In a competitive marketplace, the people who work in your company are your key advantage. Collectively, the purposeful recruitment, development, retention and proper placement of employees with the right skills and attitude to meet business objectives is referred to as talent management. According to the Society for Human Resource Management, only 53 percent, about half, of companies have an articulated talent management program in place. Implementing a few deliberate talent management practices to support your business strategy not only keeps you from losing ground, it can move you to the top of the pack in your industry.
Any talent management program must start with business objectives. Look at your business plan and ask yourself, “What are the people needs to fulfill those objectives?”
Like any part of your company, to be of value, talent management strategies and practices are not stand-alone, and must help meet business objectives. According to Jim Collins, most recently author of Great by Choice, long-term growth of most companies is halted by an inability to take advantage of new opportunities because they do not have the right talent in place or the ability to employ new talent when the time arises. The processes for fast action are not in place, and it takes too long to hire and/or develop the necessary talent. Whether your current business strategy is to corner a fledgling market, implement new technology, or cut costs, use your business strategy to determine the talent opportunities and roles that are needed to make it happen. Then work to align the natural abilities and passions of the people to fill these roles, in order to take advantage of the opportunities.
Do not use the current talent pool (including yourself) to determine your business objectives. Create the needed job descriptions and then identify the individuals who best fit those roles now or grow your talent to fit the needs. Effective talent management means hiring, developing, and retaining the right employees who fit the needs and values of your company. Because business strategies and business environments change, talent management, like all other practices, is not a one and done exercise. It is an ongoing process.
Talent management is not usually the highest priority for most start-up companies.
When starting a business, it is often the case that the opportunity being filled is so easy that anyone can be moderately successful — in the beginning. Taking advantage of a rising market need is usually better addressed by means other than hiring the right people or implementing a succession plan. However, as business conditions change or as the company matures, what got you here will not get you there.
Most business owners are experts in a technology, sales, or finance — and not people. Most of us have a baseline appreciation of the value of our employees, and inherently understand the importance of their contribution to our company’s success. Our internal, and often inconsistent external, gratitude often appears to suffice. People are more flexible than budgets, and therefore there is wiggle room for mistakes. Those mistakes add up and will eventually hurt the bottom line.
During rapid growth early in a company’s existence, the upside of growth drowns out the downside damage of employees who are not in the right roles, are unproductive, unmotivated or lack the specific skills needed. However, as the company matures, the upside growth plateaus, but the downside of mediocre or poor talent doesn’t go away, potentially to the point of overtaking profits.
The full impact of talent, especially lack of talent, is hard to measure. It is difficult to know the full potential of each employee or of having the right employees. And it is difficult to quantify the lost potential of not having the right employees in place. Therefore, it is hard to justify a tangible investment in talent management programs. Alignment of talent management strategies with business strategies is one way to get a handle on the gaps that exist in your company.
According to Bloomberg News, about 50 percent of companies do not make it past their four-year anniversary (47 percent construction, 49 percent manufacturing, 55 percent services, 56 percent agriculture). While there are many reasons for success or failure, from a talent perspective in the very beginning, the success of the company mostly depends on the “talent” of the founders to set vision, persuade funders and get the company off the ground, and a highly flexible jack-of-all-trades talent of the workforce. However, as an organization matures, the importance of the founder decreases and the required skill sets of the employees changes to be more specialized. To maximize success, employees, including the original founders, must be reach their greatest potential in order to make the right contribution. While at the same time becoming more important, and when efforts must be made by all employees and not just a few leaders, the talent management strategies become more complex and difficult to implement.
Talent management does not belong only to HR.
Talent management is shared with everyone in the organization. Talent is like budgets or safety. While someone heads up these areas, everyone makes it happen. Each employee is responsible for his or her own safety and the safety of others. Everyone impacts the talent — perhaps through hiring, retention or employee development. If you have a human resources person or someone to whom talent management can be assigned, his or her role is to identify and deploy the right strategies to engage employees by driving satisfaction, loyalty and retention, for example. But these strategies must be incorporated by all, and into all aspects of the company.
Moving talent management initiatives forward requires buy-in from all levels of management. Involvement by senior management gets visibility but no action. Involvement by middle and line management gets action but little traction. Involvement by senior management is essential.
Talent management is not an administrative task confined to compensation and benefits. Talent management is an integrated, continuous organizational practice that includes, for example, succession planning, leadership development, retention and career planning. Usually, talent management is seen as the responsibility of human resources. However, integrated talent strategies, like other business strategies, is executed by all employees regardless of their function or level.
Where do I get started?
Each aspect of talent management is a trade or industry in and of itself. As a result, the choices that need to be made and getting started on a talent management program can appear overwhelming.
Choosing one or two initiatives is a great way to get started. These choices should be based on your business objectives. For example, if growth is your objective, recruitment and onboarding will be a focus. If new technology integration is a business objective, then training of current employees will be necessary.
The most commonly cited talent need in large companies and government agencies is replacement of a retiring workforce. Therefore, succession planning is at the heart of talent management efforts. Access to a workforce pool is a major challenge for small- and mid-size companies, especially those in rural locations. Therefore, the greatest portion of their talent management efforts is recruitment and onboarding. Technology organizations are at greatest risk of losing employees with highly specialized knowledge required for their roles. In this case, benefit plans are a key component of talent management.
Employees need to know about your talent management goals and objectives. They must be both tied to business goals and beneficial to employees. Employees regard organizations with purposeful talent management strategies as places with positive workplace cultures, with more opportunities for development and reward, even without professional advancement. This approach has the added benefit of increasing employee retention, which is a talent strategy that can help all companies regardless of their business objectives.
Over the next few issues, we will highlight particular practices of talent management, successes and failures that you can apply to your company in order to meet your business objectives.
