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Closing the talent management gap
Harnessing your employees’ talent to deliver optimum business performance
Jon Ingham of HR consultants, Penna, suggests that an organization’s relationship with its talented employees needs to be fundamentally different from that of other employees if the strategy gap is to be closed. Here, he shares Penna’s experiences of working with various leading organizations, and offers four stages to help create a strategic talent management program.
OST BUSINESS LEADERS understand that having the right people in the right place at the right time to maximize business opportunities has become the most important factor in ensuring ongoing organizational success. While managing employees effectively is obviously important, it’s the acquisition, allocation, development, retention and succession of the most important, valueadding people that can best create competitive advantage. No wonder then, that so many surveys show effective management of an organization’s talent ranking as one of business leaders’ most critical challenges. For example, Accenture’s latest global survey1 found that attracting and retaining talent is the third biggest concern of senior business executives, coming after only the health of the global economy and worries over competition. Identifying the talent gaps However, despite the strategic importance of talent management, few business leaders are currently heavily involved in leading and sponsoring talent management programs. What’s the reason for the disconnect between talent’s importance and the low-key nature of the response? The gap may be caused by the prevalence of nonstrategic talent management programs that treat talent very much the same as everyone else in an organization. Most people identified as talent find that they benefit from just a few incremental additions to other employees – a little more development, some coaching, a few more planned career moves – but the basic career dynamic remains the same. Penna, a human capital management consultancy, proposes that an organization’s relationship with its talented employees needs to be fundamentally different from that of other employees if the strategy and implementation gap is to be closed. Becoming a real employer of choice A strategic approach cannot, therefore, treat all employees as talent. This method boils down to straightforward HR without the strategic benefits of employee segmentation. Talent management, implemented effectively, doesn’t have to be seen as divisive by those people not identified as talent, or stop organizations developing the skills and potential of all their employees. The opportunity is to present the organization as an employer of choice. A real employer of choice will have developed and promoted itself in such a way that those people the organization considers to be its talent would never want to look anywhere else (perhaps only to add a bit more variety to their career). This doesn’t mean that only very few organizations can become employers of choice – just as there are plenty of variations in
Volume 5 Issue 3 March/April 2006
• high performers who make a particular contribution to value-adding processes. • individuals with skills that are scarce in the employment market. values. Effective use of the talent framework for assessment and development of talent helps ensure that talent management actions are aligned with the organization’s Jon Ingham talent strategy. the Figure 1. the talent framework can be used as the basis for assessing and confirming talent. motivation and potential. networks and relationships which would be difficult or time consuming to replace. potential employers of choice need to ensure they clarify the requirements of their talent management program – including the success criteria to be used to measure their program’s contribution.” but we advise clients to avoid labelling individuals as talented (and others as untalented) as this is firstly unhelpful and secondly inappropriate. development. Once completed. but are insensitive descriptions to use internally. scope and boundaries of their own approach to talent management. • other people in key roles. openness and closure? • How will talent management be integrated with existing performance management. Talent definition As well as creating a talent strategy. 1. correct view of whether any one individual is generically talented). Volume 5 Issue 3 March/April 2006 t 21 . Employee value proposition An employee value proposition (EVP) should articulate what’s unique and compelling about an organization that would is an associate consultant with Penna and director of Strategic Dynamics Consultancy Services Limited. In a strategic approach to talent management. Questions that need to be answered within a talent strategy include: • What should be the balance between assessment and development. It’s important that the framework references the values and other attributes that talent will be required to possess and display in the future. type of firm and competitive environment. networks.business strategy and the way that these strategies are executed.e. Penna’s experience of working with a variety of leading organizations on strategic talent management programs indicates that closing the strategy and implementation gap and delivering real business value requires an holistic approach to managing the following five areas. we refer to those within the talent pool as “people who have been identified as talent. 4. Talent strategy In order to develop strategic capability. inclusivity and exclusivity. The point here is that talent and talent management are useful concepts and approaches. reward and recognition and other HR processes? 