Talent Management: Making it Real
Talent management. Is it just the newest buzz word making the rounds in the business publications? Or are we truly beginning to understand what it takes to attract, retain, develop and promote our best people who will in turn add value to our organizations?
Actually, the term "talent management" has been kicked around for four or five years. It comes on the heels of "human capital," which has been around since the late 1990s. The concept of human capital, and the body of study it has spawned, has just lately begun to pick up steam in the business world.
The folks at Gallup Management Journal know how important having "engaged employees" is to profitability. They have been reporting survey data since the fourth quarter of 2000 on the cost of employee engagement. Gallup estimates that the lower productivity of actively disengaged workers cost the United States economy $328 billion in 2006.
Let’s start with the notion that talent management isn’t about a department within your organization. It’s about the people. Talent management is the effective allocation of money and resources to ensure the right people with the right skills are in the right job at the right time to maximize business performance.
Research reported by LBA Consulting Group (Talent Management Handbook, 2004) lays a solid foundation for understanding what talent management is all about, and more importantly, why we should care. They reveal that for failed organizations, the core elements of human resources (performance appraisal, assessment of potential, competency evaluation, career planning, replacement planning, development and training, compensation and selection) were unlinked and largely irreconcilable. They also identify that when these elements are managed as separate programs, the ROI was low, time expenditure was high, credibility suffered and employee dissatisfaction was pervasive.
These findings sum up the evidence that a systematic approach is needed to integrate the core elements of human resources for the purpose of accomplishing three primary talent management objectives:
- Identifying the few people in the organization who embody the core competencies and values that make the organization successful and then building selection, development and retention efforts around them.
- Identifying and developing "bench strength" for the few positions that are key to the organization’s success.
- Investing in each employee based on his or her current and future potential for adding value to the business.
Paramount to impacting business results is to execute a talent management strategy that permeates your culture–it affects not only what you say, but what you do to invest in your people. This level of success is achieved when the top leadership of your organization—led by the CEO—initiates and designs the strategy. Once the solution is built, you must equip those who lead these elements with a technology solution that will integrate these activities to create the following results:
- A culture that is performance-oriented
- Lower turnover (especially in certain groups)
- Higher levels of employee satisfaction
- Increased number of qualified replacements
- Effective investments in compensation and development
- Use of competencies (success factors) in employee selection and performance evaluation
You will undoubtedly continue to hear the term talent management used when discussing the challenges that face businesses today. Talent management is not just another word for human resources. It’s about having a systematic approach for managing your highly talented people who will put forth the discretionary efforts needed in pursuit of your organization’s values, vision and mission.
At the end of the day it’s about business performance. It’s about knowing that the resources and money you are investing in your people are paying dividends in the form of results. A talent management strategy deploys the critical initiatives your business needs to achieve the results required for future business success.
Originally Published in Sequent Advantage Newsletter, Nov. 2007.