Talent is the composite state made up of several elements. People are called talented when they possess or acquire (i) skills, knowledge, intelligence, and experience, (ii) ability to learn and grow, (iii) judgment, attitude, and character, and (iv) perseverance and self-motivation. Talent is a set of unique abilities possessed by individuals. There are two types of talent normally found in the organization. These are uni-dimensional and multi-dimensional. Both types of talent have the same objective, however, with different perspectives.
When the employees possess a singular talent in any particular field, it is called uni-dimensional talent. Uni-dimensional talent is there in the organization, when employees are best in a particular skill and ability. They can be best in their respective functions. On the other hand employees in the organization can be adept in multiple skills and abilities i.e. employees possess multi-dimensional talent. Organizations normally desire to have multi-dimensional talent in their employees since this proves highly beneficial in bridging the gap between organizational goal and objectives.
Skill and knowledge both are the abilities of individuals. Knowledge is information based and skill is the ability to perform a particular task in the required time frame. Knowledge is the theoretical and practical understanding of any subject. It provides the foundation to gain skills on any subject or action. Skill of the employees can be developed through experience, training, and continuous effort.
Talent management is the science of using strategic human resource planning to improve organizational values and to make it possible for the organizations to achieve their goal and objectives. Everything done to recruit, retain, develop, reward and make people perform forms a part of talent management as well as strategic workforce planning. A talent management strategy is needed to link to the organizational strategy for its appropriate functioning.
The objective of talent management is to create a high performance, sustainable organization which meets its strategic and operational goals and objectives. Talent management is the processes of ensuring that talented people are attracted, retained, motivated, and developed in line with the needs of the organization. It is a set of activities taken with regards to personnel with outstanding talents, to ensure their development and increase their operational efficiency, while simultaneously achieving the organizational goal and objectives.
Talent management, also known as ‘human capital management is the process of recruiting, managing, assessing, developing, and maintaining the most important resource of the organization which is its people. It is a set of integrated organizational workforce processes designed to attract, develop, motivate, and retain productive, and engaged employees. The issue of talent management gained prominence at the end of the 1990s. The growing interest in this sphere has two fundamental causes. First and foremost is that there is the dissemination of the view that human resource plays a key role in creating a competitive advantage in the organization which is operating in a knowledge based economy. The second cause had to do with the changes in the people market. This concerned the demand for specialists in areas of strategic importance to those companies and the problems involved in recruiting and retaining them
Talent management has become an imperative in the face of the present day challenges being faced by the organizations. Organizations are increasingly realizing that successful talent management is the key to high performance. By assessing available talent, placing the right people in their best roles, and finally retaining them, organizations can survive and thrive in the present day’s increasingly competitive markets.
Talent management refers to the skill of attracting and nurturing highly skilled employees, integrating new employees with the organization, and developing and retaining existing employees to meet the present and future organizational objectives. It is also known as the management of the human capital which involves several important processes namely (i) sourcing, attracting, recruiting qualified and skilled people, (ii) managing and defining competitive wages, (iii) training and development opportunities, (iv) performance management processes, and (v) retention programmes such as promotion and transitioning.
Talent management implies recognizing the employees’ inherent skills, traits, personality, and offering them a matching work. Every person has a unique talent which suits a particular work profile and any other position causes discomfort. Talent-management processes include workforce planning, talent gap analysis, recruiting, staffing, learning and development, retention, talent reviews, succession planning, and evaluation. Simply put, talent management ensures that the right people, with the right skills, are in the right place, and are engaged and focused on the right activities to achieve targeted results for the organization. It is the complete set of processes, the organization employs to identify, acquire, deploy, develop, and manage the employees it needs to successfully execute its corporate strategy.
Definitions of talent need to be taken in the context of the strategic needs of the organization. Talent is only talent when it is critical to the success of the organization and its value is relative to the role which it plays in the success of the organization. This value is not static but dynamic, appreciates or depreciates, depending on the need and situation in the organization. The strategic and effective management of the organizational talent needs a process and this process needs to be driven by the strategic needs of the organization. Strategic positions needed to implement the organizational strategy and achieve its objectives need to be identified.
