Talent Management - Meaning and Important Concepts

Talent Management - Meaning and Important Concepts

What if you could attract your competitor’s best employee for few extra bucks? Sounds easier than done! Attracting high-worth individuals from the competitors is not everyone’s cup of tea. Targeting them and finally hiring them is the test of your competencies experience, personal traits and brain application. This is where the strategic approach plays an important role. A full-fledged department, precisely Talent Management (a part of HRD), especially dedicated to the purpose is required to recognize, source and poach them. However the process doesn’t finish here. It is a never-ending course of action that requires continuous effort. Let’s read further to explore and understand the concept. Talent Management, as the name itself suggests is managing the ability, competency and power of employees within an organization. The concept is not restricted to recruiting the right candidate at the right time but it extends to exploring the hidden and unusual qualities of your employees and developing and nurturing them to get the desired results. Hiring the best talent from the industry may be a big concern for the organizations today but retaining them and most importantly, transitioning them according to the culture of the organization and getting the best out of them is a much bigger concern.

Talent Management in organizations is not just limited to attracting the best people from the industry but it is a continuous process that involves sourcing, hiring, developing, retaining and promoting them while meeting the organization’s requirements simultaneously. For instance, if an organization wants the best talent of its competitor to work with it, it needs to attract that person and offer him something that is far beyond his imagination to come and join and then stick to the organization. Only hiring him does not solve the purpose but getting the things done from him is the main task. Therefore, it can be said that talent management is a full-fledged process that not only controls the entry of an employee but also his or her exit.

 

Benefits of Talent Management

Talent management can be a discipline as big as the HR function itself or a small bunch of initiatives aimed at people and organization development. Different organizations utilize talent management for their benefits. This is as per the size of the organization and their belief in the practice.

It could just include a simple interview of all employees conducted yearly, discussing their strengths and developmental needs. This could be utilized for mapping people against the future initiatives of the company and for succession planning. There are more benefits that are wide ranged than the ones discussed above. The benefits are:

• Right Person in the right Job: Through a proper ascertainment of people skills and strengths, people decisions gain a strategic agenda. The skill or competency mapping allows you to take stock of skill inventories lying with the organization. This is especially important both from the perspective of the organization as well as the employee because the right person is deployed in the right position and employee productivity is increased. Also since there is a better alignment between an individual’s interests and his job profile the job satisfaction is increased.
• Retaining the top talent: Despite changes in the global economy, attrition remains a major concern of organizations. Retaining top talent is important to leadership and growth in the marketplace. Organizations that fail to retain their top talent are at the risk of losing out to competitors. The focus is now on charting employee retention programs and strategies to recruit, develop, retain and engage quality people. Employee growth in a career has to be taken care of, while succession planning is being performed those who are on the radar need to be kept in loop so that they know their performance is being rewarded.
• Better Hiring: The quality of an organization is the quality of workforce it possesses. The best way to have talent at the top is have talent at the bottom. No wonder then talent management programs and trainings, hiring assessments have become an integral aspect of HR processes nowadays.
• Understanding Employees Better: Employee assessments give deep insights to the management about their employees. Their development needs, career aspirations, strengths and weaknesses, abilities, likes and dislikes. It is easier therefore to determine what motivates whom and this helps a lot Job enrichment process.
• Better professional development decisions: When an organization gets to know who its high potential is, it becomes easier to invest in their professional development. Since development calls for investment decisions towards learning, training and development of the individual either for growth, succession planning, performance management etc, an organization remains bothered where to make this investment and talent management just make this easier for them.

Apart from this having a strong talent management culture also determines how organization rate their organizations as work places. In addition if employees are positive about the talent management practices of the organization, they are more likely to have confidence in the future of their organization. The resultant is a workforce that is more committed and engaged determined to outperform their competitors and ensure a leadership position in the market for their organization.

Financial Benefits of Talent Management

There are pros and cons of every management philosophy and the associated processes. Talent management is no exception to it. While many organizations simply decline to have it under their umbrella because it costs the exchequer, still others approve of it equally strongly as an effective people management process. Before we discuss the financial benefits of talent management the following may be of our interest and worth a thought: Most of the organizations are short sighted, when it comes to people management. People management may not go well with pure capitalists. Organizations and industries are growing at a fast pace, faster than the rate at which talent is produced. There is dearth of talented and skilled professionals both at the top as well as bottom. Due to cut throat competition and a consequent lack of talented professionals the attrition rates have increased across all industries, especially so in services industry. Poaching has become common place; employee retention has become the Achilles heel of corporations.

All the above mentioned statements clearly indicate that the talent is unable to keep pace with the growing industry and also that the industry has failed to breed the pool of talented individuals as per its requirements. A fast industry growth meant that there would be a need for talented professionals for upcoming avenues and unfortunately corporate seemed to miss out on this. Business houses nowadays have diversified interests in different industries, employment opportunities are fast coming up but unfortunately the talent is pool is shrinking. This tells upon the finances of an organization in a big way.

Less attrition means lesser expenditure on hiring: BPO’s and start ups, for example where the attrition rate is the highest remain occupied in searching for people every now and then. Now this incurs financial losses to the organization. An organization not only pays an employee for his/her work but also spends a considerable amount on their training and development. There is transfer of skill and expertise and when the same employee leaves after a brief stint with the organization, it costs the latter.

