British business is failing to make the most of its star talent – with less than half of UK businesses implementing talent development programmes (49 per cent), according to landmark research launched today by recruitment outsourcing specialist Capital Consulting and Cranfield School of Management

While 60 per cent of the businesses surveyed say talent management – the strategies and practices needed to define, identify, develop, attract and retain those deemed to have skills valuable to an organisation – is essential to a businesses bottom line, only 41 per cent of businesses are strategically managing their star talent. This reveals a major ‘disconnect’ between what senior managers say about talent management and what’s actually in place in their organisations.

Those surveyed say that various factors are holding back implementation of talent management strategies; chief among them a lack of financial investment (51 per cent) and insufficient senior management support (40 per cent).

Jeremy Tipper, Group Managing Director of Capital Consulting, reflects on the report: “Businesses are becoming increasingly aware of the growing importance of attracting the best available talent from the marketplace, but often fall short when it comes to following through on development, retention and allowing talented people to reach their potential.”

Mr Tipper adds: “The changing nature of UK and global economies and the demographics that lead to a shrinking talent pool entering the workforce will really begin to bite over the next three to five years. Acquiring and keeping people is already very important, and will only become more so. How good you are at managing talent will become a crucial factor in whether you are a winner or a loser in terms of competitive advantage. Creating an effective talent management framework has the potential to make HR Directors the organisational heroes because of the ever growing impact it will have on business performance and the bottom line.”

Even those who practice what they preach come up short in the Report: less than half (47 per cent) of organisations have published their talent management strategy internally, one in five does not link the strategy to their business plan, and just 15 per cent measure return on investment. Innovation is also in short supply, with the likes of sabbaticals and overseas assignments taking a back seat to conventional courses and on-the-job training as methods for developing future leaders.

Dr Emma Parry, research fellow at Cranfield School of Management, says the report should serve as a ‘wake up call’ to employers at a time when mounting global competition and the changing demographics mean the need for strategic management of human capital has never been greater. “The ‘disconnect’ between what senior managers are saying and what they are doing is very worrying. It’s clear that, in the main, their actions have not caught up with their rhetoric when it comes to talent management.”

To help businesses meet this urgent challenge, the report includes a framework for best practice talent management. Dr Parry adds: “Our research highlighted a number of case studies of organisations that are bucking the negative trend, and they offer insight into what successful talent management looks like in practice. These insights, from interviews with American Express, Britvic, Cobham and Tower Hamlets Borough Council have helped develop a model pathway to effective talent management.”