Workforce Development Programs Become ‘Table Stakes’ to Land, Retain Top Employees: New Report
By Dave Hendrick
University of Virginia Darden School of Business student Aniket Patil (Class of 2019) will likely pursue a career with a large consulting firm after graduation. The San Francisco Bay Area native knows and likes the work — he spent six years in various roles at Deloitte before coming to Darden — but there’s another factor driving his decision: the positions typically come with ample training and development opportunities.
“We all know that we need a lot of skills development in order to be successful in this age, and the pool of companies that provide that sort of training seems to be narrowing,” Patil said. “I think that’s one reason that, if you look at elite universities across the U.S., the pool of industries and company types that top graduates are going to has been narrowing for quite some time.”
That dynamic is a key factor driving Darden students to the fields of consulting, investment banking and technology, Patil said. While talent development plans and opportunities vary widely from company to company, the three sectors have collectively attracted roughly 70 percent of new Darden graduates in recent years.
A generation attuned to the need for continual skill development requires a new organizational approach, and savvy companies are investing in their talent, even without the guarantee of long-term tenures with the organization.
That’s one of the findings of a recent white paper from Darden Executive Education, “Rethinking Talent Management: A Brave New World,” written by Darden Executive Education Managing Director Lisa Cannell (EMBA ’17).
The research, based on more than 50 interviews with talent executives with large companies in a variety of industries, seeks to better understand how companies are considering talent in an era of technological disruption, a highly mobile workforce and changing consumer values.
According to Cannell, the interviews suggest that while many companies have not adjusted their talent policies to reflect the rapidly changing corporate landscape, others are adopting growth mindsets, agile practices and robust development programs for employees.
The Darden Executive Education research revealed that 11 percent of companies had shifted their learning and development approaches to keep new employees engaged, and one interview subject said prospective and new employees increasingly come in asking the question, “How will I be developed?”
“It used to be that learning and development was primarily for companies with growth cultures, and companies that didn’t invest planned to just buy their talent,” said Cannell. “Now, you have to do it because it’s table stakes to even get the talent to begin with.”
A recent study from the Human Capital Media Advisory Group echoed the findings, suggesting that 49 percent of organizations planned to increase their spending on learning and development in the next 12 to 18 months. Only 14 percent planned to decrease their spend.
Investing in development may seem counterintuitive in an era of short employee tenure, but Cannell said the research suggests it would be self-defeating not to pursue a robust development program.
“People want to grow, they want to learn, they want to know they are going to have those opportunities,” Cannell said. “Yes, they probably will move on, but if you don’t give them these opportunities and they stay, the talent is not appreciating to the level you need to keep up with where the company is going.”
As organizations themselves transform and adapt to meet changing markets and consumer needs, they require an agile, forward-thinking workforce to successfully adapt.
“There are so many companies that used to be squarely in one industry and now they are rebranding themselves,” Cannell said. “That impacts how you think about talent. How you manage employees, how you recruit them — everything.”
According to a recent Darden Business Publishing case authored by Professor June West and John Kelly (MBA ’18), modern personnel development and evaluation often owes more to its industrial-age heritage than the realities of modern business.
In the case, “Performance Management Systems: How Companies are Rethinking People Development,” West and Kelly identify what they describe as the tension of modern performance evaluation mechanisms, which often focus on accountability — the goal often sought by senior management — at the expense of development.
West and Kelly note a number of ways performance management is shifting to keep up with the era, citing the use of Agile methodology — typically considered a tool for software development — to help companies offer a more responsive method for the management of people, for instance.
“Companies are waking up to the fact that they need to shake off the old way of doing things,” the authors write. “Performance management systems occasionally need a refresh, and to remain competitive in the 21st century in the global marketplace, companies must implement a system that aligns with the long-term business strategy.
The Darden Executive Education white paper suggests the future of effective talent management relies on focusing on the needs of employees and empowering managers to lead and develop talent as they see fit.
“In order to keep pace, leaders will need to find the courage to let go of some old approaches and pioneer new ones,” the report concludes. “Taking an agile approach to innovating and customizing talent programs with the focus on customer needs (employees and leaders) — and not HR needs — is a solid method to enter this brave new world.”
The University of Virginia Darden School of Business delivers the world’s best business education experience to prepare entrepreneurial, global and responsible leaders through its MBA, Ph.D. and Executive Education programs. Darden’s top-ranked faculty is renowned for teaching excellence and advances practical business knowledge through research. Darden was established in 1955 at the University of Virginia, a top public university founded by Thomas Jefferson in 1819 in Charlottesville, Virginia.
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Darden School of Business
University of Virginia