Introduction

People are the last weapon of competitive advantage in the global market
today. No matter your industry, company, or nationality, there is a battle-
ready competitor somewhere who is busy thinking how to beat you. Products
can be quickly duplicated and services cheaply emulated – but innovation,
execution, and knowledge cannot. The collective talent of an organization is
its prime source of its ability to effectively compete and win. In the new
economy, competition is global, capital is abundant, products are developed
quickly and cheaply, and people are willing to change jobs often. In this kind
of environment smart, committed, experienced people who are
technologically literate, globally astute, and operationally agile are the new
competitive advantage. And even as the demand for this talent goes up, the
supply of it will be going down. As a result, an unprecedented shift is
occurring. Organizations are increasingly recognizing the need to radically
change the role of their Human Resource function.

Today, there is a progressive movement to transform the HR function and

establish a Human Capital Management (HCM) environment that truly
leverages the workforce as a competitive weapon. Organizations leading the
way in HR transformation are focusing less on administrative aspects and
more on strategic issues. Talent management tops the list as a strategy for
radically improving workforce productivity to drive higher value for the
organization. Today, most organizations are struggling to understand the
characteristics, enabling technologies and definition of talent management.
While they know how to administratively recruit, retain and replace, they
struggle with the strategic elements of managing talent. The process of
managing the supply and demand of talent to achieve business goals,
represents one of the greatest opportunities for organizations to not only
overcome these critical issues, but most importantly, survive and thrive for
years to come.

Talent Management

Traditionally, organizational growth has been enabled by hiring more people.

However, today’s economic environment requires that the productivity of
existing workers increase before new headcount is considered.
Organizational growth has transformed from”quantity of talent” to”quality of
talent.” As organizations seek new ways of improving workforce productivity,
“talent management” has become a vital element in establishing a human
capital management (HCM) environment. A term that has suffered from
significant abuse and misuse over the past few years, talent management is
more adequately defined as: A continuous, integrated process that helps
employers to:
 Effectively plan talent needs
• Attract the very best talent
• Speed time to productivity
• Motivate the right behavior
• Develop targeted capabilities and knowledge
• Retain the highest performers
• Enable talent mobility across the organization
Talent Management can be defined as:

A conscious, deliberate approach undertaken to attract, develop and retain

people with the aptitude and abilities to meet current and future
organizational needs.

Talent management involves individual and organizational development in

response to a changing and complex operating environment. It includes the
creation and maintenance of a supportive, people oriented organization
culture.

Importance of talent management

Like human capital, talent management is gaining increased attention.

Talent management (TM) brings together a number of important human

resources (HR) and management initiatives.

Organizations that formally decide to "manage their talent" undertake a

strategic analysis of their current HR processes. This is to ensure that a co-
ordinate, performance oriented approach is adopted.

Quite often, organizations adopting a TM approach will focus on co-

ordinating and integrating:

 Recruitment - ensuring the right people are attracted to the

organization.
  Retention - developing and implementing practices that reward and
support employees.

 Employee development - ensuring continuous informal and formal

learning and development.

 Leadership and "high potential employee" development - specific

development programs for existing and future leaders.

 Performance management - specific processes that nurture and

support performance, including feedback/measurement.

 Workforce planning - planning for business and general changes,

including the older workforce and current/future skills shortages.

 Culture - development of a positive, progressive and high performance

"way of operating".

Do you know what the greatest loss is for any company?

It’s not marginalized market share or shrinking margins of profitability or

dipping share rates but losing its key people and talent. That loss becomes
exponentially high when they lose their talent pool to competitors. It is this
fear of losing talent that gives sleepless nights to many CEOs.  Your ability
to retain your talent pool could be the key difference between success and
failure of your business; between survival and soaring profits; between
being a developing and developed nation. It is not that those companies that
retain their talent pool do not hit the rough patch, they do, but they recover
fast and return to the stream that they belong to and stay ahead of others.
How Much Money Does Employee Turnover Cost You?

