Many HR studies in recent years have clearly shown that successful competitive businesses consider that talent management is essential for the bottom line.
Talent management can be understood as a set of integrated organizational workforce processes designed to attract, develop, motivate and retain productive, engaged employees. The goal of talent management is to create a high-performance, sustainable organization that meets its strategic and operational goals and objectives consistently going forward.
You would expect that today all companies would see the importance of having a Talent Management strategy yet Jeffrey Joerres, former leader of Manpower, commented in a recent interview in Harvard Business Review, “Nevertheless, companies routinely fail to put in place a workforce strategy that supports their business strategy. Most have done a pretty good job of looking out three years, maybe five, but they don’t then marry that up with the skills they’re going to need.”*
Essentially there are two key questions:
- Are we developing a Talent Management Strategy for the right reasons?
- Are we constructing it in the right ways?
The key reasons for investing in Talent Management
Ability to capitalize on new opportunities: Talent management is very much about sowing seeds for the future and business leaders who implement the best talent management processes are more prepared than their competitors to compete in the global economy and capitalize quickly on new opportunities.
There is a demonstrated relationship between better talent and better business performance. Increasingly, organizations seek to quantify the return on their investment in talent. The result is a body of “proof” that paints a compelling picture of the impact that talent has on business performance.
Ability to adapt to a changing business environment: Jeffrey Joerres makes a valuable remark, “My point is that you don’t know what you’re going to need three to five years from now, but if you have your skills sharpened in multiple work models, you can turn the volume up in one and down in another, minimizing the latency time to get what you need. And that’s going to be the difference between success and failure.”
Having clearly thought out and planned for different talent and work model configurations, that enable you to realise your business strategy, will give you a distinct advantage in being ahead of the curve in responding to the increasingly volatile business environment and being prepared for the significant changes coming.
Employee expectations are also changing: This forces organizations to place a greater emphasis on talent management strategies and practices.
Employees today are:
- Increasingly interested in having challenging and meaningful work.
- More loyal to their profession than to the organization.
- Less accommodating of traditional structures and authority.
- More concerned about work-life balance.
- Prepared to take ownership of their careers and development.
Responding to these myriad challenges makes it difficult to capture both the “hearts” and “minds” of today’s workforce but it is critical to do so.
Employee turnover: Turnover is a huge expense in any business. When a good employee leaves, the company must spend money to replace them and the company loses the productivity of the worker during that time. Work in organisations increasingly means collaborative working in fluid teams and losing a key employee leads to not only a potential loss of important knowledge but also a significant disruption of one or more teams and projects. The organization will not only have to spend money to find and hire the new employee, it will also have to invest in integrating that individual into the way of working and potentially training as well. The process can be surprisingly expensive, and not just in terms of money but also in the time commitment of other key people.
Retention is a key area in relation to talent management. “In general, people leave their jobs because they don’t like their boss, don’t see opportunities for promotion or growth, or are offered a better gig (and often higher pay); these reasons have held steady for years.”* In my experience this is very much related to feeling appreciated. Company leaders need to spend time and money making sure employees understand the impact they have on the overall performance of the business and experience behaviour from their managers that supports their personal growth.
Attracting top talent: The employment market is increasingly mature and recruiting the most talented and skilled employees available becomes a challenge when many companies are chasing the same people. When you have strategic talent management, you are able to create an employer brand, which organically attracts your ideal talent, and in turn contributes to higher levels of business performance and results.
How to work with Talent Management
Many businesses know already that they must have the best talent in order to succeed. They understand that they need to hire, develop, and retain talented people. They are aware that they must manage talent as a critical resource to achieve the best possible results. However, this is where many organizations come up short. They do not have the necessary knowledge about how to work with talent management in their organization.
Constructing a Talent Strategy
One of the challenges in constructing a talent strategy lies within HR and their ability to align talent management with the company strategy. HR often fail to have the necessary skills to translate or break down the company strategy into useful pieces. One way for HR is to go into depth with business plans for the entire company and by that identify relevant areas that help to form a talent management strategy. Another path for HR could be to involve the relevant people from the organization responsible for strategy making to collaborate together to work out the full people and skills implications of the business plans.
Important questions you need to ask yourself:
- What are the strategic objectives and the plans for achieving them?
- What are the critical business processes?
- Where are there constraints in those processes?
- How does the organization differentiate itself from competitors?
- What skills are critical for being able to deliver those processes?
- How do our people match up with the expected skill demands going forward?
A talent strategy should consider all key aspects of an employee’s “life cycle”: selection, development, succession and performance management. It is therefore very important when constructing your talent strategy to see the whole picture and have a clear understanding of how you see these elements being linked together. Talent management in isolation will often fail or have difficulties meeting its primary goals.
HR also needs to define consistent leadership criteria across all functional areas. What do we expect leaders to do and how do we expect them to behave? These criteria are important to both leadership development in general but will also provide a guideline and direction for the work with talent management.
Important things to remember
Here is my advice to you in setting out to develop or review your talent management strategy.
- Get buy in: It comes as no surprise that it is crucial to the have the buy in from the top executives. Talent management should not be owned by HR but by the top management group. HR’s role should be as project responsible facilitating all the processes.
- Involve all leaders, experienced with strategic alignment, who have insight on the business/industry context as well as talent practices.
- Openness: Talent management should be an open process for everybody in the organization and the key here is to keep a very high degree of openness and a high level of information sharing.
- Get the necessary skills and knowledge: Before starting to work with talent management each organization should ask themselves: “Do we have the necessary skills and capabilities to ensure a successful talent management process?” It may be useful to get some expert help. At minimum it is good practice to check out the latest thinking and what others are doing.
So, talent management is a huge area of opportunity for many companies. When properly developed and managed, a talent management system can definitely have a positive impact on the organization's bottom line.
To find out more about how PPI can help your HR professionals step up to the challenges of successfully implementing talent management contact Gerry Buckley at the PPI Network at email@example.com
*”Why people quit their jobs”, Harvard Business Review Article, September 2016.