Manufacturing's War for Talent
It’s no secret that finding and retaining top talent is a challenge faced by all organizations, not just manufacturers. But manufacturing is dealing with unique challenges relative to the skills gap. According to Deloitte research, 90% of manufacturers currently have a moderate to severe shortage of skilled production workers. More troubling, 83% said that this shortage is negatively affecting their ability to serve customers.
So what are manufacturers to do? Developing and managing talent is a basic capability of any well-run business, let alone one with lofty growth targets. It’s an evergreen issue, and it’s enthusiastically discussed and debated in every single one of MAPI’s councils, whether the members are in charge of HR, running a business unit, or even a tax department. It’s such an important topic that for the last several years, we’ve held a best practices roundtable on talent management, with another planned for June 2015.
And it was also one of the central themes for this year’s Executive Summit, specifically building growth capabilities for an uncertain world. According to the Hackett Group, cracking the talent code can yield big dividends: companies with top-quartile talent management generate 15% better EBITDA and 22% better net profit margin.
One such top-quartile company is Johnson Controls, and we were honored to have Kim Bors as a featured speaker at the summit, talking about JCI’s practices for building a best-in-class talent pipeline. Kim runs HR for Johnson Controls’ $15B Building Efficiency Group and is a long-time member of and frequent contributor to MAPI.
Kim’s presentation (contact MAPI to request a copy) covered some of Johnson Controls’ latest work on increasing the learning agility of their people. Specifically, what they do to develop individuals who are continually able to give up skills, perspectives, and ideas that are no longer relevant, and learn new ones that are. Why is this important? As the rate of change within organizations accelerates, leaders are constantly required to adapt. Further, the behaviors and skills that are effective at one level don't necessarily lead to success at the next. Therefore, agility is a critical attribute for any employee in today’s climate.
Kim also discussed the issue of potential, and how important it is to understand that predicting success in future roles is different from performance (success in the current role). When discussing long-term potential, an individual’s current skill set is of secondary importance to their ability to learn new knowledge, skills, and the behaviors that will equip them to respond to future challenges. Johnson Controls’ processes allow them to assess potential so they can accurately predict the success of their people as they transfer to new roles.
This prediction can be challenging, as different behaviors are required to be successful at different organizational levels. Put another way, past performance is only predictive of future performance if the new role requires the individual to perform similar tasks. But the stakes are high, and the benefits to getting this right are substantial. As Kim stated in her closing, “organizations achieve greater levels of development and succession health by recognizing and understanding these variances in talent potential.”