Business & Leadership Insights
Our latest thinking on the issues that matter most in organisations.
Organisations place a high premium on talent.
Organisations have upped the ante on talent management efforts, making sure that the welfare and personal development of their employees is at the forefront while taking business decisions. Talent management initiatives don’t just attract better talent, but completely transform talent management—and change what it means to be at work.
Having looked at the current status of talent management in organisations, let’s take a step back and define talent management.
What is Talent Management?
Talent management is the systematic process of identifying a vacant position, hiring a suitable candidate, developing the skills and expertise of that candidate to match the position and retaining them to achieve long-term business objectives.
Talent management includes the integrated organisational HR processes that work together to attract, engage, motivate and retain the best employees for a company.
Talent management is an organisation’s commitment to recruit, retain and develop the most talented profiles available in the job market, taking into account global demographic shifts, widening skill gaps and the entry of a more flexible and technology- driven generation into the employment market.
In short, talent management is hiring candidates appropriately and nurturing them into life-long employees. Within talent management, the term ‘talent’ is frequently used while referring to human resources or employees.
Talent Management Strategy (TMS)
A talent management strategy (TMS) is the magic ingredient behind managing an organisation’s talent – both current and potential. Talent management is an important business goal for any organisation and talent management strategy can give the competitive edge to any organisation.
Talent management strategy can move an organisation’s talent management beyond essential talent management activities like talent acquisition and performance management, to levels of critical talent growth, managed talent relationships and an inclusive talent system.
A well-designed TMS within an organisation facilitates the HR function and management to plan toward recruiting and retaining top performers, employing them against specific business goals at a better rate than their competition.
The best talent management strategy is the marriage of the organisation’s goals and objectives and the personal developmental aspirations of its present and future talent.
For an organisation, talent management strategy starts by understanding personal aspirations of its talent, rather than adjusting to templates that are not current, and aligning these to the overall business strategy.
Talent management strategy is majorly concerned with the following areas:
Talent attraction and recruitment: Organisations often undermine the cost of recruiting the wrong talent. Failing to recruit the right person at the right time can result in significant cost to an organisation. Recruitment processes can be gruelling and niche profiles may be difficult to find. Hence the recruitment function within an organisation’s HR department needs to focus on its attraction recruitment strategy while seeking specific profiles with specific skill sets.
Employing innovative recruiting strategies can help organisations to get job openings seen by candidates who are looking for a new role. Innovative recruitment strategies also make it faster to hire great candidates, more consistently, and with significantly less effort.
Almost three quarters (72.8%) of employers are having a difficult time finding skilled candidates and 45% of employers are concerned about finding employees with the necessary talents.
Talent management strategy allows the use of analytics to determine the number of people with particular skill sets the organisation will need in future. This helps to reduce the chances of having to manage competency gaps and increases the effectiveness of the recruitment process.
Building and employing talent: Building and employing talent refers to addressing the specific needs and aspirations of talent and balancing them with the short-term and long-term goals of the organisation.
As a talent management strategy, deploying talent is getting the talent placed in the right roles at the right time to fill critical competency gaps and support the individual career growth of the each employee.
Talent management strategies like hire vs build help organisations in more than one way. Such a strategy doesn’t just save the hiring cost for acquiring a talent in the organisation, but also ignites faith within the existing talent. Further to this, developing plans that factor in the personal aspirations of the existing talent increases the satisfaction levels as a by-product of the talent getting motivated.
There is a strong proven link between talent allocation and effective talent management as nearly two-thirds respondents of a survey say their talent-management efforts have improved overall performance owing to rapid allocation of talent, compared with just 29% of their slower-moving peers.
Talent retention: The average cost of losing talent for the organisation is a surprising 33% of their annual revenue.
Talent is every organisation’s supreme revenue generator in terms of innovation, sales and customer relations. The cost of attrition is directly related to the organisation’s disability to consider the welfare and personal goals of the talent.
For succeeding in talent retention efforts requires organisations to think about things from the talent’s perspective. Every employee is different, and same goes for the personal goals and objectives for the talent.
An effective talent retention strategy, as part of the overall talent management strategy, attends to this concern.
As a first step, organisations must realise that talent exits are unavoidable. However, they can be controlled to some extent by anticipating and limiting them. The “why” behind talent exits must be taken seriously and made one of the starting points of the talent management strategy. Practices like exit interviews are part of understating the ‘why’ behind talent exits.
