talent management, taking a systematic approach

Talent Management

Taking a systematic approach

Feb.

2010

Nariman H.B.

http://FromNorthlands.wordpress.com

Talent Management Feb. 2010

http://FromNorthlands.wordpress.com [email protected]

BETTER TALENT IS WORTH FIGHTING FOR…. [1]

Contents Introduction ........................................................................................................................... 4

What is Talent management about? .................................................................................. 4

History ............................................................................................................................... 4

Concepts ............................................................................................................................... 5

Definitions ......................................................................................................................... 5

Talent management's importance, Talent age ................................................................... 5

Talent marketplace ............................................................................................................ 8

Features of a talent management strategy ........................................................................ 8

Arrangement to corporate strategy ................................................................................. 8

Inclusive versus exclusive approaches .......................................................................... 9

Involving the correct people ........................................................................................... 9

Focusing on the talent management circle ....................................................................10

Integrating Talent Management via a system (TMS) .........................................................11

The Talent Development Pipeline Architecture .................................................................12

A sample TMS [6] ..............................................................................................................13

Some software for managing talent ..................................................................................14

For Assessing ...............................................................................................................14

For Competency Managing ...........................................................................................15

Automated Employee Appraisals ..................................................................................15

Development Planning ..................................................................................................15

Goal Management ........................................................................................................15

Succession Planning .....................................................................................................15

Compensation Management .........................................................................................16

Configuration, Setup & Integration ................................................................................16

Global Talent Management (GTM) ...................................................................................16

http://fromnorthlands.wordpress.com/



Final viewpoint .....................................................................................................................17

References ..........................................................................................................................19




Introduction

What is Talent management about?

Talent Management looks for addressing how organizations can make best use of the talents they employ. It is generally accepted that the skills, information and attributes that employees demonstrate can be an important asset to organizations. Research demonstrates that there is a direct relationship between the employment of high contributing individuals and the long term performance of the organization, most usually measured in terms of shareholder return and sustainable profitability.

History

Organizations have always wanted to hire the people they supposed to be most suitable for the position they hold. In this respect, the acquisition of talented individuals is not a new noticeable fact. However, the concept was formally born in 1990s when McKinsey commissioned research on the universal ―war for talent‖ to review the methods companies in the United States were adopting on recruiting the best performing employees. It found that organizations were insistently competing for talented people in the background of the favorable economic climate and that what made the most difference was a strong belief held by leaders that competitive advantage could be achieved from employing the best talent. The challenge was to deal with the talent effectively. Since the research was published, scientific and academic interest in the subject has grown rapidly, and many organizations have adopted the talent management strategies.

[16]




Concepts

Definitions

Each business to formulate its own meaning of what talent is than accepting universal or prescribed definitions and there are considerable differences in how talent is defined across different industries and sectors. It is helpful to start with a broad definition for both "talent" and "talent management":

Talent consists of those persons who can make a difference to organization' performance, either throughout their instant contribution or in the long-term by demonstrating the maximum levels of potential.

Talent management is the systematic attraction, identification, improvement, engagement/ retention of those persons who are of particular value to an organization, either in view of their ‗high potential‘ for the future or because they are fulfilling business roles.

This definition emphasizes the significance of recognizing that it is not enough to just attract individuals with high potential. Developing, managing and retaining those individuals as a part of organization' strategy for talent is equally important, as is adopting structures to measure the return on this investment. Now more organizations also are broadening their definitions, looking at the ‗talents‘ of all their staff and workforces to develop their strengths.

Talent management's importance, Talent age

These days, the human beings are in their talent age. During the agricultural age, the financial system was based on land, a truly physical and very tangible asset. The industrial age followed with a manufacturing-driven economy. Higher business performance was derived through the most efficient use of factories and allocation networks. The knowledge age moved the basis of economic value to information assets through integrated communications and computer technology. Now the competitive battlefront is for the best individuals because they are the right creators of value.




McKinsey research [1] reveals that 75 percent of corporate officers were concerned about talent shortages and Deloitte reports that retaining the best talent is a top priority for 87 percent of surveyed HR directors [1]. This need for talent – and, therefore, its expert management – is also driven by macro trends including:

New cycles of business growth, often requiring various kinds of talent.

Changing personnel demographics with decreasing labor pools and, therefore, a talent squeeze.

More difficult economic conditions which require separated talent and TM.

