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Feb.

2010

Talent
Management
Taking a systematic approach

Nariman H.B.
http://FromNorthlands.wordpress.com
Feb. 2010 Talent Management

B ETTER TALENT IS WORTH FIGHTING FOR…. [1]

Contents
Introduction ........................................................................................................................... 4
What is Talent management about? .................................................................................. 4
History ............................................................................................................................... 4
Concepts............................................................................................................................... 5
Definitions ......................................................................................................................... 5
Talent management's importance, Talent age ................................................................... 5
Talent marketplace ............................................................................................................ 8
Features of a talent management strategy ........................................................................ 8
Arrangement to corporate strategy ................................................................................. 8
Inclusive versus exclusive approaches .......................................................................... 9
Involving the correct people ........................................................................................... 9
Focusing on the talent management circle ....................................................................10
Integrating Talent Management via a system (TMS).........................................................11
The Talent Development Pipeline Architecture .................................................................12
A sample TMS [6] ..............................................................................................................13
Some software for managing talent ..................................................................................14
For Assessing ...............................................................................................................14
For Competency Managing ...........................................................................................15
Automated Employee Appraisals ..................................................................................15
Development Planning ..................................................................................................15
Goal Management ........................................................................................................15
Succession Planning .....................................................................................................15
Compensation Management .........................................................................................16
Configuration, Setup & Integration ................................................................................16
Global Talent Management (GTM) ...................................................................................16

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Final viewpoint .....................................................................................................................17


References ..........................................................................................................................19

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Introduction

What is Talent management about?

Talent Management looks for addressing how organizations can make best use of
the talents they employ. It is generally accepted that the skills, information and
attributes that employees demonstrate can be an important asset to organizations.
Research demonstrates that there is a direct relationship between the employment
of high contributing individuals and the long term performance of the organization,
most usually measured in terms of shareholder return and sustainable profitability.

History

Organizations have always wanted to hire the people they supposed to be most
suitable for the position they hold. In this respect, the acquisition of talented
individuals is not a new noticeable fact. However, the concept was formally born in
1990s when McKinsey commissioned research on the universal ―war for talent‖ to
review the methods companies in the United States were adopting on recruiting the
best performing employees. It found that organizations were insistently competing for
talented people in the background of the favorable economic climate and that what
made the most difference was a strong belief held by leaders that competitive
advantage could be achieved from employing the best talent. The challenge was to
deal with the talent effectively. Since the research was published, scientific and
academic interest in the subject has grown rapidly, and many organizations have
adopted the talent management strategies.

[16]

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Concepts

Definitions

Each business to formulate its own meaning of what talent is than accepting
universal or prescribed definitions and there are considerable differences in how
talent is defined across different industries and sectors. It is helpful to start with a
broad definition for both "talent" and "talent management":

 Talent consists of those persons who can make a difference to organization'


performance, either throughout their instant contribution or in the long-term by
demonstrating the maximum levels of potential.

 Talent management is the systematic attraction, identification, improvement,


engagement/ retention of those persons who are of particular value to an
organization, either in view of their ‗high potential‘ for the future or because
they are fulfilling business roles.

This definition emphasizes the significance of recognizing that it is not enough to just
attract individuals with high potential. Developing, managing and retaining those
individuals as a part of organization' strategy for talent is equally important, as is
adopting structures to measure the return on this investment. Now more
organizations also are broadening their definitions, looking at the ‗talents‘ of all their
staff and workforces to develop their strengths.

Talent management's importance, Talent age

These days, the human beings are in their talent age. During the agricultural age, the
financial system was based on land, a truly physical and very tangible asset. The
industrial age followed with a manufacturing-driven economy. Higher business
performance was derived through the most efficient use of factories and allocation
networks.

The knowledge age moved the basis of economic value to information assets
through integrated communications and computer technology. Now the competitive
battlefront is for the best individuals because they are the right creators of value.

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McKinsey research [1] reveals that 75 percent of corporate officers were concerned
about talent shortages and Deloitte reports that retaining the best talent is a top
priority for 87 percent of surveyed HR directors [1]. This need for talent – and,
therefore, its expert management – is also driven by macro trends including:

 New cycles of business growth, often requiring various kinds of talent.


