Companies Struggle with Managing Talent

October 29, 2008 ( - A new study by Hewitt Associates and the Human Capital Institute (HCI) reveals progress in managing talent, but most companies are still struggling to build the capabilities necessary to consistently execute their talent management programs.

According to a press release, the study of 700 senior-level talent leaders, reveals that 92% recognize superior talent as providing a vital competitive advantage; however there is a key gap in talent management execution – specifically, lack of accountability. Few organizations consistently hold managers (7%) or senior executives (10%) accountable for developing their direct reports through performance management processes.

Other struggles revealed in the study include:

  • Gaps in talent development capabilities – Only 5% of organizations report having the managerial capability to grow people in their jobs or provide feedback to support employee development consistently across the organization.
  • Lack of alignment between human capital and business strategy – While human capital is viewed as important, only 17% of respondents indicate their workforce strategy is consistently aligned with their business strategy across the organization.
  • Inconsistent execution of talent programs – Most companies have fundamental talent management processes in place, such as workforce planning, high-potential development programs and succession planning. However, few consistently execute these programs across the entire organization.
  • Limited use of meaningful analytics – Most organizations track traditional workforce measures, such as headcount, turnover and cost-based metrics, but few have graduated to tracking the metrics that matter. A mere 10% of companies consistently measure the effectiveness of talent management programs and even fewer (7%) consistently use quantitative frameworks to align human capital investments with their business strategy.

The Hewitt and HCI study, "The State of Talent Management: Today's Challenges, Tomorrow's Opportunities," found that organizations making significant strides in managing talent have differentiated themselves in the following ways:

  • Depth and consistency of practices: These companies have effectively institutionalized specific talent management programs-such as conducting talent reviews, performing succession planning, and improving manager ability to develop employees-and are applying these programs more deeply and broadly into their organizations.
  • Higher commitment for talent development: Successful companies view talent management as a shared business and HR responsibility and require active engagement, commitment and accountability from leaders and managers.
  • Progressive and innovative practices: Some organizations are introducing new and innovative ways of managing talent, including progressive approaches to workforce planning and more effective employer branding strategies. While still an emerging trend, a growing number of companies are also using predictive analytics to guide human capital decisionmaking and business alignment.