What is Talent Hoarding and How is it Bad for Your Business?

 What is Talent Hoarding and How is it Bad for Your Business?

Every once in a while there comes a high-performing employee that the manager does not want to let go at any cost… and then out of nowhere, things change and they want something better and they do not want to continue in your organisation anymore. Well, it could be a number of reasons ranging from a ‘not so great’ salary package or that they found something better or just that they simply want to leave. But, what is it called when you don't want to let them go cause you may never find someone better? We are still talking about the employee here. 

It’s called Talent Hoarding!

We all have talented people who make a remarkable impact on our team’s productivity. Our ‘star’ cohorts are innovative, hard-working, future-oriented and visionaries. We are proud of them and we do not want them to leave, but sometimes we can knowingly or unknowingly keep them from their future development.

It is one of the biggest disruptors of a company’s business strategy. It not only holds back an employee and limits their career growth, but it also has a catastrophic effect on a company's future. After all, this act  leads to the hoarding of skills and ideas. As a counter-effect, your business will not be able to reap the benefits of employee knowledge and experience. Without expanding and diversifying your existing talent’s skill sets, your company could be at risk. Read on to find out more about the dangers and solutions to talent hoarding.

Why Does it Occur?

Talent hoarding is a malicious practice companies (mostly managers) use to keep the best employees in their current roles without providing any advancement opportunities or career development. It begins at a managerial level when a manager does not identify employees who are most likely promotable to the next level.

The main reason behind this malicious practice is the absence of incentives for recognizing talents. I mean, who doesn't like to be rewarded for their hard work and the good use of their innate talent? 

A manager’s performance and compensation are often based on the team’s performance, which is why it is to a manager’s advantage, and the team’s advantage to keep the best employees to themselves. 

Five Ways Talent Hoarding Can Hurt Your Company

Encouraging your team to internal mobility might seem counterproductive and disruptive, but it can be good for your long-term business health. On the other hand, here are some ways this practice  can hurt your company.

1. The surge in Employee Turnovers

Employee turnover is the measurement of the number of employees who leave an organisation during a specified period of time. If employees feel like talent-hoarding bosses are holding them back, they might start looking for new opportunities. This increases your company’s employee turnover. Lack of growth and opportunities is the second most common reason why employees change jobs.

2. Decrease in Productivity and Capacity

Talent-hoarding prevents employees from reaching their full potential, which also translates to your business not achieving its full potential. This in turn reduces your organisation’s capacity which in turn makes you prey to competition.

3. Organisational Silos, Assemble!

For those who do not know the meaning; an organisational silo is a team of employees/experts who are grouped by departments, specialisation or location- it does not sound that bad until the silos start to pursue departmental goals instead of company goals. Silos often rank poor when it comes to interacting with people outside of their group. They also develop more loyalty towards the group than the employer. Silos hinder innovation and productivity, which leaves managers wasting their time reinventing the wheel instead of executing priority tasks. Talent hoarding is one of the root causes of the formation of silos.

4. Roadblock for Skill Building

Developing new skills and competencies should be the top priority for both employees and organisations. Talent hoarding acts as a major obstacle to acquiring new skills. Employees who are unable to develop new expertise at a competitive speed are left behind, meaning the company could also be left behind and it could succumb to the competition.

5. Increase in Cost

Replacing a talent or acquiring new talent is  expensive, and the cost is especially higher if you want to find good talent. According to a survey by Sasha Corporation, replacing an employee who makes $8 an hour, can cost as much as $9,500 or more. This cost is incurred mainly due to restricting corporate growth, in other words, talent hoarding.

How to Know if Your Company is a Victim of Talent Hoarding?

Now that you know what talent hoarding is and how it can directly affect your business, it is now time to know if you as a manager, HR or a business have hoarded your talent. The evil of talent hoarding goes undiscovered because A: there is no proof and B: no manager in their right mind would  admit doing it or most of the time managers may not even realise they are doing it. So, here are a few easy ways we put together for you on how you can find out if your company is a victim of talent hoarding.

1. Zero Turnover Rate

Are you proud that your employee turnover rate has been zero since “forever”? While in some cases this might be a good thing, in this case; we’re going to have to burst your bubble! 

A zero turnover rate could be a major indicator that your employees have not been able to work and acquire new skills and that they have been stagnant in terms of the learning curve. Talent Hoarding is basically ground ‘zero’ for the decline of your team's productivity and efficiency. 

2. Afraid of Developing the Employees

Are you afraid that if you develop your employees, they might go somewhere else or even worse over-throw you? Well, do you think if you hoard them, would they stay longer?  No! The most important thing employees seek from employers is development. Now while this might look like ‘talent hoarding’ in a different costume, where you are trying to keep your best performer with you and you're trying to enhance their skills this is actually important. 

Most of them want to learn and the primary negative reason for a job change is stunted growth in their career path and the ones who are fully committed to their development will sooner or later depart from your organisation if they do not see proper development. It's all in the balance. Let go of the ones that are committed to change and retain the ones, whose skills you as a manager can nurture.

3. Concealing Internal Opportunities

Have you ever been in a situation where you were discussing a certain career opportunity with your manager and they landed up acting all funny about it and then kind of steered you or discouraged you from taking it? Yeah… that’s a big bright red flag right there. 

When managers conceal information about current openings outside the team, they are contributing to talent hoarding. Managers can sometimes discourage their employees from going to internal job fairs and make such information hard to find.