Concept and historical aspects
The concept of talent management emerged after McKinsey & Company in 1997 created the now legendary catchphrase ‘War for Talent’ to describe the contemporary business world as permeated by the scarcity of talent and the struggle of the organizations to attract and retain human capital (their most important asset). However, the connection between human resource development and organizational effectiveness has been established since the 1970s.
Interest in the concept and value of talent grew in the organizational contexts and from the 1960s onwards the word ‘talent’ came to be used, albeit sparingly, in connection with organizational prosperity. Organizational interest in ‘talent’ continued to grow and, in the 1990s, the abilities of talented individuals became the focal point of a new managerial discipline named ‘talent management’. The basic underlying processes are, of course, not particularly new since the organizations have been recruiting, selecting, and training people in structured ways for over 100 years.
Talent management has since then have developed and come to mean and encompass a multitude of things. Five reasons which support the continued existence of talent management is (i) that the knowledge economy persists, (ii) the new generation which has begun to enter the workforce has different demands than their previous generations, (iii) organizations need new tools to manage the human resources, (iv) the HR (human resource) department and the HR managers need to become involved in strategic issues, and (v) the middle managers who are responsible for the employees, have to take a larger responsibility for the talent management processes in their daily work.
The profession which supports talent management became increasingly formalized in the early 2000s. While some people defined the field as including nearly everything associated with human resources, the NTMN (New Talent Management Network) defined the boundaries of the field through several surveys which indicated that activities within talent management included succession planning, assessment, development, and high potential management. Activities such as performance management and talent acquisition (recruiting) were less frequently included in the responsibility of corporate talent management. Compensation was not a function associated with talent management. Lastly, the strategy of using talent management helps organizations with workforce retention. Fig 1a shows four steps approach to talent management while Fig 1b gives the mapping of the talent management territory.
Fig 1 Talent management
The most important functions of the talent management are (i) establishing a high-performance workforce, (ii) attracting individuals with high potential and retaining them through proper training and knowledge refreshment, (iii) increasing the productivity of the organization, (iv) proper time management, as untrained and unskilled workforce lead to wastage of time because of the commitment of errors, which is not cost-effective, (v) retaining talented and high-performing employees, (vi) ensuring growth and innovation in the organization, and (vii) developing skills and competencies in employees. A requisite pool of qualified and talented employees can simplify the process of achieving the organizational goal and help objectives and focus on issues which really matters in the interest of the organization. Hence, the overall purpose of talent management is to maintain a skilled and efficient workforce for the organization.
Talent management is the overarching initiative which supports organizational growth and stability. Several organizations give talent management a top priority. Broadly speaking, effective talent management practices create a workplace culture which makes people wanting to join the organization, aligns employees with the mission and vision of the organization, fosters an environment where employees’ ideas are listened to and valued, provides existing employees with adequate training to allow them to do their jobs well, and places the right people in the right jobs.
HR personnel also use talent management practices and policies to create a talent pool of internal candidates for future positions. Specifically, such practices and polices encourage career growth and developmental opportunities, empower employees to make decisions which affect their work, and provide the organization with a competitive advantage by finding the best talent with the needed skills and competencies. Though a large number of the organizations have specific talent management initiatives, several organizations experience challenges in attracting and retaining talent. Hence, talent management initiatives are where organizations are to concentrate their resources.
Talent management is not just a simple human resource key term which people come across. It is also committed to hire, manage, develop, and retain the most talented and excellent employees in the industry. In fact, talent management plays an important role in the business strategy since it manages one of the most important assets of the organization, its people. That is why, organizations are required to make the effort to effectively manage the employees to help them develop their skills and capabilities in order to retain them.
Management of a good talent management programme optimizes organizational performance. One of the studies contends that talent management is about ‘the implementation of integrated strategies or systems designed to increase workplace productivity by developing improved processes for attracting developing, retaining, and utilizing people with the required skills and aptitude to meet present and future organizational needs’.
Hence, talent management becomes the process of managing the set of events which each employee experiences. Another study asserts that the aforementioned set of events, or core components, are considered fundamental for the success of the organization in the retention of its talent. This study shows the set of processes which, when integrated, form the foundation of a comprehensive ‘talent management’ system. The core components of talent management as per this study are as below.
Strategic workforce planning – This first stage in talent management addresses the needs and goals of the organization.
