Talent Edge 2020

Redrafting talent strategies for the uneven recovery

Despite a new wave of uncertainty, many leading companies are pressing forward and reshaping their talent strategies. Many executives foresee leadership shortages in the year ahead and are looking at programs to accelerate leadership development within their companies. At the same time, given the stalled economy, many companies are seeking new sources of growth and are tailoring talent plans to address differing regional needs to support effective talent strategies and business operations.

To help shed light on how companies are adjusting to the demands of today’s talent market, Deloitte launched Talent Edge 2020—a longitudinal survey series conducted in collaboration with Forbes Insights. This January 2012 edition of Talent Edge 2020, Talent Edge 2020: Redrafting talent strategies for the uneven recovery builds from the findings of two earlier studies: the first from a December 2010 report on executive attitudes and the second from an April 2011 report on global employee attitudes and talent concerns. The key findings include:

Companies are seeking new sources of growth in a stalled economy: When asked to rank their top strategic priorities, 38% of surveyed executives listed improving top- and bottom-line performance, followed by expanding into global and new markets at 33%.
Executives are looking to strengthen their leadership development pipelines and programs: Approximately one-third (30%) of executives surveyed ranked developing leaders and succession planning as today’s top talent priority—the highest of any response in the survey. A nearly equal percentage (29%) predicted it will likely remain the top talent concern over the next three years.
Organizations' top three most pressing talent concerns in 2011

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As talent demands go increasingly global, the pressure is building to create talent strategies that can both scale (for size and efficiency) and focus on regional markets: Surveyed Asia Pacific (APAC) executives face urgent needs, with significant shortages anticipated in research & development (R&D) (68%), operations (64%), and strategy and planning (62%). Survey participants in the Americas see executive leadership and operations as the main talent gaps (both 56%), while business leaders in the Europe, the Middle East, and Africa (EMEA) region are far less concerned about shortfalls in talent.
Corporate talent programs are falling short on performance and investment: Only 17% of executives surveyed believe their talent programs are “world-class across the board,” while 83% acknowledge that significant improvements need to be made. Executives who call their talent efforts “world-class” are more likely to report —by margins of 20 percentage points or more—that their companies are investing in these programs at a “high” level.

The survey results show that many executives are aligning their talent management practices to identify and develop new leaders, create effective succession plans and build global workforces. A majority of executives surveyed say performance management (73 %), talent assessment (72%) and high-potential employee development (71%) are core talent priorities that will likely increase over the next 12 months. These priorities clearly dominate new hiring initiatives across the board, including the hiring of experienced managers, new campus hires and contract/part time workers – a data point consistent with the high levels of unemployment in developed countries worldwide.

Building world-class talent programs requires investment. Our research has shown that while fewer than 1-in-5 surveyed executives self-identified their organizations as “world-class” in talent, more than 4-in-5 acknowledge the need for significant improvements and investments. The organizations that self-report that they are “world class” in talent are not sitting back and waiting for a slow recovery to solve their talent challenges. Many of these executives are more likely to invest (by a 2-to-1 margin) across the board on talent priorities and initiatives. These talent leaders are taking responsibility for their futures and focusing investments and capabilities on their top priorities. They are getting down to the brass tacks (i.e., hard work) of rebuilding and developing new talent programs for leaders and critical employees. In short, self-assessed world-class companies are putting their money on the table and investing in talent priorities and programs.

Many surveyed executives anticipate seeing across-the-board talent shortages over the course of the next year, and are developing plans to meet the challenge. Deloitte will continue to track these trends, and we will report on new developments in corporate talent strategies when we release the results of the new Talent Edge 2020 employee survey in the spring of 2012.