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Talent Development

Talent Troubles Back-Burnered In Recession Are Heating Up

Does your company have the right talent? The blunt answer is — not likely. I read with great interest an article in Harvard Business Review summarizing the Talent Management Strategies Conference which took place in March. According to the author, experts from companies such as Cisco, Gap, Toyota, Wal-Mart and Oracle gathered to share perspectives at the conference.

Does your company have the right talent? The blunt answer is — not likely.

I read with great interest an article in Harvard Business Review summarizing the Talent Management Strategies Conference which took place in March. According to the author, experts from companies such as Cisco, Gap, Toyota, Wal-Mart and Oracle gathered to share perspectives at the conference.

During formal remarks, most speakers did their best to stay upbeat. But a different story emerged in the hallway chatter between sessions. Over coffee and muffins, attendees swapped stories of what it's like—even in a recession—to be battling a "talent problem."

Executives fumed about internal pipelines that keep producing the wrong kinds of leaders and the promotion paths clogged with lackluster managers who can't be moved. Conference-goers also expressed concerns about how well their companies' leaders can truly gauge a rising star's promise.

How bad is it? According to a recent survey:

  • 18% of companies claim to be winning the war for talent;
  • 72% portrayed it as an endless struggle in which they were neither gaining nor losing ground;
  • 10% declared that the war for talent was winding down in defeat for their enterprise.

Top that off with a skyrocketing retirement rate (330 people turn 65 every hour in the U.S.), the talent problem is a big one–and it isn't going away anytime soon.

I recently spoke with a representative of one of the largest companies in the U.S. who told me that during the next few years, talent will take over marketing as the chief investment in corporate America.

Due to the recession, many companies have made the mistake of back-burning the talent topic. This move is likely to have a long-lasting backlash on our economy.

The scary truth for many of America's largest enterprises is this: they don't have the right talent in place now, and they don't have a plan for future talent development either.

Here's why:

Companies aren't sure what they're looking for.

Even in the best-run organizations, talent is a mystery or an after-thought. Boards and chief executives may have decisive ideas about how to revamp priorities to deal with emerging markets, changing labor costs, health reform, or other profound changes in the business landscape. But few align their talent-assessment processes to their strategic priorities and it can take years to realign career development paths accordingly.

In the meantime, strategies and talent pipelines are out of sync and companies are grooming lots of superbly qualified candidates for leadership in dead-end specialties that don't have much to do with where the business actually needs to be going.

Talent development is just a slogan, not a culture.

What happens when managers regard the finding and grooming of future leaders as someone else's business and not theirs?

Roger Cude, senior vice president for talent management at Wal-Mart, refers to this as the creation of a corrosive culture of "talent importers" — executives who shirk the essential but selfless tasks of developing stars themselves,instead relying on others to do the job for them.

I run into this all the time in my consulting role. Senior executives will complain that young professionals need too much 'hands on' training. They grumble about having to give continuous feedback, and the mentoring and leadership development tasks, and they try to pass off the responsibility to someone else. This speaks volumes about a company's ability to retain and develop talent.

Furthermore, what happens when managers refuse to use talent development tools?

In recent surveys, more than 20% of talent-management specialists conceded that their tools for succession planning, executive coaching, and identifying high-potential employees are widely regarded within their own companies as not being simple or easy to use.

The finest mentoring and assessment tools aren't much use if no one puts them into action. Here again, negligence to use–or change–a process speaks volumes about the importance of talent within a company's culture.

Wal-Mart is working on the antidote. It tracks how well its top executives are doing to meet and inspire the company's up-and-comers. Data is shared and compared. Executives with strong scores are rewarded; those who can't be bothered are told that hey have a problem.

The result is that Wal-Mart's intensely competitive top echelon of executives try to outdo one another in being seen as champions of talent development. And the entire company benefits.

Companies don't know how to get better.

Traditionally, the payoff from talent development efforts is hard to measure and takes years to play out. As a result, there haven't been many systematic efforts to keep track of what assessment techniques are most valuable within a company; which bosses have the best eye for talent, or what recurring mistakes ought to be fixed.

A talent expert at IBM is trying to fix that. He is developing a tracking system that keeps track not just of executives' career paths, but also of their assessments and training along the way. That tool gives his team the potential to size up IBM's own talent-development efforts so the company can see where it's getting the best results and where it has bottlenecks that need fixing.

On the flip side, holding up a mirror to executives can be a difficult concept to introduce–and accept. Our company has a formula for tracking talent development ROI, measuring progress and providing valuable insight to a company's talent development process–including the successes and pitfalls.

Yet, few of our clients take advantage of the formula because they fear what they will find and they loathe being held accountable for someone else's career.

I would argue that companies should fear that they are falling behind and loathe the idea that they are hiring the wrong talent, failing to develop their existing talent, or building a pipeline of future talent. 

Zs came of age in an era of disruption

In many ways, it’s symbolic that Generation Z is named after the last letter in the alphabet because their arrival marks the end of clearly defined roles, traditions, and experiences. After all, Gen Z is coming of age on the heels of what has been referred to as the most disruptive decade of the last century. America has become an increasingly changing and complex place.