Total talent acquisition – Talent acquisition is associated with the use of an applicant tracking system targeted at recruiting full-time employees. However, effective talent management comes from focusing on total talent acquisition and integrating it.
Employee development – Integrating employee development with total talent acquisition provides an obvious benefit. Organization is to understand ability of each person as it relates to the core competencies identified in strategic workforce planning.
Performance management – Linking employee development activities and goals to performance management makes sense. Motivating managers to conduct performance management in a thoughtful and deliberate manner is crucial.
Succession planning – Every organization has key people and positions which are important for the success and achievement of its goal and objectives. Talent management proactively identifies key people in the organization and develops a plan to manage people and positions. In this respect, employing a technology solution can facilitate this process, and can mitigate obstacles. Also, having a system which links the other components immensely increases organizational commitment to succession planning and streamlines the process.
Talent management has become a mainstream people management strategy because of its ability to help organizations more effectively acquire, align, develop, engage, and retain their high performing and potential talent. Some of the reasons for the organizations to invest in talent management are given below.
Attract top talent – Having a strategic talent management gives the organization the opportunity to attract the most talented and skilled employees available. It creates an organizational brand which can attract potential talents, and in turn, contributes to the improvement of the organizational performance and results.
Employee motivation – Having a strategic talent management helps the organization to keep the employees motivated which creates more reasons for them to stay in the organization and do their tasks. A survey has revealed that over 91 % of the employees want more than just money to feel engaged and motivated.
Continuous coverage of critical roles – Talent management equips the organization with the tasks which need critical skills to plan and address the important and highly specialized roles in the workforce to its employees. This means that the organization has a continuous flow of employees to fill critical roles to help the organization to run its operations smoothly and avoid extra workload for others, which can lead to exhaustion.
Increase employee performance – The use of talent management makes it easier for the organization to identify which employees are the best suited for the work that can lead to less performance management issues and grievances. It also ensures that the top talent within the organization stays longer.
Engaged employees – Talent management allows the organization to make systematic and consistent decisions about the development of employees, which ensures the employees’ skills and development. Also, employees feel more engaged when there is a fair procedure for the development, which helps in increasing the retention rates that help the organization in meeting its operational requirements.
Retain top talent – Well-structured on-boarding practices create higher levels of retention which saves the organization on its recruitment and performance management cost in the long run.
Improve operational performance – Talent management helps employees feel engaged, skilled, and motivated, allowing them to work in the direction of the goal and the objectives of the organization, which in turn, increases customer satisfaction and the operational performance.
Higher customer satisfaction – A systematic approach to talent management means that there is an organizational integration and a consistent approach to management. When systems are more integrated, customer satisfaction rates are normally higher, since they are dealing with fewer people and their needs are met more rapidly.
Principles of talent management
There are six principles of talent management. These are (i) alignment with strategy, (ii) internal consistency, (iii) cultural embeddedness, (iv) management involvement, (v) balancing global and local needs, and (vi) organization branding through differentiation.
Alignment with strategy – Organizational strategy is the natural starting point for thinking about talent management. The talent need of the organization is determined to meet the requirement of the organizational strategy. For example, if the growth strategy of the organization is based on five pillars namely (i) technological leadership, (ii) services acceleration, (iii) enduring customer relationships, (iv) resource allocation, and (v) globalization, then the organizational management is to understand that implementing these initiatives can have less to do with strategic planning than with attracting, recruiting, developing and deploying the right people to drive the effort.
Internal consistency – Implementing practices in isolation do not work and can actually be counter-productive. The principle of internal consistency refers to the way the talent management practices of the organization fit with each other. One of the studies shows that consistency is crucial. For example, if the organization invests considerably in developing and training for high potential employees, then it is to emphasize employee retention, competitive compensation, and career management. It has also to empower employees to contribute to the organization and reward them for initiative.
Cultural embeddedness – Several successful organizations consider their organizational culture as a source of sustainable competitive advantage. They make deliberate efforts to integrate their stated core values and operating principles into talent management processes such as recruitment methods, learning and development activities, performance management systems, and compensation and benefits programmes. For example, whereas organizations have traditionally focused on job-related skills and experience to select people, some multi-nationals organizations have expanded the selection criteria to include cultural fit.
