‘Talent’ in general terms refers to a set of personal characteristics that enhance one’s ability to achieve expertise in an accelerated manner. These traits allow one to improve at quicker rates than others in their field that are at the same level of expertise or skill, etc. This is because talent is one’s ability to adapt to training and develop skills in their specialized field. Talent exists when strong genetics and a desire to practice come together to create superior ability for a specific activity. It can only exist along with a deliberate interest. Because of this, talent will often only become apparent after a moderate amount of practice as this is when one’s ability to adapt and improve is more clearly visible.
Talent Management, as the name itself suggests is managing the ability, competency and power of employees within an organization. The concept is not restricted to recruiting the right candidate at the right time but it extends to exploring the hidden and unusual qualities of employees and developing and nurturing them to get the desired results. Every organization requires the best talent to survive and remain ahead in competitive. Talent is the most important factor that drives an organization and takes it to a higher level, and therefore, can’t be compromised at all. It won’t be exaggerating saying talent management as a neverending war for talent. Globalization, the process by which economies, societies, and cultures are fast integrating through a globe-spanning network of communication and trade, drives both collaboration and competition. However, within many companies the concept of human capital management has just begun to develop. In fact, only five percent of organizations say they have a clear talent management strategy and operational programs in place today. To develop a clear talent management strategy and to increase awareness of available talent and successors, all organizations should conduct regular Talent Review Meetings to be prepared for a variety of business changes, such as mergers, company growth, or a decrease in talent needs. Thus, talent management has become one of the most pressing topics today in organizations to gain competitive advantage.
Talent management as a term emerged in the 1990s to incorporate developments in Human Resource Management which placed more of an emphasis on the management of human resources or talent. The HR professional or department that excels, not only solves specific business problems today, but also delivers the ability to address broader, more universal strategic challenges as well—thus building a solid foundation for tomorrow’s success. A solution must have the scope to handle widespread business problems and encompass new business partners, corporate mergers, new markets, new technologies and more. The term was coined by David Watkins of Softscape published in an article in 1998; however the connection between human resource development and organisational effectiveness had been established since the 1970s. Talent management is part of the Evolution of Talent Measurement Technologies. Companies that focus on developing their talent integrate plans and processes to track and manage their employee talent, including the following:
- Sourcing, attracting, recruiting and inducting qualified candidates with competitive Backgrounds
- Managing and defining competitive salaries
- Training and Development opportunities
- Performance Management processes
- Retention programs
None of these are new to age old Personnel Management, nor the recent HRM practices. Then what is new in Talent Management? In the past all these were done as a matter of routine in silos without having any connect with each other. But Talent Management concept emphasises on the integration of all these activities of HR Department in alignment with the business strategy.
According to McKinsey, talent is … “the sum of a person’s abilities… his or her intrinsic gifts, skills, knowledge, experience, intelligence, judgment, attitude, character and drive. It also includes his or her ability to learn and grow”. (Michaels, E., et al, 2001) Bradford Smart defines talent as “A players [that] are the top 10% of talent available in all salary levels, best of class.” (Smart, B., 2005). Robertson and Abbey also focus on the best and the brightest (Robertson, A., Abbey, G., 2003).
In many organisations, however, talent has become a synonym for the entire workforce and a large number of companies do not even know how to define talent. David Ulrich takes a holistic view with his formula defining talent: talent = competence + commitment + contribution (Ulrich, D., 2006). In his formulation, competence means that individuals have the knowledge, skills and values that are required for today and tomorrow. Commitment means that employees work hard, put the time in to do what they are asked to do, giving their discretionary energy to the firm’s success. Contribution means that they are making a real contribution through their work — finding meaning and purpose in their work.
Organisations that earnestly desire to have competitive advantage must address talent management issues. Talent management is difficult to define because it is a complex undertaking that operates within the strategic human resource management. It requires HR managers and their associates to understand how they define talent, who they consider as ‘the talented’ and what their background might be. It also requires clarifying whether such recruits should be seen as particularly gifted. Talent can be considered as a complex amalgam of employees’ skills, knowledge, cognitive ability and potential. Employees’ values and work preferences are also of major importance.
Kaye Thorne and Andy Pellant (2007) explain what talent management is and how it works: “We would prefer to call it ‘talent development’, as it is actually quite difficult to manage talent. Talent slips and rolls around an organisation and often before one realises it, it leaves the organisation. Organisations often try to set-up talent management processes, but real success comes when they engage with the hearts and minds of individuals. The organisations that achieve most success with this are those where the visions and values of the organisation are aligned with the individual.
