Talent management

24 and 25 February 2010
National Convention Centre, Canberra

Thank you for the opportunity to speak today.

The topic of talent management and issues of workforce development are very timely. As a part of the current review of the APS led by the head of PM&C Terry Moran, we are reassessing the capability and preparedness of the service to respond to current and future challenges. The performance of our workforce, our ability to attract, engage, develop and retain key people in key jobs is vital.

I don’t want to pre-empt the blueprint for reform that will come out of that review, but there are many signals in the work thus far and in the many submissions received that go to the heart of what we are discussing today.

When I talk about talent, I am referring to those individuals who can make a difference to organisational performance, either immediately or in the longer term, by demonstrating they have high potential. When I talk about managing that talent I am concerned with the systematic identification and development of those particular individuals. Business and institutions across the world are increasingly highlighting the criticality of getting talent management right in order to ensure orgnisational success. A focus on putting the right people in the right positions is part of the organisation’s strategy to ensure flexibility and adaptability to meet changing challenges and markets.

So what does that mean for the APS?

By way of snapshot, the APS has just over 162,000 people employed in about 95 agencies, ranging from 27,000 employees in Centrelink down to less than 10 in several agencies including the Office of the Renewable Energy Regulator.

More of those employees are women than men, and the gender gap continues to widen. 58% of employees have a graduate qualification, and this too is increasing; 68% of all employees engaged last year had a graduate qualification. Contrary to popular belief, nearly 2/3 live outside Canberra and the APS isn’t a closed shop - 45% of all vacancies were filled from outside the APS last year, and this increased to 52% of all SES recruitment.

As an organisation we are getting older, especially compared to the general labour force. Our median age is 42, and in the next five years 45% of SES and 30% of EL employees will be eligible to retire.

It is that environment that shapes and informs our talent management imperatives and initiatives. The retirement demographic for instance represents a significant challenge in terms of replenishing what will be lost.

A sports scientist once said “if you want your kids to be good athletes, marry a good athlete”. Clearly we can’t breed for talent, at least not quickly, but sporting bodies have for many years identified what it takes to be, for example, a good rower, then gone looking for people with those attributes.  Whether or not they currently row is not the main criteria; rather, it is about getting the raw material then training it to be a good rower. 

Talent management in our world is arguably no different. We are looking to identify and then develop the “rowers” we need to make a difference to our public sector organisations in the future. Where they come from and what they are currently doing is a secondary consideration.

Without wishing to extend the sporting metaphor too far, you need rowers with different talents and contributions: you need a ‘stroke’ at the front to get the timing right, a ‘bow’ at the back to ensure stability, a middle crew to provide energy and drive, and not forgetting the ‘cox’ who provides guidance and direction. In short, you need the right people in the right positions with the right skill sets, working effectively in collaboration, to really make a difference to the boat’s performance.

Therefore in taking a systematic and integrated approach to the management of talent, we need to be sure that we are developing the right sort of talent for the roles and positions that will really make a difference in the future.

However, there is no doubt that talent is an exclusive concept. It’s a differentiator. Not everyone will be viewed as having talent, in the sense that I described it earlier - namely, the talent to make a difference – but that talent can be (and needs to be) realized in different ways.

Work by the Corporate Leadership Council suggests that 71% of high performing employees are not high potential employees; that is, they don’t have what it takes to excel at the next level of the organisation. Further, only 8% of staff have a strong chance of achieving high potential at their next level of employment. As you move up the ladder, that high potential pool gets smaller and smaller, so proper management is critical.

The CLC then looked at the people that made up that 8% and found they had the following characteristics:

• a desire to succeed
• a commitment to the organisation
• possession of the necessary skills and abilities

 

The resultant model of employee potential shows that such people occupy the ground shown by the intersection of those three characteristics. People can obviously be pushed or moulded towards that patch, and some of that pushing is easier in some fields than in others.  What should be apparent however is that simply having a model of, say, learning and development might improve capability, but it won’t necessarily do anything about engagement. It might result in a highly skilled individual, but one who lacks the desire and the commitment to become a truly talented and transformational leader.

A strategic and holistic approach is required - without it, to paraphrase the Hay Group,  “the talent management cogs simply spin rather than mesh”.

Talent management isn’t something new for the APS. We have been in the game for a long time - the very basic task of recruitment is a talent identification process. During 2008–09, across all agencies, the APS engaged 12,963 ongoing employees, or about 9% of our workforce; if we weren’t trying to identify talent that’s over 12,000 wasted opportunities.

We also engage in learning and development, executive coaching, induction programmes, performance management, reward and recognition, graduate and skill based recruitment, exit surveys, succession planning and assessment centres.