Management involvement – Successful organizations know that the talent management process needs to have broad ownership, not just by HR, but by managers at all levels, including the top management. Senior management needs to be actively involved in the talent management process and make recruitment, succession planning, leadership development, and retention of key employees in their top priorities.
Balance of global and local needs – For the organizations operating in several countries, cultures and institutional environments, talent management is complicated. Organizations need to figure out how to respond to local demands while maintaining a coherent HR strategy and management approach. In majority of cases, there is no single strategy. For example, one organization emphasizes global integration, with a high degree of centralization and little local discretion, while another organization focuses on responsiveness to local conditions and allows local operations to be highly autonomous.
Organizational branding through differentiation – Attracting talent means marketing the organization to the people who fulfill its talent requirements. In order to attract employees with the right skills and attitudes, organizations need to find ways to differentiate themselves from their competitors. For example, a leading organizational brand has been able to attract in one year about 500,000 applicants worldwide. Out of these applicants it recruited around 2,500, by emphasizing opportunities for long-term careers and promotion from within.
Talent gap, also known as a skills gap, simply refers to a lack of skilled personnel in the organization. Every organization occasionally faces the tough issue of talent gap. The definition of a talent gap is where there are more jobs than qualified people to fill them. Positions with the greatest gap are those of heavily skilled workers found in industries. They are the hardest candidates to come by according to Society for Human Resource Management. A talent gap is defined as ‘a significant gap between an organization’s skill / talent needs and the current capabilities of its workforce. It is the point at which the organization can no longer grow or remain competitive because it do not have the right talent to help the operational results and support the organizational strategies and goals’.
The organization makes an all-out effort to fill this gap through various methods. Persistent talent gap is likely to hamper the growth and development of the organization. It also has a negative impact on the employees’ motivation as they feel demotivated because of lack of talented people to look up to for necessary instructions and advice to work effectively. When the organization is troubled with the talent gap, it performs rather poorly in every respect. This is when it becomes the management to step in to fill the gap by recruiting talented people to work in the organization.
To fill the talent gap in an organization, the organization is required to follow certain basic steps. It helps in working out solutions to deal with the talent gap. The steps to address talent gap are (i) to know the ‘knowledge, skills and abilities’ (KSAs) needed for the positions, (ii) to identify the areas where proficiency is needed, (iii) to look for persons with required KSAs within the organization, industry or market, (iv) to select the right or deserving candidates with required proficiency, (v) to identify the skill gap of the candidate to the position, (vi) to devise plans to mitigate the skill gap, (vi) to provide training and refreshment to the newly recruited employees, (vii) to roll out professional development plans to help employees succeed in their role, and (viii) to carry out periodical assessment of individual performance and to identify the areas where extra training or specialized attention is needed.
A continuous alignment between organizational needs and employees performance is necessary in meeting the goal and objectives of the organization. It is found that talent gap has a moderate-to-high negative effect on the organizational operations. It also reduces competitiveness and productivity. It hampers the turnout rate and reduces employees’ morale in the organization. Hence, the organization is required to take strategic steps to reduce the talent gap to a negligible level so as not to hamper the productivity of the workforce. Some of the strategies which can help in the reduction of the talent gap in the organization are given below.
Development of a culture of talent development – Culture is the environment for people at work. Every organization has its own culture. Organizational culture includes the norms and behaviour which outline its shared values. Management is required to build and maintain an effective organizational culture for the larger interest of the organization. Organizational culture is to be so nurtured that it facilitates to retain, sustain, and grow talent.
Managers to act as a role model – Managers are to be transparent about their own needs to learn, develop, and share. They are to embrace openness. They are never more powerful than when they are shown to be learning.
Reinforcement of the value of learning – It is necessary to go beyond the preliminary conversation about goals. The employees are to be asked what they want to accomplish and what they feel their gaps are. When someone completes an assignment, celebrates both the outcome and the learning, especially when the assignment has not been completed smoothly. It is necessary to reinforce shared values.
Building of sustainable processes – Managers are required to coach and develop their employees. Every employee knows what areas they need to improve, and for those with particularly high potential, career tracks are to be developed which give them a sense of a sustainable relationship with the organization.
Strengthening of shared values – Employees are required to be able to connect their daily work productivity and responsibilities to the values of the organization. They need to understand the job and the reason for completing the job successfully.