 Changing personnel demographics with decreasing labor pools and,
therefore, a talent squeeze.
 More difficult economic conditions which require separated talent and TM.
 The emergence of new enterprises which suck talent from larger
organizations.
 An international focus on leadership which is now permeating many levels of
organizations.

Talent management is often defined as performance management, incentive


compensation, or talent acquisition. Talent management is also often confused with
leadership development. Although leadership development is a vital function of your
organization, focusing on it exclusively is an inheritance of last century. The modern
service and knowledge economies in the talent age require a broad and holistic view.
A high performance business depends on a wide range of talent. In picture below,
the Talent management is depicted as a circular—not a linear—set of activities.

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[5]

The concept of talent management has evolved into a general and important
management practice and what was once solely attached to recruitment now covers
a large number of areas including organizational capability, personal development,
performance development and succession planning.
Some researches [2] demonstrate that the forces driving the increased interest in
talent are a potent mix of external supply issues and internal organizational demands
as illustrated in figure next page.

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In order for organizations to gain competitive advantage they have to develop a


strategic approach to TM that goes well with their business and gets the best from
their employees. It provides a focus for investment in human capital and places the
subject high on the corporate plans.

Talent marketplace

A talent marketplace is an employee training and development strategy that is set in


place within an organization. It is found to be most costly for companies where the
most creative employees can pick and select the projects and assignments that are
most ideal for the specific employee. An ideal setting is where productivity is
employee centric and tasks are described as ―judgment-based work,‖ for example, in
a law firm. The point of activating a talent marketplace within a department is to
harness and link individuals‘ particular skills (project management or extensive
knowledge in a particular field) with the task at hand. Examples of companies that
implement the talent marketplace strategy are American Express and IBM. [3]

The distinctions between a formal talent marketplace and more traditional


approaches to TM are significant. At first, formal talent marketplace makes
employees responsible for managing the greater part of their careers. Second, it
removes the idea that senior managers "own" talent. In a talent marketplace,
employees are "restricted free agents" (the restrictions define, for example, pay
grades and terms of service). They are expected to find the best opportunities for
themselves, and the market gives them the chance to take part in a non price-based
competition across a range of candidates and job alternatives.

Furthermore, a talent marketplace formalizes the terms of employment—that is, the


role, its duration, the place of work, travel, and so forth. It does so by making the
terms more formal than a mere handshake and by making the protocols around the
contract formal and explicit. Finally, it dispenses with two-party contract negotiations
and instead uses the HR "broker" to protect confidences, promote the interests of
both parties, and ensure compliance with the terms of the contract.

Features of a talent management strategy

Key features of a talent management strategy contain the following elements.

Arrangement to corporate strategy

Ensuring that the talent strategy is strongly aligned with the corporate strategy must
be a priority. In developing a talent strategy, both of internal and external factors
must be considered, including those detailed in figure above. Strategic analysis from
the business outlook should feed into an HR forecast.

Often organizations are at an unlike stages of talent management strategy


development. Some research suggest [2] that for a number of organizations there

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was a desire to progress through the stages highlighted in figure below, making the
transition to a more official, strategically-integrated approach.

Inclusive versus exclusive approaches

Lots of organizations adopt an inclusive approach to talent management creating a


"Whole workforce" loom to engagement and talent development, while others
develop a more exclusive focus segmenting talent according to need.

Despite of which approach organizations adopt, fairness and consistency must be


applied in all talent management processes. Diversity considerations should also be
built-into talent management processes to ensure that organizations are able to draw
from the broadest pools of talent possible.

Involving the correct people

Careful attention needs to be paid for involving the right stakeholders in the talent
management strategy. Clearly, HR experts have an important role in providing
support and guidance to design and develop approaches to TM that fits the
organization's needs.

Line managers must take responsibility for managing performance, identifying and
developing talent in their own areas but also need to be encouraged to see talent as
a corporate rather than a local resource.

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Focusing on the talent management circle

It is also important to pay attention on the four areas of the talent management circle,
detailed in figure below.