Fundamentally, talent development needs attention to make it happen. It also needs a holistic approach, like customer service, quality standards, and health and safety. One person cannot just be given the responsibility and expect that it will happen. There has to be a belief and a commitment to make it happen from the CEO and the executive right through line management to the newest recruit.
Organisations can convince themselves that talent management is being carried out when they create a system to define the steps or outline a process to manage talent. However, Talent Development only happens when you create a culture based on shared values and beliefs, where thinking and feeling emotions are engaged and the leadership demonstrates its commitment through its behaviours and attitudes. Individuals joining an organisation need to feel that they are valued and that their contribution will make a difference. It is easy to say that this is happening, but far harder to have concrete evidence of its application. In any discussion about talent development, it is important first to emphasise the development of all individuals. No organisation should focus all its attention on developing only part of its human capital. What is important, however, is recognising the needs of different individuals within its community.
In the search for an effective process for developing talent, most organisations recognise the need to do it differently. The challenge is often to identify how and where to start. People are talented in many ways. Some may have a particular aptitude for doing something which may be primarily skill based. Others may be gifted artistically and yet others may demonstrate their talent in more courageous ways and may be seen as maverick in their approach to life.” (Kaye Thorne and Andy Pellant)
Talent Management and HR
Talent management differs from previous HR processes for hiring, training, and retaining employees—and indeed from HR itself—in several key ways:
Where hiring, training, and retention before were centralized in the HR department, with talent management many of these duties are federated to the front-line managers actually leading the employees in question. In this way the whole organization is responsible for, and has a stake in these activities.
HR is more administrative-focused, dealing with pay, vacation days, benefits, and complaints, while talent management is almost singularly-focused on helping and improving the top talent in the organization. Think professional development vs. tracking attendance.
Talent management is strategic, often manifesting as a company-wide longterm plan closely associated with overall business goals, while HR is more tactical, dealing with the day-to-day management of people.
Factors affecting Talent Management Practices
On the basis of the literature review the factors affecting talent management practices are:
- Age, Seniority and level of Education: Regarding the intention to stay in the organization by the talented employees, the researcher has found that there is positive relationship between age and the retention. The older an employee within the organization the more he or she want to stay Govaerts et al (2011) and employees of a younger age were significantly more likely to leave their current job or organisation than older employees (Hellman, 1997; Ito et al., 2001). Employees with more than twenty years seniority score were higher on intention to stay than employees with less seniority. Moreover it is more common for the young employees to change jobs at the beginning of their career in any organization wherein it is not easy for an older employee to find another job Stark (2009). The level of education had no significant influence on retention Govaerts et al (2011).
- Salary and Benefits: The relationship of salary and benefits with talent retention is another aspect of making people stay in the organization. Fair remunerates and rewards to the employees have been found to have a significant negative effect on the intention to quit from the organization. The major causes of attrition identified by some IT companies were again the desire for higher education, marriage or transfer of spouse, salary, or when expectation of going on-site abroad is not met. In BPO industry staff satisfaction is always in proportion with money received and it shows quickly compared to other industries. This is one of the major reasons why attrition levels high in the BPO‘s Feldman (2000). A study carried by Mwangi (2009) revealed that poor remuneration and reward schemes would have contributed to loss of talent.
- Working Environment Employee Retention is another biggest challenge and involves how to create and maintain daily working environments in which the talented ones can productively pursue the joy of work and financial benefits from their individual or collective contributions. New generation executives are looking for challenging assignments with adequate compensation to get professional satisfaction where as an effective work-life balance strategy is not simply about complying with the law. A study of Nation Media Group by Mwangi (2009) revealed that the respondents cited lack of space in the organization. Congestion in the offices, sharing of desks, and other resources were some of disabling environmental factors. Very few respondents revealed that they had adequate working space. Some of the respondents said that lighting and ventilation within the offices is also a problem.
- Succession Planning: There are different perspectives about succession planning but almost all of them hold a common root. Some consider it as a process of planning for succession of choosing the next senior team. For other groups, it is an adequate pool of proper talents for in-house recruitment. Some succession planning is a “future-proofed” strategy that enables the organization to grow and perform in the future successfully Hills (2009). In these three different explanations, a unique basis can be found, which is; “have the right people in the right jobs at the right time” Hills (2009). Investment in human capital requires careful planning. Under the talent management umbrella, succession planning is an important organizational business strategy to develop and retain talent Lockwood (2006).
