Are People Really Your Most Important Asset?: A View from the C-Suite
By Jeff Schwartz, Principal, Deloitte Consulting LLP
Talent costs — and impacts — loom large over corporate income statements. So it’s not surprising that talent issues loom large in the minds of chief executive officers (CEOs) and boards. During the final months of 2008, our global talent professionals interviewed CEOs, board chairs and other executives about talent issues and emerging concerns. Here’s what we found:
Companies are expected to “thread the needle” on talent. When it comes to cost cutting, preserving talent and improving talent management capabilities, CEOs expect human resources (HR) and talent leaders to do it all. That’s one of the lessons of the past several years. Talent is a crown jewel for most companies. That means boards and CEOs expect cost cutting to be done in a manner that deliberately reviews and ranks talent so high performers and critical talent across the enterprise are clearly identified and treated well. We expect there will be little tolerance for throwing the baby out with the bath water when it comes to headcount reductions.
Branding remains key. Many companies have been painstakingly building their brands as employers in key talent markets — on campus and across their own industries. Despite the downturn, CEOs expect to maintain or improve this brand by protecting their positions with key campuses and recruitment pools. Although the recruiting targets might be lower, only shortsighted companies will pull out of campus and key recruitment markets.
Forward-thinking organizations are opportunistically acquiring top talent. The downturn presents a rare opportunity to recruit hard-to-find leaders and critical talent. Although the numbers will be small, CEOs expect surefootedness in going after highly select talent. They also expect talent leaders to use this time to reinforce the company’s commitment to key markets, products and services and customers. Competitor missteps can lead to significant opportunities.
Top businesses are positioning for the rebound. Great companies make the most of a downturn — planning new services and products and building capabilities for the next business cycle. Of course, these efforts must be highly targeted. A clear, long-term commitment to critical and emerging sectors inspires confidence both for customers and employees.
Although talent and HR leaders are expected to help the company address its immediate bottom-line pressures, they are also expected to keep an eye on the company’s strategic future. Cost reduction, especially when revenues and margins are declining, is a fact of life. However, great talent leaders will find ways to cut costs while ensuring that critical and high performing employees feel safe, rewarded and confident that they have short- and long-term opportunities for growth and success. That’s what it means to thread the talent needle.
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Jeff Schwartz is a principal with the human capital practice of Deloitte Consulting LLP.
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