Only one in five (22%) of organisations have a pipeline of future leaders to cover their business needs, but just 18% view this as an area for concern, research released last month by Right Management has found.
The figures come from a global study conducted by the global talent and human resources firm in 14 countries, which polled more than 2000 senior HR executives in large companies.
Faced with a litany of business challenges, talent management isn’t getting the attention it needs, says Rosemarie Dentesano, who heads up the regional talent management business at Right Management.
“There’s just so much pressure on our clients. They have long-term plans, but when we work with them, it’s clear they’re managing day-to-day. While there’s a desire to work strategically, there are so many pressures that need to be addressed in the short term.”
Sign up for SmartCompany newsletter.
Free to your inbox every weekday
“One client recently said to me, ‘I’m really concerned, we’ve let go of good people and it troubles me where we’re gonna get our next layer of leaders from’. Some of these organisations are a bit short-changed, and have to go back and think how they’ll deal with this in the future.”
Part of the cost of not developing talent today is recruiting leaders in the future tends to be more expensive overall. Leaders who’ve been lured from competitors or other industries typically need a wage premium to make the jump, while internally developed leaders do not need this.
“Some organisations have no budget to recruit,” Dentesano says. “Where there’s no budget, you need to look at really good development strategies.”
Turning high-potential employees into future leaders typically revolves around the three ‘Es’: experience, exposure and education.
Experience refers to giving high-potential staff stretch projects and riskier roles, to allow them to get used to taking responsibility for difficult assignments. Exposure is about learning from others, whether through networking with experts or peers, while education refers to formal education, either provided internally or externally to the organisation.
“At the moment, a lot of organisations are decreasing access to education, which tends to be expensive, and increasing the exposure and experience,” Dentesano says.
Ultimately, she adds, such initiatives touch on a deeper issue, which is who should have ultimate responsibility for providing Australian businesses with skilled workers to support their future growth.
“Of course universities need programs in place to deliver industry needs, as do governments and businesses. We all benefit from investments in talent – there are huge flow-on effects in terms of the economy and society we live in.
“It’s up to business leaders to align with and get value from that.”