The problem gets even worse when such a scenario occurs at the top level. An unoccupied executive position can cost an organization dearly. The solution - a proper talent management in place can solve this problem. The following facts become worth consideration here:

1. New employees cost the company 30-60 % more than the existing employee in terms of compensation only.
2. There is an additional cost incurred on training and developing the new individual.
3. The process of recruitments itself costs an organization in a big way, right from advertising a post, to attracting talent and finally short listing and hiring someone for the job. Often there is a compromise in hiring when the need is urgent.

Organizations clearly need to look inside for solutions and design and develop better employee retention, rewards and recognition strategy. Performance management needs to be taken care of.

Principles of Talent Management

There are no hard and fast rules for succeeding in execution of management practices, if you ask me. What may work wonders for one organization may ruin another one! For convenience sake however there are certain principles of Talent Management that one should follow or keep in mind.

Principle 1 - Avoid Mismatch Costs

In planning for future manpower requirements, most of the HR professionals prepare a deep bench of candidates or manpower inventory. Many of the people who remain in this bracket start searching for other options and move when they are not raised to a certain position and profile. In such a scenario it is better to keep the bench strength low and hire from outside from time to time to fill gaps. This in no way means only to hire from outside, which leads to a skill deficit and affects the organizational culture.

Such decisions can be taken by thinking about the ‘Make or Buy’ decision. Perhaps questions like - How accurate is the demand forecast? How long is the talent required? Can we afford to develop? Answers to these questions can better help the talent management to decide on whether to develop or buy talent.

Principle 2 - Reduce the Risk of Being Wrong

In manpower anticipations for future an organization can ill afford to be wrong. It’s hard to forecast talent demands for future business needs because of the uncertainty involved. It is therefore very important to attune the career plans with the business plans. A 5 year career plan looks ridiculous along with a 2 year business plan.

Further, long term development and succession plans may end up as a futile exercise if the organization lacks a firm retention strategy.

Principle 3 - Recoup Talent Investments

Developing talent internally pays in the longer run. The best way to recover investments made in talent management is to reduce upfront costs by finding alternative and cheaper talent delivery options. Organizations also require a rethink on their talent retention strategy to improve employee retention.

Another way that has emerged of late in many organizations is sharing development costs with the employees. Many of TATA companies for example sponsor their employees’ children education. Similarly lots of organizations use ‘promote then develop’ programs for their employees where the cost of training and development is shared between the two. One important way to recoup talent investments is spotting the talent early, this reduces the risk. More importantly this identified lot of people needs to be given opportunities before they get it elsewhere.

Principle 4 - Balancing Employee Interests

How much authority should the employees’ haves over their own development? There are different models that have been adopted by various corporations globally. There is ‘the chess master model’, but the flipside in this is that talented employees search for options. Organizations can also make use of the internal mobility programs which are a regular feature of almost all the top organizations.

These principles are just broader guidelines; their application varies across industries and organizational cultures.

Talent Management Process

People are, undoubtedly the best resources of an organization. Sourcing the best people from the industry has become the top most priority of the organizations today. In such a competitive scenario, talent management has become the key strategy to identify and filling the skill gap in a company by recruiting the high-worth individuals from the industry. It is a never-ending process that starts from targeting people. The process regulates the entry and exit of talented people in an organization. To sustain and stay ahead in business, talent management can not be ignored. In order to understand the concept better, let us discuss the stages included in talent management process:

• Understanding the Requirement: It is the preparatory stage and plays a crucial role in success of the whole process. The main objective is to determine the requirement of talent. The main activities of this stage are developing job description and job specifications.
• Sourcing the Talent: This is the second stage of talent management process that involves targeting the best talent of the industry. Searching for people according to the requirement is the main activity.
• Attracting the Talent: it is important to attract the talented people to work with you as the whole process revolves around this only. After all the main aim of talent management process is to hire the best people from the industry.
• Recruiting the Talent: The actual process of hiring starts from here. This is the stage when people are invited to join the organization.
• Selecting the Talent: This involves meeting with different people having same or different qualifications and skill sets as mentioned in job description. Candidates who qualify this round are invited to join the organization.
• Training and Development: After recruiting the best people, they are trained and developed to get the desired output.
• Retention: Certainly, it is the sole purpose of talent management process. Hiring them does not serve the purpose completely. Retention depends on various factors such as pay package, job specification, challenges involved in a job, designation, personal development of an employee, recognition, culture and the fit between job and talent.
• Promotion: No one can work in an organization at the same designation with same job responsibilities. Job enrichment plays an important role.
• Competency Mapping: Assessing employees’ skills, development, ability and competency is the next step. If required, also focus on behaviour, attitude, knowledge and future possibilities of improvement. It gives you a brief idea if the person is fir for promoting further.
• Performance Appraisal: Measuring the actual performance of an employee is necessary to identify his or her true potential. It is to check whether the person can be loaded with extra responsibilities or not.
• Career Planning: If the individual can handle the work pressure and extra responsibilities well, the management needs to plan his or her career so that he or she feels rewarded. It is good to recognize their efforts to retain them for a longer period of time.
• Succession Planning: Succession planning is all about who will replace whom in near future. The employee who has given his best to the organization and has been serving it for a very long time definitely deserves to hold the top position. Management needs to plan about when and how succession will take place.
• Exit: The process ends when an individual gets retired or is no more a part of the organization.

Talent Management process is very complex and is therefore, very difficult to handle. The sole purpose of the whole process is to place the right person at the right place at the right time. The main issue of concern is to establish a right fit between the job and the individual.

