If you are not yet convinced that talent management should be high on your agenda perhaps this will convince you.
Figures just released by Her Majesty's Revenue & Customs (the Tax Man) reveal that UK employers will have paid out £6.0 billion in redundancy pay for the year ending 31 March 2010. This is 25% up on the £4.5 billion for the same period last year and means that in the past 2 years employers will have paid out a total of £10.5 billion for people not to work! Amazing!
Now I don't know about you, but I find this mind-boggling. After all, businesses only incur costs in order to make money and ideally should expect to earn more than £1 for every pound spent. Yet here they are spending money – when they can least afford it – without expecting a penny in return, simply so as not to have to pay it in future! You have to agree it is weird logic!
"Ah!" you say, "But it is not only businesses that are making these payments." Well, that depends on your definition of 'business' but it does not make it any less ridiculous. In fact if it is a non-profit or a public sector organisation making the payment it is even more dubious, because it means donor or taxpayer money is being expended for no return and that is even harder to justify.
Now don't get me wrong. This is not an argument against redundancy pay. Employers making people redundant, depriving them of their livelihoods and submitting them to the indignity, emotional and psychological stress that goes with losing their jobs, are morally obliged to pay compensation for that. No, I am simply questioning the non-alignment of commercial and economic wisdom. It simply does not make economic sense to pay people to do no work. Yet that logic is very rarely challenged.
Consequently more has to be done to better align economic and commercial imperatives. This requires employers do more to:
- Ensure that they employ the right talent when they recruit.
- Recognise the investment they have made in hiring and developing that talent.
- Understand what it is they are losing when they consider making that talent redundant.
It might not be possible to avoid making people redundant, but a more thorough approach to recognising and acknowledging the value of talent and managing it properly, is likely to make it far less likely. This is not least because awareness of your talent pool gives you a stronger platform for redeploying rather than retrenching your people. This will ensure that you minimise the long-term impact of any downturn and recover sooner.