Challenging Conventional Wisdom: How Your Talent Management Strategy Can Shape a Purpose-Driven Future

In today's rapidly evolving business landscape, effective talent management strategies are more crucial than ever. As companies strive to align their practices with a purpose-driven future, it's essential to examine and refine our approaches, ensuring they serve not only corporate needs but also broader societal goals. This article delves into common issues holding talent management back and offers actionable tips to elevate your strategies, promoting a more inclusive and impactful business environment.

Reimagining Talent Management for the Future

"Businesses have never done as much hiring as they do today. They’ve never spent as much money doing it. And they’ve never done a worse job of it," says Peter Cappelli of Wharton in his pivotal article "Your Approach to Hiring Is All Wrong" for Harvard Business Review. This thought-provoking statement challenges many long-standing beliefs about traditional talent management. It encourages us to rethink our hiring practices, putting more emphasis on creating value for candidates and the community.

But is Cappelli’s assertion true? From ghosting candidates to hiring externally over internal promotions and the regular media storm on CEO and company behaviour, one could argue the answer is yes.

Fourteen years ago, I wrote an article encouraging my peers to build strategies that served both their company and the community at large. I also presented in my article the long-term benefit to a company’s brand and the subsequent economic benefit that would be created for all stakeholders. After delivering a session on a similar topic at The SHRM Annual in Atlanta, Gerry Crispin provided some sage advice after I questioned if the message was being heard. It was something like “Russell, you're thinking years ahead of your peers. Be patient, they will catch up!”

While it's true that some gaps remain and room for improvement exists, Gerry was right—great strides have been made. Gerry Crispin and Chris Hoyt 's very own business CareerXRoads is a shining example of creating value for all, where they “connect recruiting practitioners, industry knowledge, and innovative ideas and technologies to improve the industry, and each other.” Call my glasses “rose-coloured,” however, contrary to the notion that progress is stagnant, I believe that companies are and can still actively leverage their talent management strategies to drive forward the cause of all stakeholders. However, I also see some existing practices that hold us back from achieving the vision I had fourteen years ago. If we change our mindset, we can see the value in realigning our talent management strategies to ensure we not only meet our company needs but also serve society. Let's explore how we can make this shift.

Outdated Talent Management Models

Firstly, the problem we face is that we largely operate with dated talent management models or dated mindsets. A Google search on “talent management model” produces more than four million results. A review of the first 100 or so models concludes with similar findings: most think of recruiting and HR as acquiring, developing, aligning, and assessing talent. These dated models or approaches are exacerbated by the fact that most books on talent management, succession planning, or sourcing focus on delivering value to the enterprise through a Miltonian lens largely centred on serving the needs of my organisation.

The Power of Purpose: Employee Priorities Have Shifted

The quiet quitting we have seen in the past couple of years, where individuals resigned from their roles, sometimes without having secured their next job, highlighted that employee priorities have shifted from the employee or follower perspective. According to Pew Research Centre, some of the top reasons employees quit include the feeling of being disrespected at work, and not having their feedback heard from their leaders. It becomes clear that employees are increasingly seeking intrinsic motivation from their work, beyond financial compensation and that some company EVP's, and or the way we measure the shift to purpose has not kept pace with this change.

The Candidate Experience and Realistic Job Requirements

The candidate’s experience is often the first touchpoint between a potential employee and a company. Unfortunately, it’s also where many organisations falter. Ghosting, for example, has become an alarming trend in recruitment, with 93% of respondents in a 2020 LinkedIn poll stating they had been ghosted during an active hiring process. I have even witnessed it within my own family where an application followed by a personal meeting with the store manager resulted in zero communication from the company, not even a system-generated reply acknowledging receipt of their application. This lack of communication not only damages the candidate’s perception of the company but also reflects poorly on the organisation's values. As talent management practices evolve, companies must prioritise transparency and communication throughout the hiring process. It’s not hard to leverage technology to support this process; after all, that is partly what it is there for.

Moreover, hiring managers must reassess job requirements and focus on candidates' potential rather than just their past experiences. The insatiable desire to find the perfect candidate means we significantly narrow available talent pools or confuse industry or years of experience with capability and overlook a significant number of people who are more than capable of performing in the role.

