Last week Deloitte Consulting LLP published a conversation on its Website with Jeff Schwarz, a principal in Deloitte's Human Capital practice, who shared his thoughts on how an economic rebound will affect companies' approach to talent management. When the economy turns around, recession will also turn-from retention strategy to potent turnover catalyst. Talent management will involve a delicate balancing act for companies, he said.
During the recession employees stayed put and out of the dismal job market. Still, while these workers were glad to have a job, employee morale diminished amid widespread layoffs. Poor communication from management compounded the problem. As a consequence, according to Schwarz, Deloitte research indicates strong evidence that many valuable players are poised to find new jobs once the economic outlook is right. Their research further suggests that the ensuing "résumé tsunami" could surpass any previous post-recessionary turnover patterns.
The irony is that in Deloitte's survey series throughout last year on Managing Talent in a Turbulent Economy, the executives surveyed reported positioning themselves for the rebound by shifting the emphasis away from cost-cutting to retention and talent development. Unfortunately, the shift may be too late: "Companies that could depend on the recession as a retention strategy in 2009 will need to turn their focus to a potential skills shortage later in the year as they return to their growth strategy," said Schwarz.
He continued: "We believe the companies that achieve the best balance of offensive and defensive talent strategies will have the inside track on the recovery curve." Specifically, that balance entails on one hand cost-cutting in benefits and compensation and continuing to eliminate staff redundancies, and keeping an eye on valuable talent in order to retain and develop leaders.
There is still time for companies to rethink talent strategies, said Schwarz-but that time is right now and the window is small. The key is to project talent picture for the next few years with an emphasis on who are the critical people in the organization today and what it will take to keep them in place. Now is the time to ask, as Schwarz put it, "Will your key talent and leaders stay with you if they have choices?"