[7]

Evaluation of each area:

 Attracting talent

The process of attracting external talent depends upon how potential


applicants view the organization or sector it operates in and whether they
share the values of that organization. Where needed, lower financial rewards
can be countered with alternative benefits and employer values such as social
responsibility.

Elevating the effectiveness of the selection processes can also deliver


magnificent gains. Not only does a strong selection process decrease the risk
of the wrong hiring decision (the Financial Review reported only a few years
ago that one in three hiring decisions is wrong), it also enhances the likelihood
of being able to differentiate the high performers from the standard
performers.

 Developing talent

Talent development should be connected to other learning schemes. Suitable


learning and development involvements are required at relevant levels in a
career pathway for talented individuals to achieve their highest potential.

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Developing talent requires informal as well as formal learning interferences.


They will include conventional development activities.

 Managing talent

Lots of Plans and activities are needed to retain and hold talent required for
the future benefits of the organization. Investing on management, leadership
and other human resource management skill besides the development
activities will surely impact on talent retention. Organizations should develop a
performance culture where individuals take responsibility for the continuous
improvement of business processes and their own skill development.

Maximizing the match between what your talented people want and what you
can offer is critical. Tools such as employment value proposition surveys can
assist the organization to identify what people value and what keeps them
there.

Retention of attracted talent is the most part of talent management process


that plays a key role on the organization. Terms listed below are some
important things to do for retention management:

o Continuous monitoring of attrition rates


o Highly competitive compensation
o Personalized career plans
o Senior management attention
o Flexible working arrangements
o Diversity programmers designed to develop, retain and promote
diverse talent

 Tracking and evaluating TM

Evaluation of TM is difficult but it is necessary to ensure that the attempts are


meeting organizational needs. Evaluation requires both quantitative and
qualitative data which is valid, reliable and robust.

Integrating Talent Management via a system (TMS)

It‘s worth highlighting that integration is critical. Without integrating TM


activities, the efforts invested will tend to be dissipated with irregular results.
Integration means how all the pieces of TM fit together within a TM system.
This will not operate separately from strategy, business planning and the
organization‘s approach to people management. It will also reach higher up
the organization than other HR initiatives, often attracting the concentration of

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boards and senior teams. Similarly, TM reaches down the organization, to


include new recruits along with tenured professionals. Lastly, talent planning
must be done in parallel with business planning, creating a rich integration of
people and strategy.

The Talent Development Pipeline Architecture

This requires much more than engaging in traditional, person-to-person


succession planning, as essential as that is. Talent-rich organizations do more
than look just at individuals; they look at cadres of talent at different ranks in
the organization. They want to be confident that they have lots of twenty-
something with great potential, thirty-something with both potential and
experience and who are building a performance record, and forty something
that are seasoned, mature, but still aggressively driving forward. From this
group they will select a few people to be organizational leaders or leaders of
specialist roles within the organization. Lots of things have to be done well to
make this ideal a reality. You have to define what kind of talent you need, both
for the present and the future. You have to create and maintain the HR
systems that help you attract, choose, arrange, develop, reward and retain
this talent. You have to manage the careers of your talented people to ensure
that they develop the skills and judgment they need as they move into key
leadership roles. And you have to design and deliver the programs that
contribute to making all of these things happen.

If you're a minor enterprise, it is difficult to do all of this on the inside. You


have to be good at recruiting people from other organizations and be creative
and imaginative in developing and retaining them. You may have to expose
them to environments and practices outside your own enterprise so that they
extend the broader perspectives and understanding of what is possible and
how others do things. In other words, you must prepare and enable them to
select the right practices for your organization.

There are three dimensions to this architecture:

 A plain, articulated picture of your talent needs over the next several
years. This picture must be clear on the competencies and other
characteristics that you wish for your talent pool, so that people can
see what it takes "to make it" in the organization.

 Progressive pathways that you can use to get rare potential developed
into polished performers. You will require defining the experiences,
exposures and challenges that they need to meet so that they can
emerge as high performers in the future, whether as organizational
leaders, specialist leaders or simply advanced specialists.

