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Bucking the Trend: Using Strategic Talent Planning to Battle Recession  Bucking the Trend: Using Strategic Talent Planning to Battle Recession Executive Summary During a recession, businesses rely more than ever on the talent they employ, to help them stay afloat in tough economic circumstances. As it becomes harder to meet organisational financial objectives, senior executives and HR departments alike must concentrate on getting the right people into the business and retaining them, while working within their own budgeting constraints and obtaining additional value for the organisation wherever possible. Talent Planning adds value to organisations in two significant ways: • Through the flexible application of intelligence-gathering to a wide variety of business situations as described below, enabling better informed decision-making • By turning expenditure in market and talent intelligence into a long-term investment in recruiting more of the right people to drive sustainable

high performance Matthew Mellor, Managing Director of Armstrong Craven, a leading provider of Executive Search and Talent Planning services, explains how organisations of all types and sizes can take pragmatic steps to beat the bad times, by employing smart Talent Planning strategies to gain competitive advantage and weather the coming storm. Background: Face the Enemy There’s a saying that in a bottle of milk, the cream will always float to the surface. So it is in business, with the most effective organisations reaching the pinnacle of leadership in their industry; reaping the rewards of commercial success, enjoying great reputations as employers of choice and achieving popularity with customers and other stakeholders. Even in the best of times, it’s a real challenge to be the cream of the industry and swim to the top. When the general business environment is tough, however, it’s a real acid test of who has the tenacity, creativity and confidence to survive in the face of

adversity, staying afloat while, for others, the cream turns sour. Employers already embattled by the impact of the economic downturn on financial performance and market confidence now face another test – managing their recruitment strategies to help them swim, not sink, in increasingly difficult operating conditions. Bucking the Trend: Using Strategic Talent Planning to Battle Recession The challenges are as follows: • The instinctive reaction of many businesses is to put the brakes on recruitment. This can only have longterm negative effects on commercial success • Even if recruitment is limited to business-critical positions and strategic hires, executives need to stay in touch with the talent market and continue planning for when confidence is restored • The job market will be over-supplied as organisations downsize, making searching for high calibre individuals among a growing pool of available resources more complex • High quality candidates that are not actively

seeking a new role may be afraid to pursue new opportunities because of the uncertainty of leaving an established position • Finally, but by no means insignificantly, organisations need not only to locate and bring the right people on board, they need to do so cost-effectively at a time when recruitment fees based on high percentage of salary are hard to justify. Talent Planning, through researching what you need to know about markets and people, is an intelligent approach to helping organisations overcome these challenges. Nevertheless, many organisations remain unaware of its potential contribution to addressing their current problems, without freezing recruitment and paralysing progress. It may seem counter-intuitive to allocate scarce resources to market discovery and strategic planning when faced with immediate and business-threatening circumstances, yet doing so can pay dividends. Right now, the worst thing is to do nothing: only those who maximize their resources, including

having the audacity to maintain momentum in human resource management, will secure their futures. What is Talent Planning? Talent Planning is about attracting more of the right people, a versatile approach to gathering sophisticated intelligence about markets and people who are  able to make positive things happen. It allows employers to understand the career aspirations of the people they might need to hire, work out what they want from an employer and learn how to attract them more effectively. With the ultimate goal of delivering high calibre individuals to businesses that need them, Talent Planning can be applied in a number of creative ways to give executives improved insight into the competitive talent landscape, in preparation for making better informed human resourcing decisions – whether those decisions concern individual hires or strategic plans. Talent Planning is a driver of improvement – in processes, in skills and in awareness. It can help businesses to understand

how others perceive them, to determine what makes the cream of the industry successful, to challenge accepted wisdom about role descriptions and people profiles. Talent Planning can help solve complex organisational problems, uncover valuable information and facilitate benchmarking. Above all, it helps organisations be prepared to face up to the challenges that keep senior executives awake at night – including the key question, “What do we need to do better in order to survive?” In practical terms, Talent Planning is about intelligencegathering: assessing capabilities, not just of individuals but of other companies; analysing behaviours; understanding available skills and corporate values; challenging company structures and processes; identifying market trends. In short, Talent Planning provides crucial information that enables businesses to make decisions based on facts, rather than assumptions. They have never needed it more than they do today. An Antidote to Depression Talent

