Talent Management

Banks in the beginner group do not treat talent management as a priority. As a result, they tend to rely on external recruiting for their evolving talent needs. To retain top talent, the beginners also tend to emphasize compensation and brand names rather than career prospects and inspirational leadership.

Banks in the intermediate group recognize the importance of talent management and have put in place basic practices centered on identifying and reviewing talented mid-level and senior executives. Yet these banks have not applied themselves consistently in other areas, such as talent development, where progress is less visible.

Banks in the advanced group are clearly the most effective in the war for banking talent. The top team makes a high priority of talent management, developing and applying key processes and creating a specific, centralized unit to handle it.

Even the intermediate and advanced banks that have attempted to transform the way they manage talent have much room for improvement. Our experience suggests that, to succeed, they’ll need to be more rigorous in their talent-management processes--for instance, by using objective indicators (such as the average time to fill critical positions) to measure and improve the effectiveness of these efforts.

Furthermore, members of the top and senior-management teams must work harder to incorporate talent-management activities into their own weekly routines--for example, by personally advocating, endorsing and communicating key messages to middle management and to front line employees. Such commitment drives active participation in talent management, rather than mere compliance with it, throughout the organization and shows employees that it is a top priority.

This article was originally published in The McKinsey Quarterly, www.mckinseyquarterly.com. Copyright (c) 2008 McKinsey & Company. All rights reserved. Reprinted by permission