Quest for the best: managing the talent pipeline

January 2020  |  FEATURE  |  LABOUR & EMPLOYMENT

Financier Worldwide Magazine

January 2020 Issue

Talent, it has been said, is everything. With great companies built on the back of exceptional talent, ensuring that a pipeline of such talent is regularly replenished is of profound importance.

So, how should a company construct a talent pipeline? What essential constituents does a pipeline require in order to identify, attract and develop the right mix of critical talent to support and grow a business over time?

According to the US Chamber of Commerce report ‘Managing the Talent Pipeline: A New Approach to Closing the Skills Gap’, leading employers are focusing on talent pipeline management strategies that combine career advancement from their existing workforce, job-ready workers accessible through networked recruitment and staffing partners, and new entrants to the workforce with recent customised education and training.

“In today’s economy, companies will increasingly compete on talent,” says Jason Tyszko, vice president of the Centre for Education and Workforce at the US Chamber of Commerce Foundation. “Having strong talent pipelines for those positions on which your competitiveness depends is essential to long-term growth and success. Companies that have strong and reliable talent pipelines are more likely to see cost reduction and productivity growth.”

Well aware of the benefits of an efficient talent pipeline is Sam Fletcher, head of client services at Armstrong Craven. “It can significantly reduce the time it takes to hire, avoid issues or losses from the role being vacant while a replacement is identified, and enables companies to undertake a more thorough selection process which improves the quality of hire,” he asserts. “If managed properly, talent pipelining also improves the candidate experience and enables companies to take a broader view of available talent, focusing on onboarding or development requirements of incoming candidates.”

Adding its voice to the talent pipeline debate is the UK-based The Institute of Leadership & Management. In its ‘The leadership and management talent pipeline’ report, The Institute states that to compete successfully on the global stage, the UK needs a steady stream of talent capable of delivering strong economic growth – an aim it believes should be a top priority and which requires a fully functioning talent pipeline.

“A robust talent pipeline is the key to a sustainable company – one which does not get derailed when an individual departs,” adds Kate Cooper, head of research, policy and standards at The Institute of Leadership & Management. “Today’s companies are complex, interconnected and reliant on all parts working together to deliver products and services.”

Anticipation, preparation and prioritisation

Creating a talent pipeline is a long game requiring significant planning, with anticipation, preparation and prioritisation all key principles underpinning the process.

It is of course inevitable that a company will need to replace a highly valued employee at some point, and this should be anticipated, with disruption kept to a minimum. “We often see companies in a ‘panic buying’ situation, which can end in the wrong hire or having to spend excessive amounts on interim or contract solutions,” says Susie Turpin, a director at Wilbury Stratton. “A strong and accurate talent pipeline allows companies to make the right hire in a short space of time and, most importantly, with a focus on diversity and future skills requirements.”

Assessing whether existing employees are suitable for upcoming opportunities provides a company with useful preparatory groundwork when searching for talent. “If they are not, a role would then be sourced externally,” explains Sarah Chester, digital and marketing lead at Talent Works International Ltd. “This ensures that no potential talent is overlooked. Then, when a vacancy goes live, contact can be made with appropriate candidates. Most importantly, having a pipeline of relevant candidates reduces the time-to-hire as, once a vacancy is live, you can shortlist candidates for interview straight away.”

Talent pipelining should be prioritised by roles critical to the company, according to Ms Turpin, such as those considered ‘high-risk’ and those where a focus on diversity is required. “Companies often look to make significant changes and therefore need to understand what talent pipeline best practice looks like,” she says. “Managing communication effectively with potential candidates is the most critical aspect in ensuring a successful process, not just with HR and resourcing but with the business.”

The US Chamber of Commerce makes three key recommendations toward managing the talent pipeline: (i) dynamic short-term forecasting and real-time labour market information – companies are experimenting with dynamic short-term labour market forecasting and real-time data sharing to get a more accurate sense of what skills are in demand; (ii) defining competency and credentialing requirements – some companies are removing unnecessary academic credentialing and experience requirements, replacing them with more transparent industry-recognised credentials and competencies; and (iii) establishing networks to source core capabilities – companies are making more sophisticated ‘make and buy’ decisions for talent management, especially for those core capabilities and jobs critical to the execution of their business strategies.

