Optimizing your Workforce

Managing Talent

Our EOC Model clearly demonstrates that the only thing that will make your company successful is your ability to manage talent effectively.  This includes rigorous selection practices and the ongoing motivation, development and performance management of existing employees.

Consulting firm McKinsey & Company has identified five imperatives that companies need to act on if they are going to make talent a competitive advantage:

  • Embrace a talent mindset.
  • Craft a winning employee-value proposition. Everyone wants to be given challenging development opportunities with a forward-thinking, market-winning company.
  • Rebuild your recruiting strategy. Hunt for talent all the time, not just when a position is vacant.
  • Weave development into the organisation. Improve the frequency and encourage the candour of feedback, and institutionalise mentoring.
  • Differentiate and affirm your people. Cater to your top performers, help middle performers improve their game, and remove weak players.

What is Talent Management?

Talent management is the process by which an organisation identifies, manages and develops its people currently and for the future. It is concerned with:

  • Developing a strategy to determine what the organisation needs to meet the current and future demands of the business plan
  • Establishing processes to measure competence – required and available
  • Creating a range of developmental tools and processes to provide tailored approaches depending on the individual needs of employees
  • Identifying ways to obtain and retain those who are critical to success
  • Establishing suitable approaches to deal with those who no longer fit organisation requirements
  • Measuring the impact these strategies have so that policy can be continually updated and refined to deliver high performance, now and in years to come.

Talent Management Approaches and Tools

  • Pre employment testing
  • Performance management
  • Team development
  • Workforce and Succession Planning
  • Coaching and Mentoring

The case for talent management and succession planning rests on several arguments:

  • The cost of unfilled vacancies and replacement costs. Hewitt Associates (quoted by Brittain, 2006) suggest that turnover can cost between 30 and 150% of annual salary. At an average replacement cost of $15,000 a time, many of the activities suggested in this book are easily justified by modest improvements in turnover.
  • The opportunity cost of foregoing the advantage to be gained by high performing individuals. In key roles, marginal improvements in performance can have dramatic impacts on the bottom line. The engineer who anticipates a quality problem and institutes a redesign of the product before the customer complaints arrive, or the sales manager who finesses a sales campaign because she knows the customer’s needs, all point to the value of competence in critical roles. It is useful to ask two questions of any role in the organization: ‘If this role did not exist, would the organization be impaired?’ and ‘If there were only poor or mediocre performance from the role incumbents, would the organisation’s performance suffer?’
  • Releasing discretionary effort. In an increasingly service-oriented world, ensuring that customer-facing staff give of their best is crucial. A bad service experience is relayed to more people than a good one. Some studies indicate that a determinant of how staff treat customers is the way in which staff are treated by their organizations. Talent management, at a minimum, demonstrates to staff an acknowledgment of their value and contribution – now and potentially for the future. Feeling valued and recognized are key motivators and important to retention.
  • Employee choices. Where critical skills are scarce, employees have choices. In a mobile society where employability is a growing requirement for survival in the labour market, prospective employees will increasingly make their choice of employer based on its development practices. ‘Will I get from this organization the training and development I need to further my career and make me employable in the future, especially if this job comes to an end prematurely?’

It should be noted that the business case for focusing on those individuals most likely to add value may result in hard choices, but is likely to give the best return for your investment.  Research has found that only 28% of respondents to a recent study used a ‘whole workforce’ approach to talent management.

How much will talent management and succession planning cost?

Several factors should be taken into account in developing the budget:

  • How vulnerable is the organization if key roles are not filled or key individuals not retained? The greater the vulnerabilities, the greater the justification for investing in development programs and succession planning.
  • How scarce is critical talent? The more the business relies on people who are difficult to find in the marketplace, the greater the justification for investing in retention strategies.
  • What lead times do you have to correct problems? Where staff are on short notice and are easily mobile, the greater is the justification for investing in planning and strategies to cover key positions quickly.

 


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