This good article on talent from an Indian perspective, by R Gopalakrishnan & Satish Pradhan, in the Financial Express on 3 December 2005. Read it here, or below.
The problem with respect to the loss of talent is of two kinds: the occasional loss of a few experienced and expensive managers, and the perennial loss of a large number of younger and less expensive managers. In both cases, the financial cost of the loss is high and amounts to a charge to the P&L (profit & loss) account. It is a huge loss, because valuable ‘implicit knowledge’ is lost with management separation.
To contemplate the remedies, the three drivers of this churn must be understood. The first is that large expansions in the productive capacity for goods or services lead to a talent vacuum, causing experienced managers of that domain to get ‘sucked out’ by new opportunities. The second is the entry into the country of new international players, who tap talent from existing players. The third is a changing social dynamic, whereby young people feel less threatened by job insecurity compared to their father’s generation and have a more experimental attitude to jobs.
What retards talent loss is “care”, not absence of programmed schemes.
Five decades ago, William Whyte (The Organisation Man) described the emerging automaton organisation; modern companies have converged to that model. ‘Programmed strategies’ get designed to retain talent (for example, stock options and deferred bonus). In our experience, they can be effective only when the motivational climate and hygiene factors have been made caring and congenial. An organisation that is perceived to be caring does four things:
• Provides an opportunity to be exposed to role models;
• Offers richer and diverse job responsibilities through rotation;
• Conducts open discussions on career options and possibilities:
• Coaches managers consciously, including counseling.
These work well when the turbulence of separations is high; in some industries where there is a tsunami of separations, the remedy has to be more with aggressive recruitment and induction.
In addressing these challenges the Tata group has learnt a few lessons. Here are some initiatives taken by Tata.
• Launching of the talent identification and development process across the group: The senior group leadership annually reviews with the company management their talent bank. The company management in turn takes steps to strengthen their talent nurturing processes in their work units.
• Strengthening coaching and mentoring: The group companies have initiated programmes to hone the coaching skills of the senior managers. Many of them mentor young talent inducted in the companies.
• Tata Management Training Centre has instituted a three- tier Leadership Development Programme: These are broad (and prestigious) courses meant for the better managers; they ‘socialise’ group managers from companies in different domains.
• Differentiation is integral to effective talent management: More sophisticated use of market indexation of salaries for high potentials as well as larger population is being used to refine and tweak the competitiveness of salaries.
• Emphasis on mobility, first within the company and then within the group: The most populated Tata company, TCS, is an excellent example. The company has benefited immensely in performance as well as in consistently experiencing attrition rates lower than the industry average.
• Use of structure design tools like ‘Work Level’ to create large and challenging jobs for managers: Management research literature has shown that talent development happens by handling large job challenges and through constantly throwing new challenges.
• Recognition programme in companies like Taj and TCS have significant impact. They build glue, encourage appropriate behavior and signal a positive message of value to the huge benefit of the organisation.