“For those non-core functions and jobs that are not essential to executing business strategy, companies are exploring a wide range of workforce strategies, including automation, contracting, temporary staffing and outsourcing,” states the US Chamber of Commerce report. “However, for their core capabilities, leading companies are focusing on talent pipeline management strategies that combine career advancement from their existing workforce, job-ready workers accessible through networked recruitment and staffing partners, and new entrants to the workforce with recent customised education and training.”

Pipelining challenges

No planning is ever without its challenges, and talent pipelining has its fair share. “The most important aspect of talent pipelining is ensuring that everyone involved understands the approach,” suggests Mr Fletcher. “It is key for leaders to think strategically and establish a timeline for hiring to be able to build talent pipelines with the right candidates, in the right place, at the right time. One of the main challenges faced in talent pipelining is getting everyone aligned on the approach, as there is a difference in communicating with and interviewing candidates for future roles in comparison to live requirements that can be often overlooked. With a pipelining approach, candidates need to be engaged throughout the process to ensure they remain interested and their circumstances have not changed.”

In the experience of Mr Tyszko, a talent pipeline is essentially a supply chain problem, requiring a supply chain solution. “Companies that expect the right talent to show up at the right time and at the right cost are hoping for a miracle,” he suggests. “Instead, companies should implement a structured end-to-end process where they produce actionable data on their workforce needs and co-design talent pipelines with their most trusted suppliers of talent.”

Another challenge is talent pipelining in a passive market, when it is more difficult to engage with candidates. “In these circumstances, it is of vital importance that an employer has a strong brand which resonates,” adds Ms Chester.

Internal vs. external

For many companies, a through-the-ranks approach to talent, rather than an external appointment, is the preferred option. Each recruitment strategy has merits, as well as difficulties.

“In a direct comparison, internal candidates often have established relationships and knowledge which makes the appointment less of a risk in the view of the hiring manager,” says Mr Fletcher. “So, the internal candidate can be the preferred choice.” Conversely, an external search allows a hiring manager to consider a much larger pool of potential candidates. “The decision to hire externally should be based on the nature of the role, the internal supply and the organisation’s broader strategy,” adds Ms Turpin.

According to The Institute of Leadership & Management report, 55 percent of managerial vacancies are filled internally. Furthermore, the proportion of these appointments decreases the higher up you look in terms of recruitment needs – going from 61 percent at first line management level, down to 58 percent for middle management, to 50 percent for senior management. The trend, suggests The Institute, is that, at upper management levels, companies are struggling to identify suitable internal candidates with the right mix of skills and attributes, causing them to look externally to meet their own workforce requirements.

“The popular perception today is that a company is far more willing to hire from without rather than advance from within,” suggests Mr Tyszko. “However, that is changing as more and more companies are now seeking to create internal career pathways that can address their most critical talent needs, while also improving the company’s reputation as an employer of choice. The reality is companies need a ‘both/and’ approach to their talent management pipeline. Companies need clear and effective upskilling pathways for current workers while backfilling those positions with newly trained and credentialled talent from outside the company.”

In Ms Chester’s experience, generally speaking, the most beneficial option for a company is to train and promote their employees from within into more senior roles. “Hiring can be expensive, and new hires can take months to settle in,” she says. “When you have found a valuable hire, training and promoting them increases the likelihood that they will remain with your company for a long period of time. However, there may not always be internal candidates who are relevant to the post. In which case, hiring externally can provide an opportunity to bring fresh skill sets into the team.”

Keeping it fresh

Today, the talent landscape is larger and more competitive than ever before, with factors such as increasing social media and professional networks usage making the search for talent increasingly competitive.

“Ensure your company culture and values are a front and centre priority,” says Ms Chester. “It takes effort to keep a culture healthy, but it takes a lot more effort to get your culture back on track when employees are unhappy, and you are struggling to retain them. Companies need to develop a strong employer brand and then invest in their workplace so that people feel valued and, as a result, motivated to succeed.”

For Ms Cooper, the best talent pipeline strategy is for a company to be a great place to work and is not a talent drain that attracts, disappoints and then conducts exit interviews. “Offer flexible working, fair pay structures, development opportunities and reward existing managers for their talent development strategies to prepare for the future. That said, people, however content, will still leave.

“So, there will always be opportunities to employ new and fresh talent,” she continues. “If your brand as an employer says you care, your products and services are produced and delivered ethically, and your values are authentic and lived, you will be able to choose from the best.”

© Financier Worldwide

BY

Fraser Tennant