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Organizations are now competing in two markets, one for their products and services and one for the talent required to produce or perform them. An organizations success in its business markets is determined by its success in the talent market. At the very time that business markets are expanding, talent markets seem to be shrinking. As the knowledge required to build products and deliver services increases, the retention of experienced employees becomes critical to improving productivity and time to market. In areas such as software development and nursing, the shortage of talent is so great that companies are beginning to offer incentives that were once only available to executives or professional athletes. In every domain of business, executives know that their ability to compete is directly related to their ability to attract, develop, motivate, organize, and retain talented people.
Yet the people-related challenges of the business stretch far beyond recruiting and retention. Competing for talent and recruiting the best is not enough, and focusing just on winning the “talent war” can be damaging to the organization. As agility in responding to continual change in technological and business conditions has become critical to success, organizations must strive to create learning environments capable of rapidly adjusting to the changes engulfing them. A critical component of agility is a workforce with the knowledge and skills to make rapid adjustments and the willingness to acquire new competencies. In fact, an agile workforce may reduce some of the stress currently being experienced as a talent shortage.
Organizations have attempted to apply many different techniques in their efforts to move towards strategic human capital management. They combine downsizing with restructuring, apply reengineering or process improvement, improve information sharing, clearly communicate the organization’s mission, institute employee involvement programs, establish formal complaint resolution procedures, institute gain-sharing or other incentive plans, emphasize the importance of training the workforce, formalize performance management and feedback processes, perform job or work analysis and design, support job rotation, begin to establish team-based work designs, retrain employees to meet changing demands, provide flexible work arrangements, address diversity issues, conduct formal mentoring programs, and align business and human resources strategies. What many organizations lack is a framework for implementing these advanced practices.