Why Talent Should Be a Strategic Priority

Monday I looked at how HR will change post recession, and Wednesday I looked at how companies and CEOs will change due to the influences of the recession. But these changes do not happen separate from each other, of course.

McKinsey recently described well where changes to HR and the company critically converge – prioritization of talent and talent management.

“Companies like to promote the idea that employees are their biggest source of competitive advantage. Yet the astonishing reality is that most of them are as unprepared for the challenge of finding, motivating, and retaining capable workers as they were a decade ago. Since investments in talent intangibles are expensed rather than capitalized, managers may try to raise short-term earnings by cutting discretionary expenditures on people development. This tendency may turn into a vicious circle: a lack of talent blocks corporate growth, creating additional performance pressures that further divert the attention and thinking of executives toward the short term."

As discussed on Wednesday, short-term decisions to satisfy shareholder wants have been a key contributor to the poor long-term effects leading us into this current economic mess. Managing the talent you have is equally important. You must invest in employee needs for self actualization and self esteem as seen in the upper levels Maslow’s Hierarchy of Needs.

Consider that 85% of a company's assets are tied up in intangibles – people. What are you doing to ensure you are getting the most value out that very significant investment? Join the discussion in comments.