Recession or Not, Talent Is More Important Than Ever
Jan 24, 2019
Vikram Pandit, Citigroup’s new CEO, has his hands full. Pandit, who replaced Chuck Prince in December 2007 after Prince was forced out by the board, stepped in to rescue a company reeling from the subprime mortgage catastrophe. On January 15, Citigroup posted a $9.8 billion dollar loss and announced that it would write down over $22 billion in assets related to subprime mortgage loans. Quite literally, the company is fighting for its survival.
Yet despite these dire circumstances, one of the first things Pandit did after taking the reins was to ramp up Citigroup’s talent management efforts. In a conference call with analysts and investors, Pandit said that developing key talent would be one of his first orders of business. A few weeks later, he made good on his word by creating the position of a chief talent officer. “Attracting, developing and retaining people at the most senior levels of our company is one of my top priorities and requires concentrated attention,” Pandit said in announcing the new position.
When a multibillion dollar company facing the worst financial crisis in its history places a chief talent officer squarely in the middle of its turnaround plans, it’s a sign of just how critical talent has become.
The economy is teetering on the brink of a recession, and inevitably, one of the first victims of corporate cutbacks will be the elements vital to a robust talent management strategy. Compensation will be scaled back. Recruitment will slow down. Training and development programs will be cut.
Such moves would be shortsighted, because the need for talent has never been greater. A survey conducted by the Conference Board found that the talent is one of the top issues on the agendas of CEOs, both at home and abroad. It’s not only knowledge workers who are in short supply; the scarcity of skilled workers spans many industries. A recent article in USA Today described the staffing problems the manufacturing industry faces. "Our workforce is an aging workforce," the article quotes the CEO of one manufacturer. "There isn't a queue of people lining up to come into the industry."
Demographics tell only one side of the story, however. The war for talent is not just driven by numbers. The theme of this year’s World Economic Forum, innovation and collaboration, drives home the point that there is a growing need for workers with the competencies that will be critical for future growth. Talent management will play a large role in how companies address that need.
The bottom line is that while the recession will eventually end, the competition for talent is going to be a business challenge for the foreseeable future. Companies that deal with the recession by cutting back too drastically on talent management practices may find themselves woefully unprepared for the long term.
That being said, clearly, companies are going to have to find creative ways to get more out of their talent management budgets while they weather the recession. Performance & Profits asked several experts for their advice on what companies can do to stretch their training and development budgets. Here’s what they said:
Jim McCormick, performance improvement expert: “Seek out resources who can address multiple topics instead of hiring a different trainer for each topic. You’ll get fee concessions by offering multiple engagements. Think comprehensively. Seek out experts who can provide not only the training you require, but perhaps also additional needs such as sales performance coaching, executive coaching and organizational consulting. Again, you will get better pricing if you are making a bigger purchase.”
Todd Dewett, author of Leadership Redefined (TVA Inc., 2008): "Rely more heavily on internal resources. To the extent that they exist, use internal professionals to develop and deliver training that is currently outsourced."
Rita Gunther McGrath, coauthor of MarketBusters (Harvard Business School Press, 2005): "For those that are going to an external training program, make it part of the deal that they have to come back and share what they’ve learned with their peers and colleagues—perhaps through a series of brown-bag or lunch time seminars. This spreads the learning of key concepts without requiring more people to attend courses."
Suzanne Bates, author of Speak Like a CEO (McGraw-Hill, 2005): "Make training a requirement. This might sound counterintuitive during a downturn, but there are several reasons to make it mandatory. If you're going to spend the money, you need people to show up. Your employees are busier than ever. They may sign up for training with the best of intensions and then, inevitably when crisis hits that morning, bail out. Their own bosses may put pressure on them not to attend because of other 'priorities." To get the most for your dollars, make the commitment to a program and then secure the commitment from those who will attend."