If you are net yet convinced that talent management is something that should be high on your priorities, perhaps this will convince you.
Figures just released by Her Majesty’s Revenue & Customs (aka “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!
Now I don’t know about you, but I find this very difficult to understand. 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 now – presumably at a time when they can least afford it – and not expecting to earn a brass farthing in return, simply in order not to have to pay it in future! Honestly, what kind of logic is that?
Ah!” you say, “But perhaps it is not only for profit businesses making these payments.” Well, maybe it isn’t, but does it make it any less ridiculous? In fact if it is a non-profit or a public sector organisation it is even more dubious, because that means that 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. If employers are going to make people redundant and deprive them of their livelihoods and submit them to the indignity, emotional and psychological stress that goes with losing their jobs, it is just and right that they pay compensation. 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.
Consequently to better align the economic and commercial imperatives, it is essential that 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 that talent and managing it properly, is likely to make it far less likely, not least because awareness of the talent pool gives you a stronger platform for redeploying people rather than retrenching them. This will help your business recovery much more.