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 Human Resource systems that can enable potential to be recognized


as performance. Normally, this means having sound, integrated,
human resource planning, recruitment and selection, training and
development, recital management, career management, succession
planning, and compensation processes to make sure that the talent
pipeline is filled. This will allow people move through the pipeline and
ensure that the pipeline delivers the talent where it needs to be
deployed, when it is needed.

A sample TMS [6]

One way to achieve such integrated system mentioned above is a Talent


Management System with 5 important elements as below:

1. Need – the business need derived from the business model and
competitive issues.

2. Data collection – the fundamental data and ―intelligence‖ critical for good
talent decisions.

3. Planning – people/talent planning guided by data analysis.

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4. Activities – the conversion of plans into integrated sets of activities.

5. Results – costs, measures and effectiveness criteria to judge the value


and impacts of TM.

Using this system can help TM become a strategic differentiator rather than a
standard set of HR processes – if the right conditions, context, timescales and
offerings exist in the first place. System integration and alignment ensures
that TM efforts are rational and fit for purpose. Since the arrival of the current
era of ―talent‖ is widely acknowledged, it‘s not surprising that renewed
importance is being placed on the management of that talent. And as talent
continues to be seen as a strategic differentiator, its management will take
more of a strategic role.

Some software for managing talent

There are hundreds of software for managing talent and monitoring human
resource performance in the market. Each software has specific features and
is able to deal with various parameters and factors in the organization's HR
sector. It could be a good investment for every organization to use powerful
TM software for increasing talent management skills and monitoring.

Make a direct connection between employee performance and compensation


to create a culture where top performers are motivated and excited about their
contributions. Centralize ongoing performance data and give the employees a
clear line of site between their contributions and the company goals.

Appropriate TM software usually has these features [15]:

For Assessing

 Multi-rater assessments and peer assessments should be some of the


configurable automated workflow options
 Skills and behaviors measured against professional standards
 A library of industry-validated competency models built from individual
competences
 Comprehensive reporting and data analysis capabilities to support
succession planning, job/person matching, career planning and
employee training

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For Competency Managing

 Competency Dictionary and Model Library are comprised of key


topics, definitions, and appropriate supporting behavioral indicators
 Tested and validated competencies divided into core
 Competency models should be organized by level, industry, function,
etc. leadership (by career band), and functional groupings

Automated Employee Appraisals

 Serve up historical data to both the individual and the manager at the
time of the review so all parties can see information about goals,
assessments, appraisals, development plans, and other performance
metrics
 Managers can leverage the Writing Assistant to consistently make
comments about observable behaviors and competencies for their
employees
 Making Schedule reviews for different parts of the organization
differently

Development Planning

 Create and manage personalized development plans


 Each individual should have their own development plan
 Map competency models to individual development activities so that
competency assessments directly impact development plans
 Supports approval requirement process for activities that incur costs

Goal Management

 Managers should be able to assign goals to individuals or to multiple


team members in a single batch process
 Cascade goals down to individuals and groups giving everyone a
clear line of sight between their own contributions and the company
goals
 Managers and executives should be able to view aggregated goal
results and progress reports

Succession Planning

 Succession planners must be able to see all potential candidates and


their relative readiness for specific positions
 Search for potential talented candidates and add them to a succession
plan
 Side-by-side candidate comparison reporting

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 Launch development plans or prescribe development activities to


individuals or pools of candidates from the succession planning screen

Compensation Management

 Manage the distribution of merit increases, stock incentives, bonuses,


equity pools and spot awards
 Based on performance reviews, goal attainment and any other
requirements
 Budget compliance enforced by business rules
 Include the use of salary matrix info, 3rd party salary ratios, salary
bands, and other compensation metrics when allocating compensation

Configuration, Setup & Integration

 Easily create forms for various needs using templates


 Configurable user interface
 100% browser-based, accessible from any computer with Internet
access
 Simple, streamlined user interfaced coupled with page-by-page
instructions
 Every user usually have the ability to see a personalized view of the
TM system, depending on their role and assigned permissions

Global Talent Management (GTM)

There are many HR actions for organizations that want to implement their
GTM efforts as effectively as possible. "Although the economic downturn is
slowing business globally, firms still need to hire and manage their talent to
operate today and anticipate their leadership needs of the future. Thus they
may need to engage several HR actions simultaneously. A suggested
summary of which HR actions might be most appropriate for which GTC is
shown in Figure 2 as indicated by the check marks." [8, 9]

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While the table above suggests that organization may select just one HR
action for a particular global talent challenges, in fact, the HR actions shown
in this Figure might be more effective if done as part of a system.