Talent Management Consulting/Outsourcing

Talent management, beyond an iota of confusion, is critical to organizational success. It’s equally important for innovation, customer satisfaction, profitability and new product development of the organization. All go hand in hand. People are at the center of any organization. They are outside it as well as inside the same. Unfortunately for talent management, not many organizations have realized the importance of it till date. They still consider it as an overhead, much of which may be attributed to the fact that it does not directly reflect in the balance sheet of the company. When we dwell into the reasons we find that somewhere those are the helm of affairs in HR fail to implement talent management in their organizations effectively. In addition many HR personnel either are themselves not convinced with the practice or lack the relevant skills to implement the same. In such a scenario outsourcing is one way to look at solving the problem. The idea is that those who are best in the business will take care of the same. Talent management consulting organizations have people who are specialists in the department. After all it is very important to have a talent management strategy in place that is consistent, systematic and strategically focused. But there are pros and cons to outsourcing talent management. Let us analyze each of them.

Positive Aspects of Talent Management Consulting

Primarily organizations outsource their talent management because of underlying assumptions like - the management will be effective, efficient and result oriented, HR people will be spared of unnecessary engagement, employees can be focused in their respective domains and the like.

The following are some of the benefits or positive aspects of talent management

• Talent management consulting firms employ proven talent selection, career planning and development, people orientation and retention tools after strategizing with the top management. This is contrary to the common in-hose organizational practice which is very unsystematic and does not make use of any tools.
• They are focused unlike in-house talent management team that has other things to take care of.

Negative Aspects of Talent Management Consulting

The negative views are based on the fact that since it’s the employee data and the employees themselves that the talent management consulting deals with, there is a potential risk of the information getting leaked. However the negative aspects of talent management consulting are summarized as follows:

• Talent management consulting/outsourcing demands access to your critical organizational/people data. There is a potential risk of any consulting firm gaining insights into organizational functioning.
• Since organizations do not have a great belief upon the effectiveness of the practice they do not want to spend much on the same. There is a big cost attached to the outsourcing thing.

Organizations world over have begun to realize the importance of talent management especially after the economic downturn. Outsourced or otherwise, it is crucial for any organization that wants not only to survive but also excel in their respective sphere. The decision is theirs!

Talent Management - Opportunities and Challenges

There is no dearth of professionals but there is an acute shortage of talented professionals globally. Every year b-schools globally churn out management professionals in huge numbers but how many of are actually employable remains questionable! This is true for other professions also.

The scenario is worse even in developing economies of south East Asia. Countries like U.S and many European countries have their own set of problems. The problem is of aging populations resulting in talent gaps at the top. The developing countries of south East Asia are a young population but quality of education system as a whole breeds a lot of talent problems. They possess plenty of laborers - skilled and unskilled and a huge man force of educated unemployable professionals. These are the opportunities and challenges that the talent management in organizations has to face today - dealing with demographic talent problems.

Now if we discuss the problem in the global context, it’s the demographics that needs to be taken care of primarily and when we discuss the same in a local context the problem becomes a bit simpler and easier to tackle. Nonetheless global or local at the grass roots level talent management has to address similar concerns more or less. It faces the following opportunities and challenges:

• Recruiting talent
• Training and Developing talent
• Retaining talent
• Developing Leadership talent
• Creating talented ethical culture

1.      Recruiting Talent

The recent economic downturn saw job cuts globally. Those who were most important to organizations in their understanding were retained, other were sacked. Similarly huge shuffles happened at the top leadership positions. They were seen as crisis managers unlike those who were deemed responsible for throwing organizations into troubled waters. It is the jurisdiction of talent management to get such people on onboard, who are enterprising but ensure that an organization does not suffer for the same.

2.      Training and Developing Talent

The downturn also opened the eyes of organizations to newer models of employment - part time or temporary workers. This is a new challenge to talent management, training and developing people who work on a contractual or project basis. What’s more big a challenge is increasing the stake of these people in their work.

3.      Retaining Talent

While organizations focus on reducing employee overheads and sacking those who are unessential in the shorter run, it also spreads a wave of de motivation among those who are retained. An uncertainty about the firing axe looms in their mind. It is essential to maintain a psychological contract with employees those who have been fired as well as those who have been retained. Investing on people development in crisis is the best thing an organization can do to retain its top talent.

4.      Developing Leadership Talent

Leadership in action means an ability to take out of crisis situation, extract certainty out of uncertainty, set goals and driving change to ensure that the momentum is not lost. Identifying people from within the organization who should be invested upon is a critical talent management challenge.

5.      Creating Talented Ethical Culture

Setting standards for ethical behavior, increasing transparency, reducing complexities and developing a culture of reward and appreciation are still more challenges and opportunities for talent management.

(Since an opportunity is the other face of challenge and vice versa, the words challenge and opportunity have been used interchangeably in the article)

Current Trends in Talent Management

If you ask me for the guidelines for talent management, my response would be the following: Developing employees. Redeploying employees. Retaining the best talent. Yes, the prime focus of talent management is enabling and developing people, since the quality of an organization is determined by the people it employs and has onboard. After hiring and deploying we may say that retaining and nurturing talent is quintessential. Talent management also known as human capital management is evolving as a discipline that encompasses process right from hiring people to retaining and developing the same. So it includes recruitment, selection, learning, training and development, competency management, succession planning etc. These are all critical processes that enable an organization to compete and stand out in the market place when managed well!

Talent management is now looked upon as a critical HR activity; the discipline is evolving every day. Let’s analyze some trends in the same.

