Tackle talent management to achieve high performance
Let’s be honest. Industrial products companies face a talent crisis. Despite the durable demand for products, a critical shortage of skilled labor threatens your ability to outperform the competition. Worse, your workforce is aging and the younger generation doesn’t think your industry is glamorous or 'high-tech.
Let’s be honest. Industrial products companies face a talent crisis. Despite the durable demand for products, a critical shortage of skilled labor threatens your ability to outperform the competition. Worse, your workforce is aging and the younger generation doesn’t think your industry is glamorous or 'high-tech.’ What’s more, they fear your culture is rigid and 'old school’ and would never accommodate their ambitions.
Accenture research confirms that organizations that excel in developing their people also tend to be high-performance businesses that dominate their markets. Unfortunately, few industrial products companies achieve this level of excellence. Most tend to under-invest in identifying, developing and training their people, and many have been forced to hire back retirees to compensate for this failure.
That’s the bad news. The good news is that globalization has opened doors to previously inaccessible talent pools in Asia and elsewhere. With multiple product types and job descriptions, your industry is in an excellent position to offer a variety of career possibilities.
Now is the time to abandon obsolete, piecemeal approaches to recruitment and training and to expand people development skills that will help you power well ahead of the competition.
Four critical capabilities
Our research shows that talent management success hinges on mastering four inter-dependent capabilities:
1) Align the workforce with your business strategy
High-performance industrial products businesses understand that workforce constraints can impair their successful execution of business strategy. They focus on pursuing and developing talent that complements %%MDASSML%% and improves %%MDASSML%% their existing corporate gene pool. They also clearly articulate a vision for their workforces, based on an understanding of their present and future worldwide needs.
For example, Woodside Energy Limited, a leading Australian upstream energy company, integrates people management processes and tools to encourage behavior that supports its vision and business objectives.
It provides opportunities for individuals to realize personal and professional growth and has a flexible rewards and recognition program that compensates employees based both on their ability to achieve individual and team goals and on how well their behaviors align with Woodside’s mission, vision and values.
2) Attract, develop and retain key talent
Attract talent %%MDASSML%% Today’s well-educated, highly skilled young people no longer expect lifetime employment, but they do want to tailor their careers to their evolving needs and expectations. They favor employers who will allow them to make decisions, and they want the chance to move sideways, as well as upward, in the corporate hierarchy or to change jobs at key points in their careers.
Refining your brand image can help attract employees as well as customers. In some companies, leadership personifies the brand. Think of General Electric and you think immediately of the charismatic Jack Welch, who considered his success in attracting the right people to be his single greatest accomplishment.
Convincing younger people that you are creative and flexible is a tougher proposition, but targeting universities and even high schools helps. For example, Cummins Corporation’s 'Dream It. Do It.’ program showcases the challenging nature of the company’s work to students approaching high school graduation. The program has raised enrollment in manufacturing-related courses at the local technical college by 35% and has helped the local area win a $15 million federal Workforce Development grant.
Develop talent %%MDASSML%% Individuals who lack on-the-job nurturing are likely to shop for better opportunities; career and succession planning programs should demonstrate your commitment to recruits’ long-term success. Training with rich content, backed by the expectation that learning is part of every employee’s responsibility, is key to successful talent development.
Caterpillar offers an unusually successful example of a corporate 'university,’ which relies heavily on e-learning, a cost-effective means of global training that has saved them an average of $87 per person for every e-learning course taken. E-learning also allows the university to customize learning, which younger employees find especially valuable.
Retain talent %%MDASSML%% Today’s workforce demands stretch goals, so retaining talent demands that your employees have options. Look for ways to make job opportunities visible across the organization. Invest in retraining and reassigning.
Compensation is crucial. Whirlpool Corp. has increased the maximum bonuses for high-performing employees and has made a larger percentage of employees eligible for bigger bonuses. The company awards merit raises based on performance, but it considers bonuses more cost effective, motivating and a means of breaking away from 'entitlement.’
It’s important to keep the workforce informed about critical developments; solicit employees’ assistance in tackling transition issues like layoffs. One vehicle manufacturer sought feedback from its workforce about the effectiveness of its human capital programs. On the basis of their responses, management installed new HR information systems and transaction processes.
3) Minimize the loss of critical skills
Many companies are trying to lure valued retirees back to work or entice older workers to stay on the job longer. In Finland, for example, Oras, Ltd., a manufacturer of faucets and valves, grants older workers more days off. Other companies are introducing more 'ergonomic’ working environments to make older workers’ jobs more pleasant and less stressful.
Still others use mentoring to capture and transfer the knowledge that retiring baby boomers will take with them. For example, at International Truck and Engine Corp., a subsidiary of Navistar International, highly experienced workers actively mentor younger people, ensuring that newer employees are steeped in the corporate philosophy and operating model.
4) Challenge the enterprise
To turn 'fixed’ into 'variable’ cost, industrial companies are increasingly adopting a more flexible workforce model. Re-thinking shared services and outsourcing can help. Creating world-class support functions to perform processes that are business-cycle dependent can trim operating costs and reallocate the time key employees spend on low-value functions.
Avaya, the world’s second largest supplier of voice communications systems, introduces complex products continually and quickly, which necessitates regularly updating its workforce, channel partners and customers.
Globalization and competition have accelerated this schedule, severely straining Avaya’s internal learning organization, which was fragmented across several geographies. By outsourcing its training and development function %%MDASSML%% which offers 1,800-plus e-learning courses for more than 50,000 people in some 90 countries %%MDASSML%% the company has dramatically improved time-to-proficiency.
Getting talent management right requires a long-term commitment. As our research shows, aligning the workforce with your overall business strategy is just a starting point. You also must develop systematic approaches to attracting, developing and retaining key young talent while minimizing the loss of older workers’ critical skills.
Successful talent management is key to high performance. Now is the time to start seeing the talent shortage as an opportunity %%MDASSML%% and seizing the chance it offers to create and nurture a workforce that can outperform your competitors on every level.
Paul Loftus is a managing partner with Accenture and currently leads the Industrial Equipment Practice within North America. He is responsible for Accenture’s industrial equipment clients in this region.