C-suite executives, Human Resources personnel, academics, management consultants and numerous other observers long have warned about the dire implications of what is commonly referred to as “the talent shortage.” Although their assessment should be taken seriously, the terminology clouds the situation.
“Talent shortage” is a description of a condition, not a cause. The cause, instead, is a failure to identify and develop talent, especially talent from diverse backgrounds, and unless the cause is understood, the condition can’t be remedied.
The Scope of the Problem
Let’s start here:
· Talent is potential. But talent is wasted unless you actually turn it into something. And then figure out how to use it.
· A lot of people have talent. In fact, talent is evenly distributed among race, gender, geography … everything.
· We’re not developing the talent in a way that’s evenly distributed across all groups.
· The result: qualified women, minorities and people from impoverished backgrounds aren’t effectively educated, aren’t hired, aren’t developed and aren’t considered for promotions.
The talent challenge is pervasive across organizations. Managers and department heads aren’t being held accountable for identifying diverse talented staff and then developing them. Likewise, too many Chief Executive Officers and Boards of Directors are failing to build the next-generation of diverse executive-level talent, particularly future CEOs.
Each is a serious problem. Combined, they represent a major issue to overcome. “The business case for mobilizing new and diverse talent sources has never been stronger,” writes Michael Grover of Mercer and Charlene Solomon of RW3 CultureWizard.
In this column, we’ll focus on challenge #1: managers and department heads and their direct reports. We’ll devote the next column to developing future C-level executives.
Issues to Consider
Several issues impact talent-shortage concerns: among all demographic groups, the list includes pre-existing silos or walls that prevent narrow efforts that are not company-wide; lack of measurement; utilizing one-size-fits-all programs, and viewing companies as monolithic.
The issues more specific to underrepresented groups: Unconscious bias; existing diversity policies, operating/organizational structure of the company, leadership philosophies and abilities, and understanding and aligning with the many cultures that comprise a company.
“In many cases, companies experiencing labor shortages need to take a realistic look at their demographics,” writes Amanda Pennington. “For most employers, young talent and diverse talent is the same thing; new hires should be a mixture of different ages, ethnicities, genders and backgrounds.”
To simplify what isn’t a simple situation, the issues most adversely affecting women, Blacks and other minorities can be grouped into the following three areas:
- Talent visibility. Almost 70% of the U.S. population is not a white male. Yet we know that white males dominate management and leadership roles. Bringing the issue into focus: If you are looking at a typical corporate org chart, scan down to the support functions to find female names. Then search out the operation and technical-and-buisness-development areas (which directly impact profitability) and you ‘ll find the male names.
Question: How did that occur?
One answer: Networks. We know that networking plays a significant role in hiring and that networks tend to be homogenous.
Implication: Unless managements become intentional about searching out and breaking into new networks – and changing the way they identify prospects – the outcomes won’t change. And much of the non-white male talent in the 70% bucket will continue to be ignored.
· Talent development. Assuming some level of progress is made on the visibility issue, we then encounter the development hurdle. Feedback and mentorship are critical to the development of talent. Yet, women and people of color are less likely than white male counterparts to receive either.
“There’s a very clear trend that women are having a harder time in the workplace than men, women of color are having a harder work experience than white women and Black women are having sort of the hardest experience overall,” says Rachel E. Cooke, Lean In’s deputy director of communications.
She adds that LeanIn’s study, Working at the intersection: What Black women are up against, found that just 26% of Black women say they’ve had equal access to sponsorship and 59% say they’ve never had an informal interaction with a senior leader at their company.
· Talent promotion. OK, taking the what-ifs an additional step: We’ve identified talent and we’ve begun to develop them. Here’s the next problem: Studies show people of color and women are not promoted at the same rates.
“The challenges women and Black women face in the workplace are really daunting, and very real, and we’re never going to fix them unless we first focus on the fact that we have them,” says Sheryl Sandberg, Chief Operating Officer of Facebook and the founder of LeanIn.Org. “Companies and people who believe they’re meritocratic often have more bias. If you believe you’re great at these issues you’re actually probably more biased, because biases run deep,” she said.
Talent promotion, of course, is impossible without employee retention. “The cost of employee turnover is incredibly high, impacting not only operational costs, but also revenue, productivity, company culture, customer experience and more,” writes Marc Holliday, Senior Product Marketing Manager at Oracle NetSuite.
Think about this tech industry statistic: According to the Centre for Talent Innovation (now Coqual), twice the number of women leave jobs in the tech sector as men do and more than half say goodbye to tech for good.
Actions to Take
Much work needs to be done, both because it is the right thing to do and because diverse organizations actually perform better than non-diverse ones. Despite being ignored by a rash of companies, the initial steps are straightforward and can be incorporated into any company.
· Broaden your aperture of where you look for talent
· Proactively and intentionally build expanded networks
· Ensure everyone receives the feedback they need to develop
· Encourage mentorship and sponsorship
· Track rates of promotion and pay increase across various groups including ethnicity and gender. Intervene where there are anomolies
To succeed, programs also need to touch every square inch and every person (each region, function and operating group) of a company.
“People don’t learn just by taking online classes or reading articles. And they don’t absorb new material in a day or even a week,” states Jens Baier, Deborah Lovich, and team at Boston Consulting Group. “Building knowledge requires focus, practice, coaching, and the forming of new attitudes, all of which take months.”
We’ll look at the C-suite in the next column