The emergence of new enterprises which suck talent from larger organizations.

An international focus on leadership which is now permeating many levels of organizations.

Talent management is often defined as performance management, incentive compensation, or talent acquisition. Talent management is also often confused with leadership development. Although leadership development is a vital function of your organization, focusing on it exclusively is an inheritance of last century. The modern service and knowledge economies in the talent age require a broad and holistic view. A high performance business depends on a wide range of talent. In picture below, the Talent management is depicted as a circular—not a linear—set of activities.




[5]

The concept of talent management has evolved into a general and important management practice and what was once solely attached to recruitment now covers a large number of areas including organizational capability, personal development, performance development and succession planning. Some researches [2] demonstrate that the forces driving the increased interest in talent are a potent mix of external supply issues and internal organizational demands as illustrated in figure next page.




In order for organizations to gain competitive advantage they have to develop a strategic approach to TM that goes well with their business and gets the best from their employees. It provides a focus for investment in human capital and places the subject high on the corporate plans.

Talent marketplace

A talent marketplace is an employee training and development strategy that is set in place within an organization. It is found to be most costly for companies where the most creative employees can pick and select the projects and assignments that are most ideal for the specific employee. An ideal setting is where productivity is employee centric and tasks are described as ―judgment-based work,‖ for example, in a law firm. The point of activating a talent marketplace within a department is to harness and link individuals‘ particular skills (project management or extensive knowledge in a particular field) with the task at hand. Examples of companies that implement the talent marketplace strategy are American Express and IBM. [3] The distinctions between a formal talent marketplace and more traditional approaches to TM are significant. At first, formal talent marketplace makes employees responsible for managing the greater part of their careers. Second, it removes the idea that senior managers "own" talent. In a talent marketplace, employees are "restricted free agents" (the restrictions define, for example, pay grades and terms of service). They are expected to find the best opportunities for themselves, and the market gives them the chance to take part in a non price-based competition across a range of candidates and job alternatives.

Furthermore, a talent marketplace formalizes the terms of employment—that is, the role, its duration, the place of work, travel, and so forth. It does so by making the terms more formal than a mere handshake and by making the protocols around the contract formal and explicit. Finally, it dispenses with two-party contract negotiations and instead uses the HR "broker" to protect confidences, promote the interests of both parties, and ensure compliance with the terms of the contract.

Features of a talent management strategy

Key features of a talent management strategy contain the following elements.

Arrangement to corporate strategy Ensuring that the talent strategy is strongly aligned with the corporate strategy must be a priority. In developing a talent strategy, both of internal and external factors must be considered, including those detailed in figure above. Strategic analysis from the business outlook should feed into an HR forecast. Often organizations are at an unlike stages of talent management strategy development. Some research suggest [2] that for a number of organizations there




was a desire to progress through the stages highlighted in figure below, making the transition to a more official, strategically-integrated approach.

Inclusive versus exclusive approaches Lots of organizations adopt an inclusive approach to talent management creating a "Whole workforce" loom to engagement and talent development, while others develop a more exclusive focus segmenting talent according to need. Despite of which approach organizations adopt, fairness and consistency must be applied in all talent management processes. Diversity considerations should also be built-into talent management processes to ensure that organizations are able to draw from the broadest pools of talent possible.

Involving the correct people

Careful attention needs to be paid for involving the right stakeholders in the talent management strategy. Clearly, HR experts have an important role in providing support and guidance to design and develop approaches to TM that fits the organization's needs. Line managers must take responsibility for managing performance, identifying and developing talent in their own areas but also need to be encouraged to see talent as a corporate rather than a local resource.




Focusing on the talent management circle

It is also important to pay attention on the four areas of the talent management circle, detailed in figure below.

[7]

Evaluation of each area:

Attracting talent The process of attracting external talent depends upon how potential applicants view the organization or sector it operates in and whether they share the values of that organization. Where needed, lower financial rewards can be countered with alternative benefits and employer values such as social responsibility. Elevating the effectiveness of the selection processes can also deliver magnificent gains. Not only does a strong selection process decrease the risk of the wrong hiring decision (the Financial Review reported only a few years ago that one in three hiring decisions is wrong), it also enhances the likelihood of being able to differentiate the high performers from the standard performers.

Developing talent Talent development should be connected to other learning schemes. Suitable learning and development involvements are required at relevant levels in a career pathway for talented individuals to achieve their highest potential.