- Training and Development Training is a key retention factor for the talented employees in any organization at any age. Eisen (2005) in his study states that training programs available to all employees correlate with a 70% increase in employee retention rates whereas career development is the accumulation and cultivation of skills and knowledge that enable a professional to advance or grow in the field of his or her choice. Offering a higher salary is not the only important factor motivating talented employees working with an organization but other kinds of motivation such as career path, career development, and open communication are important factors as well. As long as employees feel that they are learning and growing, they will be less inclined to leave. On the other hand, once employees feel they are no longer growing, they begin to look externally for new job opportunities Rodriguez (2008). Coaching is also one aspect of career development that can motivate the talented employees effectively. According to Whitworth, Kimsey-House, &Sandahl, (1998), as the result of coaching, high performer is less likely to leave an organization and leaders become more engaged and motivated.
- Organization Culture: Organizational culture has a substantial effect on whether talent management activities will succeed and contribute to improving results. It is the central to an organization’s ability to manage its knowledge more effectively Davenport and Klahr (1998), Davenport et al (1998) and Delong (1997). There are three components of organization culture i.e. vision and goals Leonard (1995), trust Von (1998) and the social networks Leonards and Sensiper (1998). The organization culture contributes to the individual’s level to commitment and motivation in the organization.
- Organizational Commitment: Organizational commitment of an individual is his/her psychological attachment to their organization. In fact it can make or break the bottom line. Employees who are most committed perform 20% better and are 87% less likely to resign Lockwood (2006). Steers (1977) in his study said that the more committed an employee is, the less of a desire they have to terminate from the organization. These “highly committed” employees were found to have a higher intent to remain with the company, a stronger desire to attend work, and a more positive attitude about their employment. Steers (1977) also concluded that “commitment is significantly and inversely related to employee turnover.” According to Arthur (1994) when organizations seek to foster a philosophy of commitment, then the likelihood of an employee searching for employment elsewhere is lowered. Commitment has a significant and positive impact on job performance and on workforce retention.
- Job Security: Increasing numbers of organizations mergers and acquisitions have left employees feeling displeased from the companies that they work and haunted by concerns of overall job security. As a result, employees are now making strategic career moves to guarantee employment that satisfy their need for security. On the other hand, employers have a need to keep their stuff from leaving or going to work for other companies. In fact, companies that offer employee development programs are finding success with retaining workers Logan (2000). Employers, who act as performance extraction units, without offering job security to its employees, will find it very difficult to get loyalists and cannot command commitment.
- Job Flexibility: Work practice that allows the employees a certain degree of freedom in deciding how the work will be done and how they will coordinate their schedules with those of other employees. Job flexibility is vital for retaining employees of any age Boomer. Researchers describe the importance of employment flexibility such as scheduling variations that better accommodate individual work times, workloads, responsibilities, and locations around family responsibilities Cunningham(2002) & Pleffer (2007).
- Job Satisfaction: In the present hypercompetitive and increasingly complex global economy, Job satisfaction represents one of the most challenging area faced by today’s service based companies’ managers when it comes to managing their employees. A positive and favorable attitude towards the job indicates the job satisfaction. A study on employee engagement and business success showed that employees who were extremely satisfied at work were four times more likely than the employees who are dissatisfied Lockwood et al (2006).Individuals choose organizations that complement their personality and organizations choose individuals who have personalities that complement the organization. When this occurs, there is a fit which represents the degree of job satisfaction Judge et al (2000).
- Identify and Differentiate Talented Employees: According to Smithers and Walkers (2000) responsibility, recognition and a sense of achievement in work, self-respect and recognition by others are those factors which are having a positive influence on motivation and the productivity levels can be improved as employee motivation or desire to perform is the foundation of productivity improvement Huysamen (1999). It refers to the classification of individuals in different groups with different levels of talent Lewish and Heckman (2006). In a study by Lockwood et al (2006) revealed that 82% of the respondents said that the recognition of their work motivated them to improve job performance.
- Provides Meaningful and Challenging work: Nine out of ten managers think that people stay or go because of money, which is actually not the case. Money and benefits matter, but what the employee’s want the most is challenging and meaningful work, good bosses, and opportunities for learning and development. Challenging and meaningful work in any organization requires the application of various skills, self-control and participation in the important issues of the organization. Provides meaningful and challenging work refers to ensures that subordinates are able to link their individual contribution to organizational and divisional strategic direction. Senior management must actively create opportunities for employees to be engaged in work that is challenging Oehley (2007). Sutherland and Jordan (2006) in their study suggest that the organization need to develop and communicate compelling employee propositions that highlight the availability of the challenging work.
