Talent management continues to be one the top focuses for HR departments all over the world. Why? Numerous studies show companies offering growth and development opportunities translates to high success in recruitment and retention. TM itself is a commitment from an organization to recruit, hire, retain, and develop employees.
In the guide below, the HR Exchange Network explores the topic in more detail. It takes a look the current state of affairs, strategies, why you should invest in TM and even a forecast into what to expect in the coming years.
John Hopkins University defines TM as, “a set of integrated organizational HR processes designed to attract, develop, motivate, and retain productive, engaged employees.” In simpler terms, it’s finding the right people for the right jobs to achieve the strategic goals set forth by leadership.
As a strategy, TM is not wholly owned by the HR department. In fact, it requires HR professionals to work with managers/supervisors within the company’s ranks to put the strategy into action. That’s a bit different when contrasted with strategies such as human capital management or a performance management strategy. Under those strategies, there is more reliance on HR than the managers.
Talent Management Pillars
A solid TM strategy will address four critical areas. These are often referred to as the Four Pillars of TM.
- Performance Management
- Learning and Development
To better understand each pillar, a description of each is below.
Recruitment – In order for a talent management strategy to exist, there must first be talent. Recruitment is Step 1 in creating the strategy. Here, companies and organizations work to attract talented people who can be converted in to employees.
Performance Management – Once hired, talent is expected to perform at a high standard. This process includes the way in which HR measures and improves performance. Common procedures include performance reviews, one-on-one meetings, and reward and recognition programs.
Learning and Development – This pillar includes everything from ongoing training to learning during the employee lifecycle. It allows for workers to fine-tune and further develop the critical skills needed to meet their performance goals and to help the company complete its strategic goals.
Retention – As defined, retention is about keeping high performing talent with the company or organization as long as possible. This leads to increased productivity and successful completion of strategic goals.
What HR Professionals have to say about TM
To understand more about TM, here are a few quotes from HR professionals on the topic and associated issues.
Fernando Sanchez Arias, the HR Director for Learning and Development at The Home Depot says, “We need to attract the best talent, help them to learn, help them to feel engaged and, of course, to ensure that they can perform and produce the results that the customers are expecting them to deliver.”
Dr. Uzma Burki, the Senior Global Head and Deputy Director for Total Rewards and Global Mobility Strategy for the Bill & Melinda Gates Foundation says, “Whether they are regional, national or international, companies have to look at how they attract, retain and develop these different talent centers. What types of benefits and rewards would appeal to these people? We have to start thinking of an a la carte, rather than standard, menu of compensation and benefits.”
Peter Cappelli, the director of HR for The Wharton School says, “The talent problems of employers, employees, and the broader society are intertwined. Employers want the skills they need when they need them, delivered in a manner they can afford. Employees want prospects for advancement and control over their careers.”
Why you should invest in TM
To understand more about the current state of TM, consider the following data from the HR Exchange Network.
According to surveys conducted by the HR Exchange Network, TM-related initiatives seem to be getting a significant amount of attention. When asked what specific initiatives were being put into place, the majority of HR professionals focus on performance management, leadership and development, and recruitment and onboarding.
Why is it important to invest in TM?
Firstly, it helps attract the ideal candidates to the company. If hired, those new employees help improve business performance. It also increases employee motivation meaning employees are more likely to complete their tasks and stay with the company. By retaining these employees, the company saves on recruitment and performance management costs down the road. It also increases employee engagement. With a strong TM strategy in place, employees see more opportunities to develop. Again, this leads to higher retention rates and business performance.
As a result, every function that falls under TM is seeing increasing amounts of tech disruption. There are more and more technology solutions for everything from recruitment to engagement. Massive investments are happening in intelligent assessment and moving toward more AI-based technologies in recruitment and automation. This means modernization should be a top priority for all HR departments. In other words, it’s either sink or swim.
REPORT DOWNLOAD: HR Tech Global Report 2019
To understand more about TM, here are some of the best practices to follow.
Recruitment offers both a challenge and an opportunity: finding talent that fits the company culture and can contribute to the company. Having said that, how do HR professionals accomplish the goal? Associa chief human resources officer Chelle O’Keefe says HR professionals must, “Think like a marketer as you’re considering this idea of strategic recruiting.”