2. relationships. CPA2. which could include graduates in early career grades. Talent frameworks are broader than most competency frameworks in that they encompass an employee’s entire long-term contribution and are therefore a mix of competencies. or employees at positions just below the leadership team. so there are many opportunities to differentiate those people who are identified as talent. and will bear only tangential relationship to any objective measure of having natural talent (i. succession planning. using the appropriate combination of framework-based interviews or group discussions. but could cover the following types of talent pool: • the current leadership team. organizations need to clarify the focus.. and • high potentials. for example. mobility. plus knowledge. Talent framework A talent framework adds detail to the definition of talent by describing what an employer needs its talent to exhibit and develop. 3. The employee value proposition people any one organization identifies as talent will differ from those identified by any other. At Penna. Using the names of the individual talent pools generally “does the job” – so people are “high performers” and “high potentials” and so on. The appropriate definitions of talent will depend upon an organization’s business strategy. in order to ensure that potential is not harnessed to criteria which are obsolete by the time that potential is developed. His book on strategic human capital management will be published later this year. there’s no single. Potentia3 and Prospector4). • senior people with particular capabilities. psychometrics (possibly involving specific tools that have been developed for the assessment of potential. problem-solving exercises and roleplays.
• understanding how they contribute to the success of the company – they want to make a difference. 5. This involves workshops and interviews with those people identified as talent. the EVP will cover a range of individual and organizational. broad needs in return for ongoing contribution to the organization. As the diagram indicates (see Figure 1. Stage 3. The EVP then becomes the basis for “the deal” with individual employees. Action planning Recommendations to build upon existing talent “Avoid labelling individuals as talented (and others as untalented) as this is firstly unhelpful and secondly inappropriate. • flexibility within work-life balance. Further supporting input can be provided through reviews of competitor activities and benchmarked practices in other leading organizations. can be of significant value to talent and the business in general. Note also that although the key need is for an organization to understand the EVP it offers as a whole. what attributes they believe talent needs to exhibit. It therefore partly formalizes and articulates the psychological contract between the individual and the organization. introducing this enhanced management and support is likely to prove a significant challenge in most organizations. In this way. They operate as a cascade down the organization. By including head-hunters in this process. internal talent can be compared to people outside the organization who might also display the attributes identified in the talent framework. the organization’s EVP needs to be aligned to people within the talent pools. Stage 1. effective implementation of this support depends on the motivation and capability of managers who are going to provide it. The understanding of what talent needs (moderated by what the organization believes it can provide) developed from this analysis can be documented as an organizational-level EVP. However. • friendship with quality colleagues. the future talent management program can be mapped out. rather than just to all employees. Taking action: a four-stage program The following four stages (see Figure 2. to talent managers and onto the people identified as talent themselves. This comparison can provide information on internal talent’s strengths. to have a strategic impact. maintained in a consistent manner. Since many line managers struggle to manage even everyday performance effectively. weaknesses and further development or replacement needs. Talent management capabilities Those key individuals identified as talent deserve and require more intensive support than other employees. executive shadowing and coaching to leverage exposure and learning within the organization. right) in the creation of a strategic talent management program will help develop the five areas explained earlier. if set up and ! PENNA Penna is a provider of human capital management consulting. The diagnosis stage may also include an assessment of talent against the framework. The consultancy specializes in bringing together expertise from across the employment lifecycle to create solutions to clients’ specific challenges. Stage 4. the EVP needs to be consistently demonstrated through all HR and management processes. previous page).t make people want to join and stay. For example. Penna’s unpublished research shows that the most important factors for a broad range of talent groups are: • compensation linked to performance. However. this type of support. and in particular. In Penna’s experience.” Once developed for a particular organization and talent pool. Stage 2. Diagnosis The next step is to hold interviews and focus groups with current managers of those identified as talent. Analysis Based upon the results of the diagnosis. developing and engaging talent and to understand demands for change. from senior management. These attributes can be documented in a high-level talent framework. in which the organization commits to meeting their particular. The main focus of the diagnosis is understanding how well talent management is working in providing them with what they need to run the business. Strategy formulation This stage involves understanding the current business context and its challenges followed by developing objectives and processes for the talent program. the organization’s and each individual’s EVP become key elements of developing a compelling employer brand and engaging talent to help become an employer of choice. Meetings with senior management are used to elicit their views and experiences of existing methods for recruiting. and • job security. 22 Volume 5 Issue 3 March/April 2006 . the demand and competition for talent today is such that the EVP also needs to be restated and reinterpreted for each individual person identified as talent. and tangible and intangible factors. This can often be provided through mentoring.