Developing talent requires informal as well as formal learning interferences. They will include conventional development activities.

Managing talent Lots of Plans and activities are needed to retain and hold talent required for the future benefits of the organization. Investing on management, leadership and other human resource management skill besides the development activities will surely impact on talent retention. Organizations should develop a performance culture where individuals take responsibility for the continuous improvement of business processes and their own skill development. Maximizing the match between what your talented people want and what you can offer is critical. Tools such as employment value proposition surveys can assist the organization to identify what people value and what keeps them there. Retention of attracted talent is the most part of talent management process that plays a key role on the organization. Terms listed below are some important things to do for retention management:

o Continuous monitoring of attrition rates o Highly competitive compensation o Personalized career plans o Senior management attention o Flexible working arrangements o Diversity programmers designed to develop, retain and promote

diverse talent

Tracking and evaluating TM

Evaluation of TM is difficult but it is necessary to ensure that the attempts are meeting organizational needs. Evaluation requires both quantitative and qualitative data which is valid, reliable and robust.

Integrating Talent Management via a system (TMS)

It‘s worth highlighting that integration is critical. Without integrating TM activities, the efforts invested will tend to be dissipated with irregular results. Integration means how all the pieces of TM fit together within a TM system. This will not operate separately from strategy, business planning and the organization‘s approach to people management. It will also reach higher up the organization than other HR initiatives, often attracting the concentration of




boards and senior teams. Similarly, TM reaches down the organization, to include new recruits along with tenured professionals. Lastly, talent planning must be done in parallel with business planning, creating a rich integration of people and strategy.

The Talent Development Pipeline Architecture

This requires much more than engaging in traditional, person-to-person succession planning, as essential as that is. Talent-rich organizations do more than look just at individuals; they look at cadres of talent at different ranks in the organization. They want to be confident that they have lots of twenty-something with great potential, thirty-something with both potential and experience and who are building a performance record, and forty something that are seasoned, mature, but still aggressively driving forward. From this group they will select a few people to be organizational leaders or leaders of specialist roles within the organization. Lots of things have to be done well to make this ideal a reality. You have to define what kind of talent you need, both for the present and the future. You have to create and maintain the HR systems that help you attract, choose, arrange, develop, reward and retain this talent. You have to manage the careers of your talented people to ensure that they develop the skills and judgment they need as they move into key leadership roles. And you have to design and deliver the programs that contribute to making all of these things happen.

If you're a minor enterprise, it is difficult to do all of this on the inside. You have to be good at recruiting people from other organizations and be creative and imaginative in developing and retaining them. You may have to expose them to environments and practices outside your own enterprise so that they extend the broader perspectives and understanding of what is possible and how others do things. In other words, you must prepare and enable them to select the right practices for your organization. There are three dimensions to this architecture:

A plain, articulated picture of your talent needs over the next several years. This picture must be clear on the competencies and other characteristics that you wish for your talent pool, so that people can see what it takes "to make it" in the organization.

Progressive pathways that you can use to get rare potential developed into polished performers. You will require defining the experiences, exposures and challenges that they need to meet so that they can emerge as high performers in the future, whether as organizational leaders, specialist leaders or simply advanced specialists.




Human Resource systems that can enable potential to be recognized as performance. Normally, this means having sound, integrated, human resource planning, recruitment and selection, training and development, recital management, career management, succession planning, and compensation processes to make sure that the talent pipeline is filled. This will allow people move through the pipeline and ensure that the pipeline delivers the talent where it needs to be deployed, when it is needed.

A sample TMS [6]

One way to achieve such integrated system mentioned above is a Talent Management System with 5 important elements as below: 1. Need – the business need derived from the business model and

competitive issues.

2. Data collection – the fundamental data and ―intelligence‖ critical for good talent decisions.

3. Planning – people/talent planning guided by data analysis.




4. Activities – the conversion of plans into integrated sets of activities.

5. Results – costs, measures and effectiveness criteria to judge the value

and impacts of TM.

Using this system can help TM become a strategic differentiator rather than a standard set of HR processes – if the right conditions, context, timescales and offerings exist in the first place. System integration and alignment ensures that TM efforts are rational and fit for purpose. Since the arrival of the current era of ―talent‖ is widely acknowledged, it‘s not surprising that renewed importance is being placed on the management of that talent. And as talent continues to be seen as a strategic differentiator, its management will take more of a strategic role.