Developing a Talent Management Strategy (TMS)
For an effective talent management strategy, organisations need to take the idea of talent management forwards, paving the way for the personal development of the talent and its long-term association with the organisation.
Developing TMS includes taking talent friendly and strategic initiatives like:
Making talent a pillar of business strategy, not an afterthought: While deploying TMS, organisations must focus on talent creating business value. By aligning talent strategy to business strategy, organisations can acquire and develop TMS that reflects its bottom-line.
Focusing on talent while developing a business strategy will motivate and support talent with an effective infrastructure.
Developing TMS which focuses on mobility allows talent’s aspirations to be considered while discussing business decisions. This is a strategic step, as a study says that 80% of millennials want to work abroad.
Converting business goals into talent goals: Management often views growth in terms of abstract objectives. Deploying TMS factors in the human element with respect to business goals. Organisations need to consider goals as a dimension of talent.
Overall business goals and individual aspirations must be mapped in such a way that the talent hears them in the same breath.
Anticipating future hurdles and nipping them in the bud: Developing TMS comes with its challenges. However, if stumbling blocks are identified in advance, it will be much easier to create an effective talent management strategy. This may mean, for instance, that the organisation might have to alter its benefits package to attract a certain age group, or look outside its geographical area if the talent pool there is limited. Alternatively, an organisation might anticipate and create a culture shift, in case the current preference is towards hiring new talent instead of promoting from within. Taking the bull by the horns, rather than allowing the challenge to affect the organisation, can be one of the best outcomes of deploying TMS.
Culture leading the talent management strategy: Talent management strategy must account for the fact that the culture of the organisation may shift during change. The strategy needs to appreciate how pertinent organisational culture is to the sustainability of an organisation. Developing TMS to help talent understand the organisation’s prospects on the change and highlight the opportunities to the talent that may exist as a result of change within the organisation.
Talent management initiatives: Developing TMS includes taking talent management initiatives to identify the vacant position, hiring the suitable talent, developing the skills and expertise of the talent to match the position and retaining the talent to achieve long-term business objectives.
Initiatives like recognition, job rotation, on the job training, e-learning programmes, work-related tutorials, educational courses, internships, succession planning and flexibility are part of developing successful TMS.
Strengthening employer brand with content marketing: One of the keys to developing TMS is sharing your organisation’s knowledge to attract talent. Each employee of the organisation has a unique area of expertise. Finding ways of sharing their expertise in a variety of places, whether it’s writing a short article to share online, tweeting shareable wisdom, or answering questions on various media platforms.
Research states that 84% of organisations are currently using social media for recruitment and employer branding and 9% of those who don’t use it yet are planning to.
Making use of employee referrals: An organisation’s best source for finding new talent most often exists within the organisation. When an organisation hires great talent, this has a network effect. A great talent, when happy with the organisation’s culture, will be more likely to refer a member of their network to fill a vacant position in the organisation.
Referred talent is 55% faster to hire, compared with talent sourced through career sites.
Talent management strategy for the future: Reports have highlighted that machines will carry out half of all work tasks in the next six years.
As we approach another ‘Industrial Revolution’, this technological transformation will not just displace millions of jobs, but, will also open new jobs that demand more human skills, like creativity, imagination, and social intelligence.
Amongst children still in primary school, 65% will be applying for jobs that don’t exist yet. Some jobs will gradually disappear in the near future, and a few others will appear to replace them. Organisations will have two choices: The first choice is to let go of talent in masses and hire new talent at an equal or greater rate, which could prove to be an absolute recruiting and resource management nightmare. The second is to retain employees and engage them in new ways as they migrate from dying jobs to new jobs.
Organisations must consider the future and the technological implications of new roles while developing TMS.
DEI in Hiring: A focus on diversity, equity and inclusion in the workplace has to be a focal point for developing TMS.
In a Nutshell
HRM and talent management have evolved a great deal in recent years, and will continue to do so. Organisations with higher levels of talent management maturity are more likely to out-perform those that don’t. Surveys confirm the positive effects of talent management on business outcomes.
Gone are the days when talent management was seen as a collection of transactions or services at an administrative level that, more often than not, failed to provide a competitive advantage to organisations. This function was called workforce management.
The contemporary view of talent management is of a function that needs to have an employee experience at its heart – a networked, customisable system for individuals, built around the employee’s relationship with their organisation.
How is your organisation developing its talent management strategy?
Gestaldt Consultants, Partners and Thought Leaders.
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