Organisations are experiencing the need to both appropriately manage existing talent to ensure retention, as well as beginning to look elsewhere, including offshore, for the talent needed to fill critical positions. We explore our six levers of talent management as well as tips to overcome talent shortfalls.
Organisations are facing challenging operating environments across Australia. With the unemployment rate currently at a low 3.5 per cent, as reported by the Australian Bureau of Statistics (ABS) in May 2023, skill shortages across multiple industries, and around 67 per cent of employees engaging in ‘quiet quitting’ completing only the bare minimum of what is required within their role, many employers are currently grappling with lack of talent in the Australian market. Organisations are experiencing the need to both appropriately manage existing talent to ensure retention, as well as beginning to look elsewhere, including offshore, for the talent needed to fill critical positions.
In this article we explore our ‘six levers of talent management’ designed to help combat employee disengagement, stress levels and employee movement, as well as tips to overcome talent shortfalls, including ‘borrowing talent’ from overseas markets.
Six levers of talent management
The ‘six levers of talent management’ is a useful framework to ascertain the different ways organisations can solve talent gaps, while also asking how to build a specific strategy that will help them learn what types of talent they are going to access, for which types of roles.
Lever one – Build
This lever focuses on internal talent - retaining key employees and their capabilities within the organisation through support and training. It’s a longer- term plan that won’t give you the talent you need overnight but provides a critical talent strategy.
This stage involves thinking about the future longer-term critical capabilities you are going to need in the organisation. This may include activities such as graduate programs and internships, moulding these people to become the future leaders of the organisation.
Another reason to investigate a build strategy is when there are certain position levels that are particularly difficult to hire externally. For example, those middle levels of capability are currently quite tough to find in market with a lack of candidates available. Building this capability from within is going to be one of your major sources of fulfilling this capability requirement in the future.
Lever two – Buy
The buying talent lever is one that organisations rely on most – when we need talent, we buy it. This stage is all about external recruitment, going to competitor organisations or adjacent industries where we know that a similar skill set is used and recruiting into the level that the organisation needs. This lever is particularly useful when organisations are looking at capabilities that are needed from a succession planning perspective, that aren’t available inhouse. Alternatively, there may just be gaps, such as in certain leadership positions, that the organisation isn’t able to build from within and will need to continually recruit externally.
If you’re organisation is currently going out to market and ‘buying’ talent, it’s highly likely you are struggling to get the quality of candidates that might normally be received. This is partially because of the low unemployment rates and immigration issues which we will explore in more detail later in the article.
Lever three – Borrowing
The borrowing talent lever is an interesting one which we are seeing more organisations think through in the current environment.
This can be borrowing talent from other areas of the organisation, outsourcing a function to a third party, or bringing on a contractor. There are many reasons that this strategy might be the best option. You might be working on a particular project, building your business in a certain area, overcoming a specific challenge, or looking to boost your business to the next level of growth and maturity. Ultimately, you only require the capability for the short-term, such as a 12-month contract.
Borrowing talent is currently being used regularly in the payroll, HR, IT and finance spaces, where an organisation may have a relatively small function and the risk of having a vacancy means this service can no longer be conducted.
Borrowing talent is an interesting strategy to think about, considering what elements of your business may be reduced from a risk perspective if you were to borrow talent to complete that function.
Lever four – Bind
The binding lever will be critical in our current environment. This lever asks the question ‘how do we bind people to our organisation?’ It looks more broadly around your employee engagement and uses engagement to ensure retention. We're seeing many organisations start to proactively think about their culture, and actively designing their future culture. They’re looking at every aspect of their operation from office spaces, flexible work patterns, promotion opportunities and support to make sure they're fulfilling the needs of their employees.
Binding isn’t about everyone. It focuses on specific individuals within your business that are critical to your ongoing success, particularly where you've got succession gaps or areas that you are relying on specific talent pools. It's about truly understanding what those individuals are looking for, understanding the potential risk around their willingness to stay or propensity to move on, and putting very targeted strategies around that.
Old retention strategies, such as bonuses, do work but generally for a finite period of time. The key is to understand career objectives, and make sure the organisation is fulfilling as many of these objectives as possible.
Lever five – Boost
Boosting is about pushing through planned promotions of critical staff earlier than anticipated and putting in place the necessary supports to ensure their success, thereby binding them to the organisation. In some situations, it can be helpful for an organisation to sit back and consider what the opportunity might look like for the employee if promoted sooner than in normal circumstances, and what might the organisation need to do to help them be successful.
This strategy is useful in situations where you need to accelerate building a certain capability that you might not be able to get externally, or you might not want to get externally because it may block the progression of someone who you want to develop in the organisation.
Lever six – Bounce
The bounce lever is often the most critical in many respects.
When there are talent shortages, leaders and HR managers can be reluctant to exit or ‘bounce’ people from their organisation, even if it’s necessary. Bouncing requires you to think about what capabilities or individuals you have that no longer serve the function of your organisation. It may be that as you've gone through your growth, you have certain talent that no longer align with your strategy, or the strategy may have shifted. It could be a result of poor performance issues or a culture misalignment. Either way, keeping people who don’t fit with your organisation can be a waste of resources and block other valuable talent from being able to progress.
As much as it is painful at times, we always recommend sitting and objectively looking at what the impact is of maintaining people within the organisation who are no longer serving the right purpose, and then thinking about how to respectfully move those individuals out of the organisation.
The key to implementing all these levers is strategising and planning ahead. It’s about being very clear on the capability that you need and knowing how and when you will get them.
Leveraging migrant workers to manage talent shortages
Australia's migration program has contributed to our 30 years of economic prosperity, the longest period of any country in the world. While border closures halted this, between February and May 2023, the Department of Home Affairs has received some 4.7 million applications including employer sponsored temporary and permanent entry visas to address skilled workforce needs.
While Australia’s immigration laws and policies are complex and highly codified, many employers are recruiting from overseas as they cannot fill positions from within the Australian workforce.
Employers have a range of Visa options including the subclass 400 Visa which allows for highly skilled specialists to undertake short-term non-ongoing assignments, the subclass 482 Visa Program which enables the recruitment of skilled workers for between two to four years depending on the occupation, and the subclass 186 Employer Nomination Scheme which allows for permanent residency once the Visa is approved.
Australia as a nation of immigrants, with an ageing population and slowing population growth will continue to rely on the skilled migration program, to meet skilled workforce needs.
In doing so, Australia competes with all high-income countries for talent, in the post-pandemic world.
It is best to seek expert legal advice regarding your workforce needs and the visa options that may be available to address these, when positions can’t be filled from within the Australian workforce.
Questions? Contact us.
If you'd like to find out more about talent management, get in touch with BDO's People Advisory team today. To learn about leveraging the international workforce, reach out to our Migration Services team.