Leveraging problems as opportunities – Problems in the workplace are to be seen by the employees as opportunities to develop their skills and improve their talent for future performance. Learning the causes and stresses inherent in the problems can be helpful for both the organization and the employees.
There are a number of methods, which the organization can utilize when overcoming the talent gap. Once the present and the future potential talent gaps are identified clearly, management can begin to develop concrete action and investment plans. The five key action areas to address the talent gap are given below.
The first action area is to build and maintain a structured, searchable skills and competency database. The skills and competency database is to outline core competencies, managerial and employee self-assessments, a list of key initiatives or programmes supported, experience with identified methodologies and certifications. Achieving consistency from one employee or manager to the next is another big challenge, but critical to overcome if such databases are to be useful in making assignments which account for competency, identifying talent gaps, and directing future investments in recruiting, training, and development.
The second action area is to create and align specific career and wages progression tracks, using operational and technology strategic roadmaps as a starting point. Again, while this can seem to be the common sense, progression planning and consistent execution (moving people along according to their plans) has become less common since the average terms of employment have become progressively shorter and hence managers have been challenged to do more with less, resulting in less time to allocate to these types of efforts, and frequent job hopping has become the norm over the past several decades, especially among younger generation and junior talent.
The third action area is to tap into large, but considerably under-utilized talent pools. There is always a large pool of retired personnel and average graduates who can be recruited in certain job profiles which enhances and expedites their work skills and also benefits the organization. Also, there are significant number of talented people in the rural areas who can be trained a little, developed, and converted to effective talent pool. Lateral entry at various positions is also a good way of utilizing under-utilized talent pool.
The fourth action area is to fund or deploy ongoing professional development to re-skill existing employees. Clear progression planning makes it easier both to recruit and retain junior talent and to encourage existing employees to invest time and energy in acquiring new skills and / or adding competencies which can be needed but not necessarily perceived as exciting or marketable over their longer term career horizons.
The fifth action area is to build and market own brand as organization of choice. While certain brands carry huge consumer cache which makes it relatively easy for them to attract talent, majority of the organizations need to work much harder at becoming perceived as the organization of choice in the marketplace. This involves not only establishing a strong employment brand, but marketing and promoting consistently through all available channels, including social media, events, and other traditional advertising and PR (public relations) avenues. While career progression planning is one aspect of building a strong employment brand, other aspects important in the present day marketplace include flexible work arrangements, work-life balance, consistent and transparent measurement and reporting on employee satisfaction, pleasant work environment, exposure to global markets and work experience, access to the state-of-the-art advanced technology tools and investment in both internal and external training, continuing education, and mentoring.
Identification and acquisition of talent
Talent identification is evaluating what the organization has (supply) against its needs (demand) in terms of abilities, skills, knowledge, experience, numbers and commitment. Talent identification primarily aims at (i) translating organizational vision into goals and mapping the required level of capacities and competencies to achieve goals, (ii) assessment of talent to profile the level of capacities and set of competencies possessed within the organization, (iii) gap analysis and identification of development path for internal talent, and (iv) acquiring talent other than those available internally from the external market. Fig 2 shows talent acquisition process.
Fig 2 Talent acquisition process
Talent management integration
Talent management has been described and illustrated as a process. This process serves as an impetus to implement the talent management initiative. However, the process is actually within a model. The core values and strategic objectives of the organization become the foundation of the integrated talent management model. Built on that foundation are departments which support the organizational strategy. For example, the HR functions in a given organization can include any or all of the processes such as recruitment and talent identification, training and development, compensation and benefits, and HR information systems.
Other processes associated with talent management are best included in a more integrated talent management approach which encompass processes such as recruitment, selection, on-boarding, mentoring, performance management, leadership development, career development, career planning, succession planning, and recognition and rewards. These processes are best utilized when designed to support the organizational strategic goal and objectives.
Talent management has become an imperative in the face of the present day challenges. The challenge of doing more with less in the present day environment has placed increasing demands on the workforce to be multi-skilled, flexible, and independent. Further, as technology continues to advance breaking down traditional barriers, new production methods getting introduced, increasingly demanding customers, shrinking product life cycles, the criticality of the organizational talent becomes a top priority for the management.