Final viewpoint

Number of overall messages that transcend organizational boundaries:

 A successful approach is based on an agreed, organization-wide definition of


talent and talent management. Such definitions form the spring board from
which both talent strategy and talent management processes can be
launched.
 In addition, a language for talent management activities that is understood by
all parts in the employment affiliation is a strong requirement.

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Feb. 2010 Talent Management

 A practical strategic approach to talent management offers significant


organizational profits in terms of developing a pool of talent as a source to
meet identified needs.
 Support for talent management should flow from those at the very high
position of an organization.
 Engaging line managers from an early stage is critical to ensure that they are
committed to organizational approaches to talent management.
 Talent management can be used to enhance an organization's image and
supports employer branding in the labor market as well as a providing a
means of enhancing employee engagement to improve retention.
 Talent management activities should be developed with other HR policies and
practices for a joined-up approach. Developing talent may be based on a
blend of informal and formal methods.
 Processes must be developed to track the performance and progress of those
identified as talent.

A final conclusion was that talent management was a dynamic process that has to
be continuously reviewed to ensure that organizational requirements are still being
met in the light of changing business priorities. Ultimately, organizational success is
the most effective evaluation of talent management.

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References

1. THE McKINSEY QUARTERLY 1998 NUMBER 3

2. TANSLEY, C., TURNER, P. and FOSTER, C. (2007) Talent: strategy,


management, measurement. Research into practice. London: Chartered
Institute of Personnel and Development

3. 3Lowell L. Bryan, Claudia I. Joyce, and Leigh M. Weiss, 2007

4. http://www.compassess.com/pdf/Talent_Management_White_Paper.pdf

5. Some charts and pictures from:


http://www.taleo.com/solutions/media/images/Image-Talent-Management-
large.jpg

6. Strategic HR review, Volume 4 Issue 5 July/August 2005

7. Webpage:http://www.cipd.co.uk/subjects/recruitmen/general/talent-
management.htm

8. Journal of International Management, Volume 15, Issue 3, September 2009,


Pages 273-285 ,The Emerging CEO Agenda in Multinational Companies

9. State university of Rutgers New Brunswick's webpage:


http://www.rci.rutgers.edu/~schuler/mainpages/GTM-
HR_Actions%20August%202009.pdf

10. BRITTAIN, S. (2007) How to manage key talent. People Management. Vol 13,
No 12, 14 June. pp46-47.

11. YAPP, M. (2008) Top talent in tough times. Talent Management Review. Vol
2, No 4, October. pp22-24.

12. PARRY, E. and URWIN, P. (2009) Tapping into talent: the age factor and
generation issues. Research into practice. London: Chartered Institute of
Personnel and Development.

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Feb. 2010 Talent Management

13. CHEESE, P., THOMAS, R.J. and CRAIG, E. (2008) the talent powered
organization: strategies for globalization, talent management and high
performance. London: Kogan Page.

14. Jeffrey Gandz (2006)Talent development: The architecture of a talent pipeline


that works, Ivey Business Journal at
webpage:http://www.iveybusinessjournal.com/view_article.asp?intArticle_ID=
611

15. Webpage of SILKROAD connections company at this


address:http://www.silkroad.com/human_resource_software/employee_perfor
mance_management/epm_software_features.html

16. Elizabeth G. Chambers, Mark Foulon, Helen Handfield-Jones, Steven M.


Hankin, and Edward G. Michaels (2007), WAR FOR TALENT, THE
McKINSEY QUARTERLY , NUMBER 3, pp44-58

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