6 steps for HR: how to build a great talent strategy

Organisations need to take a more holistic approach to talent assessment, and think more critically about screening tools

The ability of companies to identify and develop talent for key future roles is in question, as research has found only 30 per cent of local organisations believe their current approach to assessment and talent identification will assist with future workforce needs.

More than half (53 per cent) of organisations did not use talent identification tools across their business and 60 per cent did not have a development plan for identifying and filling critical long-term roles, according to the research, which included interviews with more than 200 Australian and New Zealand business leaders.

“There’s a lack of clarity as to what skills will be most important in the future and the best approach to screen for them. The talent crystal ball is very hazy,” said Wendy Montague, talent and development expertise leader for Hay Group, which conducted the research.

“HR and business leaders believe that they don’t have the right processes in place in order to adapt. They realise today’s approach won’t get them where they want to be tomorrow, they know they’ll need to change to keep pace with changing business demands.”

The research found that only one-third of HR professionals (31 per cent) and one-fifth of business leaders (21 per cent) said positions are easy to fill. Only 44 per cent of business leaders felt their organisation recruited the right people, with 60 per cent of HR directors sharing the same view.

The two groups had differing views when asked whether the selection process for hiring decisions represents ‘best practice’ – with 45 per cent of HR professionals agreeing, while only 34 per cent of business leaders felt similarly.

Most local companies were found to use a handful of talent diagnostic tools – with most surveyed organisations (66 per cent) using between one and three assessment methods in their selection process.

One-third (33 per cent) of organisations leave the responsibility for  choosing and implementing the organisation’s selection process to a single person and only 10 per cent have more than three people involved in selection and hiring decisions.

Soft skills driving employee selection decisions
Businesses overwhelmingly favoured screening for behavioural traits rather than skillset when using these tools.

Around 80 per cent of organisations used personality testing when evaluating employees, while 68 per cent used assessment tools to measure ability and 40 per cent screened for emotional intelligence.

Only 35 per cent of assessments are being used to evaluate job-specific skills. Less than half (40 per cent) use a competency framework – a model of competencies or capabilities an organisation has identified as critical to their long term business plan – to assess all their roles.

Montague said organisations need to take a more holistic approach to talent assessment, and think more critically about screening tools.

“They might be effective at making a quick talent decision but can cause real issues at an organisational level if they’re being used incorrectly,” she said.

“Assessment tools shouldn’t be deployed in isolation, they need to contribute to an overall workforce strategy to be relevant for the future as well as satisfying more immediate needs.”

Future talent strategy trends
Montague said predictive analytics was trending towards HR from other industries such as technology.

“Organisations like Google have long been using complex algorithms to project whether candidates are a good fit, whether they will stay, and how far they will go,” she said.

“We are moving beyond basic assessments and reviews into nuanced annual 360’s, pre-screening, preferences, video analysis, and customer simulations”

Montague said this approach to deep analytics will help the industry get much better at betting on who will succeed and who won’t.

“Like it or not, predictive analytics is coming – and can in fact help position your organisation for success. HR and operations leaders need to gain expertise in this area,” she said.

This information will enable HR to tweak their assessment process to meet changing business priorities, and Montague said the recruitment and selection process can then offer a competitive advantage for the firm that can predict successful performers.

How HR can improve talent strategy
The use of more sophisticated data collection processes and predictive analysis provides HR leaders with an opportunity to make assessment a strategic, rather than transactional, process. Montague added.

“Taking the time to reflect and study the organisation’s current recruitment process and to provide insights from the tools they are using,” she said.

“A simple study of high performers and average performers can yield some insights on what abilities or personality preferences thrive in their business environment, or studying the trends in the assessment data and the people that are consequently hired and those that were not.

“Are they screening in the best candidates possible? Does the data show a bias to a particular type of candidate?”

These types of studies provide the data that can bring more value to the selection/development processes, Montague said.

This information could also offer the opportunity to provide individual employee value propositions for the employee matched to his/her preferences, strengths and development activities.

“And perhaps in the longer term we will use techniques used by marketers to send them tailored employee communications in the form that they would most like to retrieve them,” she said.

“This can strengthen employee loyalty and performance and help HR to become true business partners.”

Future-proofing your business through assessment
Assessment should be seen as talent strategy based on the identification of work requirements for today and tomorrow, and Hay Group highlighted six steps to help achieve this:

  1. Define your talent strategy in light of your business strategy: Step back and understand your organisation’s business strategy for the future.
  2. Align your Customer Value Proposition (CVP) and Employee Value Proposition (EVP): Identifying employees who are aligned to your CVP and EVP provides them the freedom to focus on clients’ needs and provides them the freedom to be more authentic. It will also require less policy and procedures to achieve your goals.
  3. Treat your staff as individuals: A ‘one size fits all’ approach to talent simply does not work. It is critical to cater to the specific needs of each employee.
  4. Review your employee assessment tools: The future business and talent strategy should clearly outline what you are assessing for – looking at every aspect of the key success factors for a role, as well as finding and attracting people with the breadth of skills and competencies to perform well in the new roles.
  5. Apply assessment insights past the selection process: Use the information you’ve collected during the assessment process – it can help predict success and identify areas for growth.
  6. Report and measure on the effectiveness of your talent management strategy: Use assessment more broadly to identify high potential employees and inform long-term development programs to create a strong pipeline for mission-critical roles.

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