We are currently in mid 2007, navigating in uncharted waters as far as the labor market of the past ten years is concerned. The economy is stalled, home prices are falling, but the stock market remains near record levels, unemployment is low and companies are experiencing talent shortages as they position themselves to compete in an ever increasing, and more competitive global marketplace. We now have neither a labor buyers or sellers market. It is eerily balanced. As a result employers are doing all they can and investing in tools and processes to attract and retain a skilled, agile, and motivated workforce.

A recent report published by Bersin & Associates titled Enterprise Learning and Talent Management 2007 finds that corporate training budgets increased 7% in 2006 – the largest increase in 6 years. The complete report can be downloaded at http://www.bersin.com/contactus/2007_predictions.asp. Other key findings from the report include:

• Leadership development and management education is the largest single program area of spending in corporate training today.
• Talent management research indicates that, among all the talent-related processes in HR, more focus is being given to leadership development and succession planning than almost any other area (with performance management coming in second) 
• The war for talent and changing workforce demographics mean that companies in almost every industry sector are suffering from a lack of middle managers. Companies must build from within their ranks. 41 percent of HR managers state one of their top talent challenges is building and maintaining their leadership pipeline
• Talent management drives changes in HR
  • Just as learning organizations are evolving, so is the HR organization. Today, it is not enough for HR to partner with lines of business; it must understand and develop organizational capabilities.
  • In this new role, HR managers and executives must identify critical talents required by the organization; integrate the business processes involved in retaining and developing employees with these talents; and provide ongoing workforce planning.
  • This integrated approach requires eliminating silos of processes and information for compensation, performance management, leadership development, and succession planning. It also requires better integration of HR systems for a more complete view of the workforce.

• HR’s changing role impacts learning organizations in these ways:
  • Organizations are revamping, improving and automating performance management.
  • Performance management and corporate learning are being integrated, as are the supporting system platforms.
  • Organizations are rethinking core competencies.
  • New job roles and organization structures are emerging.

What these findings tell us is that the role of HR, vis a vis, recruitment, training, succession planning and performance/talent management have become a strategic imperative for a company to grow and flourish in today’s business climate. Employers are looking to HR to implement solutions to attract, develop, and retain skilled employees. Implementing systems that integrate and manage employee development and performance management to meet the current and future needs of the organization is crucial.