4. Hiding the Best People

Are you able to pinpoint where talent is located within your organisation? If your answer is no, you are a victim of talent hoarding. If you do not reacquaint yourself with the team and start identifying people, you will be left hiring people with the same skill sets, until they depart and the cycle continues.

 5. Mistaking Hoarding with Retention

Do not use Talent hoarding and  Talent retention synonymously. Talent retention is the ability to keep employees by having an environment that people want to be a part of. Employees should feel supported and valued. So if you were heading towards hoarding instead of retention, now is the time to correct your course.

How to Prevent or Eradicate Talent Hoarding?

Can we reduce or eliminate talent hoarding? Yes, but it is not going to be easy. We are talking about changing generation after generation of leaders who have been raised with the same institutional dynamics. Here are some methods to help reduce this.

1. Create a Feedback System

Provide regular and meaningful feedback to employees to show that you care for them and you are interested in their work. Find out the long-term and immediate career objectives of your employees, and help them come up with a plan. Even if your star employee gets promoted and moves to another department, you will ultimately contribute to your company’s strength. You may also set up peer-run networking organisations that can help employees learn about other domains in the company and discover upcoming talents.

2. Knowledge Sharing

The best way to harness knowledge and talent, and prevent them from becoming stagnant is to share them with the rest of the team. You can set up mentoring programs, cross-training for other roles within the team, let star employees work closely with talent acquisition and train new talent to fill any kind of skill-gaps.

3. Fair Assessments

Develop a consistent way to measure performances across the team and set up a growth path for those who consistently excel expectations. Ensure you share the name and skills of such employees throughout the organisation. This will allow your employees to grow professionally and allow other teams to leverage their skill sets. Try out HireQuotient’s Skill Assessment platform to figure out who are your star performers and who needs help!

4. Engage with All Stakeholders

Communicate with employees, managers and supervisors across the company, and speak about the dangers of talent hoarding. You can create a corporate initiative to abolish this insidious practice. By doing so, you also send a clear message to all the managers that your company does not entertain talent hoarding.

5. Incentivise Referrals for Open Positions

Consider incentivising referrals across departments. If managers are rewarded for referring and talent development, they will encourage internal mobility and your business will be able to retain good talent.

6. Break Down Silos

Make it clear that your company is pro-employee development, and put policies that support cross-department coordination and training. This will set up a forum through which your employees can explore new career opportunities. Additionally, you should also implement a system to keep track of development activities. This can help break down silos and encourage complete coordination across the organisation.

7. Monitor Career Moves

By analysing factors such as why, when and how employees are making career changes, you can find opportunities that your star employees are looking for within the organisation. This will also help you retain your best talent.

8. Be Honest

To avoid losing top talent and increasing your turnover rates, it is better to be honest about the nature of careers. Employees, especially the good ones do not want to stay stagnant or in other words hoarded.

Why Prevent Talent Hoarding?

Managers or leaders, for that matter, should focus on developing employees to whom they can delegate their work. This makes it less challenging for managers to work on special projects and attend training to upskill themselves. In case a manager gets a promotion, they can promote their own star employee to their role.

Eliminating talent hoarding can help you leverage the workforce you already have. Companies that focus on employee training and development will benefit from having a skilled workforce and better employee retention. This translates to increased work capacity, and productivity and ultimately allows your company to flourish in the industry.

Statistics, Summary and Conclusion

First things first, employees who contribute to the company’s growth are the ones who want to advance. When employers help their employees learn and develop professionally, they can utilise their skills and abilities to the fullest.

Talent hoarding is a manager’s tendency to prevent or discourage employees from pursuing internal promotions.

According to a survey by Gartner. inc, about 60% of HR leaders have reported that acquiring new skills and competencies was the number one priority in 2022.

HR priorities for 2022 have been to change management, current & future leadership bench change, diversity, equity and inclusion.

Deloitte’s Global 2022 GenZ and Millennial Survey found that about 47% of Gen Z and 54% of Millennials leave their organisations within a year, as they feel they are not heard at work.

Employees are searching for broader and more diverse opportunities to build a career that evolves over time. They do not expect to build a 30-year career, climbing the ranks one step at a time in the same organisation.

According to data compiled by Role Point, 90% of HR professionals mention that employee recognition programs improved engagements. 55% of employees rate opportunities to skills and abilities as a very important contributor to their job satisfaction. About 45% of employees who changed their companies between 2014 to 2015 mention that they moved on because they didn’t have career advancement opportunities.

Tech giants like Google are trying to minimise talent hoarding by giving individuals a chance to self-nominate for promotions.

Companies like Booz Allen and Cisco have assigned their own recruiters to source and place their internal talents.

Firms like Unilever have already undertaken steps to ensure no employee gets left behind. They have decided to leverage AI to reskill and upskill employees with future-fit skills by 2025.

Many other businesses are trying to set up predictable career paths to ensure there is less uncertainty. The goal of the  future is to democratise career development and increase workforce visibility.

Technology is the key to adapting to a quickly changing work culture. As the world becomes more and more digital, a digital platform is an ideal way to bring the workforce into the future.

Finally, leaders must realise that investing in developing talent is a constant process of growing through new challenges, even if it means mobility, it will bring a benefit to your company.

If you feel that your company is on the verge of talent hoarding, if not already there, you should set up a team of HRs and managers to counter the challenge. . Their role should be to identify the extent of the damage and come up with an effective way to reduce it. 

 What do you think about talent hoarding? Will it soon be a thing of the past? Share your wisdom with us.