• Talent War: Finding and retaining the best talent is the most difficult aspect of HR management. HR survey consultancies are one in their view that organizations globally are facing a dearth of talented employees and it’s often more difficult to retain them. Further research has also shown that there is clear link between talent issues and overall productivity.
• Technology and Talent Management: Technology is increasingly getting introduced into people development. Online employee portals have become common place in organizations to offer easy access to employees to various benefits and schemes. In addition employees can also manage their careers through these portals and it also helps organizations understand their employees better.
• Promoting Talent Internally: An individual is hired, when there is a fit between his abilities or skills and the requirements of the organization. The next step is enabling learning and development of the same so that he/she stays with the organization. This is employee retention. An enabled or empowered means an empowered organization.

It is also of interest to organizations to know their skills inventories and then develop the right individual for succession planning internally.

• Population Worries Globally: World populations are either young or aging. For example, stats have it that by 2050 60% of Europe’s working population will be over 60! On the other hand a country like India can boast of a young population in the coming and present times. Population demographics are thus a disturbing factor for people managers. Still more researches have predicted that demographic changes in United States will lead to shortage of 10 million workers in the near future!
• Talent Management to rescue HR: HR has been compelled to focus on qualitative aspects equally and even more than quantitative aspects like the head count etc. Through talent management more effort is now being laid on designing and maintaining employee scorecards and employee surveys for ensuring that talent is nurtured and grown perpetually.
• Increase in Employer of Choice Initiatives: An organization’s perceived value as an employer as helps improve its brand value in the eyes of its consumer. Most importantly it helps it attract the right talent.

Myths about Talent Management

Without doubt talent management is a very useful concept for organizations but unfortunately many of them look upon the former as an overhead rather than a value creating process. This can be attributed to some flaws in the implementation and some myths among HR practitioners regarding the same.

In this write up we try to unravel some of those myths and solutions of the same.

• Myth 1 - Paying higher compared to Rival Firms will stop the Employee from Leaving: Offering more compensations than rivals or above industry standard will prevent employees from leaving and will also attract the best talent.

Reality: Paying higher than rival firms may help to a certain extent in retaining your employees. It may also help you poach certain employees from your rivals but in the long run, money fails to motivate people. Money is a hygiene factor; its absence may be a de-motivating factor but presence surely cannot be motivating for long.

Solution: It is the day to day work, organizational culture and career progression that motivates people more on a daily basis. Analyze each employee on what motivates whom and try to align their career interests with their growth in the organization.

• Myth 2 - Rewards and Incentives only Motivate People: The first myth that we discuss here is that its rewards and incentives only that motivates people to give their hundred percent and work more productively. Consequently it’s the rewards and incentives that is at the focus of HR people.

Reality: It is the attributes and the culture of the organization that is most likely to motivate people to work better and be happy with their jobs. Leadership and job empowerment are other factors that contribute to that happiness of employees.

Solution: Work on making the organization a better place in terms of enriching the culture, improving senior junior relationships and of course laying due emphasis on how the employees are being compensated.

• Myth 3 - Employee Engagement is Useless: In industries where the attrition rate is low there is a common feeling prevalent that employee engagement programs are of no benefit. Further there is also a feeling that employee engagement helps only the employees and not the organization.

Reality: There is no direct connection between levels of attrition and employee engagement. In fact employees who are engaged well are more productive and take ownership of their work. Since organizations about people, well engagement not only improves employee performance but also organizational or corporate performance. According to one recent research engaged employees perform 22 percent better, have lesser rates of absenteeism, and produce greater customer satisfactions.

Solution: Customize engagement strategy for each employee and show the connection between employees work commitment and organizational success. Improvise key drivers such as manager’s expertise and future career opportunities and development.

• Myth 4 - Low Growth Periods do not require Employee Engagement: Organizations typically believe that low growth is an industry wise phenomenon and does not demand employee engagement. Employees are naturally left with lesser options to switch jobs.

Reality: In absence of employee engagement the organizations stands at the risk of losing projects in hand. Continued absence of employee engagement may in fact de-motivate an employee to contribute his best.

Solution: Employee engagement is critically required to retain and polish talent that is essential for future growth and opportunities.

 

Talent Management System

Management systems are of strategic importance to organizations. HRMS and ERP systems are used these days in the administration of basic human resource data such as payroll, compensation, time management etc. Talent management systems are similarly used to offer strategic gains to an organization in the achievement of long term goals vis-à-vis the human capital. Talent management systems also referred to as applicant tracking system (ATS) can either be a standalone application or embedded as part of the ERP and other HRMS system. Whereas as applicant tracking system or ATS is software typically meant to handle the recruitment needs, a talent management system or TMS may be a suite of various coherent or disparate modules that covers diverse areas rather than just one. Both are an important feature of a large number of organizations these days. Applicant tracking system is a regular feature of all HRMS software of many large and small organizations globally. The software allows for tracking recruitment needs. This may include the database of CV’s received, shortlisted, reasons for rejection, list of interviewees, and finally those selected. ATS thus acts as a central location and database for an organization’s recruitment needs. They are developed and designed to assist organizations in better resume management. Major recruitment portals like Naukri.com, monster.com etc have tie ups with ATS software providers for support and data migration.

The software exists as a standalone module in small organizations where it takes care of their recruitment needs or it may be integrated into other HRMS in large corporations. The software is currently entering into small and medium enterprises by software as a service offerings (SaaS) also called as open source.