needs are being met.management processes can be made based on the above data. Examples of strategic. However. supported by the enhanced manager capabilities described earlier on. One important area emerging from the EVP is likely to be development of potential. is effective delivery of the deal that has been agreed. Following the four stages involved in developing a strategic talent management program will provide the basis for understanding which of these examples and other strategic actions may be appropriate for your organization and your identified talent groups. Formal executive education programs can address specific development needs and produce better performance. Organizations can then engage the external talent early on. 1. a more strategic approach to either response would be to develop an ongoing relationship with those who have been identified as talent rather than focusing on just one short. transforming the level and quality of talent that can be made available. Another common approach involves developing alumni networks to encourage talent with further appropriate development experiences outside of the organization back in again at a later date. www.accenture. Pre-recruitment actions Organizations have an opportunity to ensure they’re recruiting the very best people (rather than just those who are available when an organization wants to recruit) by proactively searching for external talent. Implementing this approach would fundamentally alter the talent career dynamic and make it absolutely clear which organizations were operating as true employers of choice. Departure-related actions. This helps potential employers of choice to identify who to target when the time is right. These should be real work assignments that a leader would be expected to deliver against. 2. management of performance extends into management of the “deal” – clarifying both organizational and individual needs and providing a twoway review of whether. In employment actions. value-adding actions that might arise at this stage in talent program development and that could excite business leaders and help close the strategy/implementation gap fall into three categories: 1. transactional contract of employment. www. The talent program’s four stages 3. 2. Experience and research tell us that the key development opportunities for talent lie within the roles they occupy and the element of stretch these roles provide. This approach recognizes that talent will always be in high demand and will also be attracted by the prospect of short periods of employment with a large number of employers. in order to rejoin as even more valuable talent later on. in case their career move proves not to be a success. but also to recruit internally with knowledge of all options and to succession plan externally as well as internally.ccl. employers should encourage those they’ve identified as talent to leave. CONTACT Jon Ingham E-mail: jon. honest conversations.uk 4. Think towards the future Real employers of choice will be totally focused on developing their talent’s full potential and will understand that the best development opportunities can sometimes be found elsewhere. even more important than the discussion.rsmi. However. Pre-recruitment actions. With this support. .org Volume 5 Issue 3 March/April 2006 23 . Figure 2. At the appropriate point. 3. and how well. The benchmarking conducted in the diagnosis stage of talent program development has an additional benefit here in enabling organizations to pinpoint existing external talent. finding out how they are being looked after and identifying their career drivers.co. www.com References: 1. Effective development aligned to both the talent framework and the EVP will have the potential to significantly upgrade talent’s contribution and retention and so have tangible impact on business results. Departure-related actions Most leading organizations already maintain ongoing contact with departing talent for six months or more following their exit. www. but they’re unlikely to offer the range of development situations necessary to maximize potential. It’s therefore important that those assessed as talent are assigned to (and can contribute towards) high-value strategic roles or assignments. This relationship needs to be based on discussion around the organizational and adapted individual EVP. In employment actions During employment. these employers of choice need to encourage their talent to review their long-term career development needs and how these needs can best be met – internally or externally.bioss.com 3.ingham@strategic-hcm. The opportunity is there to make a difference and perhaps future surveys will indicate that talent management activities are starting to live up to the strategic challenge of managing an organization’s key resource: its talent. Through enabling open.com 2. it’s the personalized relationships between talent managers and the individuals identified as talent that is key.
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