Consider my promotion to CPO at Froneri. If a brief was given to an international search firm to find suitable candidates, I’m sure I wouldn't have been on a shortlist. I didn’t have prior experience as a global CPO, or significant exposure to Europe, or speak a common EU language, all of which were pointed out in my interview. Yet, I was in the role for nearly five years, proving that potential and adaptability can outweigh conventional requirements. Just as the musical SIX, which was written by two last-year university students, defied industry expectations to become a global phenomenon, it's crucial to look beyond traditional criteria of years of experience in an industry or at a particular level to recognise the untapped criteria of potential.

Socioeconomic Diversity: The Overlooked Dimension of Inclusion

The current landscape of talent management presents both a challenge and an opportunity for enhancing a company's purpose, as highlighted by McKinsey's insightful report on social mobility in the UK. According to the report, the UK ranks 21st out of 37 OECD countries for social mobility, an alarming statistic that underscores the depth of this issue. Companies are often limited by traditional recruitment practices that fail to tap into the full spectrum of available talent, especially from lower socioeconomic backgrounds. This gap is especially glaring when considering socioeconomic diversity, a complex but crucial element of a truly inclusive workplace. For instance, organisations that focus primarily on academic attainment may overlook highly capable individuals from economically disadvantaged backgrounds. This not only hampers individual social mobility but also restricts corporate performance by narrowing the talent pool.

However, there's a significant opportunity here. By re-evaluating and broadening their talent management strategies, companies can enhance their purpose and drive economic growth. Incorporating socioeconomic diversity can lead to improved decision-making, better customer orientation, and higher employee satisfaction. Now is the perfect time for corporations to act, especially as we navigate economic challenges and societal changes. By doing so, businesses can turn a moral imperative into a strategic advantage, fostering both social justice and enhanced performance.

Industry Collaboration and the Shared Talent Pool

The traditional "war for talent" mindset often pits companies against each other in a zero-sum game. However, this approach is not sustainable and often leads to a fragmented talent landscape. I wrote about this same topic in a post some months ago where Dr. Samone McCurdy, an advocate for women in STEM, emphasised the need for industry-wide collaboration to create robust talent pipelines that benefit everyone. Instead of poaching talent from competitors, companies should work together to address industry-wide challenges, such as gender diversity in STEM fields, by collectively nurturing and developing talent.

This collaborative approach not only strengthens the industry but also fosters a sense of shared purpose among companies. When organisations unite to address common challenges, they can drive meaningful change and create a more inclusive and equitable workforce.

Planned Successions: The Secret to Sustainable Diversity Leadership

The recent Global CEO Turnover Index by Russell Reynolds highlights commendable progress made by boards in internally appointing CEOs, with 78% of incoming CEOs being internal promotions in Q2 2024. This marks a significant shift towards long-term cultural changes and structured succession planning. However, there are still critical gaps that need addressing. For instance, of the 51 CEOs appointed in Q2 2024, only five were women. At the present rate of change, it’s estimated to take 78 years to achieve global gender parity. Planned CEO successions are still relatively low, averaging around 11%. Boards must actively engage in succession planning, not just by focusing on the current CEO but by fostering the development of women and people from diverse backgrounds to prepare them for top roles.

With an average CEO tenure of 8.1 years, boards have ample time to develop ready-now successors through frequent lateral moves beyond an individual's core function. It's not just about filling a role; it's about creating an ecosystem of diverse and dynamic leadership that aligns with the company's purpose and enhances its sustainability. By addressing these gaps, boards can ensure a smoother transition and a brighter, more inclusive future for their organisations.

