Effective talent management can be likened to a jigsaw puzzle – multiple components must fit together seamlessly in order for it to work well.
HR professionals would be familiar with the concept of engagement from ‘hire to retire’ – and indeed, savvy employers these days recognise that the employee life cycle extends beyond ‘retire’ and through to the alumni network.
The repercussions of this concept for talent management are multifaceted and complicated.
All about people capability
Mike Erlin, Cornerstone OnDemand’s managing director, Australia and New Zealand, views talent management as essentially being about harnessing people capability – and particularly how that capability is aligned to the needs of the business.
“If I go across the spectrum of talent management, the critical elements are engagement, enabling people, aligning them to the needs of the business, and continually developing and adjusting them to the purpose.
This works both for individuals and their careers as much as for organisations and the planning they must do for the future workforce,” he says.
Engaging employees throughout their career with a company has long been recognised by HR professionals as being critical, but today they have the metrics and empirical research to back up their hunches.
“I’ve been in the talent space for 17 years, and what’s great is that in the last four years, for the first time, I see the C-suite acknowledging that an engaged workforce enhances business performance,” says Erlin. “We’re used to seeing the people leaders understanding this, but nowadays because of the research and metrics from the likes of Aon Hewitt and Bersin by Deloitte, you can have a conversation with the CFO. You’ve got credibility when you walk in there and talk about the importance of engaging your workforce.”
Results from Aon Hewitt’s global employee engagement research clearly show the impact of engagement on financial performance and customer satisfaction:
- A 5% increase in engagement results in 3% incremental revenue growth.
- Organisations with top-quartile engagement experience show a 4% increase in their incremental operating margin.
- A 55 percentage point net promoter score difference is shown for highly engaged employees versus actively disengaged employees.
“Highly engaged employees improve operational efficiency and productivity, and are advocates for the organisation’s success,” confirms Stephen Hickey, partner and head of talent consulting at Aon Hewitt Pacific. “Best Employers are confronted by the same set of market forces and economic circumstances that challenge all organisations. However, they drive increased discretionary effort from their workforce as a result of more effective, outcomes focused talent management practices.”
It starts at the top
Aon Hewitt’s research suggests that what sets Best Employers apart from other organisations are four critical talent management priorities: employee engagement, committed leadership, performance culture, and differentiated employment brands.
These are all interlinked pieces of the puzzle, and Erlin says it’s almost impossible to achieve all four if one element is missing.
In a 2014 Deloitte survey on business challenges, the number one challenge was leadership. In 2015, leadership had slipped to number two, replaced by culture and engagement in pole position.
“In 2014, employees were saying ‘we want better leadership’, so companies responded. In 2015, leadership dropped position, signalling it remains a priority and that we still have work to do to make things happen. However, engagement and culture moved to the top spot. That is a big statement saying to leaders:
‘Set the vision and create an environment for realising it’. Also very interesting was to see that L&D was number eight in 2014, and in 2015 this had moved up to number three on the priority list, emphasising the importance of committing to employee development.”
Indeed, Erlin suggests that anyone uncertain of an organisation’s commitment to engagement or talent management practices should look to the CEO. “The first component is leadership and the strategy the leader and leadership team puts in place. Then it’s about the objectives they set, the plans for execution and the environment in which to do it,” Erlin says.
“If leaders do that well, it means they’re setting up a performance culture.”
Aon Hewitt research confirms the critical role leaders play – indeed, leaders, as acknowledged in Aon Hewitt’s Best Employers research, exemplify great leadership behaviours. “Best Employers have highly engaged leaders that consistently succeed at the critical behaviours that drive high employee engagement,” says Hickey. “All organisations need to ensure that their leaders are creating a very clear picture of the future of their organisation, cascading this through their management layers, and ensuring frontline employees understand how their work contributes to the success of the organisation.”
Erlin echoes this sentiment. “Making sure employees understand their role in the company’s success and also that the company is committed to supporting and developing their capabilities towards their own individual success – that’s how you get engagement.”
It’s easy to forget the final item on the list – a differentiated employment brand – but Erlin says this is critical in today’s social media-driven, ‘Glassdoor’ world, where with one click it’s possible for candidates to get the ‘inside story’ on working at a company.
“The social aspect pulls the wizard from behind the green curtain and you get to see what’s going on,” he says. “The reality is if you don’t deliver on the leadership front, if they don’t have a plan and don’t set up a performance culture or ensure that people know how their role adds to organisational success, you’ll never have a differentiated employer brand. Employees will be the first ones to say, ‘that’s not real’.”
Talent management in the social technology era
As the consumerisation of technology continues apace, it’s up to businesses to keep up. Erlin says it’s time to accept that smartphones and social media are here for good and have changed the way employees communicate. For talent management, this means appreciating that the multichannel, multidevice aspect of communication needs to be embedded in the operation of the business.
“In the context of talent management it goes back to the sense of creating a sense of connection and belonging,” says Erlin.
“That’s not only for the employees but for the contractors, for the partners in the company, and for the customers within the community of the company. That social aspect has to manifest itself in terms of regular two-way communication. For example, if Alan Joyce was to post something on a blog I could reply to Alan Joyce.
“In the context of an effective business operation it’s also about feedback. It’s feedback both for recognition of a job well done and constructive feedback if not. It’s how individuals are performing on projects, how they’re performing against their goals and objectives; it’s about knowledge sharing and collaboration.”
This feedback should be collated and utilised in a more structured conversation – but it’s critical that the social elements are embedded in these systems in the first place. “If you didn’t have that social integration you miss it,” Erlin says.
Erlin also sees the impact of social tools on another critical aspect of talent management: L&D. While he says there will always be a place for traditional synchronous learning (whereby a group of employees are all engaged in learning at the same time), the most successful companies today are utilising the asynchronous nature of social learning – that is, their employees are learning the same material at different times and locations.
“That’s when you get truly social and collaborative learning, even though you’re in different time zones and spaces. However, this is impossible unless you embed that aspect of learning, creating groups and cohorts, with common topics of learning. If you can’t bring people together through community, and you’re trying to push them through structured learning, it just isn’t the same.” Even the ‘social chatter’ generated by social forums can be useful. “If you just enable social chatter, that has very little benefit,” says Erlin.
“If you enable social chatter and align it around things like company values or a purposeful objective or a strategic initiative, then you can check the pulse of the business and the surrounding community. That’s high value and that’s how social plays in this space.”
Technology in perspective
For all the focus on technology and the social aspect of work, Erlin urges business leaders not to forget that technology is always an enabler; it’s not the solution.
“When it comes to talent management, the solution is the leadership, the plan and its execution. If you have that, the culture – and the engagement – will follow.”
Cornerstone OnDemand is a global talent management software provider that is pioneering solutions to help organisations realise the potential of a modern workforce.