Here are 9 key costs associated with departing employees:

 Exit interviews

 Advertising

 Recruiting

 Interviewing

 Testing

 Hiring

 Orientation

 Training

 Lost productivity until they learn the job

Cost to Replace Just One Entry Level Employee, Middle Manager, IT

Specialist, or Engineer

% of Pay in Turnover Replacement

Position
Costs Cost

Entry Level ($8/hr) 30% $4,992.00

Middle Manager
125% $56,250.00
($45k/yr)

IT Specialist ($83k/yr) 200% $166,000.00

Your total cost to replace just three entry level people - $14,976.00

Your total cost to replace just three middle managers - $168,750.00

Your total cost to replace just three IT specialists - $498,000.00

These percentages of pay in turnover costs are what industry experts

typically cite. Think they’re high? Then reduce them by 25%. The costs
are still significant – and it’s eating away profit from your bottom line at a
staggering rate.

Turnover costs add up quickly, and they’re one expense that typically
returns nothing of value.
Love 'em Or Lose 'em: Employee Retention

Everyone is aware that employee retention is a growing and expensive

problem for companies today. But do managers and supervisors understand
the key role they play in keeping their talented employees on board? Many
believe that the “glue” that makes employees “stick” is made up of money,
perks, and benefits-issues over which they have no control. The truth is that
there are many simple and inexpensive ways to create a loyal and
enthusiastic workforce.

The picture states the latest statement

that corporate believes in “Love them or Lose them’’
TALENT RETENTION: An Ongoing Issue

Talent is one of the most important assets of an organization. An efficient

workforce determines the level of productivity of the organization and thus
determines the effectiveness of organizational systems and processes. Any
organization, whether small or large, which expects to grow and prosper,
must take the talent retention issue as a top priority. Failure to do so leads
to organizational slowdown and steady decline. Even during the times of
economic slowdown, it is imperative for an organization to focus on talent
retention strategies. This way, the organization can retain talent and make
judicious use of the same. The expedition to find the best way to retain
talents has taken HR professionals through concepts such as talent reviews,
talent satisfaction and talent delights. The latest idea is "Talent
Engagement", a concept that holds that it is the degree to which a talented
talent is emotionally bonded to his organization and passionate about his
work that really matters. Talent engagement is the level of commitment and
involvement a person has towards his organization and its values. An
engaged talent is aware of business context, and works with colleagues to
improve performance within the job for the benefit of the organization.
Talent engagement is a critical ingredient of individual and organizational
success. Engagement is strongly influenced by leadership quality, as well as
by job and organization features. This conceptual research is designed to
determine if the potential for talents to be engaged in work can be predicted
at the time of their initial application for work. These studies also provide
additional evidence about the impact of talent engagement on important
business outcomes.
Employee Retention Strategy: How to Attract and Retain Top
Performers
One of the biggest challenges companies are facing is the attraction and retention of top
performers. The World Future Society predicted that the greatest test of durability for
companies in the next five years would be the ability to get and keep good people. In
some industries such as the homebuilding industry there is a phenomenon of merry-go-
round employees where employees jump ship within the industry and companies are
recycling employees. In the finance industry the big question to a top performer is
"Where did you jump from?"

One executive management client had left a specific financial institution because she
was wooed by a competitor. Once there, she wasn't as happy as she thought would be
and was wooed back again to the original employer. She did this back and forth thing
two more times! This is very common in specific industries as the fight for good people
continues. So how do we attract the top performers and second to that how do we keep
them from jumping?

Here are the top five things leaders can do to attract and keep the best of the
best:

1) Top talent wants to work for the top companies.

If your company is committed to superior practices, has profile and brand recognition
and is known for exemplary management practices, you will have a list of salivating
hopefuls lined up to work for your company. This would be a good problem to have.
Bottom line - the company needs to be working towards being the best, brand
recognition and having excellent employee systems in place.

2) Build it and they will come.

If your company is revamping, rebuilding or restructuring, be aware that every man and
his dog out there has been through some form of reengineering in the workplace. To
attract top talent you need to be able to show the vision of where you are taking the
company and offer the opportunity for the talent to be part of building the new dream.
Top performers are often drivers, which mean they are turned on by challenge, change
and results.

3) Recognize and reward over and over again.

Money isn't everything to top performers. On a list of ten items that are important to top
performers, money ranks at number four. The most important element for top
performers is having challenging work, the second is having an open and honest work
environment, third is recognition for work and fourth is money. Again top performers
thrive on opportunities for recognition in the form of time off, family days off or flex work
schedules.

4) Don't take them for granted.