- Leadership: Leadership can be described as a process of social influence in which one person can enlist the aid and support of others in the accomplishment of a common task. Leadership is the ability of a superior to influence the behaviour of his/her subordinates and persuades them to follow a particular course of action Van (1982). The leaders’ role also encompasses communicating the talent management philosophy companywide and knowing the industry competition. . Organizations will be more effective in their talent management if they encourage active leadership by managers. A study by Mwangi (2009) revealed that a majority of both the current and the past employees agreed that the nature of leadership styles had an effect on the staff morale. The respondents were of opinion that the leadership made them feels happy.
- Communication: Studies have indicated that effective communications improve employee identification with their agency and build openness and trust culture. Increasingly, organizations provide information on values, mission, strategies, competitive performance, and changes that may affect the employee’s interest Gopinath and Becker (2000). Many companies are working to provide information that employees want and need in better way of communication, through the most credible sources (e.g., CEO and top management strategies) on a timely and consistent basis.
- Motivation: Nowadays motivational issues are more complex because of the wealth and opportunity so many employees have enjoyed. Over the long haul, people need intrinsic rewards to keep going and to perform at their peak Thomas (2000). Workers have been forced to take more responsibility for their own careers, going where the work is rewarding and where they can develop skills that will guarantee their employability, in whatever organization Hall and Associates (1996). Talented workers have more choices than ever before, and are likely to leave if not satisfied with their employer or job content.
- Superior-Subordinate Relationship: Employee development programs cannot exist without a culture that supports them. Any effective program must have strong support from people in senior management positions, and these people must also serve as positive role models to subordinates Zenger et al (2000). Managers and supervisors take on a new role when an organization gets into the business of employee development. The factors emerging of retention strategies also indicate that employees stay when they have strong relationships with others with whom they work as a positive learning environment leads to higher retention rates Clarke (2001).
Functions of Talent Management
- Talent need analysis
- Locating the talent resources or sources
- Attracting talents towards the organization
- Recruiting or appointing the talents (in house or outsourced)
- Managing competitive salaries or professional fees
- Training and development of talent pool
- Performance evaluation of talent
- Career and growth planning
- Retention management
Principles of Talent Management
There are no hard and fast rules for succeeding in execution of management practices, if you ask me. What may work wonders for one organization may ruin another one! For convenience sake however there are certain principles of Talent Management that one should follow or keep in mind.
1. Principle 1 – Avoid Mismatch Costs
In planning for future manpower requirements, most of the HR professionals prepare a deep bench of candidates or manpower inventory. Many of the people who remain in this bracket start searching for other options and move when they are not raised to a certain position and profile. In such a scenario it is better to keep the bench strength low and hire from outside from time to time to fill gaps. This in no way means only to hire from outside, which leads to a skill deficit and affects the organizational culture.
Such decisions can be taken by thinking about the ‘Make or Buy’ decision. Perhaps questions like – How accurate is the demand forecast? How long is the talent required? Can we afford to develop? Answers to these questions can better help the talent management to decide on whether to develop or buy talent.
2. Principle 2 – Reduce the Risk of Being Wrong
In manpower anticipations for future an organization can ill afford to be wrong. It’s hard to forecast talent demands for future business needs because of the uncertainty involved. It is therefore very important to attune the career plans with the business plans. A 5 year career plan looks ridiculous along with a 2 year business plan. Further, long term development and succession plans may end up as a futile exercise if the organization lacks a firm retention strategy.
3. Principle 3 – Recoup Talent Investments
Developing talent internally pays in the longer run. The best way to recover investments made in talent management is to reduce upfront costs by finding alternative and cheaper talent delivery options. Organizations also require a rethink on their talent retention strategy to improve employee retention. Another way that has emerged of late in many organizations is sharing development costs with the employees. Many of TATA companies for example sponsor their employees’ children education. Similarly lots of organizations use ‘promote then develop’ programs for their employees where the cost of training and development is shared between the two. One important way to recoup talent investments is spotting the talent early, this reduces the risk. More importantly this identified lot of people needs to be given opportunities before they get it elsewhere.
4. Principle 4 – Balancing Employee Interests
How much authority should the employees’ haves over their own development? There are different models that have been adopted by various corporations globally. There is ‘the chess master model’, but the flipside in this is that talented employees search for options. Organizations can also make use of the internal mobility programs which are a regular feature of almost all the top organizations.
These principles are just broader guidelines; their application varies across industries and organizational cultures.
For Citing this Article use:
- Gangula, A. (2016). Talent management practices in information technology sector.