Are you worried that your business could suffer from talent shortages in the future? What precautions can you take to prepare for potential staffing shortages?
Talent shortages are sometimes unavoidable—especially in today’s world. If you’re not prepared, then losing employees could leave your business vulnerable.
Here’s a look at the risks that come with talent shortages and how to mitigate them.
How to Plan for Staffing Shortages
Unfortunately, you can never guarantee that the talented people you hire will stay or develop as you thought they would. This can lead to talent shortages—when team members either leave the company or get fired. Let’s examine some risks that could leave you vulnerable to staffing shortages and ways you can mitigate those risks.
Risk #1: Not having enough qualified people lined up to succeed current leaders—To manage this risk, Bossidy and Charan, the authors of Execution, advise you to have solid talent development plans in place. This will give you a constant stream of internal candidates who can step into roles.
(Shortform note: Bossidy and Charan don’t provide clear suggestions for creating and implementing talent development plans. One-to-one mentorship can be especially valuable for high-potential employees who need support with particular skills, such as communication and leading a team. It may make more sense to pair them with mentors who’ve mastered those skills, even if they work in a separate department. Employees could also access external learning programs—online, in-person, or hybrid—that are not available internally.)
Risk #2: Vacant positions due to unexpected departures of key staff—Look out for red flags that someone might be inclined to leave. The authors recommend considering factors such as how marketable someone is to potential recruiters, their potential, and how long they’ve been stagnant in the same position. Also, assess whether people have been adequately rewarded for their contributions. If you spot any red flags, consider how you could entice the person to stay.
Risk #3: Not having people with the skills needed for the company’s next stage of growth—Your staff might be performing their current roles well, but that doesn’t mean they’re equipped to handle increased responsibilities following growth, such as a higher sales volume or launching a product overseas. Bossidy and Charan urge you to anticipate what skills you’ll need next quarter or next year, and be proactive in having qualified people ready to fill those roles.
Risk #4: Letting poor performers linger—Keeping poor performers on board in their current positions can destroy morale, sabotage the business, and send high performers running. Explore all options to eliminate this risk on a case-by-case basis. The authors suggest putting poor performers on a development plan, moving them to another position, or firing them. While all of these options can be emotionally challenging for both leader and subordinate, they’re necessary to keep your company strong.
(Shortform note: Bossidy and Charan acknowledge that handling poor performers can be emotional and difficult, but they don’t provide any guidance on how to deal with this challenge. In First, Break All the Rules, Marcus Buckingham and Curt Coffman provide practical advice on moving someone out of a role that isn’t a good fit. When having these conversations, stay composed and consistent in your feedback, and remember that removing an underperformer will benefit the rest of the team. Also, be sure to acknowledge that the employee does have talent, just not the talent needed for this particular position.)
|How to Define Potential and Incentivize Employees |
Whereas Bossidy and Charan provide basic recommendations for preventing staffing shortages, they don’t provide much guidance on how to define potential when looking for staff to fill leadership vacancies or upcoming skill gaps or advice on how to reward and incentivize at-risk people to stay in their roles in a way that doesn’t alienate other high performers. So how do you know which people are capable of becoming future leaders? And what’s the best way to incentivize high-potential people to stay and continue developing with the company?
The best way to identify high-potential employees is through the regular performance reviews we discussed earlier. Alternatively, invite junior managers to nominate employees who show the most promise. To assess promising employees’ potential, weigh these five essential traits:
Their desire to positively influence others—You want people who are passionate about the company’s mission and are motivated to see others succeed.
Their resolve to engage others, discover new ideas, and create lasting solutions—You want people who are constantly seeking out deeper understanding through inquiry and feedback.
Their sense of identity—You want people who think of themselves as leaders who create change.
Their skills—You want people who are equipped to perform the necessary tasks so they can apply their knowledge to the job at hand.
Their knowledge—You want people with the learning and awareness needed in their particular role.
Once you have your list of high-potential employees, inform those candidates that they have been designated as such. Research shows that this type of transparency improves employee productivity and retention. Then, develop your high-potential employees through a combination of mentorship, informal coaching, formal training programs, and on-the-job experiences that challenge and motivate them. Gradually expose them to more responsibility and tasks that require more advanced skills so they can integrate their learning without becoming overwhelmed.
Now, what about retaining these high-potential employees? It’s important to reward them for their commitment to developing and contributing at a higher level. But don’t go overboard with financial compensation, which could alienate employees who are not designated as high potentials. Instead, balance external motivators, such as money, with internal motivators, such as recognition.
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Like what you just read? Read the rest of the world's best book summary and analysis of Larry Bossidy and Ram Charan's "Execution" at Shortform .
Here's what you'll find in our full Execution summary :
- What execution in business is and why it matters
- The three core functions that leaders must perform to execute well
- The three important qualities leaders must have to execute well