For example:

  • ‍Zs were born into a “modern family era” in which highly involved dads help out at home, and the nuclear family model (two parents, married, with children) represent only 46% of American households.
  • ‍Zs are the first generation to be born into a world where everything physical, from people to places to pennies, has a digital equivalent.
  • From the time they were infants, Zs had access to mobile technology. As a result, their brains have been trained to absorb large amounts of information, and Zs are especially adept at shifting between skills and subject matter.
  • Zs tend to have crystal-clear memories of sitting up for the first time at six months old because they can easily and quickly reference the photos and videos their parents shared on social media or saved in the “cloud”. 

Members of this generation have undoubtedly been shaped by crisis and disruption. This generation will largely be responsible for confronting the aftermath of the Great Recession, high youth unemployment, the effects of climate change, terrorism, energy sustainability, and more. These dark events have undoubtedly made this generation more cautious and pragmatic, but they have also provided this generation with the inspiration to change the world – and their grit will likely allow them to do it.

Coming of age during disruption means that most Zs will be comfortable being the disruptors. While Millennials tend to be collaborative and innovative, this generation tends to be sincere, reflective, thick-skinned, and self-directed, and will likely approach work in much the same way.

Zs were raised to be competitive

In the era following World War II, Boomers (1946-1964) were born and eventually became the wealthiest, most prosperous generation in history. Raised to aspire for the American Dream, this very large generation moved into positions of power and influence, and served as the workforce majority for 34 years.

With the American Dream alive and well, Boomers had no reason to teach their children, mostly Millennials, about competition. Instead, they taught them to focus on academic achievement and to be team players because if everyone works hard, everyone can win.

Enter Generation X (1965-1981). In contrast Boomers, Xers came of age during a time when change and economic and political uncertainty began to take root. They have lived through four recessions, struggled with debt and economic decline most of their lives, and watched the best educated and accomplished generation of all time (Millennials) graduate during the Great Recession and become the most debt-ridden generation in history.

Gen Xers can be defined by their independence and anti-status quo approach to life, and they have taught their Gen Z children to be competitive, believing only the best can win. They have encouraged their children to be realists, finding something they are good at and aggressively pursuing it.

Xers have raised their Zs with an intense focus on competitiveness -- in academics, sports, and other activities. This approach to parenting has many implications, but one stands out in terms of business: Gen Z is likely to lead.

Millennials in the workplace created and aggressively advocated for collaborative work environments. In fact, their aversion to leadership has been so strong, some Millennials sought out companies that boasted boss-free or team-managed workplaces.

In contrast, Zs have been raised with an individualistic, realistic, and competitive nature. They have been taught the skills to successfully defy the norm. This means we’re going to see the pendulum shift away from collaborative workplaces towards a widespread demand for, and pursuit of, leadership development.

Zs are career-focused.

While Millennials have been criticized for their “delayed adulthood”, Gen Z is showing signs of “early adulthood”. Educators and parents often describe this generation as being more serious and contemplative about the world. Zs are thinking about their career paths and exposing themselves to career training at an earlier age than Millennials. It’s probable that some of this early onset of adulthood is caused by parents, who are pressuring their children to be competitive and successful and to avoid the debt that plagued both the Gen Xers and Millennials.

The numbers from our global research found 46% of Gen Z said they know what career to pursue and 51% have taken a class at school focused on their career interests. Forty percent joined an extracurricular program (team, club) based on their career interests.

Zs are seeking financial security. 

Zs have been shaped by the aftermath of the Great Recession. They watched Millennials become debt-ridden and are concerned about falling into the same trap. XYZ University’s survey results show 66% of Zs said financial stability is more important than doing work they enjoy, which is the exact opposite of Millennial survey results.  Also, 71% of survey-takers have a paying job.

Zs value leaders who are positive and trustworthy.

When presented a list of leadership traits, Zs ranked positive and trustworthy the highest. While Millennials and Gen Zs both value trust in a leader, Millennials usually cite collaboration and vision as most important. In other words, Millennials focus on the outcomes leaders inspire, whereas Zs are more likely to consider leaders’ attitudes and personalities. To Z, what leaders encourage others to do isn’t as valuable as how they make them feel.


Zs want to be challenged.

Both Millennials and Gen Zs place a very high value on feeling challenged and appreciated in the workplace. However, according to our survey results Millennials rank appreciation slightly higher than challenge, whereas Zs rank feeling challenged slightly higher than appreciation.

Time will tell how Zs go down in history, but we know this generation’s influence on history will be unlike any other.


Does your organization have what it takes to engage the next generation? Take this quiz to find out.


Sarah Sladek is CEO of XYZ University. Our generational intelligence can assist you with engaging and retaining young talent and members.

Sarah Sladek

Concerned about declining engagement in our nation’s membership associations, non-profits, and workplaces, Sarah Sladek founded XYZ University, the nation’s first and only generations-focused training and engagement strategy company, in 2002.

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