In order to effectively support organizational strategies, management is required to conceive, fashion, and successfully champion explicit strategies to ensure access to sufficient talent flow and actively engage the organizational talent to achieve the organizational goal and objectives. The requirement for quality people is rising day after day, it is a tough call for the organizational management to adopt suitable strategies for the talent management. Fig 3 shows typical model for management of talent.
Fig 3 Typical model for management of talent
Broadly speaking, talent management is the implementation of integrated strategies or systems designed to increase workplace productivity by developing improved processes for attracting, developing, retaining, and utilizing people with the required skills and aptitude to meet the present and future needs of the organization. A recent study shows that 85 % of HR executives state that the ‘single greatest challenge in workforce management is creating or maintaining the organizational ability to compete for talent’. Without question, effective talent management provides one of the most critical points of strategic leverage today. Different studies confirm that organizations which excel in developing their people also tend to be high-performance operations and dominate their markets.
Talent development needs development of available talent in the organization and the development of the potential talent available in external talent supply source. Internal development of talent is ensured through identification of skill gap and developing them through skill training and development programmes.
Talent Management, as the name itself suggests is managing the ability, competency and power of employees within the 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 the employees and developing and nurturing them to get the desired results.
Talent management is a process which emerged in the 1990s and continues to be adopted, as more and more organizations have come to realize that the talent and skills of the employees drive the organization towards success. These organizations develop plans and processes to track and manage their employee talent, including, attracting and recruiting qualified candidates with competitive backgrounds, managing and defining competitive wages, training and development opportunities, performance management processes, retention programs, promotion and transitioning.
Talent management refers to the process of developing and integrating new employees, developing and retaining the present employees, and attracting highly skilled employees to work for the organization. The process of attracting and retaining profitable employees is of strategic importance, since there is increasingly more competition between the organizations. Despite intense competition being the key to market development and success, organizations have failed to identify some of the major reasons which highlight why good performers leave the organization.
Talent in the present context can be represented by the equation ‘Talent = Competence x Commitment x Contribution’. Competence is the ability to do the work which means the knowledge, skills and values which the employees need for the jobs of today and tomorrow. Commitment means the level of employee engagement. It is there when the employees work on time, work hard, and do what is expected of them. Contribution is the meeting of the requirements of the meaning and purpose of the work.
Talent management process
Talent management process is the procedure to manage the ability, competency, and power of the employees within the organization. Everything which is done to recruit, develop, retain, reward, and make employees perform better is a part of talent management. Employees are undoubtedly the best resource of the organization. Sourcing the best people from the industry has become the top most priority of the organizations today. In such a competitive scenario, talent management has become the key strategy to identify and to fill the skill gap in the organization by recruiting the high-worth individuals from the industry. It is a never-ending process which starts from targeting people. The process regulates the entry and exit of talented people in the organization. To sustain and stay ahead in the market, talent management cannot be ignored.
In the present day competitive and complicated talent situation in the world and global approach to talent management, it has huge potential. Scope of talent management is very wide and far reaching. It is a key succession planning tool which provides an integrated means of identifying, selecting, developing, and retaining top talent within the organization which is required for long term planning.
The main area of scope include (i) identification of the talent needed, (ii) right selection of talent or human resource since the right person at the right job is the key to have a successful and effective organization, (iii) clear, competent, and competitive compensation plan for ensuring the right compensation to the right people, (iv) training and development of talented individuals so that employees are updated to meet market challenges and requirements, (v) strong and systematic performance assessment system so that the talented employees can be identified and appreciated, and (vi) retention of the right and synergized talent for keeping the synergy between employee and organization smooth and growing. The stages included in talent management process as described below help in understanding the talent management concept better.
Understanding the requirement – It is the preparatory stage and plays a crucial role in success of the whole process. The main objective is to determine the requirement of talent. The main activities of this stage are developing job description and job specifications.
Sourcing the talent – This is the second stage of talent management process which involves targeting the best talent of the industry. Searching for people according to the requirement is the main activity.
Attracting the talent – it is important to attract the talented people to work in the organization as the entire process revolves around this. After all the main aim of talent management process is to recruit the best people from the industry.
Recruiting the talent– -The actual process of recruiting starts from here. This is the stage when people are invited to join the organization.