Planning comes into its own during an economic downturn. In the last recession, in the early 1990s, providers that were able to offer research-based market intelligence to help organisations better plan their human resources experienced significant growth. This was due to a pressing need among organisations to understand the talent available to their businesses, to plan ahead and Bucking the Trend: Using Strategic Talent Planning to Battle Recession to locate and secure the right people. Properly equipped to stay afloat as competitors struggled, these companies were also eager to build a strong team to secure future growth once the storm clouds lifted. They were also keen to demonstrate to shareholders that they were taking sensible measures to keep the company in good health. When times are hard, management cannot afford to leave anything to chance or good luck, every available resource has to be making a positive contribution to success and when hiring, getting it right first

time is imperative. With every news bulletin come more statistics about job cuts and negative indicators. Permanent placements in the UK are falling at the fastest rate since the turn of the millennium and we are experiencing the sharpest drop in overall demand for more than a decade, while candidate availability is rising rapidly, according to Markit Economics (Source: Report on Jobs, October 2008). The employment market will undoubtedly be oversupplied with candidates as the recession bites. At the same time, companies resort to the default defensive position and impose a freeze on hiring. This is where they sometimes miscalculate. Although they don’t necessarily need more people, and sometimes need less people, they do need the right people. It is counter-productive to ignore strategic succession planning and similar forwardlooking activities. Similarly, a blanket ban on recruitment ignores the fact that certain positions may be critical and could, in fact, contribute positively

to sustaining stable performance. While few will be optimistic enough to pursue growth strategies at present, organisations must at least do what they can to maintain stability. However, as share prices and margins suffer and stakeholders become increasingly nervous and demanding, the traditional approach to search and selection is no longer adequate. Hiring managers have to look beyond the growing pool of candidates who are actively seeking new work to truly understand the talent  market in which they operate and find those individuals who are best suited to their organisation’s culture and vision, regardless of whether or not those individuals are active jobseekers and irrespective of where that talent resides – locally, nationally or internationally. Managing through a recession often involves making difficult choices – for example about location of facilities to optimise operations, or about team structure. Talent Planning allows executives to stay one step ahead of the

competition – bearing in mind that the competition will also be having a difficult time, but he who blinks first can forget floating to the top of the milk. Talent Planning in Action The following are some practical examples of the kinds of intelligence that can be gathered in a Talent Planning project. They demonstrate how, by replacing conjecture, assumption or accepted wisdom with facts and genuine understanding; businesses can take assertive action to gain the upper hand and emerge from recession possibly streamlined, but definitely more effective: • Talent Attraction Just because the economy has taken a turn for the worse, a truce has not been declared in the so-called War for Talent. Companies already knew they had a battle on their hands to secure more of the right people. Now, smart executives know that they have to fight harder than before to recruit the best available talent to keep performance on track. The quantity of speculative CVs hitting the HR department may have

increased, but still it is hard to make the real high achievers stand out from the crowd, just as it remains hard to recruit specialist expertise in certain areas. Even if talent is not needed immediately, executives need to ask questions about the kind of talent they should plan to bring into the organisation in future. What if a key position does become vacant and no internal successor Bucking the Trend: Using Strategic Talent Planning to Battle Recession exists? At times like this, a hiatus before filling a businesscritical position could be deadly. What if there were some key talent that could be brought onboard to make a significant impact on an under-performing part of the business? If the process of locating that talent has not begun, it might be too late to save an ailing product line or prevent damage to the rest of the organisation. Regardless of the state of the economy, real stars will always be in high demand. Now is the time to locate them, understand their needs,

