What is the Most Significant Change Coming for the HR Profession?


The following is a column by Dr. Robert Hogan, that recently appeared in the “2009 Forecast” edition of Human Resources Executive. Dr. Hogan was asked to comment on what he sees as the most significant change affecting the HR community in the future.

By now, everyone is aware of the coming demographic tsunami which will be defined by the retirement of the baby boomer generation. On the one hand, this means that a lot of talent and institutional memory will walk out the doors. On the other hand, the replacement pool—composed of the young, the inexperienced, and the untried—will grow steadily smaller. The generic answer to dealing with this looming problem is called talent retention, and a number of talent retention models are available for commercial consumption.

Talent retention can be broken down into two generic strategies. The first concerns how to retain older workers past their normal retirement date. The second strategy concerns how to attract and retain talented replacements for the retirees. Standard talent retention solutions involve special training, on boarding, compensation, and career pathing packages, all of which are sensible structural solutions. However, what is missing from most talent retention packages is a careful consideration of the human factor. The critical insight comes from the Gallup research, which shows quite clearly that people don’t quit organizations, they quit their immediate bosses. Unless and until talent retention programs take this crucial generalization into account, they will not be effective tools in the coming war for talent.

Research data gathered over the past three decades clearly indicate three conclusions.

  • First, the base rate of managerial incompetence in corporate American, in the public and private sector, is between 50% and 65%; slightly more than half of all existing managers will fail in one way or another.
  • Second, employees at every level, in every organization, in every geographical region of the country, and in every industry sector report that the worst and most stressful parts of their jobs are their immediate bosses.
  • Third, bad bosses are the major cause of absenteeism, poor employee morale, bad customer service, low productivity, and high turnover in every organization.

The conclusion is inescapable: the foundation of any talent retention strategy is good management. Consequently, weeding out or retraining bad managers is the fundamental first step in implementing any talent retention strategy. There is not enough time here to explain why there are so many bad managers employed in corporate America, nor is this the place to describe how to fix them. It is sufficient to say that there is a well-defined taxonomy of bad managers—there are about 11 different types, ranging from people who yell and scream to people who will routinely sacrifice their subordinates to please their superiors. Well-established assessment methods can be used to identify potential or existing bad managers.

Several forward-looking HR programs have taken advantage of these new assessment procedures to hire or promote managers who won’t alienate their talented employees. They also use these procedures to identify incumbent managers with useful technical skills, and coach them regarding ways to ameliorate their more abrasive tendencies. Finding and employing managers who know how to engage their staff is the real key to talent retention.