- Improve the candidate pool
- Consider internal candidates
- Strengthen the employee brand
- Involve current employees
- Offer the best pay and best benefits
- Check references
The current talent environment is one most HR professionals have not seen before. There are more jobs than there are skilled people to fill those positions. And it’s forecasted to get worse before it gets better. Between 2017 and 2027, a talent shortage of 8.2 million US workers could exist according to Manpower.
That makes succession planning all the more important for the HR professionals doing their best to minimize the impact on their respective companies. The problem is succession planning is not always seen as paramount strategy.
In an HR Exchange Network survey, we asked respondents this question: does your company have a formal succession planning strategy that focuses on long-term goals, hiring, and talent retention? The results were split right down the middle.
So, what makes up a critical succession planning strategy?
First, HR must understand the organizational goals of the business over the next 6 months. They must also understand goals for one, two and five years. This is important because HR needs to be able to assess the skill set of the current workforce and then define what skills they need moving forward. This is critical when looking at and planning for talent development.
It’s not just about understanding the business goals of their respective companies, HR must be able to understand and follow current and future trends of their company’s industry. Again, this is key to defining the skills needed for succession candidates.
The second component is an assessment of employee engagement. It goes without saying an engaged employee is a much more productive employee. The engaged employee also makes for a stronger succession candidate and overall critical succession planning strategy.
Finally, HR must be able to assess their current hiring strategies, specifically those related to filling an open leadership position. External hiring can be a lengthy process. It is certainly a costly one. A succession planning strategy can wipe out the lengthy process and can cut back on costs.
“Succession planning is a process every company needs to have to make sure they know where the gaps are, they know what talent they have in place and how to develop them in the upcoming years until the position is ready,” Larry Brand said. He’s the chief human resources officer for Elkay Manufacturing.
Career pathing is that process by which the employee and, usually, the employer chart a path toward the employee’s future development goals. The destination, as well as the steps, experience, and development needed to get there are included.
The challenge for HR professionals is knowing what knowledge, skills, personal characteristics, and experience are needed to reach the intended goal. For the employee, the challenge is about examining whether or not the employee possesses the qualities deemed necessary for the job they wish to pursue.
Employees want to see and understand the opportunities available within their company. They expect to see career development opportunities while being satisfied and motivated. As a result, career pathing is an important factor in other strategies including employee engagement and employee retention. It also provides companies with the opportunity to differentiate itself from competitors.
The Future of TM
The future of TM centers on modernization. Those companies and organizations that don’t modernize should expect to get left behind.
Gone are the days of 30 year careers in one organization… where employees started at the bottom of the personnel ladder and tried to work their way up. In fact, most new entries into the workforce are likely to change jobs every three to five years and hold 12+ jobs in five to six different companies. Furthermore, these individuals will change professions two to three times and, in the process, will be working for a very long time.
So, what’s the reason for this development?
Simply, workers are living longer, healthier lives and choose to continue working for a variety of reasons. It’s been said before that Baby Boomers are retiring, and while that’s true, it isn’t happening at the rate first thought.
One of those reasons focuses on the continuing technology disruption. Simply, technology creates this concept of the half- life skill. Essentially, the half-life of a learned skill is 5 years. That means much of what a worker learned 10 years ago is now obsolete and half of what the worker learned five years ago is irrelevant.
Mix that with what some say is a volatile business environment and it translates to workers’ necessity to change jobs. In doing so, they must be prepared for the new future of work.
HR must find ways to source new talent by specifically looking at the open global talent economy. This allows HR to find talent anywhere in a variety of formats.
Next, companies should focus on the learning and development aspect.
Workers want to continue to learn, so companies must offer platforms that create an environment of continuous, ongoing learning with new opportunities to learn and grow and contribute to the organization.
Finally, companies need their TM strategies to be more nimble.
Talent practices need to be reinvented and converted into an ecosystem that helps with rapid deployment and development of talent by using agile processes and systems that help HR to respond to talent.
Move the company forward. That’s the mission of every TM strategy when it also serves as the next big business strategy. HR and managers place a premium on talent who add to the business and who support and reinforce the company. That, in turn, becomes a vital part of what a business stands for.