For companies large and small in industries across the board, top-tier talent is limited. A Conference Board study concludes that the biggest challenge C-level executives are facing – both currently and in the upcoming years – is “developing next-generation leaders” and “failure to attract and retain top talent.” The same survey revealed that only 14% of CEOs feel that they have the leadership talent they need to execute their strategy.
When it comes to top-tier talent, your ability to identify these folks early on and develop them within your organization is paramount. Showing your next generation leaders that you care about their growth enough to invest in them will aid in retention, not to mention keep them engaged and influence your company culture as a whole.
Investing in top-tiers is also advantageous when it comes to the competitive landscape of today’s 21st-century workforce. Investing now will lead to continued growth and success when it comes time for them to take the reins.
Here are some other reasons why investing in your top talent is crucial to the future of your organization.
The (continued) war on talent
There is an inevitable war on talent that will continue as we move into the next decade. With a deficit of skilled workers looming, the proverbial bargaining power is shifting into the hands of the talented workers. Organizations need to do everything in their power to keep their high-potential contributors from jumping ship.
From Korn Ferry’s The Global Talent Crunch
By 2030 demand for skilled workers will outstrip supply, resulting in a global talent shortage of more than 85.2 million people. This talent crisis will cost nations trillions of dollars in unrealized annual revenues. If unchecked, the financial impact of this could be $8.452 trillion in unrealized annual revenue – the United States could miss out on $1.748 trillion alone.
From Conference Board’s CEO Challenge Survey
Failure to attract and retain top talent was the number-one issue identified by CEOs.
From McKinsey’s Global Institute Study
Employers in Europe and North America will require 16 million to 18 million more college-educated workers in 2020 than are going to be available.
In advanced economies, up to 95 million workers could lack the skills required for employment. Developing economies will face a shortfall of 45 million workers with secondary-school educations and vocational training.
Millennials (still) want to be developed
Proactively developing the next generation of leaders in your organization is critical to your businesses’ legacy. No company has ever told us that they had too much bench strength.
In fact, research shows quite the opposite – only one in five employers has competent successors ready to fill executive-level roles and even fewer (15%) are prepared with successor candidates for mission-critical roles that extend beyond the executive level.
From a tactical standpoint, continued development allows for your talented folks to learn and have more “real-world reps” – as we like to call them. Aside from the skills that are sharpened, development is what Millennials – or your next generation of leaders – want in a job. The generation of workers who will soon make up 75% of the global workforce want you to prove that you are invested in their personal and professional growth and continued development.
74% of Millennials cited bettercareer development opportunities as a top attractor in a job.
Offering career training and development would keep 86 percent of millennials from leaving their current position.
Fifty-six percent of millennials believe that an individual should stay at a single company for more than 20 years. However, if that job lacks growth opportunities and avenues for leadership development, 67 percent of millennials would leave that position.
90% of millennials are looking to grow their careers from within their companies.
Top talent is different
Investing time and money into someone’s development is not a one-size-fits-all solution. Similar to the need for customized development, the resources you have to invest in your employees should not be offered across the board. In any organization, there are high-potential folks who have proven that they are a bit ahead of the pack. Investing in these folks will lead to the greatest ROI.
From Applied Psychology’s Individual differences in output variability as a function of job complexity
For unskilled and semiskilled jobs, the top 1 percent are three times more productive; for jobs of middling complexity (say, technicians and supervisors), 12 times more. One person in the top 1 percent is worth 12 in the bottom 1 percent. For high-complexity jobs, the differential is so big it can’t be quantified.
From Personnel Psychology’s The best and the rest: revisiting the norm of normality of individual performance
The top 5 percent of the workforce at the researched firms produced 26 percent of the firm’s total output.
It is also noteworthy that talented employees are “force multipliers”, raising the performance bar for their colleagues, and particularly for their direct reports. By word and deed, they model and teach winning behaviors that shape high-performing cultures. Simply adding a star performer to a team boosts the effectiveness of other team members by 5-15%. No wonder, then, that study after study shows stronger financial performance in companies that make proportionally greater investments in identifying and developing top talent.
Top-tier talent is not easy to find. Focus on identifying these people in your organization and invest in their intentional development so that when push comes to shove, they are the captain of your team – not elsewhere.
Talented folks have options when it comes to employment. Make it easy for them to stay.