Like anything, the novelty and excitement of a new job tends to wear off after about six
months or so. Human nature is often to leave a good thing alone and this could be the
worst thing we could do to our top performers. Ongoing coaching, retreats and training
are crucial to top performers. Again people at the top of their game tend to be lifelong
learners and are eager to learn as much as they can. Do not underestimate the value of
providing ongoing learning opportunities, reimbursement for college or university and
giving them challenging projects where they can be stimulated and challenged.

5) Know what thy enemy does.

Be on top of your competitor's practices around attraction and retention of top

performers. Don't get blindsided by a top performer coming to you to tell you what they
have been offered. Be aware first and ensure you address it once you find out. If you
are consistently establishing a top performers' value they won't go looking elsewhere
but often when we don't pay attention to what else is out there they may be scouted
right out from under your nose.

Powerful leaders know that the success of their company is built on the quality of their
people. As leaders, we must make our people our priority and this is and will be the
biggest challenge.
 BPO Employee Retention
Attrition is the biggest problem faced by BPOs these days.
Attrition rate in BPOs is more than the attrition rate in any other
sector. It is very important to control this attrition rate. Many
retention schemes are applied in BPOs for retention.

A single tool like training alone is not sufficient for employee

retention. The best results for employee retention can be
achieved by applying different tools strategically. Let us now learn
about various strategies which can boost successful employee
retention in BPOs.
1. First know the cost. This is the most basic and initial part of
the retention process. A good retention plan needs all the
facts. The turnover cost includes cost of selection process,
hiring, induction, training, lost productivity, etc.
2. Hire from known sources like employee referrals through
trustworthy employees.
3. Hire the right people. Retention starts with recruitment itself.
Identify the characteristics of the people you want to hire
who fit in organization’s culture. To retain employees, the
people who are productive and are likely to stay for a longer
time should be hired.
4. Focus on employee orientation. It is the first impression that
the employee takes home with him. A proper welcome form
the management will encourage the employee to stay with
the organization.
5. Individual development. Develop career plans for
employees. Initiate mentorship and higher education
programs to keep the learning and development moving.

6. Training for managers. An important factor that keeps the

employee in the organization is the manager. Employees
need a manager who manages them well. A manager should
be a good listener and motivator. Proper training should be
given to the managers.
7. Find the reason why employees are leaving. Conduct exit
interviews with the employees after 3-4 months of leaving
the job. This is because most of the employees would not
like to reveal the true reason of quitting the job as long as
they are in the organization and are associated with the job.
The exit interviews can be conducted online. Then the
employees can talk straight-from-the-shoulder.
8. Employee recognition. Star of the month, top performer,
picture on bulletin boards, appreciation cards and
certificates, etc, increase employee moral and confidence.
This is a great way to retain employees of a call center.
Talent Scenario During Recession

The law of demand and supply mercilessly applies to human resources, also.
During the economic downturn, companies were able to downsize by getting
rid of redundant work force and dead wood. They also restructured the
employee compensation (mostly by decreasing) to stave off financial losses.
Only those employees were retained who proved their worth. The employees
had to accept all kinds of compensation-related compromises while
maintaining the same or even higher level of efficiency and productivity.
They could thus survive the financial tsunami.

These survivors got the opportunity to handle a variety of tasks that further
sharpened their skills and made them multi-skilled. Thus, overall quality of
talent has increased. At the same time, those who were out of job lost this
opportunity to hone their skills in a new challenging environment. Adding to
our woes, slashing of training and development budgets has led to a
depletion of the number of skilled employees within the companies.

And a Difficult Road Ahead

Such steps from companies have created an altogether tricky scenario: The
quality of talent within the companies has increased (raising the bar of the
talent), while the quality of skills available in job market has dwindled. Now,
recruiters can hire the required quality talent not from outside but from
inside their competitors’ workplace.

While many have forgotten the term “War for Talent”, the phenomenon is
slowly re-emerging. “A study by Accenture has found that more than two-
thirds of executives are now deeply concerned about not being able to
recruit and retain the best talent. In today’s global and highly competitive
economy, the war for talent is now global, not local. The survey of more
than 850 top executives from the U.S, UK, Italy, France, Germany, Spain,
Japan and China found worries about talent management were growing, with
67 per cent this year putting it second only behind competition as the key
threat, up from 60 per cent last year.”