We do target this at specific segments and needs. APSC SES programs for instance are focussed on developing our SES leaders. The Finance Jobs project is an ongoing strategy to recruit economists and the Gershon ICT review was designed to address identified gaps in capacity and to improve recruitment, retention and engagement of ICT employees. A range of initiatives help onboard the 1000 graduates we recruited last year, and specific agency projects have resulted in talent warehouses to assist future recruitment (DEEWR), regional hubs to take the jobs to the employees (ATO) and a Succession Council to oversight senior succession planning (Centrelink).

However to see talent management as a series of separate actions misses the key point, namely that talent management is a system or a strategy. It might felicitously all come together through engaging in those things, but more than likely it will only ever be as strong as its weakest component, and the lack of a systematic approach may well not even identify what that component is.

It would be fair to say that as a jurisdiction or employer we have not viewed or carried out our responsibility or our effort in a sufficiently joined up way. In this years State of the Service Report only 8% of agencies reported having active talent management strategies in place, although 36% reported they were developing such strategies.

As well, 41% of agencies reported facing some type of barrier or impediment to managing talent. The most frequently cited barriers (particularly for small agencies) were the inability to provide career and mobility opportunities and - somewhat of a Catch 22 self fulfilling prophecy - not having a framework or strategy in place to develop and manage talent.

More strategically, have we looked at the issue through a future focused lens and asked ourselves what do we know about our talent pipelines, our leadership attitudes and our future capabilities? Have we analysed the workforce to determine the critical positions and the talent reservoir? Have we redefined our jobs and their needs in light of a changing environment.

I suspect the answer is no. We have tended to focus on replacement planning - someone leaves so we look to fill the hole. Talent management needs to occur in a context of role-critical job management, and the broader capability sets that need to be built. The process of “filling the job” may be different depending on the lead time required given that broader context.

We also need to ask those questions at a higher level. The APS reform process has revealed our tendency to behave as silos rather than a whole, and our talent management agenda has to move outside simply an agency based approach.

Our innovative practices are also offset by poor performance elsewhere. For instance, we have let the myths emerge and drive bad recruitment practices, rather than deploying and utilising the flexibilities inherent in our Act and our system to develop best practice.

From an APSC perspective, the time is right to recalibrate our efforts, and refine our policies and practices.

We aren’t though a renovators delight. There is no doubt that the APS is a high performing public service:

• It is a global leader. In most international comparisons Australia is in the top five recent report prepared for the (UK) National Audit Office).
• It is efficient. For over a decade now, the APS has had to make considerable cost savings to fund wage increases (around 2% p.a. over wage cost indexes) and the efficiency dividend (3.25% effective from 1 March 2008 to 30 June 2009). This compares very favourably with annual labour productivity growth in the economy more broadly (State of the Service Report 2007–08).
• It is ranked among the leaders in terms of customer service.

However that strength and that achievement is coming under increasing societal and government pressures.

The Government’s policy agenda is ambitious, reform-focused and long-term.  It strives to be more citizen focussed, and citizens themselves are demanding that it be so. Technology has transformed how we do so much of our business, and economic realities local and global continue to apply pressure. To meet both our current and future requirements we will need strong across the board capability and we will need outstanding leaders. Put another way, we will need talent.

In his ‘John Paterson Oration’ last year, the Prime Minister stressed how crucially important it is that the APS does more to attract, train and retain the very best people. He observed:

“The APS must have its proper share of the nation’s most talented people, because ... the challenges facing government are as tough, intellectually demanding and important for our nation’s future, as the challenges facing any of our businesses or non-profit organisations. It is the view of the Government and the heads of the APS that only by hiring and promoting the best people can we solve the great challenges of our time”.

Our share of the best must of course be the best of what we need. The APS reform process has focussed on strategic capability in ideas, policy, service delivery, stakeholder engagement and negotiation. A long term perspective has been emphasised. From the State of the Service Report we know we have a continuing, though improving, need for ICT and accounting skills, and a growing gap in high level policy and research skills.

 

Our planning must consider those gaps in the demographic environment I outlined earlier. An older more female work force may mean a greater emphasis on building flexibilities such as home based work, more part-time work and job sharing.

Much of what we need to do is within our gift and particularly our leaders gift. But there’s the rub. That same demographic environment has a likely early exit of those very same leaders. What we do about that particular pipeline in the next 5 years will be key.

The literature reveals that there is no ‘one size fits all’ approach, and what works best organisationally will depend upon variables relevant to that organisation. Where you want to be and where you have to come from, how resource intensive you can be, the existing talent profile - these are all relevant to formulating a relevant strategy.