In organizations talent management system solutions typically take care of the following:

• Performance Management
• Goal Management
• Talent acquisition
• Learning management
• Succession planning
• Learning management
• Compensation management

The role is thus wide and farfetched compared to the Applicant tracking system (ATS). Both are however used interchangeably. Nowadays however its talent acquisition and performance management that seems to have gained more weight in the talent management market. The focus is now more on developing integrated talent management systems.

The problem with talent management system may be that of integrating talent management systems with other HRMS applications or software. Many vendors have so far promised varying degrees of integration of with other enterprise management software, the credibility of which still remains questionable. Many vendors also nowadays offer certifications for their claims.

Like ATS, talent management systems also became popular through the channel of software as a service (SaaS), earlier however these were typically delivered through the standard applicant service provider (ASP) delivery model.

As Steven Hankin of Mckinsey and co. described it aptly as a war for talent, lots of vendors are entering the domain of talent management to assist and integrate the same with their strategic human resource applications. Though SaaS model is affordable and less costly other channels are equally lucrative and offer more competitive avenues.

How to Build an Integrated Talent Management Strategy

The human resource professionals are the cornerstone of any organizations. They not only solve business problems today but also participate in strategic aspects of the organization; talent management is one of them. Formulation of a talent management strategy is the responsibility of the HR function. This is often done in consultation with the business function. Be it talent mapping and planning or performance, recruitment and retention the human resource professionals of the day are seeking out ways to streamline and integrate their functions with the broader business functions. In Aditya Birla group, for example there is huge dearth of leadership positions at the top. The company is expanding globally and at a rate faster than it can grow its human capital. This has lead to talent deficit and this is common in many organizations. The problem requires a comprehensive set of solutions.

Again in the same organization as mentioned above, people are empowered very early in their careers to give them more responsibilities and build more competencies in employees. This enables to develop high potential personnel. The organization runs an internal programme Adventure where they promote entrepreneurship. You have an idea; you come forward, share and develop a comprehensive business plan. The best plan receives a support from the organization!

Needless to mention now, organizations require an integrated approach to talent management. There is a need to strategize in HR functions to enable and support the business functions. Some strategies in this direction could be:

• Aligning Business strategies with the HR strategies: Business HR is one function that is developing fast as part of the human resource department. The person is responsible for ensuring a smooth relationship between business and HR functions. They work with business heads to develop people strategies to support both short term and long term business objectives.
• Performance Planning and Evaluation: An integrated HR approach means that are uniform and standard procedures for employee performance evaluation and compensation, up and down the organization. Performance is linked to growth and the process adds value for employees to evaluate their work on their own. Indian digital disk giant Moser Baer employs such process.
• Strategic Manpower Planning: HR and Business function are interrelated. None can exist without the other. HR functions need to work in collaboration to assess current and future manpower requirements are plan for the same. They need to strategize on the approximate manpower requirements, the relevant skills and educational qualification, compensation and the like. This has to happen well in advance. Recruitment itself means a host of other activities like training and development, compensation, induction and orientation etc.
• Mapping your Talent: An ever increasing emphasis is being laid on identifying the top performing and talented employees to think of ways to develop, nurture and retain them. Further organizations also like to keep skill inventories for contingencies. As organizations realize the skills and abilities of individuals, they can then be more focused on devising means and strategies to attract, develop and retain these people.

People Problem in Talent Management

Organizations globally are one in their view that managing people in a strategic priority. Yet something somewhere seems to be going wrong and research has it that it is the human factor that is big impediment in talent management processes. Is it something in the implementation or lack of people participation at the top level? Let’s try to understand. McKinsey conducted one research in this direction in the year 2006 and found out that the obstacles preventing talent management programs from delivering business value are too human! Either the top management holds business line managers responsible for not giving enough time to the issue of people management or the executives blame the top management for failing to align their business strategies with talent management strategies. Senior managers blame the apathy of the top management towards the issue and also that the line managers are not sufficiently committed to people development. According to the survey it was found out that 54 percent of the respondents believe that senior managers don’t spend enough high quality time on talent management. Perhaps the senior managers fail to recognize the strategic importance of the process in their business and therefore don’t see the point in spending so much time on talent management or maybe they are not managing their time well.

Business line managers, according to the survey are equally responsible. Fifty two percent of those interviewed contributed that line managers were not sufficiently committed to people development. Understandably because lower the organizational hierarchy the focus remains more on the present than on the future; additionally it was also found out that line managers do not want to differentiate their employees are top, average and underperformers. Add more to it, forty five percent reasoned that the managers failed to deal with the underperformers.

Another forty five percent people in the survey believed that some part of it could be attributed to silo thinking i.e. focusing on the interests of only one part of the organization. Silo thinking results in immobility of talent across the organization and also hinders knowledge sharing across various departments.

Apart from the above mentioned factors succession planning and lack of understanding of critical jobs in the employees is another impediment to talent management.

The Solution

We may begin from the bottom or start from the top, because both have a stake. Beginning from the bottom would mean performance management for line managers and employees with self service convenience. Performance management systems with superior user experience will increase the use of the system. Business line managers need to be trained on various aspects of delegation and dealing with underperformance and reporting the same. Employee rotation within the organization may help and this needs to be conveyed.

Similarly a top down approach would mean aligning talent management strategy to the business strategy. Intelligent reporting system has some answers perhaps because the results are seen immediately. If the problem is of conviction and belief in talent management as strategic tool rather than a mere cost center, perhaps intelligent reporting may solve it for the organization. For talent management to be successful a though participation and belief in required up and down the organization hierarchy.

