“Is talentism the new capitalism?”
Klaus Schwab, Founder and Executive Chairman of the World Economic Forum, thinks so and said as much as he opened this year’s event in Davos.
Mercer chose this quote to open the executive summary of its new report, Talent Rising: High-impact Accelerators to Global Growth. It includes some great survey data from more than 1,250 HR and talent management executives in 65 countries around the world. It includes important and useful data about how organizations are or are not expanding their definition of capital to include talent.
Forever, it seems, organizations’ primary sources of value and competitive advantage have been financial in nature: money, lands, buildings and machines – all the values carried on the balance sheet. Mercer’s observation that with human capital being the main determinant of success today, it is troubling that so many organizations leave the development of their talent “largely to external systems and forces, with resulting gaps in their talent portfolios.”
(One could also position that if, indeed, human capital is the main determinant of organization success today, then there should be an entry on the balance sheet to capture its importance. But that’s for another day.)
This report is a huge call to action – not just for HR, but for the entire C-suite. And it is a great roadmap for HR to initiate the discussion of talent as capital.
Central to this discussion is the definition of strategic workforce planning. We hear about this all the time in HR. And BCG, funded by the World Federation of Personnel Management Associations together with SHRM, has observed that there is low current capability worldwide in strategic workforce planning. Perhaps that’s because we know it when we see it, but we can’t really define it.
Mercer’s done a great job of defining strategic workforce planning and published a great infographic along with the Talent Rising executive summary.
This 7 step virtuous circle seems simple enough, but I think we all know that sometimes the most simple things are the hardest to achieve. And that certainly would be true for strategic workforce planning. Identifying accelerators on which to focus might help organizations begin to break the process down into manageable chunks. Just knowing where to begin will undoubtedly help some make progress.
“Talentism is the new capitalism.” Well, maybe in 5-10 years. When HR is seen as a business function and not an overhead function. And human capital is valued on the balance sheet.
We can dream, can’t we?
6 responses to “Is Talentism the New Capitalism?”
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Another resource China, relating to your comment “One could also position that if, indeed, human capital is the main determinant of organization success today, then there should be an entry on the balance sheet to capture its importance.” – take a look at some of the work Wayne Cascio has done over the years, including the book “Costing Human Resources”.
There are pockets of excellence in Strategic Workforce Planning around the world, especially in the Fortune 100. But many are overwhelmed with where to start – and confused by the fact that workforce analytics vendors talk about “Workforce Planning and Analytics” as if they are one discipline, rather than two distinct but related ones. HCI and the Conference Board have very sensible and comprehensive SWP methodologies and are worth a look at also.
Thanks for your thoughts!
I know Wayne and his work well from my days on the SHRM Foundation Board. Thanks for your reminder about his book. I need to pull it down from the shelf. Thanks for reading and commenting.
No problems China, great to hear your thoughts (as always). I’m a practitioner and consultant in Strategic Workforce Planning and have been involved with it in one way or another since 2008, so it’s great to see that it’s gaining traction.
“To plan effectively for its human resources needs, a company ought to have a clear idea of what its needs actually are and what they will be in the future.” That was written by James W. Walker in 1980 in his breakthrough book on workforce planning. It was true then and it has evolved into the ability to be able to better quantify the value of this resource today. Fortunately, we have given a lot of thought to identifying the data necessary to manage this resource and to be able to justify improvements in people management as it impacts productivity. Hopefully we will also continue to uncover the value of satisfying individual needs as a key to improving culture which in turn also improves productivity.
In a way, it is a good thing that there is not a way to put people into a spreadsheet to add up and crossfoot. Managing people is still more of an art than a science. If in some way we were to be able to point out the value of people on the balance sheet without depersonalizing them as people we would be making great strides forward. We have arrived where we are today by lessons learned over the 30 years since Walker’s book, but looking at the next 30 years in the new light of better actual data is good… as long as people don’t become simply another column of numbers.
Great background and info, Tom. Thanks!