Talent management can best be defined as the integration of all of the complex processes within HR, managed in an integrated and optimized environment, to deliver business benefits to the organisation. Many of the organisations I come into contact with like to promote the idea that their employees are their greatest asset and also the source of their competitive advantage, yet many of them are unprepared for the challenge they face in finding, motivating, and retaining the employees they need to achieve their business goals.
In fact, I have often said that if organisations managed their financial assets as loosely as they do their human assets, then their auditors would probably raise an issue with them on their inefficient use of funds. It is as vital to the organisation’s success to be able to measure and manage their employees’ contributions to the bottom line.
As the financial crisis still lives with us, organisations are continually faced with the challenges of ensuring their profitability whilst creating an environment to nurture sustainable growth. In all of this the role of the HR Department needs to become strategically focused, as ultimately, it is the people and their skills that will determine the future of the organisation. In 1997, a McKinsey study coined the term: War for Talent, this research showed that companies with strong talent practices earned 33% higher shareholder returns than their peers. In 2012, we are already well embedded the talent age, so what are some of the challenges that organisations are facing when it comes to talent management?
Managing Talent – A Strategy
Today organisations need to understand that there is a difference between tactical HR and strategic talent management. Transactional HR activities are an administrative overhead and will always be with us, the key is to have these as automated as far as possible. Talent Management however is not just one single function – it is in fact a series of integrated processes that work together to drive strategy delivery. Talent management should also be seen as a continuous process to deliver the optimal workforce for your business as opposed to being a “once-off” project.
Today, another great challenge that organisations face within HR is how to manage the different silos of HR processes and technologies that have emerged. Organisations find that the competitive battlefront is for the best people because they are actually the true creators of value within the organisation. There is no doubt that the predicted shortage of skills worldwide will also affect South Africa, which in turn faces its own specific challenges especially when it comes to the effects of HIV on the workforce as well as the seemingly never increasing emigration of our skilled resources.
Organisations need to embark on dual strategies – the first is to ensure that their current workforce is trained on a continual basis to ensure that the skills sets of the employees continually matches that of the requirements of the organisation. Secondly, a strategy around the Recruitment and Selection of the correct people to meet the skills sets required to fulfill the organisation’s strategy needs to be clearly defined, documented and of course implemented.
Enough cannot be said about an organisation maintaining a suitably skilled workforce, and it stands to reason that if the organisation is not willing to train its employees they will certainly leave and join an organisation that will.
It should also be remembered that Talent Management is a forward looking function, and as such planning is essential. In conjunction with this the organisation’s training needs need to be continually matched and updated to address the current skills requirements.
In summary, your Talent Management strategy should encompass ALL of the following HR functions, and although segmented, should be managed as a single process:
- Recruitment and Selection
- Performance Management
- Workforce Planning
- Skills gap analysis
- Succession Planning
- Career path planning
- Training and Development
Managing the Work Life Balance
One of the changes we have seen is the trend for employees to be far more conscientious about the balance between their work life and their home life. It is now not uncommon for a candidate for a job to turn the job offer down if it does not fit into their personal life plan. In order for an organisation to secure the services of such candidates they will need to become far more flexible in their work arrangements.
Linked to this change in focus on a work-life balance is the employee’s expectation of wanting to start deriving a greater sense of purpose from their employment. The old scenario of people trudging to work each day to earn their keep is fast becoming a thing of the past.
There are a number of key actions an organisation can take as part of its staff retention strategy. The first mechanism for retaining its staff is to have a well documented training and development plan for each staff member. Organisations should never underestimate the importance an employee places on their own development plan. Employees are keen to see their careers grow, and key to this is expanding their skills sets. It is however unfortunate that the more an employee is skilled the more attractive they become to the opposition and the easier it becomes for them to resign and seek greener pastures elsewhere, thus seemingly defeating the goal of developing staff as a strategy for staff retention.
It is thus imperative that an organisation does not only have skills growth as the only strategy for staff retention and talent management. Linked to staff retention is the ever important remuneration strategy which should include aspects such as flexible remuneration – a policy that will allow employees to structure their package in a way that suits their lifestyle.
Finally, when it comes to reward an organisation must also ensure that employees are able to accumulate wealth as opposed to just earning a good salary, usually through some form of share incentive scheme. This starts focusing employees on the performance of the organisation as a whole, as opposed to just getting their job done. With this in mind, it is imperative that an organization masters the art of talent management.