Myth: a myth is a story made up to explain how the world works. OR a story that explains the worldview of a society. A MYTH, you mean, is a old legend, basically. A myth may grow out of an old legend.

Talent Management as a Profession: Unleashing the Gifts and Talents of Human

Creating a talent-rich workforce can make a great deal of difference in the world of business. Unleashing the talent, ability and aptitude of the human resources, undoubtedly, is one of the most difficult tasks in the world. If you’re able to hire the best industry talent and balance the human intellect, this is, for sure, more than a miracle. To get going and winning the battle of competition, talent management professionals can be of great help to any organization. These days when there is so much uncertainty in the business world, talent management professionals come as a rescue who handle your entire talent management lifecycle while unleashing and harnessing the gift and intellect of the employees. Talent management jobs, nowadays, are not restricted to just recruitment and selection. It means much more than that. However, it may be the beginning of one’s career. The core responsibilities of a talent management professional include sourcing, attracting, recruiting, selecting, and training, developing, deploying, evaluating, appraising and retaining the best talent.

Individuals who want to build their careers in this particular line of Human Resource Management must learn how to tap the diverse talent to meet the organization’s requirements. Their aim should not be limited to poach the high-worth individuals of their competitors but they should be able to deploy them properly and meet the challenges in today’s highly competitive marketplace. Simply hiring them does not solve the purpose.

Individuals may start their careers as a recruitment consultant. However, the profession may seem unattractive to them because of the current image of a recruitment professional in the industry. But it is one of the most important stages in one’s career as the individual himself discovers and develops his own natural talent. This is the best time when he or she understands what it takes to source and attract the high-profile individuals. Blended learning and the knowledge of internet-based tools help them understand the tricks of the trade. By now they know how to leverage their own strengths and accordingly, they manage their professional development.

Next stage is to be a talent smart manager. This is when one increases their basic skills and builds a powerful social network aligns efforts to ensure a career fit. Understanding the industry trends, practicing mastery and mentoring juniors are the main responsibilities of a talent management professional at this stage.

By this time, there are several career options available to the professionals. Now the individual can accelerate his or her learning by supporting talent mentors and developing plans and practices according to ever-changing industry trends. Understanding organizational trends, industry trends and the job trends and aligning them smartly to achieve the pre-decided goals. The talent management consultants help organizations create a high-performing work culture through their specialized services.

The next stage is to work as a trainer in organizations and provide coaching to the employees in order to help them understand their strengths and weaknesses and unleash their hidden potential. Breaking the ice and making employees think beyond their imagination is a challenging task. The main aim of the talent management professional is to successfully align the organizational goals and individual aspirations.

Another lucrative field for individuals interested in this particular profession is to work as independent Talent Management Consultant. The professional helps the organization throughout the entire cycle of unleashing the natural gifts and talents of their people.

Employee Value Proposition - Meaning and its Importance

Imagine a situation where you have to sell jobs for your organization to individuals who have many lucrative job options in hand, what would you sell the job for or would you actually be able to attract the right talent towards a certain job! Every organization wants the best talent onboard, but how many of them actually succeed in the same? The question stares most of the organizations on their face today!

Businesses can no more afford to think only of existence, they need excellence for survival. When we look at what makes organizations great, is it the fixed assets, the plant and machinery, the technology? No, while all of these are important and contribute in their own way to an organizations success, there is more to it that makes great organizations great, it is the people!

The biggest Challenges and EVP

Attracting, hiring and retaining people are the biggest challenges for the talent management of the day. For this to happen it is equally important to develop value propositions for jobs to attract talent sufficiently. Employee value proposition means creating a balance of rewards and recognition in return to an employee’s performance at workplace. It is a people centered approach that is directed to existing employees and integrated manpower planning strategies because it comes from existing employees themselves. It must be original, unique, compelling and strategically directed to a talent pool.

The biggest challenge to talent management is ensuring a supply of talent sufficient to match the estimated demand, especially when the demand is very hard to predict and when the supply of talent is not constant. Remember - the talent management of 1970’s that failed severely because of the demand supply match. In such a scenario it is the best to build an employer brand of the organization which can be achieved by developing an employee value proposition. The latter is also referred to as employer brand proposition.

Why Employee Value Proposition

Many workers including Tandehill (2006) have recommended organizations to build unique brands of themselves in the eyes of its prospective employees. This essentially means developing a statement of ’why the total work experience at their organization is superior to that at other organizations. The value proposition should outline the unique employee policies, programs, rewards and benefits programs that prove an organizations commitment to people and management development. In nutshell it should define an employee’s ‘why should I join this organization?’

The employee value proposition needs to be communicated in all hiring efforts of the organization. It may be reflected on the company’s website, job advertisements and letters extending employment opportunities.

Importance of EVP

Benefits of EVP - It is a known fact now that there is more to employee satisfaction than just remuneration (salary and benefits). Employee value proposition has been proven crucial to attracting, hiring and retaining the best talent in the industry. This goes a long way in helping prioritize the HR policies, creates a strong brand in the eyes of people, and helps in workforce engagement.

