MCA & Hay Group Report. Tomorrow’s people. Managing talent in a diverse world. Organisations say they must change to deliver future leaders
04/08/2007
A new report [1] published by the MCA and sponsored by Hay Group has found that less than a quarter of organisations in the UK believe their current talent management processes will deliver the leaders they need in the future, with nearly three quarters (70 per cent) feeling they need to change their approach. The report also found that nearly two thirds of organisations (61 per cent) see talent management as integral to their survival.

The report also found that two thirds of organisations (64 per cent) feel that changes in demographics will cause them to have a greater dependence on collaborative working, more international teams and more flexible working. In line with this, the report identifies that the key to successful working in the future will be agility – the ability to respond quickly to changing needs.

Changing demographics will also mean that organisations have to focus more on developing and promoting their existing high-performance staff as they will be able to rely less on making lateral hires from other organisations. This focus is becoming more widespread within the higher echelons of organisations, with 63 per cent of respondents stating that talent management is a high priority for their Chief Executive.

The report also found that understanding is not the problem, with four fifths of respondents saying they felt their organisation was clear both about capabilities and type of leaders needed in the future. However, the report identifies that the issues lie in practice:

* Although half the organisations questioned said they know who their high performers are, only a third said they managed to retain them all or most of the time.

* Only a third has formal management processes in place

* Less than a fifth of respondents said they treat talent management with the same degree of seriousness as the annual budgeting cycle.

Diversity and Talent Management

The issue of diversity is also explored in the report, and whilst the priority at the moment is in encouraging people from different ethnic groups and backgrounds to apply to join organisations; in the future it will be to ensure these people are making their way up the organisationial hierarchy.

The report identifies the following two reasons why organisations find it so difficult to find and develop future leaders:

* Diversity – widening the net – After decades of recruiting from the same labour pool, they need diversity of thought

* Talent management – narrowing the mesh. Whilst the recruitment and promotion net is thrown wider, organisations need to turn talent management on its head and start with the demand side.

Chris Watkin, Head of Talent Management, Hay Group, commented: "If you’re trying to throw the net wider, you can’t afford to develop everyone equally. If you’re a multinational that’s shifted much of your production overseas, then skills and quality of your workforce is likely to vary hugely, but you can’t create a mass corporate programme for talent management, you have to be able to leverage some skills – and some people – more than others."

Fiona Czerniawska, author of the report, and Director of the MCA Think Tank concluded: "The challenge is to bring talent and diversity management closer together. The looming leadership crisis is only going to be resolved if we ensure that an organisation’s talent pool – the small number of people who are being prepared for future leadership roles – is distilled from the whole organisation. If we define the pool too narrowly, then organisations simply won’t have either the number of leaders they need or leaders with the right skills."

The report also details the following ten things organisations need to get right in order to apply principles of talent management in a diverse environment:

1. Start with demand, not supply – the skills that organisations desire, need not be those they already have.

2. Articulate the objective criteria they’ll use to judge whether someone is a high performer or not, something that means having better (and more objective) information than is currently available in many organisations.

3. Tell people what they’re doing so everyone feels included.

4. Ensure that managing talent is a responsibility of all managers, not just ‘talent managers’.

5. Be joined up: organisations need to ensure that the decisions they take about resourcing and development are consistent with their overall strategy.

6. To broaden their definition of diversity to include – for example – different patterns of working and managing, not just demographics.

7. Focus on developing high-potential people by giving them a diverse range of experience.

8. Help people navigate their way through the complex networks that underpin organsiations.

9. Encourage people to see work and life as integrated, not as opposing elements that need to be balanced.

10. Get people to choose: organisations can’t be made diverse any more than individuals can be told to be empowered or leaders ordered to lead.

About the Management Consultancies Association

The MCA was formed in 1956 to represent the consultancy industry to its clients, the media and government. Management consultancy is an increasingly important industry for the UK economy with management consultancy revenues for 2006 estimated at £7.7bn. MCA members represent around 70% of the UK consulting sector, employ 18,000 consultants and work with the FTSE100 and all government departments. Nine of the top ten UK-based consulting firms (by consulting fee income) are members.

The MCA supports its member firms with a range of services including events, publications, interest groups and public relations. The Association also works with its members to attract the top talent into the industry. The MCA provides advice on the selection and use of management consultants and is the main source of data on the UK market.

About the report sponsor

Hay Group is a global consulting firm that works with leaders to transform strategy into reality. We develop talent, organise people to be more effective and motivate them to perform at their best. With 88 offices in 47 countries, we work with over 7000 clients across the world. Our clients are from private, public and not-for-profit sectors, across every major industry and represent diverse business challenges. For over 60 years, we have been renowned for the quality of our research and the intellectual rigour of our work. We transform research into actionable insights. We give our clients breakthrough perspectives on their organisation and we do it in the most efficient way to achieve the desired results. Our focus is on making change happen and helping people and organisations realise their potential.

www.haygroup.com

For more information please contact:

David Pippett

Director

Creatrix Public Relations

Tel: 01225423400/07899798197

david@creatrixpr.co.uk

[1] The report is based on a survey commissioned by the Management Consultancies Association (MCA) of around 200 talent managers in the public and private sectors.