work out how to attract them and start building relationships. In any industry, an investment in upfront evaluation of the skills and resources available will demonstrate payback – if an organisation is well-informed and has contemplated its strategic people options ahead of the point of need, it will be nimble and able to secure talent quickly when a specific need arises. Researchers are expert in identifying talent, knowing how to present a compelling employer proposition and generating qualified talent pools of suitably experienced and interested individuals that can form the basis of high quality shortlists in future. By exploring fully the requirements of the organisation – not just role descriptions, but longer-term vision, culture and skill gaps – and aligning these with a detailed understanding of where talent resides, regardless of industry or country borders, a Talent Planning provider can obtain an accurate and invaluable snapshot of the talent landscape and build a

resource bank to be tapped at any time. At first sight, Talent Planning may seem an unnecessary additional cost. As we shall see later, it is actually a way to turn investment in recruitment into long-term added value and a powerful resource for the HR team. In short, recruitment fees are wasted unless an organisation knows how to maximise its chances of finding and attracting the right people. • Business Intelligence For an organisation gasping for breath and frantically  waving one arm above the surface of the water, there may be a life ring within grasp. What would it be worth to know the secrets of competitor’s success? Understanding best practices in any industry can help challenge the established predominance of major players. Insight into how competitors structure their teams, the goals they set for employees, how they measure and reward achievement, their management infrastructure and business processes can help other businesses in the sector evaluate ways to enhance

their own performance. Recession can be a great motivator to delve deeper into why others are respected and viable and to work out how that viability can be replicated in the context of another company. Inevitably, recession leads to downsizing or closure of facilities. How can companies be sure they are making a sound evaluation of the relative merits of each site and its long-term potential? Just as it is important when selecting a new location to thoroughly research available skills in the local area, it is equally valid during a period of rationalisation to carefully consider the merits of individual sites, including availability of skills, attractiveness of the location to people needing to relocate and factors such as local compensation differentials. Talent Planning researchers are skilled at discreetly gathering and analysing these kinds of intelligence, allowing executives to make informed choices, rather than relying on instinct or guesswork. Where livelihoods are at stake,

the ability to support action with real knowledge of likely consequences allows organisations to make short-term adjustments to operations without shooting themselves in the foot and damaging future prospects. • Benchmarking Faced with an abundance of candidates in a flooded market, employers may conclude that they do not need the services of a recruitment company. However, it is more important than ever to perform adequate due diligence on potential employees to ascertain whether Bucking the Trend: Using Strategic Talent Planning to Battle Recession the candidates presenting themselves truly have the right experience and demonstrate the behaviours the company is seeking. There may be a temptation to promote internal candidates to business-critical roles without incurring expensive recruitment fees to source external candidates. Nevertheless, for a more manageable investment, those internal candidates can be benchmarked against the market to ensure they are best possible fit

for the position at a time when anything less may be a mistake. Another instinctive response to recession is to halt pay rises. This may or may not be the right decision, but it inevitably makes it harder to retain real talent. The real question to ask is, “What is the true market value of each role that exists within the organisation?” Only extensive probing into salaries and benefits, combined with role descriptions and team structures, can reveal whether an organisation is comparing like for like with others in its industry and paying competitive rates. At this point in time, organisations will want to be sure they are paying the right level for comparable roles – enough to retain people they cannot afford to lose and to attract essential talent, but not too much, so that compensation is out of line with industry expectations and an excessively expensive outgoing. • Reputation Management Something that is frequently underestimated is the power of brand to either attract or

