Building Talent v/s Buying Talent

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If there ever was a time the “the war for talent” looked like anything close to a war, it is now.

The “war” has almost created an environment of attrition, which is industry agnostic. It has created scenarios that are almost amusing were it not for the fact that this war does not have clear winners. All parties seem to be losing.

It is a war of musical chairs (musical chairs, incidentally, was never a game, it was always a war for that one chair!).

In this one, a person A moves from a company XYZ to company KBC, and a person B moves from company MNC to company XYZ and so on. After a few months person A quits company KBC to join company Alpha and person B has now left XYZ to join KBC.

The net result for individuals being, that they have acquired a significant increase in their compensation, grown in designation and responsibility levels but they have not acquired any additional capability to deliver the results for those roles.

For the Organisations involved the cost structure has gone up, and they perhaps do not have adequately experienced Leaders for the critical roles. This is where leadership development programs come to the forefront.

Most organisations are dealing with the quandary of having all positions filled with sub optimal leadership capability versus having some positions filled with capable leaders. The long-term impact of both the situations is concerning.

Confounding, isn’t it? Yet perhaps all too familiar.

The frequency of people movement has increased in some cases, from years to months. We know of many instances where Leaders have changed three jobs in less than two years and have also moved 2 rungs in the responsibility ladder.

The business impact –  the cost to the company is at least 30% higher compared to salaries in the same organization and for similar roles. However, the performance of the person is well below the expectations for two reasons.

  • The time taken for assimilation to the company vis the time for comprehending and assimilating the new role and the plethora of knowledge of the company, which is needed to perform the role effectively.
  • The person may not have the proven requisite experience, and leadership capability to perform the role since they have moved up the responsibility ladder without performing roles leading up to their present role!

While the functional knowledge and processes can be learned over a shorter span of time the leadership capability required to handle the complexities of a higher-level role would require significant effort and time. If you get your employees under the wings of the right leadership training program you can save them from all this trouble.

The leadership gap creates a dissonance within the team and doesn’t lend itself to hope of the situation getting better anytime soon. The anxiety of low performance, that the leader undergoes also prompts them to look for a change yet again

Companies in their keenness to acquire high performers from other organizations as a quick fix for their manpower needs may have compromised on the more sustainable option of developing internal Leaders. They can work extensively on developing leaders of tomorrow by giving them a management training program.

It is a well-accepted fact that the cost of acquisition of a leader at mid-management and at senior management can range anything between 10 to 14 months of the cost of the person. This includes the cost of hiring, the time and cost of induction, the time and cost for the incumbent to become reasonably functional and finally the probable cost of performance & attrition risk.

This is not included the opportunity cost of time for which the role was vacant!

Given the context above – for organisations to have a strong leadership development strategy and policy seems like a no brainer and is non-negotiable.

It will be preaching to the choir if we were to articulate a two-pronged approach for attaining the “BUILDING TALENT” advantage. Bust we will still articulate it!

  • A comprehensive belief and alignment that the development of all leaders at each level is a strategic ongoing investment. (Much lower than the cost of hiring and rehiring)
  • Continuously develop a bench strength of high potential and high-performance leaders for all critical roles through leadership coaching programs. Even if it means having some redundancies. Even redundancies are an investment that can save massive costs.

The advantages (Just the lead success measures) of this approach are evident. You are

  • raising the base level of your managers and leaders across the organization,
  • creating strong levels of capability ,
  • generating strong levels of motivation in the existing team of leaders and
  • a stronger commitment to the company for taking care of their growth and career needs.

The lag measures are sparkling!

  • High performance at individual and Organisation levels
  • Low disruptions internally to counter the highly disruptive environment.
  • High retention levels. Leaders are less likely to disrupt themselves if their growth needs are being met within the organisation.
  • Less load on the cost structure
  • High engagement and a coveted place to work with.

It then is no surprise that the blue riband Indian companies are also known for their commitment to, focus on and continuity of leadership development strategies.

The conclusion cannot be more conclusive than the single simple statement – “ It is time for organisations to take a strategic view and commit to the “building the leadership advantage”,. Pun on “building” is very intended!


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