Selecting the talent – This involves meeting with different people having same or different qualifications and skill sets as mentioned in job description. Candidates who qualify this round are invited to join the organization.
Training and development – After recruiting the best people, they are trained and developed to get the desired output.
Retention – Indeed, it is the sole purpose of talent management process. Recruiting them does not serve the purpose completely. Retention depends on different factors such as wages, job specification, challenges involved in a job, designation, personal development of the employee, recognition, culture, and the fit between job and talent
Promotion and career development –Employees cannot work in the organization at the same level with same job responsibilities for a long time. Job enrichment plays an important role.
Competency mapping – Assessing employees’ skills, development, ability and competency is the next step. If needed, there is requirement also to focus on behaviour, attitude, knowledge and future possibilities of improvement. It gives a brief idea to the management if the person is fit to be promoted further.
Performance appraisal – Measuring the actual performance of the employees is necessary to identify their potential. It is to check whether the person can be loaded with extra responsibilities or not.
Career planning – If the employees can handle the work pressure and extra responsibilities well, the management is required to plan their career so that they feel rewarded and satisfied. It is good to recognize their efforts to retain them for a longer period of time.
Succession planning – Succession planning is all about who replaces whom in near future. The employees who have given their best to the organization and have been serving it for a very long time definitely deserves to hold senior positions. Management is required to plan about when and how succession takes place.
Exit – The process ends when the employees get retired or are no more a part of the organization. Talent management process is very complex and hence is very difficult to handle. The sole purpose of the whole process is to place the right person at the right place at the right time. The main issue of concern is to establish a right fit between the job and the individual.
Talent management wheel
The talent management wheel divides the important elements of the talent management into two namely (i) talent management practices (shown in the outer ring in the Fig 4a), and (ii) guiding principles (shown in the inner ring in the Fig 4a). The six guiding principles apply equally to each of the individual talent management practices.
Fig 4 Talent management wheel and talent retention elements
Talent retention is critical to talent management. The challenge of the talent management is more aggravated with the increasingly high attrition. The true impact of loss talent is frequently unclear to the management. When talent walks out the door then there are four broad categories of costs which the organization has to bear namely (i) separation costs (e.g. costs of exit interviews, and separation wages etc.), (ii) vacancy costs (e.g. costs of additional overtime, or part-time employees etc.), (iii) replacement costs (e.g. testing, recruitment, interviewing, travel and moving, and training), and (iv) performance differential costs (e.g. customer dissatisfaction, and lower productivity).
With this background in view, talent retention is of vital importance. Employees have needs and these needs vary with changing times and situations. Achieving this requires a talent retention strategy which addresses the five major elements namely (i) employee benefits, (ii) employee engagement, (iii) learning and development, (iv) competitive compensation, and (v) performance management as shown in Fig 4b. The organization needs to make specific plans to create a total retention package which is valued by their identified talent pool.
Role of talent management in building sustainable competitive advantage
Organizations work towards the achievement of their mission and strategic objectives. This needs a thorough understanding of the resources required for achieving the same. Resources here imply both the financial and non-financial since they are equally important and interdependent. Technically these resources have been divided into two namely (i) non-contingent capabilities, and (ii) differentiating capabilities. Whereas non contingent capabilities are basics which enable the organization to compete and exist in the marketplace, differentiating capabilities are those which differentiate the organization from the other organization and offer competitive advantage. Effective marketing management, for example can be one of non-contingent capabilities. Similarly several HR processes aspire to develop non-contingent capabilities but they frequently fail to align with the strategy and offer competitive advantage. Majority of these processes end up developing people in similar areas and similar capacities as their rival organizations but this fails to provide any competitive advantage.
For the organization to develop competitive advantage through HR processes is very important to define strategic differentiating capabilities and then develop a process for identifying and developing the same. This empowers the HR people to create an impact on the organizational strategy and also provides a link between talent management and strategy.
For HR to prove that the talent management can be of strategic importance to the organization, the critical relationship between the two is to be proven. Talent management specially needs to be projected as a differentiating strategic capability which can offer real and substantial competitive advantage. One of the studies have found out that creation of differentiating strategic capabilities signifies the relationship between organizational strategy and human resource. Human resource has been assumed as the primary source of strategic advantage. The study was primarily based on ‘resource based view’ (RBV) of the organization. This view has gained substantial ground among HR practitioners as basis of models for formation and structure of resources.