Some software for managing talent

There are hundreds of software for managing talent and monitoring human resource performance in the market. Each software has specific features and is able to deal with various parameters and factors in the organization's HR sector. It could be a good investment for every organization to use powerful TM software for increasing talent management skills and monitoring. Make a direct connection between employee performance and compensation to create a culture where top performers are motivated and excited about their contributions. Centralize ongoing performance data and give the employees a clear line of site between their contributions and the company goals. Appropriate TM software usually has these features [15]:

For Assessing

Multi-rater assessments and peer assessments should be some of the configurable automated workflow options

Skills and behaviors measured against professional standards

A library of industry-validated competency models built from individual competences

Comprehensive reporting and data analysis capabilities to support succession planning, job/person matching, career planning and employee training


http://www.silkroad.com/human_resource_software/employee_performance_management/multi-rater-assessments.html



http://www.silkroad.com/human_resource_software/employee_performance_management/competency-management.html



For Competency Managing

Competency Dictionary and Model Library are comprised of key topics, definitions, and appropriate supporting behavioral indicators

Tested and validated competencies divided into core

Competency models should be organized by level, industry, function, etc. leadership (by career band), and functional groupings

Automated Employee Appraisals

Serve up historical data to both the individual and the manager at the time of the review so all parties can see information about goals, assessments, appraisals, development plans, and other performance metrics

Managers can leverage the Writing Assistant to consistently make comments about observable behaviors and competencies for their employees

Making Schedule reviews for different parts of the organization differently

Development Planning

Create and manage personalized development plans

Each individual should have their own development plan

Map competency models to individual development activities so that competency assessments directly impact development plans

Supports approval requirement process for activities that incur costs

Goal Management

Managers should be able to assign goals to individuals or to multiple team members in a single batch process

Cascade goals down to individuals and groups giving everyone a clear line of sight between their own contributions and the company goals

Managers and executives should be able to view aggregated goal results and progress reports

Succession Planning

Succession planners must be able to see all potential candidates and their relative readiness for specific positions

Search for potential talented candidates and add them to a succession plan

Side-by-side candidate comparison reporting


http://www.silkroad.com/human_resource_software/employee_performance_management/automated-employee-appraisals.html



http://www.silkroad.com/human_resource_software/employee_performance_management/development-planning.html



http://www.silkroad.com/human_resource_software/employee_performance_management/goal-management.html



http://www.silkroad.com/human_resource_software/employee_performance_management/career-succession-planning.html





Launch development plans or prescribe development activities to individuals or pools of candidates from the succession planning screen

Compensation Management

Manage the distribution of merit increases, stock incentives, bonuses, equity pools and spot awards

Based on performance reviews, goal attainment and any other requirements

Budget compliance enforced by business rules

Include the use of salary matrix info, 3rd party salary ratios, salary bands, and other compensation metrics when allocating compensation

Configuration, Setup & Integration

Easily create forms for various needs using templates

Configurable user interface

100% browser-based, accessible from any computer with Internet access

Simple, streamlined user interfaced coupled with page-by-page instructions

Every user usually have the ability to see a personalized view of the TM system, depending on their role and assigned permissions

Global Talent Management (GTM)

There are many HR actions for organizations that want to implement their GTM efforts as effectively as possible. "Although the economic downturn is slowing business globally, firms still need to hire and manage their talent to operate today and anticipate their leadership needs of the future. Thus they may need to engage several HR actions simultaneously. A suggested summary of which HR actions might be most appropriate for which GTC is shown in Figure 2 as indicated by the check marks." [8, 9]


http://www.silkroad.com/human_resource_software/employee_performance_management/compensation-management.html



http://www.silkroad.com/human_resource_software/employee_performance_management/epm-integration-setup.html





While the table above suggests that organization may select just one HR action for a particular global talent challenges, in fact, the HR actions shown in this Figure might be more effective if done as part of a system.

Final viewpoint

Number of overall messages that transcend organizational boundaries:

A successful approach is based on an agreed, organization-wide definition of talent and talent management. Such definitions form the spring board from which both talent strategy and talent management processes can be launched.

In addition, a language for talent management activities that is understood by all parts in the employment affiliation is a strong requirement.




A practical strategic approach to talent management offers significant organizational profits in terms of developing a pool of talent as a source to meet identified needs.

