Talent Management

T. Vijayabaskar
Management Department,
Eastern University, Sri Lanka

The emergence of the talent management concept changes the role of HR. 'Talent Management' has become one of the most important buzzwords in corporate HR and training. To understand why Talent Management has become so important, we must first look at the evolution of corporate HR: that is 'From Personnel Management to Strategic HR to Talent Management'.

Stage 1:

Personnel Department

In the 1970s and 1980s the business function which was responsible for people was called 'The Personnel Department'. The role of this group was to hire people, pay them, and make sure they had the necessary benefits.

The systems which grew up to support this function were batch payroll systems. In this role, the personnel department was a well understood business function.

Stage 2:

Strategic HR

In the 1980s and 1990s organizations realized that the HR function was in fact more important and the concepts of 'Strategic HR' emerged. During this period organizations realized that the VP of HR had a much larger role: recruiting the right people, training them, helping the business design job roles and organization structures (organization design), develop 'total compensation' packages which include benefits, stock options and bonuses, and serving as a central point of communication for employee health and happiness.

The 'Head of Personnel' of Strategic HR' had a much more important role in business strategy and execution. The systems which were built up to support this new role include recruiting and applicant tracking (ATS), portals, total compensation systems, and learning management systems.

In this role, the HR department now became more than a business function: it is a business partner, reaching out to support lines of business.

Stage 3:

Talent Management:

We are now entering a new era: the emergence of 'Talent Management.' While strategic HR continues to be a major focus, HR and L&D organizations are now focused on a new set of strategic issues:

* How can we make our recruiting process more efficient and effective by using 'competency-based' recruiting instead of sorting through resumes, one at a time?

* How can we better develop managers and leaders to reinforce culture, instill values, and create a sustainable 'leadership pipeline?'

* How do we quickly identify competency gaps so we can deliver training, e-learning, or development programs to fill these gaps? How can we use these gaps to hire just the right people?

* How do we manage people in a consistent and measurable way so that everyone is aligned, held accountable, and paid fairly?

* How do we identify high performers and successors to key positions throughout the organization to make sure we have a highly flexible, responsive organization?

* How do we provide learning that is relevant, flexible, convenient, and timely?

These new, more challenging problems require new processes and systems. They require tigher integration between the different HR silos - and direct integration into line of business management processes.

Today organizations are starting to buy, build, and stitch together performance management systems, succession planning systems, and competency management systems. The HR function is becoming integrated with the business in a real-time fashion.

Post recession challenges

* Recovering economies

After a year or so the news on recession is taking a U-turn (not a V-turn though). Officially, analysts are reporting that recession is over, including Google CEO.

While it will take some time for recession to pave the way for prosperity and growth for business in general, the prosperity is already on its way to certain economies such as BRIC (Brazil, Russia, India and China).

* HR may be caught off guard

Although this is good news for business operations, including marketing and sales, it poses new challenges for human capital. Businesses would no longer run on the old rules, but new out-of-the-box solutions, more comprehensive efforts, innovative thinking, and new skills and competencies would be required to grow and prosper.

Needless to say, the demand for both the quantity and the quality of talented employees will grow worldwide.

Companies that have fired employees in the past are already feeling the pinch, as they do not have enough bandwidth to execute.

* Talent scenario during recession

The law of demand and supply mercilessly applies to human resources, also. During the economic downturn, companies were able to downsize by getting rid of redundant work force and dead wood. They also restructured the employee compensation (mostly by decreasing) to stave off financial losses. Only those employees were retained who proved their worth.

The employees had to accept all kinds of compensation-related compromises while maintaining the same or even higher level of efficiency and productivity. They could thus survive the financial tsunami.

These survivors got the opportunity to handle a variety of tasks that further sharpened their skills and made them multi-skilled. Thus, overall quality of talent has increased. At the same time, those who were out of job lost this opportunity to hone their skills in a new challenging environment. Adding to our woes, slashing of training and development budgets has led to a depletion of the number of skilled employees within the companies.

* And a difficult road ahead

Such steps from companies have created an altogether tricky scenario: The quality of talent within the companies has increased (raising the bar of the talent), while the quality of skills available in job market has dwindled. Now, recruiters can hire the required quality talent not from outside but from inside their competitors' workplace.

While many have forgotten the term 'War for Talent', the phenomenon is slowly re-emerging. A study by Accenture has found that more than two-thirds of executives are now deeply concerned about not being able to recruit and retain the best talent.

In today's global and highly competitive economy, the war for talent is now global, not local.

