Amidst a fiercely-competitive business landscape, talent is widely recognised as a valuable asset for any organisation. After all, it is common knowledge that skilled and motivated employees drive innovation, productivity and profitability. Not surprisingly then, some companies inadvertently fall into the trap of talent hoarding. They retain talented individuals without offering them opportunities for growth and advancement. While most employers hoard talent as a safeguard against losing top performers, the long-term consequences of doing so can be both detrimental and expensive for the organisation.
Tanaya Mishra, VP and head – HR, Endo International, emphasises the importance of ensuring a strong talent pipeline and implementing succession planning as an essential step in talent management. However, when companies begin to hoard talent without providing opportunities for growth and challenge, they may encounter significant issues.
“Holding onto talent without providing them with avenues to grow and contribute can result in the loss of valuable employees who are eager to make a difference. It is crucial for organisations to recognise and address the aspirations of their high-potential individuals to keep them engaged and committed to the company’s vision and goals”
Tanaya Mishra, VP and head – HR, Endo International
P Dwarakanath, former non-executive chairman, GSK, believes that the challenge arises when businesses retain talent that may not remain effective or productive in the long term. “Instead of optimising talent based on ongoing assessments of learning agility and relevancy, some companies hold on to individuals solely because they were previously identified as stars,” observes Dwarakanath.
Decreased employee productivity
Talent hoarding restricts the movement of skilled employees within the organisation, leading to stagnation in their roles. Without new challenges or opportunities to learn and develop professionally, talented individuals may experience decreased motivation and productivity. In a static work environment, employees are less likely to be engaged, impacting overall team dynamics. This can lead to a dip in the organisation’s productivity levels.
Increased employee turnover
One of the most significant costs associated with talent hoarding is the increased likelihood of employee turnover. Talented individuals who feel trapped in their roles and see no prospects for advancement are more likely to seek new opportunities elsewhere. The recruitment process to replace these employees can be expensive, including recruitment agency fees, advertising costs and the time invested in interviews and onboarding for new hires. Moreover, the loss of institutional knowledge and experience when top performers leave can have a detrimental impact on the company’s overall performance.
Negative impact on company culture
“Instead of optimising talent based on ongoing assessments of learning agility and relevancy, some companies hold on to individuals solely because they were previously identified as stars”
P Dwarakanath, former non-executive chairman, GSK
Talent hoarding can create a toxic work culture where employees perceive favouritism and a lack of transparency. When some individuals are seemingly protected from internal competition, it can breed resentment and dissatisfaction among other employees. This leads to a fragmented work environment, hampering collaboration and teamwork, which are crucial components of any successful organisation.
Reduced innovation and creativity
Talented employees are often the driving force behind innovation and creative problem solving within a company. When these individuals are confined to their current roles without the freedom to explore new challenges, the organisation loses out on their potential to generate fresh ideas and drive meaningful change. Over time, this stagnation can hinder the company’s ability to adapt to market demands and stay ahead of competition.
Why is talent hoarding best avoided?
Talent hoarding can prove to be a costly practice for businesses. Keeping skilled employees without providing them with meaningful work and growth opportunities can lead to reduced productivity, increased turnover costs, and missed opportunities for innovation and growth. Moreover, it can create a negative company culture, impacting employee morale and overall efficiency.
As Emmanuel David, senior HR leader, points out, “There comes a point when organisations must carefully consider their actions to avoid cultural disruptions and potential departures. Balancing the retention of experienced individuals with providing opportunities for new talent becomes crucial to maintaining a dynamic and effective workforce.”
David shares that in a competitive market, overlooking the growth and development of new talent may lead to a missed opportunity to build a strong team capable of thriving in challenging environments. It is essential for organisations to strike a balance and ensure that talent is both engaged and strategically positioned to contribute effectively.
“There comes a point when organisations must carefully consider their actions to avoid cultural disruptions and potential departures”
Emmanuel David, senior HR leader
Dwarakanath explains, “In the rapidly changing business landscape, learning agility and relevance are vital for talent to remain valuable. Progressive companies engage in continuous talent review and identification to ensure that individuals are consistently meeting the demands of the evolving business environment. This ongoing evaluation ensures that talent remains engaged, adaptable and aligned with the organisation’s future goals.”
“Holding onto talent without providing them with avenues to grow and contribute can result in the loss of valuable employees who are eager to make a difference. It is crucial for organisations to recognise and address the aspirations of their high-potential individuals to keep them engaged and committed to the company’s vision and goals. By doing so, companies can retain their talented workforce and foster a culture of innovation and success,” points out Mishra.
Talent hoarding may seem like a protective measure to retain skilled employees, but the long-term consequences can be disastrous for any organisation. Instead, organisations should focus on nurturing a growth-oriented work environment that encourages employee development, provides opportunities for advancement, and values the contributions of all team members. By fostering a culture of professional growth and appreciation, companies can not only retain their top talent but also thrive in an ever-evolving business landscape.