There is a war for talent. It was in 1997 that McKinsey pointed out the importance of talent in helping organisations maintain a competitive advantage. The ability to properly manage employees has proven to be beneficial to companies of different sizes.
Talent management is a set of HR processes used to attract, engage, motivate, and retain productive employees. According to Sacha Thill & Tom Pfeiffer at Deloitte, organisations need to consider human capital as an essential part of their business strategy. The goal is to make sure talent welfare and development is aligned with achieving the overall strategic objectives.
There are seven components of Talent Management which help to ensure successful implementation in an organization.
Strategic Employee or Workforce Planning
Developing the organizational goals and strategic plan is the first step. This phase answers the questions “what?” “where?” “why?” and “when?”.
Strategic workforce planning is the process of designing a procedure that proactively anticipates current and future hiring needs. This provides the organization with the resources needed to meet its business goals.
In this stage, necessary information and data (business analytics, finance, and HR/procurement team data) are obtained. The information is used to determine the number of employees that are needed for now and the number of employees that would be needed in the future to meet the organization’s goals.
Talent Acquisition and Retention
This phase contains two strategic parts which are essential to the success of talent management. After strategic planning, it is important to create a process for finding and acquiring appropriate candidates for jobs that require a specific skill set. This is an ongoing strategy that is not just about filling vacancies but finding specialists and future executives for a company. It involves sourcing, recruiting, onboarding, and training new employees.
Talent retention is the effort made by employers to retain the employees in their workforce. It is the organizational goal of keeping talented employees and reducing turnover by maintaining a positive work environment.
Performance Management (Performance review/Performance appraisal)
Performance Management according to the Chartered Institute of Personnel and Development (CIPD) is the activity and set of processes that aim to maintain and improve employees' performance in line with an organisation's objectives.
Performance management is a continuous process of creating a work setting that allows employees to perform at their peak and produce the highest quality work.
Performance review/Performance appraisal is a systematic assessment of the performance of employees and it is used to improve performance over time. This phase involves taking stock of employee performance and appraising them accordingly.
Training and Development
Training gives employees the opportunity to learn the key skills required while on the job. It is the process of impacting the knowledge, skills, and attitude which are required to improve the effectiveness of an employee. Development is the process of equipping an employee with relevant knowledge, skills and attitude for future higher responsibilities.
Training and development also known as Learning and development is a strategic approach designed to align employee goals and performance with the organisation's needs.
Compensation and Motivation
Compensation is an important aspect of Talent management. It is a form of motivation and a fair compensation gives room for adequate performance of the employees. Research has shown that when employees are under-compensated, they are demotivated and that can lead to a high employee turnover rate. Adequate compensation can bring about job satisfaction, retention, prospective recruitment, and work productivity.
This phase is concerned with the drafting of a career guide with an employee. The employee and the employer are required to create the career path and to make sure the employee's career goals are in line with the organization’s goals and objectives. Some employers encourage employees to choose a mentor who is successful in their career and has more years of experience. This way, the employee understands what is expected as it relates to their growth and development.
A succession plan is usually for strategic positions and it encourages continuity as there would not be room for strategic roles to be vacant. It gives room to retain top talents as they would be encouraged to keep growing in the organization thereby reducing the rate of turnover of top talents. This last phase has been ignored by many organisations and it has in one way or the other, negatively affected the bottom line of the organization.
Losing a top employee can be a nightmare for just about any organization. It negatively affects the morale of other employees and it reduces productivity because the loss of manpower leads to reduced output. Losing a top talent can be expensive, especially when there is no succession plan in place. The organization would incur additional expenses to attract and hire a new talent.
According to LinkedIn, only 30% of companies are able to fill a vacant role within 30 days. The other 70% of organisations, take anywhere between 1 - 4 months to process a new hire. While a strategic role is vacant, there would be loss of man hours which will have a negative effect on the ROI. It also puts pressure on the talent acquisition team to fill the role on time.
Talent management has its strengths and weaknesses. Some organisations believe it costs too much to implement while others approve of it as an effective people management process. Some start-ups believe talent management is overrated because they have held on to the following misconceptions;
Start-ups need to revisit the way they manage talent. Because they tend to be focused on survival, they don't see the importance of investing in attracting and retaining top talent. This is why they tend to have high employee turnover with less motivated employees.
Talent management is the key to maintaining a competitive advantage and retaining top performing talents within an organization.
Some reasons for implementing talent management include;
Larger organisations understand that with strategic talent management, they stand a chance of attracting and retaining the best talents. When an employee can foresee their career growth, development, compensation, and benefit within an organization, it motivates them to put in their best work. It also reduces the chance of them looking for career opportunities in other organizations.
The implementation of Talent Management can be seen as expensive but when it is properly implemented, it positively affects the organization’s bottom line.
Talent management shows the relationship/link between the present and future manpower required by the organization to achieve its goals while also retaining its top talents. It is not just focused on the present needs of the organization.
It is important to note that talent management is a step-by-step process that should be followed accordingly to achieve efficient results.