The New Imperative of Talent Transition

The talent supply and demand equation has changed the way companies view the talent life cycle and talent management process from sourcing to transitioning employees. It is also transforming the way companies treat departing employees. Gone are the days of viewing employees as a depreciated asset to be discarded. Human resources is now human capital – an investment to be grown and treasured for the long term profitability of the organization. When employees leave an organization voluntarily or involuntarily, rather than ex-employees they become alumni. Indeed, the relationship with alumni is becoming as important as the relationship with candidates and employees – one to be nurtured for future referrals and even potential re-employment.

Alumni Matter

Over thirty percent of new hires are referred by employees or alumni… How does this shift in talent strategy change the way companies view outplacement? No longer an after thought, outplacement is a vital service in the career development continuum and the talent life cycle. “Employee transitions must be handled with the same care and concern as the candidate selection and hiring process itself,” commented Patricia Mitchell, former Senior Vice President with Texas Medical Center. Departing employees are not “depleted resources”, but rather talent re-entering the pool of potential candidates on which the organization must draw for its ongoing success and future growth.

Recruiting Strategy

Over thirty percent of new hires are referred by employees or alumni and increasing that percentage is the most viable and cost effective strategy for organizations to find the top talent they seek for continued profitability and growth. Providing professional and customized talent transition services is an investment in the ongoing relationship with departing employees –alumni. Ensuring that the appropriate level and quality of services is provided to departing employees is essential to a positive ongoing relationship with those alumni.

The engineering and construction industry has understood this reality for many years because their employees typically are assigned projects, which, when completed, make the employee a “free” agent if no new assignment is available. Gary Carlson, former Vice President, Human Resources for McDermott, an international engineering and construction company observed, “Outplacement is a value-added investment to ensure a positive relationship with transitioning engineers and project managers who are viewed as valuable potential talent for winning future project bids.”

Talent Relationship Management

Retaining employees is a key business imperative. Treating transitioning employees with respect and dignity sends a message to employees that regardless of the reason for departure, every employee is valued. The growth of the contingency workforce, the talent war, and the realities of the increasingly project- driven and global economy, have made outplacement and talent transition an essential service in progressive and successful corporations that value talent management. In fact, similar to customer relationship management, the best practice organizations are developing a talent relationship management process that elevates candidates, employees, and alumni to the valued status of internal customers!

An excellent example of this customer – centered philosophy is demonstrated in Ernst & Young’s innovative alumni relationship program. Sharon Kirchoff, former Director Alumni Relations Gulf Coast Area, shares: “Ernst & Young highly values its transitioned employees or ‘boomerangs.’ We recognize that in today’s competitive job environment maintaining communication with our alumni gives us a competitive advantage. These relationships support both our recruiting and business development efforts. Our formal alumni relationship program includes online and live career and networking resources, which facilitates an ongoing dialog. It is not only popular with our alumni, we believe this initiative also reinforces our overall talent management philosophy that places a high value on each employee and ultimately improves retention.”

Another unique way companies are improving the management of talent is necessitated by the impact of out-sourcing, off-shoring, restructuring and mergers – it is through strategic redeployment. Tom Durkin, former U.S. Regional Human Resources Leader with Shell IT International observed, “Assessing the competencies of employees whose positions are affected by restructuring, evaluating needs in other divisions and departments for those competencies, and assisting employees in finding appropriate internal opportunities, enables Shell Oil to increase retention, reduce transition costs and improve talent management and career development. Redeployment is a real win-win talent management strategy for the company and employees.”

Another aspect of talent transition is “retirement” planning. The percentage of workers over age 50 is significantly growing as the baby boomer generation ages, greatly impacting the workforce in which 1 in 3 workers are already over 50. A shortage of talent challenges all industries and will be particularly critical for the health care industry as service demand increases along with our graying population. Many industries such as manufacturing, energy, and engineering and construction are experiencing a rapidly aging workforce as younger employees select careers in the newer high tech and service industries. Progressive organizations realize that retiring employees are a pool of talent that must be accommodated in unique ways to keep them engaged and to retain their valuable expertise. Retirement / life change / financial planning / career planning are all topics that should be offered to employees approaching retirement age.

Retention – A Key ROI

Ultimately, effective talent transition delivers a high ROI through increased retention, reduced recruiting costs and even improved candidate and employee quality. Two generations ago worker loyalty was garnered by simple exchange for a paycheck. However, in the last 30 years, the equation has changed with the advent of technology, complex financial restructurings, outsourcing, growth of the contingency workforce and globalization. These changes are dramatically redefining the workplace loyalty equation. Many prognosticators declared that these changes made loyalty in the workplace irrelevant or at the very least unachievable. Instead, the loyalty equation now defined as engagement and retention has become more important than ever to organizational survival and growth. Now far more complex, gaining worker commitment requires an understanding of the needs of a dynamic and diverse workforce.

Research has shown that retention depends primarily on how employees are treated by supervisors and on availability of career development opportunities. As workers transition from an organization their treatment is a very visible factor and will either increase or decrease trust and loyalty by remaining employees. How they were treated in the transition will also influence how the departing employee views and talks about the organization in the future.

It has been said in customer relationships that it takes 10 positives to overcome one negative. Bob Parkey, a Newport Board consultant and former President and CEO of international plastics manufacturer ICO, Inc. said, “In talent transition, you have just one chance to get it right. There is nothing a company can do to right a poorly handled transition in the eyes of the departing executive or employee.” If there are legal actions, the cost can be staggering. And there is additional risk exposure as a result of the new discrimination rules. For remaining employees who keenly observe their co-workers and colleagues departing, the cost to regain damaged trust from a poorly handled transition is immeasurably greater than the cost of a professional transition program.

Retaining employees is a key business imperative and treating transitioning employees with respect and dignity sends a message to them and remaining employees that regardless of the reason for departure, every employee is valued. Whether the job market is hot or not, the need to provide a professional transition process and to maintain positive relationships with transitioning talent – internally and externally –does not change. Indeed, alumni may be your best source for the next top candidate by referral or direct hire. Treat them like they are a prime customer whose product or service needs have shifted, and you will reap the reward in future returns on positive talent relations.

Ultimately, effective talent transition delivers a high ROI through increased retention, reduced recruiting costs and even improved candidate and employee quality. If your organization views outplacement as an unnecessary cost, it is time to re-arm yourself for the talent war by redefining your talent transition process before your competitors win the war for top talent.


By Sheryl Dawson, CEO
Dawson Consulting Group

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