Application of Talent Management in Current Economic Condition

The current economic conditions demand a cut in the expenses. Unfortunately enough for talent management though organizations and leadership is all praise for it on papers, the same is neglected as seen as a cost center when it comes to implementation. In wake of the economic recession human resource professionals are under huge pressure to cut costs. Logically this is best time to validate the importance of talent management. Hiring and compensating the best talent in the industry optimally and ensuring performance at the same time. The question that remains is ‘what exactly is the relevance in the current economic conditions’? Before trying to answer lets ponder on certain key issues. As per industry statistics only five percent of organizations possess a talent management strategy that is operational! In another ten percent the concept has just begun to develop. Aging workforce is another area of concern that has created vacuums in organizations leadership positions. Organizations also report shortage of talent business line managers.

All this has opened up avenues for HR professionals for vindicating their stand on talent management and once organizations understand that they need an integrated approach to talent management, the involvement of a top executive is important for driving success.

The top executive who now heads the talent management function is responsible for activities like succession planning, leadership development, career development, performance management, learning and development, recruitment etc. Having said this we again arrive upon the question of relevance.

Developing Leadership Pool: Succession planning and leadership development are two issues that have felt a sense of urgency after the recent economic downturn. Organizations have been seeking leadership positions to rescue them out of crisis.

Performance Management: After succession planning and leadership development, performance management comes next on the list. Without a thorough and standard way to measure performance it is not possible to promote right people to right positions and motivate them to perform for organizational growth and development.

Recruitment assumes significance: Recruitment becomes strategic so to say. Recruitment practices determine organizational effectiveness. In a tight labor market it a daunting task to attract the brightest talent towards your organization and then getting them onboard. Internet has become an important source of external recruiting. Systems and standards have been laid down for the same. Here building an employer brand is important. Those who do, get right people onboard.

Skill based Manpower Planning: Manpower planning is a strategic HR process these days. Instead of a mere headcount based hiring; manpower planning now extends to the locating critical skills, roles and responsibilities and then ascertaining current and future talent needs for those roles.

These are vital processes that optimize the performance of the human capital management. What is required is to ensure that they are consistent in order to ascertain they meet the business objectives.

Talent management is in its nascent stage, there are still more processes that will be added in due course of time as organizations opt for more initiatives in the direction.

Recruitment and Retention

The problem of retention begins with recruitment! In most of the organizations the recruitment function operates independently of the retention department. HR people have so far been naïve to the direct relationship between the two and the resulting increase in employee turnover. It is therefore in the interest of organizations to understand how the hiring process impacts the employee turnover and devise strategies accordingly. In recruitment Human resource department comes across a wide range of people who are different in terms of their psyche, their attitudes, beliefs and all other factors. It becomes difficult to judge what motivates whom. Incentives may motivate a certain person but may be equally unimportant to some other. Money it has been observed is the prime motivator in most of the cases but it motivates only to a certain extent and fails afterwards. How does talent management deal with all this? Can we have strategies in place that are almost universal in appeal or in other words can we design programs that motivate one and all? A universal solution may or may not be possible and may vary across organizations. But talent management has an answer i.e. look at the holistic picture - deal with whatever you have. We therefore have certain recruiting factors to take care of that impact retention. Here they are:

§  Candidates who are Money Focused

It is very important to keep a track of people who are motivated by money. Often people tend to switch fast if they are not offered raises, bonuses, and stock options. No matter how great is the growth and development trajectory, if it is not being well complemented by a corresponding raise in salary the employee may leave soon! It is only during recruitment that such employees can be tracked easily. It is the interview feedback database that helps in making an assessment of what motivates whom. Further employee surveys may be conducted in order to receive their inputs on what they think is lacking in their professional lives. Here the questions should be asked implicitly.

§  Past Experience or Average Tenure with Other Organizations

Ones past experience can offer deep insights into the stability of the individual. An individual whose resume reflects frequent job changes may well be one who will soon leave your organization also once he gets onboard. On the other hand there are individuals who are in high demand because of their talents and who work on a project basis, their resumes will also reflect spontaneity. The decision lies with you.

§  Induction and Orientation

First impressions make lasting impacts. In one research conducted in Indian IT companies it was found out that fresh employees decided in their very first days that how long they were going to stay in that company! How is your induction and orientation program - fine, good, too good, exhilarating? It is high time to assess and review your programs. Try to create a kind of culture that looks challenging and rewarding.

§  Role of Recruiters after Hiring

Recruiters know well what motivates and what de-motivates or annoys the people they have hired. It is often a good practice to keep your recruiters in touch with the ones who have hired them. They add value and offer mentorship and guidance to the fresh employees. They may suggest way outs of obstacles that have come their way, both behavioral and otherwise.

Apart from this there are practices like rewarding managers for less turnover, introducing diversity into the way employees are trained (training and development). All this falls in the ambit of talent management and is common in many good global corporations.

Return on Investment for Talent Management

World over organizations are concerned about the return on investment (ROI) of talent management. Those who are investing money into the same are searching for efficient means to calculate their ROI. This problem is not unique to talent management only; training and development for example suffers from the same drawback to a certain extent.

Fortunately there are software available and in development process for the same. These software’s help you in calculating your returns on investment for talent management. The software’s span the entire talent lifecycle and are built to automate and track the entire activities including the financial inputs and outputs at each stage. The software’s bring together all parts of the talent management system into a single collaborative environment. The environment may be either web based on otherwise, depending upon the vendor.

An alternate way of doing this would be making calculations manually, hectic but worth doing considering the benefits. ROI is the ratio of money gained or lost on money invested into a particular product, process or a project. Typically these calculations are undertaken over a three year period. Here are the steps to be followed.

