Talent management needs urgent attention

[Candice]

The results of the Labour Market Survey 2009 by Statistics South Africa expose the dire state of talent management in the country.

 

The uninspiring outcome shows that companies across various industries continued to retrench in an attempt to reduce costs, resulting in South Africa losing more than 800 000 jobs over a 12 month period.

 

According to Accenture, reducing headcount without taking into account strategic capabilities does not necessarily mean that companies are reducing costs, instead they could be reducing their competitive advantage. When companies embark on a cost-reduction exercise, they also need to take into account longer-term positioning objectives.

 

“What most companies don’t realise is that talent management is as critical as the organisation’s overall strategy. Therefore, a comprehensive cost-reduction approach which does not compromise workforce quality is necessary. In South Africa, the norm has been to introduce a voluntary retirement programme. However, this approach leads to losing a great number of experienced employees who are critical to the transfer of skills and the success of their organisations,” says Lou-Anne Lubbe, Talent & Organisation Performance Lead at Accenture.

 

One of the main challenges that remain unresolved in the South African labour market is the effective introduction of inexperienced employees, mainly the youth. The Minister of Finance Pravin Gordhan alluded to this challenge during the Budget Speech and proposed a subsidy that aims to lower the cost of hiring inexperienced employees. The number of young people who could benefit from the proposed reform is estimated to be approximately 800 000.

 

The proposed reform could help reduce unemployment rate, as the Labour Market Survey shows that the 100 000 jobs which were created during the fourth quarter of 2009 were in the informal sector.

Accenture believes that the recession provided companies with an opportunity to make talent management changes that should have been put in place a number of years ago. Furthermore, the downturn also presented companies with an opportunity to create a workforce with capabilities to outperform the competition as the state of the economy improves.

Lou-Anne adds that, “it would be easier to assume that companies that did not make retrenchments will have a better chance to thrive during the upswing. However, the reality is that every organisation that is unable to transform its human capital capabilities and respond to economic pressures is likely fall behind its competitors.”

Accenture believes that organisations should take advantage of new technologies to accelerate employee development. Companies should explore new technology inventions such as Web 2.0 which leverages free content developed by experts instead of setting up costly and lengthy course development which only facilitate 20 percent of employee development.