Support for talent management should flow from those at the very high position of an organization.

Engaging line managers from an early stage is critical to ensure that they are committed to organizational approaches to talent management.

Talent management can be used to enhance an organization's image and supports employer branding in the labor market as well as a providing a means of enhancing employee engagement to improve retention.

Talent management activities should be developed with other HR policies and practices for a joined-up approach. Developing talent may be based on a blend of informal and formal methods.

Processes must be developed to track the performance and progress of those identified as talent.

A final conclusion was that talent management was a dynamic process that has to be continuously reviewed to ensure that organizational requirements are still being met in the light of changing business priorities. Ultimately, organizational success is the most effective evaluation of talent management.




References

1. THE McKINSEY QUARTERLY 1998 NUMBER 3

2. TANSLEY, C., TURNER, P. and FOSTER, C. (2007) Talent: strategy,

management, measurement. Research into practice. London: Chartered

Institute of Personnel and Development

3. 3Lowell L. Bryan, Claudia I. Joyce, and Leigh M. Weiss, 2007

4. http://www.compassess.com/pdf/Talent_Management_White_Paper.pdf

5. Some charts and pictures from:

http://www.taleo.com/solutions/media/images/Image-Talent-Management-

large.jpg

6. Strategic HR review, Volume 4 Issue 5 July/August 2005

7. Webpage:http://www.cipd.co.uk/subjects/recruitmen/general/talent-

management.htm

8. Journal of International Management, Volume 15, Issue 3, September 2009,

Pages 273-285 ,The Emerging CEO Agenda in Multinational Companies

9. State university of Rutgers New Brunswick's webpage:

http://www.rci.rutgers.edu/~schuler/mainpages/GTM-

HR_Actions%20August%202009.pdf

10. BRITTAIN, S. (2007) How to manage key talent. People Management. Vol 13,

No 12, 14 June. pp46-47.

11. YAPP, M. (2008) Top talent in tough times. Talent Management Review. Vol

2, No 4, October. pp22-24.

12. PARRY, E. and URWIN, P. (2009) Tapping into talent: the age factor and

generation issues. Research into practice. London: Chartered Institute of

Personnel and Development.


http://www.compassess.com/pdf/Talent_Management_White_Paper.pdf

http://www.taleo.com/solutions/media/images/Image-Talent-Management-large.jpg

http://www.taleo.com/solutions/media/images/Image-Talent-Management-large.jpg

http://www.cipd.co.uk/subjects/recruitmen/general/talent-management.htm

http://www.cipd.co.uk/subjects/recruitmen/general/talent-management.htm

http://www.sciencedirect.com/science/journal/10754253

http://www.sciencedirect.com/science?_ob=PublicationURL&_tockey=%23TOC%236205%232009%23999849996%231399098%23FLA%23&_cdi=6205&_pubType=J&view=c&_auth=y&_acct=C000050221&_version=1&_urlVersion=0&_userid=10&md5=cc61d0a8edc5ecff1054f575f5a88682

http://www.rci.rutgers.edu/~schuler/mainpages/GTM-HR_Actions%20August%202009.pdf

http://www.rci.rutgers.edu/~schuler/mainpages/GTM-HR_Actions%20August%202009.pdf



13. CHEESE, P., THOMAS, R.J. and CRAIG, E. (2008) the talent powered

organization: strategies for globalization, talent management and high

performance. London: Kogan Page.

14. Jeffrey Gandz (2006)Talent development: The architecture of a talent pipeline

that works, Ivey Business Journal at

webpage:http://www.iveybusinessjournal.com/view_article.asp?intArticle_ID=

611

15. Webpage of SILKROAD connections company at this

address:http://www.silkroad.com/human_resource_software/employee_perfor

mance_management/epm_software_features.html

16. Elizabeth G. Chambers, Mark Foulon, Helen Handfield-Jones, Steven M.

Hankin, and Edward G. Michaels (2007), WAR FOR TALENT, THE

McKINSEY QUARTERLY , NUMBER 3, pp44-58


http://www.iveybusinessjournal.com/view_article.asp?intArticle_ID=611

http://www.iveybusinessjournal.com/view_article.asp?intArticle_ID=611

http://www.silkroad.com/human_resource_software/employee_performance_management/epm_software_features.html

http://www.silkroad.com/human_resource_software/employee_performance_management/epm_software_features.html

talent management, taking a systematic approach

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