Talent management and leadership development remain the largest HR challenges in Europe and Germany, according to a survey of more than 2,000 executives in 35 European countries. Both topics are rated as highly critical for success by executives — who also reported these issues are insufficiently managed at their current companies.
About 60 per cent of companies have no systematic or strategic approach in place to win, develop and retain suitable talents for future challenges, found the survey, released by the Boston Consulting Group (BCG), in collaboration with the European Association for People Management (EAPM).
The lack of strategic talent management presents a major opportunity for HR managers looking to shed their unpopular image as internal service providers. By taking on a more strategic role, these professionals can contribute in important ways to advance a company’s competitiveness, said the study Creating People Advantage 2011 — Time to Act: HR Certainties in Uncertain Times.
The most critical trends for HR professionals are: the impact of the nascent shortage of talent; the targeted promotion of workforce diversity aligned with business requirements; the integration of online social networks into the core activities of personnel management; and the promotion of international standards and processes within the HR function, said BCG.
More than one-half (53 per cent) of the top-performing organizations (measured by revenue and growth over the past three years) have established an integrated strategy to recruit, develop and retain suitable talents. By contrast, only 27 per cent of the less successful companies have done so, found the survey.
“Talent development takes time. Companies need to take a long-term perspective and plan the size and composition of their talent pool in accordance with their corporate strategy,” said Rainer Strack, senior partner and global topic co-leader for people advantage and HR at BCG and co-author of the report.
Most talent programs focus primarily on experienced executives — only 35 per cent of the companies analyzed by the study have programs to systematically develop younger talent.
“Internal development and promotion options do more to retain talent in the company over the long term than monthly salaries or bonuses do,” said Pieter Haen, president of EAPM and co-author of the report.