and
would love to hear your thoughts on things you're wrestling with that we missed.

Here goes:

1. Attracting and retaining enough employees at all levels to meet the needs of organic
and inorganic growth. All three companies are facing a talent crunch. Essar, for example,
has grown from 20 thousand employees to a staggering 60 thousand in the past 3 years. Fifty-
five percent of their employees have less than two years of tenure.

2. Creating a value proposition that appeals to multiple generations. With four

generations in today's workplace, most companies are struggling to create an employee
experience that appeals to individuals with diverse needs, preferences and assumptions. The
Gap, for example, has 153,000 people in its workforce. The stores have a high percentage of
Gen Y employees, while corporate roles and leadership ranks are primarily made up of Gen
X'ers and Boomers. How does one create a compelling employee value proposition for the
organization?

3. Developing a robust leadership pipeline. I believe one of the biggest potential threats to
many corporations is a lack of a robust talent pool from which to select future leaders. This is
in part a numbers issue—the Gen X cohort is small and therefore, as I like to say, precious.
But it's also an interest issue—many members of Gen X are simply not particularly excited
about being considered for these roles. There was wide agreement among the panelists that a
lack of individuals ready to move into senior client manager and leadership roles is a critical
challenge.

4. Rounding out the capabilities of hires who lack the breadth of necessary for global
leadership. It's relatively straightforward to identify and assess experts in specific functional
or technical arenas, but much more difficult to determine whether those individuals have the
people skills, leadership capabilities, business breadth, and global diversity sensibilities
required for the nature of leadership today. Increasingly, the challenge of developing these
broader skill sets falls to the corporations. Essar has formed an academy specifically to
develop and groom its own leaders.

5. Transferring key knowledge and relationships. The looming retirement of a significant

portion of the workforce challenges all companies, but particularly those who are dependant
on the strength of tacit knowledge, such as that embedded in customer relationships, a key to
Mercer's business success.

6. Stemming the exodus of Gen X'ers from corporate life. A big threat in many firms
today is the exodus of mid-career talent—people in whom the organization has invested
heavily and in whom it has pinned it hopes for future leadership. For example, developing
talent management practices and programs calibrated to leverage technology and create
greater work/life balance has been a priority for Mercer over recent years.

7. Redesigning talent management practices to attract and retain Gen Y's. The challenge
of calibrating talent management practices and programs to attract and engage our young
entrants is critically important to all firms and particularly so for firms that depend on a
strong flow of top talent, such professional service firms like Mercer. All three panelists
agreed that making the business infrastructure more attractive to Gen Y is a high priority.

8. Creating a workplace that is open to Boomers in their "second careers." Age

prejudice still exists, but smart companies are looking for ways to incorporate the talents of
Boomers and even older workers in the workforce. In many cases, this requires rethinking
roles and work relationships.

9. Overcoming a "norm" of short tenure and frequent movement. Some industries, such
as specialty retail, are known for having a very disposable view of talent. Companies intent
on changing that norm, such as The Gap, must address both external influences in the
marketplace and an internal mindset. The Gap believes retaining employees in roles for 3+
years will be a key to their future earnings growth.

10. Enlisting executives who don't appreciate the challenge. Many talent executives
complain that business leaders still believe that people are lined up outside the door because
of the power of the company's brand. The challenge of enlisting the support of all executives
for the transition from a talent culture that has traditionally operated with a "buy" strategy to
one that places more emphasis on "build" is widely shared.

What did we miss? What are your biggest talent challenges?

Provided by Harvard Business—Where Leaders Get Their Edge

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