The survey of more than 850 top executives from the U.S, UK, Italy, France, Germany, Spain, Japan and China found worries about talent management were growing, with 67 per cent this year putting it second only behind competition as the key threat, up from 60 per cent last year.

It may be worth noting that great companies such as Infosys responded to the downturn by investing more in training.

Instead of fearing of financial losses, these corporates focused on improving the quality of their employees' skills. And the effect is visible in their financial results.

Member of Infosys' board of directors and head of HRD and Education and Research, Head T V Mohandas Pai said, 'In response to the economic crisis, we had stepped up our investment in training.

This has made us more competitive in fulfilling clients' needs today.'

Five important talent retention factors

Let us consider five factors that can help organizations retain talent to meet the client and business requirements in post-recession era:

1. Clear goals, targets and expectations: You need to tell them what exactly you expect from employees and what should they do to meet these expectations. A talented mind without a direction is most likely to pull the plug than a mediocre or a dead wood.

2. Balanced work environment: Talented employees have huge positive energy and they exhaust this energy to meet the deadlines. But often they need time to re-energize themselves. Organizations that want to retain talented employees need to provide a positive environment that allows them to re-energize themselves more often.

3. Track performance goals and provide analysis: Innovators and hard workers need constant motivation to perform better. They need to know whether they are producing desired results. Any suggestion of not being able to deliver throws them in doldrums. One way to let them know about their performance (whether improving or declining) is to point toward specific results, achievements or failures (which they can fix before it is too late).

4. Fair evaluation of performance: At the end of the day, the high fliers want to get acknowledged for their work. The first acknowledgment of the hard work is a fair and formal appraisal of their performance. They should be specifically told where they met expectations and where they did not.

5. Compensation to maintain a decent lifestyle: Employees who deliver quantity with quality also expect from employers fair compensation that is compatible with the market. If not first, compensation remains the second most important cause of brain-drain from organizations.

How do you develop and implement a Talent Management Strategy?

As I describe above, Talent Management is a natural evolution of HR. It is a series of business processes not a 'product' or 'solution' you can buy.

Organizations we speak to are focused on different elements driven by their maturity and the urgent business problems they face today.

While a few mature organizations have dealt with most of the processes process of Talent Management, most organizations focus on several of the key elements and build an integrated approach over time.

Additionally, Talent Management is a 'forward-looking' function. Not only should talent management improve your organization's flexibility and performance, it should give you the information and tools to plan for growth, change, acquisitions, and critical new product and service initiatives.

Why HR is crucial to Talent Management?

Human resources practitioners may be swept aside by line managers and business leaders if they do not meet the issue of talent management head on, according to the findings of a new study.

Talent Management - Raising the Bar, is based on an academic study of talent management concerns among leading change management consultancies and HR thought leaders globally.

Its authors, talent management consultancy Talent Edge, say the principle theme that came from the study is that human resources can no longer afford to assume that the skills shortage and aging population is cyclical and that it will pass over time. "This is a problem that has only just begun.

It will last for more than a decade and while it continues HRs will risk reducing their positions from strategists to tacticians, troubleshooting the fall-out and ultimately losing talent management responsibilities to the business units."

Some general misconceptions about talent management that came from the study include: The definition of talent management is misunderstood.

Too many organizations limit their talent management focus to 'high potential candidates' when in fact the definition of talent includes the entire organization's human capital.

* The loyalty factor - organizations assume that big brand equals talent management. A high profile brand can attract talent in the short term but a brand alone doesn't grow and develop people's potential, nor retain them in the long run.

* The leadership factor - organizations assume that employees are motivated to work for the company. Employees work for leaders. Good people expect good leadership, and will leave within six - 12 months if they don't get it.

* The happiness factor- organizations assume that financial security will make employees happy.

Employees seek job satisfaction and fulfilling careers more than financial reward.

* The silo factor-CEOs assume that business units and HR teams work closely together.

Since most organizations nowadays operate in a highly competitive and volatile global environment, they have to engage the right talent to create sustainable success, and react quickly to changing markets.

Leaders who understand the value of talent management programs and actively support them also understand that one should not take human capital for granted or expect talent to fully develop over a short period of time.

Although talent management was seen primarily as an HR responsibility in the past, the reality is that line management involvement and commitment will ultimately determine the success of this initiative.

Today, both HR and line management, from the CEO to the team leader, play just as important role in developing current talent into future leaders.

Therefore the organizations want to understand the need of an effective talent management initiative for their prospers while HR is in the line of changing their usual roles of managing human resources into take some diligent activities to develop and retain their entire human capitals through an effective talent management program.