War for talent – time to change direction

War for talent – time to change direction

Robert Bolton discusses the findings of the recent global survey of People and Change practitioners.


Partner, Global HR Centre of Excellence

KPMG in the UK


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People on Zebra Crossing, Hong Kong

In the 17 years since The War for Talent  changed how companies manage talent worldwide, HR approaches have focused on top tiers and high potentials. Now, after a short break due to the economic crisis, I believe the ‘war for talent’ is back in full force. Companies which take a fresh look at their tactics stand to gain more competitive ground as a result.

Skills shortage importance

KPMG International’s survey of HR professionals working in KPMG member firms across the globe revealed over 80 percent of respondents see addressing skills shortages  as more important than two years ago. They also believe it will become critical in the next two years. Skills shortages are set to increase as globalisation and competitive pressures affects all sectors and industries, while improving economic conditions spur employees to find new jobs.

But this new war for talent is different than in the past. The battleground is shifting as demographic and generational issues change the nature, perspective and interests of key workforce groups. Younger, skilled workers are less interested in traditional roles and see themselves as free agents, and management has been slow to respond. Further, market shortages of people with skills required for emerging roles is the most critical.

New talent management strategies

There is little evidence that typical practices engendered by The War For Talent actually contribute to improved business performance. An analysis of the 106 original adopters of the ‘War For Talent’ best practices shows that, 15 years later, certain practices have not substantively helped corporate survival and performance. These include forced distribution of appraisal ratings to nine-box grids to high-potential management development schemes. Only 25 percent of the organisations can be said to be performing well in their market place; a third have disappeared entirely.

It is time to turn to new, more relevant and holistic strategies for managing talent.

Using data to make decisions

Central to this is using data to drive decision making. We can now use technologies that enable robust data and analytics capabilities, allowing HR functions to evaluate and make evidence-based decisions to positively influence business.

For example, a KPMG UK retail banking client, Santander, wanted to make better-informed decisions about its recruitment, training and workforce. They were looking to improve branch performance and better position itself as a market leader in banking. By analysing the practice of people management, the data showed that, for the first time, Santander’s highest performing and better-engaged branches had a more flexible workforce. It had a higher proportion of part-time workers. The study also showed that the network’s highest-performing branches had retained their most experienced employees, and showed a higher average age and tenure of staff.  As expected, the best performing branches also showed lower absenteeism and higher employee satisfaction.

Rather than following industry trends and adopting off-the-shelf solutions, companies should develop distinct talent strategies tailored to their products, markets and business goals. Then, they can put powerful new data and analytics capabilities to work to gauge their success and fine-tune their people practices.

Genuine opportunity

A genuine opportunity exists to adopt a new, different HR approach, which drives business value, but requires significant effort. Organisations that are ahead of the curve and who take this more holistic view stand to benefit. Those which take a narrow approach with pre-conceived notions risk losing far more than simply the war for talent.

This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.

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