However, there are some common elements to a successful strategy, and some common understandings of why strategies fail. Key among them is that there must be organisational clarity about whatever strategy is ultimately put in place. There must be a shared vision, a committed understanding of the value of talent management and a consistent message about what talent management is and what it will do.

Other challenges to a successful strategy include:

• talent management being seen as the function of HR, not a business accountability supported by HR
• a failure to address underperformance
• a focus on development as the easy default option at the expense of tough measures to get better deployment
• not enough ‘quality’ time devoted to talent management
• a confusion between performance and potential
• lack of talent management infrastructure

As part of its submission to the reform process, the APSC put forward an approach to harness our future talent.

An overarching APS framework would consist of a number of elements, underpinned by a strategic framework and integrated implementation. Each of the elements would be deconstructed to ensure that the relevant variables were identified and addressed. 

Much like developing athletes, elements of the approach will need to be elitist. A key focus would be on what have been called superkeepers - that small group of high potential talent that will transform and lead the APS into the future. Again as with sportsmen performance will be critical; identification as high potential will not be for life and people will move out of the high potential talent pool if they are not living up to expectations.

So too the approach needs to be porous enough to admit people at many points along a working continuum, not just at a single entry point, and it must admit them from wherever they can be found. We need to be cognisant of the value of growing our own, and importing as needed.

At the same time, the development of all staff needs to continue. Whatever might be the value of the highly talented few, the skills and abilities of the many are what will get the job done. A strategic focus on the identification, development and deployment of high potential talent would clearly fail if it relied on a distinction between the ‘talented’ and the ‘untalented’. Indeed, one of the distinctive and universal characteristics of this high potential group, would be their ability to build capability throughout the organisation and enable others to perform to the highest possible level.

How to drive such an approach is another issue. In the  Netherlands, when they established their version of the SES in 1995, the de Algemene Bestuursdienst or ABD, they also set up the ABD Office, a centralised unit responsible for people management of the top public servants. By contrast, we generally have an agency based approach to SES management.

In the UK Civil Service, they are using a tripartite approach to high potential development involving a collaboration between the Cabinet Office, the National School of Government, and Departments but overseen by a Senior Leadership Committee chaired by the Head of the Public Service, Sir Gus O’Donnell.

In the APS, keeping in mind the size and variables involved, work by the Commission has suggested a hybrid model involving a partnership between a central agency with responsibility for high potential talent management, with agencies responsible for ongoing development and career progression, may be appropriate.

You will see from the diagram that we view the need to manage the top talent from an APS wide perspective, and build in capacity to spot and fast track talent wherever it might be. You will also see the diagram acknowledges that there is still a large scale effort required on the part of agencies to manage the bulk of employee development.

We do have some natural advantages in the APS. As a single employer with ‘thousands of opportunities’ we have the potential to create opportunities for individuals or teams in order to broaden their experience and skills sets. As well, survey results indicate that the complex and challenging nature of the work and the ability to ‘make a difference’ are strong attractors for future talent.

Table 1.2: Ongoing employees—number of agencies worked in, 2000 and 2009

Classification	One agency		2–3 agencies		4 or more agencies
	2000	2009	2000	2009	2000	2009
APS	79.0	87.3	19.2	12.0	1.9	0.7
EL	59.2	68.4	31.2	26.7	9.6	4.8
SES	37.4	45.4	39.4	36.7	23.2	17.9
All	74.8	81.7	21.6	16.2	3.7	2.1

We also have some inherent weaknesses. Deployment through mobility is extremely low; 81% of APS employees have only ever worked for one agency, and only 2.1% of employees have worked for 4 or more agencies. You can see from the table that this has been an increasing trend over the last 10 years. The rates are better for the SES, although 45% of SES have still only worked in one agency.

There are structural reasons for that - pay and classification structures for a start - but there are cultural reasons as well. Our structural silos tend to create an environment of ‘each for themselves’. We therefore see talent as belonging to ‘us’ rather than ‘the APS’, and mobility is constrained as result.

There is a different tension though if one looks at sustaining the organisation as opposed to sustaining the APS. It is ultimately agencies that fail, not the APS, and too aggressively or haphazardly moving the talent may well do harm to organisational capability. Similarly, the balance has to be struck between developing a depth of experience and exposure, and maintaining sufficient organisational experience and expertise.

It’s a rich and complex tapestry, but I don’t think we can argue with the position that talent management is pivotal to the APS of the future. How we go about doing it really will determine whether the APS can become the best public service in the world.

Thank you