Tips for Positioning Talent Management Strategies as a Force for Good

1. Eliminate Ghosting. Frankly, this should be a given. Respect candidates' time and effort by maintaining clear communication throughout the hiring process. Check out the CandE awards for useful information on providing best-practice candidate experience. Better still, consider applying to the awards to benchmark your performance.
2. Provide Valuable Feedback. Constructive feedback helps candidates grow, even if they aren't fit for a current role. It also reflects your commitment to their development. So, don’t let the wall of fear of potential claims and litigation hold us back; instead look to diligently add value to a candidate through constructive advice that helps them find the perfect role, even if it’s not with your company. You could even consider providing them with a copy of their assessment information or even a system-generated summary of suggested development ideas to bridge identified gaps.
3. Reevaluate Job Requirements, Take Risks and Back Potential and Capability Ahead of Experience. Reassess your job requirements to ensure they are pragmatic and inclusive. Focusing on an applicant's potential and capability rather than rigidly adhering to industry experience or years in the field can open doors to untapped talent. This re-evaluation means prioritising problem-solving abilities, commercial acumen, learning agility, and the ability to deal with ambiguity and cultural fit over traditional requirements, thereby fostering an innovative and dynamic environment. Taking a risk on candidates with non-traditional backgrounds not only promotes diversity but also drives fresh perspectives and creative solutions within your team.
4. Continue to Nurture the Promotion of Internal Talent. To maximise the potential of your internal talent, it's crucial to nurture their growth through strategic mobility and diverse opportunities. Encourage lateral moves across various functions, geographies, or markets to broaden employee skill sets and perspectives. Additionally, seconding individuals to key projects can offer valuable hands-on experience and foster a culture of cross-functional collaboration. This openness not only strengthens the adaptability and versatility of your workforce but also enhances employee satisfaction and retention by providing continuous learning and career development pathways.
5. Establish a Purpose and Realign Your EVP. To better align your Employee Value Proposition (EVP) with the rising focus on purpose, start by working out your company's purpose. You can actively involve employees in this process so it is lived and owned at ever level in the company, instead of a top down mandate. Engage in regular, open forums where feedback is not just welcomed but acted upon, ensuring every voice feels heard and respected. Develop initiatives that demonstrate a genuine commitment to societal impact, such as community projects or sustainability programs, allowing employees to see and contribute to a greater cause. Additionally, shift your employee engagement measurement to solutions that assess purpose and motivation, ensuring that you capture the intrinsic drivers that keep your talent inspired and committed. By authentically integrating purpose into your EVP and measuring what truly matters, you attract and retain talent motivated by more than just financial rewards, but by a profound sense of making a difference.
6. Embrace Socioeconomic Diversity. Although the advancement of socioeconomic diversity varies by country and is inherently complex, McKinsey’s research indicates that organisations embracing a diverse talent pool often achieve higher performance. By casting a wider net in recruitment, these companies enhance customer orientation, boost employee satisfaction, and refine decision-making, creating a cycle of continuous improvement. To support socioeconomic diversity, McKinsey outlines seven actionable steps: broadening recruitment criteria beyond academic qualifications, fostering apprenticeship opportunities, implementing mentorship programs, ensuring flexible working conditions, facilitating internal job mobility, emphasising potential in hiring practices, and systematically tracking progress through data collection. These strategies, tailored to enhance inclusivity, not only fulfil a moral obligation but also present a tangible business advantage.
7. Collaborate Across Industries. This I’m sure will feel counter-intuitive to those who only focus on serving the needs of your company. Partner with other companies and organisations to address broader community needs, such as supporting refugees, veterans, and people with disabilities. Collective efforts can lead to innovative solutions and shared success. Companies with an employee base that reflects the community outperform their peers on many financial metrics, and there are no thriving companies without thriving communities.

Conclusion

While challenges remain in talent management, the positive tips show that companies can—and should—use their influence to create meaningful change. By embracing these strategies, businesses can enhance their purpose and financial performance, support their stakeholders, and contribute to a more equitable and sustainable future. It is within our power to not only shape the performance of our organisations but to positively impact the world around us.

By addressing these critical areas, businesses can revolutionise their approach to talent management, ensuring they meet both internal needs and broader societal goals. The time for change is now—so I hope you can rise to the challenge.

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For over three decades, Russell has passionately led diverse HR and non-HR functions, notably serving as Chief People Officer for a global company across 24 countries. Co-founder of Exeden, he challenges traditional HR norms and inspires action to foster purpose-first workplaces that deliver outstanding value to customers, communities, society, and shareholders. Leveraging his hands-on experience, research, and time spent with other practitioners and thought leaders, Russell writes insightful articles on Purposeful Leadership. His impact and passion for people go beyond businesses, where Exeden has committed to donating 100% of its annual dividends to organisations dedicated to uplifting disadvantaged or underrepresented talent in our community.