repel talent. As part of a Talent Planning initiative, it may be desirable to check what outsiders think about the employer brand. Do perceptions align with the image the employer wants to communicate with potential employees? During a recession, bad news can have a significant impact on reputation, as well as on the attitudes of former employees. Where an organisation suspects its reputation has been affected by redundancies, poor financial results or unfavourable headlines, it may be worth embarking on a proactive campaign to restore faith in the employer brand – first by benchmarking perceptions and then by initiating an employer brand awareness programme, reinforcing positive values to enhance attractiveness in the skills market.  • Retention Traditional recruiters are specialists in selection, but they may not be able to locate the right candidates in order to put them on a shortlist, unless an advertisement yields good quality candidates (and advertising is becoming less

reliable, as well as being expensive). Where upfront effort is focused on understanding where talent can be found and identifying the right person for the role, not only does the company benefit from a quantity of additional information about the talent market, but it also can have confidence that it has selected from the best possible shortlist. Not surprisingly, individuals who have been engaged during a Talent Planning exercise and built a relationship with the company are apparently more likely to remain there longer than those who simply answer an advertisement. Flexibility and Added Value Talent Planning starts with a detailed brief from the client about the objectives of the assignment, establishing expected deliverables and desired outcomes. The research approach can be tailored to meet the client’s exact requirements, using an established networking methodology supplemented by bespoke research. For the client, the key advantage of gathering business intelligence in this

manner is that they get precisely the information they want, without having to pay exorbitant prices for research reports that are available on the open market but rarely address the level of detail that provides true insight and a basis for confident decision-making. When it comes to talent pipelining, in Armstrong Craven’s case the information that is gathered remains the property of the client and becomes a continual source of contacts from which to begin specific role searches, as well as the basis from which in-house HR teams can do their own ongoing networking and recruitment. Clients who opt to proactively add information to the database are building their own rich seam of intelligence and making connections to key resources in their market sector. The research-based methodology draws on many sources of public information, but permits access to the kind of Bucking the Trend: Using Strategic Talent Planning to Battle Recession detail and anecdotal evidence that is rarely

published. Analysts can therefore handle complex and challenging assignments that both traditional recruitment firms and well-known market research companies find impossible to complete. For more information, email janek@armstrongcraven.com or call Jane Kirk on 0161 493 1700. About Armstrong Craven Last, but by no means least, the partnership approach to aligning projects to client business objectives means that clients only pay for the amount of support they need and for information that is relevant to them, providing excellent returns on HR budgets. Armstrong Craven helps organisations attract global talent by supporting business through talent planning and executive search services. With a refreshingly different approach, underpinned by deep expertise and innovation, Armstrong Craven understands client goals, helping build effective recruitment strategies to attract and retain more of the right people. Demonstrating Success About the Author Armstrong Craven has a series of

case studies showcasing its Talent Planning projects, demonstrating the additional value achieved by clients from applying Talent Planning to a wide range of business scenarios. Matthew Mellor has 11 years’ experience in executive research. Since joining Armstrong Craven in 1997 as a Researcher, Matthew has progressed through the business and amongst other achievements established the Technology practice. In 2004 he assumed the role of Operations Director with responsibility for delivery across all practice groups. In 2005 he was promoted to the board and became Managing Director at the start of 2007. Matthew retains client responsibility and is an experienced advisor to clients on their talent and resourcing strategies. Matthew aims to establish Armstrong Craven as the foremost global provider of intelligence-based talent planning services. These examples from the Armstrong Craven Casebook can be downloaded in pdf format by following this link: www.armstrongcravencom/FTSE250 A

major retail bank sought to understand the branch operations of its competitors ahead of making changes to its own organisational structure. This project led to the development of a comprehensive talent pipeline, resulted in subsequent ongoing multiple hires and has changed the way the bank manages its search process. The parent company of a field marketing organisation was concerned that the subsidiary was under-performing. Armstrong Craven was retained to investigate the underlying causes and conduct a due diligence exercise on the effectiveness of the leadership team by benchmarking against industry competitors. To stay ahead of the competition, this well-known premium drinks client knew it had to have the right people onboard. As it prepared to hire executive level talent for its iconic beer brand, the first step was to understand the competitive landscape and profile outstanding performers