The war for talent is on again, but this time it’s global and many organisations and their HR professionals are struggling to keep pace. Craig Donaldson looks at the evolution of the current war for talent, the latest in retention strategies and examines what HR professionals can do to build a strong talent pool
The war for talent is on again, but this time it’s global and many organisations and their HR professionals are struggling to keep pace. Craig Donaldson looks at the evolution of the current war for talent, the latest in retention strategies and examines what HR professionals can do to build a strong talent pool
Talent management has moved from buzzword to essential strategy for many companies in recent years. However, putting the theory of talent management into practice and building a practical, effective and cost-efficient strategy is easier said than done.
Lynne Morton, principal of Performance Improvement Solutions, a US-based consultancy specialising in talent management, says that talent management has emerged at the forefront of business issues over the past few years. “This is largely due to its perceived strategic importance by CEOs and senior leaders. This isn’t another one of those ‘people are our greatest asset’HR clichés,” she says.
Talent management is starting to be seen as a business issue rather than an HR issue, and as a result, is a higher priority for executives, according to Morton. Furthermore, talent management used to be used almost interchangeably with high potential development or succession planning. But she says it has taken on more meaning in recent times. For example, talent management is closely connected to recruitment, especially as workforce demographics and work styles are changing dramatically.
Morton says the boom in talent management technology is also a reflection of the issue’s importance. “There are literally hundreds of new vendors in the marketplace offering a range of services – some of which address the needs of discrete aspects of talent management, [while] others are starting to integrate the components of talent management. A few years from now, many of these vendors will either be gone or will be merged, making implementation decisions difficult at the moment. But the potential for technology to make an impact here is new and immense,” she says.
Indeed, many of the talent management initiatives that were being developed in response to the skills and talent shortages of the late Nineties were either shelved or slowed between 2001 and 2004, according to Allan Schweyer, executive director of the US-based Human Capital Institute. “So what’s new in talent management in 2006 isn’t all that different than in 2000, except that more organisations are starting to adopt those measures, now that another shortage looms and recruitment and retention become more difficult,” he says.
In the past three years, talent and human capital management has become a discipline of its own, and includes a lifecycle approach to talent acquisition, development, retention, engagement and deployment. “Talent management has become to HR what marketing is to sales or finance to accounting. Both are vital, but one represents a sophistication or evolution on the other.”
As a result, he says HR professionals have to decide whether they will develop the skills necessary for a much more visible and strategic role, or whether they will remain in traditional HR administration. “Both roles are important. A seasoned administrative professional is as valuable as a strategist, but they are much more likely to see their work done in HR outsourcing (HRO) and business process outsourcing (BPO), where HR processes can normally be done more efficiently and effectively,” Schweyer says.
He believes that those who want to remain in organisations have an unprecedented opportunity to contribute at the highest executive levels. Senior executives today are very likely to believe that competitive advantage in knowledge economies comes largely from talent. “And so talent management professionals are vital. The opportunity is that CEOs will naturally turn to senior HR professionals to get a talent strategy. The danger is the HR professional will be unable or unprepared to respond. In these cases, the CEO may put talent strategy under finance, IT or operations, instead of elevating HR to the C level suite,” he says.
Morton says there is “at long last” some momentum for HR actually becoming the strategic business partner it has long wished to be – but leading talent management calls for a more holistic or organisational development-orientated skill set. “Those HR executives who can’t function effectively in this new world, or who continue to only be good at ‘old world transactional HR’ will find themselves out of work,” she says.
Heads of talent management often report directly to a very senior line executive or the CEO, she adds. “This is a very different positioning than HR has had. It requires thinking like a line manager, too. HR professionals will, I hope, get ready for these changes and realise that they now need to provide real business, not just HR, value.”
In the coming years, Schweyer says a true discipline and science around talent management will begin to take shape, resulting in the formation of talent management departments and the widespread appointment of Chief Talent Officers or Chief Human Capital Officers. “These executives and their teams will oversee the organisation’s integrated efforts to leverage the most value out of their investments in human capital and talent,” he says.
As a result, traditional HR – payroll, benefits, compliance – will be separate, and in most cases outsourced. Schweyer says there are a number of steps that organisations must take in order to establish a clear advantage through making more intelligent workforce and business decisions, such developing solid employer brands and building talent pools ahead of demand; integrating recruitment, performance management, compensation and learning management; understanding employee motivation and triggers for attrition and being well-schooled in their employees’ skills, demographics and retirement profiles, for example.
“Greater use of technology will also enable the rapid development of the discipline as will better managed use of external vendors to whom much transactional work will be outsourced,” he adds.
Delivering talent management success
Angela Baron, adviser on organisation and resourcing to the Chartered Institute of Personnel and Development, says that people can add real value to organisations, but tapping this value requires measurement and management. "Too many organisations rely on anecdote and mythology to develop and adjust their people management strategies," she says. "But in a fast-paced, knowledge-driven economy this will not deliver success. Competitive advantage and the highest standards of service and performance will be achieved by those businesses that have a genuine understanding of their people, are able to tap into their collective assets and motivate them to apply their abilities in the interest of the business."
