BRITAIN’s bosses are desperate to find and hire the best talent, but they do not know how to go about it.

A survey by the headhunter DDI has revealed that 70% of chief executives feel that their business is suffering because of a lack of leadership talent.

Speaking at the annual conference of Executive Grapevine, a business that advises on how to manage talent, Bill Hester, head of consulting at DDI, said: “Only 3% [of chief executives] think they are doing an excellent job on talent management and 55% of them described themselves as ‘fair or poor’ at identifying talent.”

Talent management is the glamorous new way to describe the tricky dance between the board, the chief executive, the human resources department, and external headhunters, which ensures that you have the best person for the job and an increasing supply of newcomers bubbling up the pipeline.

Hester said that Britain’s bosses are going to have to work harder at acquiring this skill for spotting and nurturing talent if their companies are to survive.

You need to be “smart with heart”, he said, explaining that tomorrow’s executives will need to feel valued as well as be highly paid. The new generation of high-flyers will demand the kind of training with kid gloves used for the stars of the sports and entertainment worlds.

Philip Rogerson, former deputy chairman of British Gas, said: “In a rapidly changing industry, success or failure depends on having the right people in the right place and on having an adequate supply of people to succeed them.”

He added that many of British Gas’s problems when he joined stemmed from having too few people in the company with the ability to step into the top jobs.

Human-resources departments are beginning to address the problem – with the clue lying in their job titles. Arvinder Dhesi, group talent management director at the insurance group Aviva, said that bosses had to stop thinking about talent as something that was in short supply. He described how one top human-resources director took pride in valuing the few, not realising how destructive that policy was when taken to extremes.

“When asked how much of her workforce she considered to be talented, she replied: ‘It used to be 13% but I think I’ve got it down to 5%’. How valued would you feel working for that com-pany?” said Dhesi.

It was time for a different approach, he said. “So how do you make people feel signifi-cant? You have to start from the top and you have to start with the attitude that you let people know that they wouldn’t be on your payroll if you didn’t think they had talent.

“We have to move away from this industrial model of work where the employee is seen as a replaceable cog in the machine. We have to treat the employee as an investor, someone who has made the choice to invest their time and their energy with you.” In return, employees will make that “discretionary effort”, which marks the difference between success and failure.

“It’s very touchy feely. Most of the decisions we make are touchy feely and based on emotion,” he said, adding that people do not buy a particular brand of soap because they have analysed its sales figures or efficiency, but because they have an emotional attachment to the brand. The world of work is no different.

It was a theme that the chairman of the conference, David Fairhurst, senior vice-president of people at McDonald’s Restaurants, felt was crucially important. He said that bosses were getting too hung up on retaining employees instead of ensuring that the people they hired were committed in the first place.

“Some £40 billion was lost in Britain last year because of poor levels of engagement,” he said. “In general you have three levels of engagement at work – about 16% are actively engaged, 10% are actively disengaged [the sort of people who enjoy disrupting the organisation], and the majority are just disengaged.

“Talent management is about maximising the engagement level of your workforce: to me that means that a person’s potential is never blocked and everyone can go as far as they can go.” Fairhurst added that the “millennium generation” is going to demand and expect far more support and personal development in their careers than any generation before them.

“This is a generation which can be very easily misunderstood. They are the ‘Google Generation’. They don’t disrespect hierarchy, they just don’t understand it. They are one of the most emotionally needy generations of employees for decades and what employers need to do is be there to support them.”

It is a generation that is good at multi-tasking and has excellent technical skills, but which has no idea of career development or how to manage their own careers. They expect it to be done for them, and on an individual basis.

“We need mass personalisa-tion,” said Fairhurst. “Otherwise the level of engagement which is already disgraceful across this sector will get worse. The real challenge for business is how to get more people who are not just engaged, but actively engaged.” Karen Ward, head of talent at the Cabinet Office, thought the carrots used to entice employees in the public sector might differ from those in the profit-making world. Ward is responsible for 4,000 senior civil service mandarins, some of whom oversee departments whose budgets exceed the GDP of Portugal.

Unlike in the corporate world, the civil service cannot use vast amounts of money as an incentive but it has other rewards. “Most people who come into the civil service have a really strong service ethos. The question is do you want to make a difference? If you want to make a difference to the world you can,” said Ward.

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