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Small Companies Reward Talent Development More Than Large Companies

Talent DevelopmentI just read an interesting white paper titled “Enablers and Blockers – Talent Management” by the New Talent Management Network. The white paper researched the talent building enablers and blockers in organizations.

The white paper covered the subject extensively and made some important observations and conclusions from the data. This blog will cover one are of the total study – the positive and negative consequences for organizations and managers having or not having a talent management strategy.

The study showed that

Only 41% of the organizations surveyed reported that they had a clear and unified talent management strategy. This does not mean that they have no strategy. Rather, it shows that talent management – hiring and development – resides across the organization. This then creates uneven results and ineffective talent development.

The study most clearly shows this when they asked if there what were the positive and negatives consequences for leaders in developing their talent.

The survey results were

Positive and Negative Conseqeunces Experienced By Leaders For Not Developing Their Team

Size of Company  Negative Consequences Positive Consequences
Less than 1,000 36% 57%
1,000 – 3,000 19% 52%
3,000 – 5,000 16% 42%
Greater than 5,000 12% 30%

Source: NTMN 2014 Study - Enablers and Blockers – Talent Management

The interesting insights from the data are that “smaller companies are more likely to reward leaders who grow their teams and punish those that don’t”.

 The negative consequences for leaders not developing their talent within small companies was the highest (36%) because the organizational impact is the greatest. Small companies by definition have fewer people and cannot rely on a deep talent pool that can exist within large companies. Small companies also properly incentivize their employees with 57% - almost 2 out of 3 – indicating that there are positive rewards for leaders who develop their team.

In contrast, large companies do not punish leaders for not developing their team (only 12% indicating negative consequences) and they do not reward them either (30% showing positive consequences). The explanation for this is that large organizations have a decentralized approach to talent development allowing business unit leaders manage it within their own structure rather than having a centralized approach. This then leads to the lack of accountability and eventually to a talent management strategy that does not bring top talent into the organization.

At The Frontier Group we conduct  strategy projects with companies of all sizes. We can validate the NTMN survey results with our own observations. We have helped organizations across the spectrum create a unified talent management strategy so that the total organizational needs are met. We see this as too important to not get the proper strategy, incentives and oversight in place. As the survey results show – there is a lot of work yet to be done.

Please let us know if The Frontier Group can help you with your talent development strategy. You can reach us at (770) 455 – 1244 or by e-mail at patl@frontiergroupusa.com.