CEOs today should have plenty on their minds, from political uncertainty to trade tensions to a potential economic slowdown. However, the problem that’s still keeping them worried the most remains the same: not having the right talent. Indeed, talent was the number one CEO worry when The Conference Board surveyed top bosses last year and the number two concern in this year’s edition.
But a new Korn Ferry study suggests that companies that purposely align hiring practices with the firms’ overall business strategy can come out ahead. The paper, “The talent-strategy imperative,” highlights a five-step process derived from research and interviews with executives who have successfully tied talent to business strategy.
These five steps require making a talent review a strategic priority, something many organizations traditionally avoid. “Problems in business persist and HR only turns to staffing after all else fails,” says RJ Heckman, vice chairman of Korn Ferry Hay Group and co-author of the report along with Ilene Gochman, a Korn Ferry senior partner and global head of Assessment and Succession Solutions. Rather than just hiring open positions, firms should step back and really determine what the organization needs to look like to execute a business strategy. Only then can executives figure out what type of talent they need and reallocate resources to areas that do most to create competitive advantage. Heckman says many executives claim they take that approach, but very few are doing it well.
It’s a systematic approach, to be sure. A CEO first needs to sit down with his or her chief human resource officer and agree on what the business strategy is based on: innovation, growth through acquisition, or myriad other ideas. Clarifying the strategy lays the groundwork for the high-stakes decisions CHROs and executive teams must make around strengthening the organization and filling talent gaps. From there, executives should have in-depth reviews of their firm’s culture and structure to ensure they can attract and retain the right type of talent. Identifying critical job roles and the competencies people need to have for those roles comes next. Finally, executives have to decide whether they can develop talent internally for those roles or if they need to recruit it from outside the firm.
The whole process may sound intuitive but it’s easier said than done, Heckman says. Corporate leaders are often “too patient, too reactive, and don’t act with the urgency or strategic intent that the situation requires.” Plus, implementing a talent strategy often requires challenging the status quo and making tough decisions. But the payoff of an aligned talent strategy could be substantial—a system that brings the right talent into the organization to create a competitive edge.