The very thought of calculating cost for performance management system appears bizarre, especially for organizations that employee a good number of people. But there is a method to it, a poll. Choose a representative number of managers or employees and enquire about the average time they spend on preparing performance appraisals for a given year on one singe employee.

Now multiply each of these averages by the total of employees in your organization and the average salary for these managers and employees. For example if the managers in consideration spend an average of 4 hours on each employee appraisal and the average pay for the managers is $ 30 (let’s say) and your company has 200 employees. Then the total cost would come up as 4 × 200 × 200 i.e. $ 24000.

Similarly now calculate the cost for employees. Assuming if each employee spends 2 hours on the appraisal process for each employee and the average pay per hour is $ 15, than the total cost for appraisals for employees is 2 × 25 × 200 i.e. 10000.

In addition the staff growth per year has also to be accounted. The average time spent by the HR people administering and managing the process also needs to be taken into account. Finally other labor costs like copying, assembling, mailing and printing etc also need to be taken into account. All these costs added make up for the labor costs. Here in our case, if we do not account for the administration and other labor costs the total cost would be $ 34000.

Then the physical costs are accounted. These include the cost of paper, stationary, copier, printer etc. An increase of 2-3 % of these costs should also be taken into consideration. The labor and the physical costs combined make up for the total costs incurred. The costs which become the investment now, divided by the cost of purchase gives us the return on investment.

The return may give different results under different conditions of measurement. Though it is entirely not possible to calculate the return on investment on intangible assets, however an approximation always gives an organization a fair idea of their profitability.

Talent Management and Poaching Talent

What could be the biggest source of competitive advantage to an organization in the current era of cut throat competition? If I asked this question a decade or two decade, the answer would have been something like - ‘it’s the technology’, ‘its global presence’, ‘its customer perception’ etc. All of them can be a potential source of competitive advantage to any organization even now. But the common answer today would be ‘the people’. Yes, it’s the people that can be and that are the single biggest source of competitive advantage to organizations nowadays. Top executives globally are one in their view that the quality of people onboard decides your present and the future. Great mission and vision statements appear futile if the talent pool or skill inventory of an organization is not good and vice versa. But since when have people become of strategic importance to organizations? They always were! But time demanded no reckoning of this fact. Organizations in the fast were progressing at standard rates and talent was developed at similar pace and consequentially there was no dearth.

But with the advent of globalization that has thrown open global market places, organizations and industries are growing at blistering pace. It is getting difficult to develop people at the same pace. The heat is being felt equally at the top as well as bottom level positions. There is shortage of skilled workers are the lower level and an equal dearth of people in leadership positions.

What’s more, organizations fail to understand how to retain the existent talent, compensation (financial and otherwise), rewards and recognition all have failed organizations in helping them retain people of skill and choice. An even more difficult aspect is to identify the right people for development for leadership positions.

Needless to mention here organizations want talent up and down the hierarchy and when they fail to retain the same, they poach. If I am an organization that believes in having talent onboard and I recognize talent in some organization, I have every right to poach the same, provided I can compensate him/her in terms of growth, learning and opportunity!

Poaching is not unethical on the part of any organization. In fact it showcases a flaw in the organizations retention strategy from where the person is being poached. It basically means that there is fundamentally something wrong in the way the organization compensates its employees. This is one of the biggest challenges to talent management. Consider the following facts:

• The average cost of hiring a new manager in place of another who has left the job is 1.5 to 3 times the salary!
• Each managerial position vacant can cost an organization up to 60000 on an average. It may shoot to six figures in some management positions.
• According to an estimate 1/3rd of business failures are due to poor hiring decision and inability to attract and retain quality people.

This is the cost of poaching to both the organizations, the one that is getting people onboard and the one that is losing people.

While poaching is not a new concept, what should be of more concern to HR is why do people leave and how to retain them. It’s none other than the talent management that has to come out with a solution.

Unlike other non contingent capabilities that can be developed easily and cannot contribute to a large extent towards the development of a sustainable competitive advantage, differentiating strategic capability such as strategic HR through talent management can. However for human resources to qualify as potential sources of competitive advantage they should fulfill the following criteria:

• Strategic Value: The resource has to contribute substantially and add value in his/her area of expertise.
• Rare: Unique in terms of skills, knowledge and abilities in order to qualify as rare.
• Appropriable: The extent to which the resource is owned by the firm.
• Inimitable: Such that the resource cannot be replaced even after the competitors having spotted the same.
• Cannot be Substituted: This means that the resource cannot be substituted by the rival firms and that there is no match for the talent!

There are not many things in the business environment that can fulfill all the above criteria and offer unique competitive advantage except human resources and that is under the jurisdiction of talent management. There is also a need to understand the strategic intent of the organization before defining strategic capabilities.

Typically the following steps are involved in performance management:

1. Commitment analysis.
2. Work analysis.
3. Defining performance standards.

In commitment analysis a job mission statement is made for each job or process which is a job definition in terms of product, scope and purpose. Here the key objectives are outlined and performance standards are set against the same.

Work analysis follows next; this underlines the reporting structure and job description. Finally performance standards and expectations are set against each job or process keeping in view the efficiency and effectiveness both.

Employee performance management is of key benefit to organizations in helping them realize effectively the strategic and operational goals. In organizational behavior lexicon, performance problem is a gap between desired and actual results and performance management seeks to address just the same problem. There the effort is called as performance improvement. The guidelines that determine whether or job is being carried out effectively is based upon factors like whether the work is planned and clear expectations are set, work performance is monitored, staff is trained and developed continuously for a certain job etc.