By Mary Clarke, CEO, Cognisco
According to research from Right Management, the career and talent division of Manpower Group, almost half (45%) of UK HR professionals and senior leaders anticipate increased spending on talent management initiatives for the remainder of the year.
The focus on talent management is clearly good news. However, experience tells us that it is not enough for companies to focus purely on developing talent, they also need to understand the risks that can arise from people not fully understanding their job roles or where their skills gaps lie.
Not everyone in an organisation will be competent in every aspect of their job roles. We work with companies around the world in various industry sectors and typically find that 30 per cent of any workforce misunderstand at least one aspect of their role – something which if left un addressed can pose a substantial risk.
For a talent management programme to be successful, it must start with a talent assessment, and an understanding of the skills, behaviours and challenges that already exist in the business. Once this is done companies that are facing talent shortages, skills mismatches and weak leadership pipelines will have a clearer idea of the core competencies needed to build the business.
Right Management suggests that no business strategy can be successfully executed without a talent strategy that looks at what skills are needed to move the business forward. They say organisations can seek out talent with individual and team assessments that provide an in-depth assessment, based on competencies and behaviours that assess a person’s current ability and future potential, a key step in identifying high-potential individuals.
One thing to note as well is that assessments can also play a key role in highlighting areas of people risk – which stem from knowledge gaps or from people misunderstanding certain aspects of the role or even if they are displaying the wrong kinds of behaviour at work and shouldn’t be ignored with the desire to implement talent management initiatives.
All too often companies are in the dark about these risks. Whilst they might have formal processes in place to assess competency – many are failing to measure the human factors – such as how people behave at work, the decisions they are likely to make and how confident they are. As such, they are failing to understand where their risks lie.
There are many factors that encompass people risk in organisations from employees not following procedures, systems, process and rules of the organisation to individual and organisation human factors. One of the unpredictable areas of being human is that we can at times deviate from expected behaviours, deliberately or not. For many organisations understanding human behaviour is a huge challenge, and can often been ignored as they strive to find the ‘best’ talent.
Measuring how people perform and behave across an organisation is crucial, especially in sectors such as utilities and transport where it can affect health and safety compliance, and in highly regulated industries such as financial services and banking, where wrongdoing can lead to a toxic culture of excessive risk-taking and poor decision-making. Even in customer service sectors or sales environments wrong behaviours can lead to companies losing customers, sales, and reputation.
Whatever the business sector, if employees fail to behave in accordance with standards or regulation there can be severe consequences that could lead to death or personal injury, severe legal or financial penalties or customer defection due to damaged brand reputation.
One only has to consider the many banking scandals that have resulted in huge fines and damaged reputations or safety breaches in the NHS that have led to unnecessary deaths to realise understanding your people risk is as crucial part of your business as ensuring you have the right talent at the top.
So whilst talent management initiatives are clearly an important part of any business strategy, a more holistic approach needs to be taken that also incorporates risk analysis. Only by assessing people risk as well as talent within an organisation can business performance be greatly improved.