Unlike other non-contingent capabilities which can be developed easily and cannot contribute to a large extent towards the development of a sustainable competitive advantage, differentiating strategic capability such as strategic HR through talent management can. However for human resource to qualify as potential source of competitive advantage, it is to fulfill a number of criteria namely (i) strategic value which means that the employees have to contribute substantially and add value in their area of expertise, (ii) rare which mean employees are to be unique in terms of skills, knowledge and abilities in order to qualify as rare, (iii) appropriable which means the extent to which the resource is owned by the organization, (iv) unique such that the resource cannot be replaced even after the competitors having spotted the same, and (v) cannot be substituted which means that the resource cannot be substituted by the rival organizations and that there is no match for the talent.
There are not many things in the organizational environment which can fulfill all the above criteria and offer unique competitive advantage except human resource and which is under the jurisdiction of the talent management.
Talent management effectiveness and benefits
Talent management is a long-term and continuous process. Foremost, talent management needs a belief in talent. As highlighted in one of the studies, ‘the talent mindset goes beyond an awareness of the importance of leadership. It includes a broad spectrum of the ability of all employees to contribute to organizational success now and in the future’. Disseminated within the organization, and wider and deeper than succession planning, an effective talent management system builds a winning organization by (i) connecting corporate strategy with the quantity and quality of leadership required to execute it, (ii) driving managers’ accountability for the cultural strategies which support the organizational goal and objectives, (iii) identifying those employees with the highest leadership potential across the organization early in their careers, (iv) assessing high potential talent for future leadership, (v) accelerating the development of high potential talent and improving the quality of executive leadership, and (vi) improving the focus on growing better leaders at all levels, from first line upwards.
For talent management to be effective, two broad issues are required to be addressed. These are (i) a thorough understanding of the organizational drivers for talent management, and (ii) identification and delivery of people / competencies. Organizational drivers of talent management include reassessment of organizational issues (e.g., as a result of new leadership, merger or acquisition, poor performance), validation of applicable policies and programmes (e.g., benchmarking studies), plans to increase performance by leveraging talent, and, dissatisfaction with present organizational performance.
Talent management is integral to the organization and is one of the crucial management functions in an organization. The major benefits which the talent management offers include (i) it helps the organization to fulfill its vision with the help of efficient and promising talented people, (ii) it assists the organization to build a talent pool comprising a list of talented people to meet future exigencies, (iii) it makes the organization more competitive and progressive, (iv) it paves the way for future leadership, (v) it helps automate the core processes and helps capture data for making better decisions, and (vi) it automates repetitive tasks thereby releasing time and resources for making strategies and more critical decisions.
Talent management can be beneficial both to the organization as well as the employees. The benefits to the organization includes (i) it improves individual and group productivity and capacity to compete effectively in a complex and dynamic environment to achieve sustainable growth, (ii) it assists in the recruitment of quality workforce, (iii) it establishes better match between jobs and skills, (iv) it helps retain top talent thereby reducing the cost of recruiting new personnel, (v) it helps in understanding the employees better, (vi) it keeps employees engaged constructively, (vii) it ensures effective use of available man-hours, (viii) it helps in developing leaders for tomorrow within the organization, and (ix) it helps in evaluating employees’ readiness to take up new roles.
The benefits to the employees include (i) it promotes long-term association with the organization, (ii) it is persistent and result in higher productivity of employees, (iii) it keeps the employees motivated which helps in career development, and (iv) it helps the employees to get job satisfaction from their work.
Some of the other advantages of the talent management are (i) better positioning in the ‘war-for-talent’, (ii) improved operational efficiency, (iii) improved people performance, (iv) decreased risk, (v) enhanced individual and group productivity and capacity to compete effectively in a complex and dynamic environment to achieve sustainable growth, (vi) build a talent pool comprising a list of talented people to meet future exigencies, (vii) encouragement of intrapreneurship and making way for future leadership, (viii) better organizing processes and systems which leads to better decision making, (ix) helping in ascertaining the right person is deployed in the right position, (x) contributing in retaining the top talent, (xi) helping in understanding employees better and shaping their future, and (xii) promoting effective communication across different disciplines.