AUSTRALIAN BUSINESSES are failing to fully utilise talent management techniques and subsequently may fail to retain staff, allowing existing talent to be snapped up by other companies or for overseas positions.
A recent survey has found that 56 per cent of businesses have no talent management policy in place, and of the 44 per cent of companies that do, only half provide it for selected employees – despite 91 per cent believing that it increases their business’ performance.
While market leaders appear to be making headway, many companies are still struggling to demonstrate meaningful human capital management, according to Nicole Gorton, regional director of Robert Half, which conducted the survey of 203 Australian HR managers.
“With the present climate of widespread staff shortages, it is surprising that talent management is not a major focus for many companies,” said Gorton.
“It is increasingly difficult to recruit new people to meet organisational needs so it becomes sensible to shift the focus onto the development of existing staff through strategic, integrated HR programs that not only attract employees but also develop and retain them.”
She cited Westpac and Commonwealth Bank as two companies that were leading the charge when it comes to talent management policies. Both companies use their annual reports to demonstrate how HR and management initiatives have improved staff satisfaction and engagement, ultimately aiding employee retention and showcasing them as employers of choice.
“It seems that for other businesses and industries, talent may perhaps be one of the most underdeveloped corporate assets in this country,” she said.
Small business may be struggling because of a lack of internal HR expertise. In companies with less than 50 employees, 62 per cent rely online managers or other roles to oversee the talent management processes.
Similarly, small businesses are also less likely to have performance review processes in place (58 per cent), while medium and large businesses are clearly aware of their importance with 85 per cent and 93 per cent embracing policies respectively.
Overall, the regularity of reviews tend to be quarterly (37 per cent) or on an ad hoc basis (37 per cent).
“It is incredibly important to manage performance reviews effectively as they are an important part of the talent management matrix,” said Gorton.
“Appraisals should form a key periodic indicator on employees’ progress, development, goals and salary expectations, and be used as a tool for providing regular feedback and recognising high performance.”
Performance culture should also be led from the top, and in companies where there is no HR manager, Gorton said the head of the business should champion the importance of talent management to the executives with responsibility for managing staff.
“If there is not buy-in at each level then talent management policies will fail or simply exist as empty rhetoric,” she said.
To leverage and motivate staff, the HR managers surveyed overwhelmingly said that they either personalise career plans (60 per cent) or personalise compensation packages (53 per cent) with only 2 per cent of companies saying that they do nothing to stimulate and retain staff.
The steps of talent management
Five key strategies organisations need to implement to ensure sustained performance by identifying and developing effective future leaders:
1. Know what the organisation needs. Define the behaviours and qualities needed, now and in the future, and the roles which will be crucial to executing current and future strategies.
2. Identify long-term potential through growth factors. Avoid focusing purely on job-specific abilities or past performance. Look for a combination of curiosity, eagerness to learn, social understanding, empathy and emotional balance.
3. Distinguish between long-term leadership potential and short-term performance. A star performer today is no guarantee of leadership success in the future. Give careful thought to what is needed in the next role and examine whether a candidate has those characteristics.
4. Take risks to help people grow by encouraging development through stretch assignments, career moves, coaching and training. Simply promoting or rotating high potentials through assignments is not enough.
5. Put effective systems in place. Appropriate talent management systems and processes can help find and promote 'hidden diamonds' and contribute to the organisation's future success.
Source: Hay Group