New Definition of Talent

While war for talent continues, the bar for talent also goes up. Old skills and
competencies may not work. Companies now need salesman who does not
sell products but does sell solutions; production managers no longer control
the operations, they are expected to innovate and improve productivity; and
quality managers need to study competitive products with more zeal and
help develop better products and services. The employer’s expectations have
changed and are set to grow:
1. Highly Productive: The talented employees needs

to be highly productive. They

should deliver much more than they are compensated for. If that
happens, employers are willing to give larger share to them.

2. Multi-Skilled: Companies have discovered that one way to decrease

recruitment cost is to have multi-skilled employees. Multi-skilled
employees help reduce manpower dependence, and the overall sum of
all the multi-skilled employees is greater than the same number of
equal number of specialist.

3. Self-Managed and Self-Motivated: Self-managed and self-

motivated employees reduce managerial efforts. This helps
organizations to have less number of managers.

4. Innovative and Out-of-the-Box thinkers: As the rules of the

business change and competition increases, the existing solutions no
longer work. Companies need employees who constantly infuse new
 ideas and provide out-of-the-box solutions to meet customer needs
that seem to have no end.

Five Important Talent Retention Factors

Lets us consider five factors that can help organizations retain talent to meet
the client and business requirements in post-recession era:

1. Clear Goals, Targets and Expectations: You need to tell them what
exactly you expect from employees and what should they do to meet
these expectations. A talented mind without a direction is most likely
to pull the plug than a mediocre or a dead wood.

2. Balanced Work Environment: Talented employees have huge

positive energy and they exhaust this energy to meet the deadlines.
But often they need time to re-energize themselves. Organizations
that want to retain talented employees need to provide a positive
environment that allows them to re-energize themselves more often.

3. Track Performance Goals and Provide Analysis: Innovators and

hard workers need constant motivation to perform better. They need
to know whether they are producing desired results. Any suggestion of
not being able to deliver throws them in doldrums. One way to let
them know about their performance (whether improving or declining)
is to point toward specific results, achievements or failures (which they
can fix before it is tool late).
 4. Fair Evaluation of Performance: At the end of the day, the high
fliers want to get acknowledged for their work. The first
acknowledgment of the hard work is a fair and formal appraisal of their
performance. They should be specifically told where they met
expectations and where they did not.

5. Compensation to Maintain a Decent Lifestyle: Employees who

deliver quantity with quality also expect from employers fair
compensation that is compatible with the market. If not first,
compensation remains the second most important cause of brain-drain
from organizations.

The Key to Retain Talent Lies in HR Policies and Practices

As organizations increase their expectations from employees, employers too

have to significantly change the way they manage the talent. Talented
employees continuously need new challenges and goals they can achieve,
and a continuous supply of information and resources they can use to solve
business problems. And needless to say, they will in return demand more
lucrative and effective compensations, a great work culture and friendly HR
policies.

“Even during the recession, companies are reviewing and revising their
leadership development programs. Survey after survey indicates that people
who quit their jobs do so because of their relationship with the boss, not
because of dissatisfaction with their job. A recession is a perfect time to take
a hard look at leadership style and training to increase employee satisfaction
with management.”

Conclusion

As organizations continue to pursue high performance and improved results

through HCM practices, they are taking a holistic approach to talent
management—from attracting and selecting wisely, to retaining and
developing leaders, to placing employees in positions of greatest impact. The
mandate is clear: for organizations to succeed in today’s rapidly changing
and increasingly competitive marketplace, intense focus must be applied to
aligning human capital with corporate strategy and objectives. It starts with
recruiting and retaining talented people and continues by sustaining the
knowledge and competencies across the entire workforce. With rapidly
changing skill sets and job requirements, this becomes an increasingly
difficult challenge for organizations. Meeting this organizational supply and
demand requires
the right “Talent DNA” and supporting technology solutions. By
implementing an effective talent management strategy, including integrated
data, processes, and analytics, organizations can help ensure that the right
people are in the right place at the right time, as well as organizational
readiness for the future. To create a sophisticated talent management
environment, organizations must:
• Define a clear vision for talent management
• Develop a roadmap for technology and process integration
• Integrate and optimize processes
• Apply robust technology to enable processes
• Prepare the workforce for changes associated with the new environment
To conclude if talent engagement is not evaluated and handled as soon as
possible, disengaged talents will multiply and negative talent satisfaction
issues.