Integrated talent management (ITM) refers to the management of traditional HR sub-functions:
- Recruitment and selection
- Workforce planning
- Performance management
- Learning and development
- Reward and recognition
- Succession planning
An integrated talent management strategy must be aligned with the business strategy of the organisation otherwise it will add no value to the business, regardless of how good the strategy is. The cornerstone of an Integrated Talent Management (ITM) System is a robust competency model that guides talent management strategy and tactics.
Five building blocks make up an ITM system, i.e. Philosophy of Talent Management, Talent Management Processes, Integrated Talent Management Information System, Governance Structure, and Talent Management Metrics.
Talent Management Philosophy
Talent Management Philosophy refers to a collective understanding of what is “talent management” and also the school of thought (on talent management) the management team has adopted. We learn from organisational psychology that for any organisational change effort to be successful, it must be supported by the top management of the organization. It is therefore important that an acknowledgement of the challenges faced by the organisation from a talent perspective, and how the organization intends to respond to the challenges are expressed in a policy statement of the organisation. The leadership of the organisation must agree on the guiding principles that will be applied to manage talent in the organisation.
Talent Management Processes
Processes are used as vehicles to transform something from one form to another form. HR Practitioners should shift their mindsets from a silo-based mentality of managing HR sub-functions to a mindset of using these functions as a vehicle to build an organisational capability to attract, engage, and retain competent and committed employees. Each process functions as a means to an end and not an end in itself. Owners of each process must understand the outputs of these collective processes, otherwise, the benefits of an integrated system will not be realised. The following is a brief discussion of how each process contributes to building this organisational capability (strategically leveraging talent).
Talent acquisition
The Talent Acquisition Process serves as a lever to pull talent from the external and the internal talent pool, but it does not lose sight of the over-arching objectives of the collective processes (talent acquisition, talent engagement, talent development and talent retention). First and foremost, the Talent Acquisition Specialist (TAS) must understand the business strategy and translate it into talent outcomes (the quality and quantity of talent) for the short term (1 year) and the long term (3-5 years). The next step will entail establishing if the required talent will be available (internally or externally) when it is needed. Decisions will be made as to which talent to buy (attract and source externally) and which one to build (develop). The TAS will not be able to make these decisions (buy or build) if he/she does not understand the depth and breadth of internal talent and also what talent is available in the labour market.
If the organisation has the luxury of time and has identified potential talent to be developed, the Training and Development Lever will be engaged to start the process of preparing the identified talent for future roles. In a case where a decision is made to buy talent for current and future roles, the TAS will embark on a recruitment drive to fill currently vacant positions and identify talent earmarked for future roles in the organisation. A talent bank will be established where potential external candidates’ names to fill these future roles are recorded.
The TAS will not be able to discharge their duties if they don’t have a “Workforce Plan” and don’t know what the organisation’s Employee Value Proposition (EVP) is. These two documents will guide the Talent Acquisition Strategy and the tactics to implement the strategy. The outputs from this process (Talent Acquisition) will flow into the On-boarding, learning and development, and talent engagement processes. The EVP commits the organisation on what value employees will gain from working for the organisation, hence it is incumbent on the TAS and other role players like HR Business Partners, HR administrators, Line Management, Learning and Development Practitioners, and Compensation and Benefits Practitioners to make this proposition a reality.
Talent engagement
Talent engagement is the extent to which employees commit to something or someone in their organisation and how hard they work and how long they stay as a result of that commitment (Corporate Executive Board, 2005). Employee engagement comes into effect from the point when an employee is on-boarded. The purpose of an onboarding process is not just about an employee understanding the policies of the organisation and preparing their workstations before they join. The purpose of the onboarding process is to enable the recruit to add value to the company in a short space of time by coaching and providing them with all the resources they need to feel engaged and valued in the organisation.
Talent Acquisition Specialists have a responsibility to ensure that they recruit the right person for the right job. If the recruit does not fit the job profile and the culture of the organisation, the talent engagement efforts will not positively influence the recruit’s engagement level. Learning and Development as a function must also understand the competency gaps identified from the recruits during the selection process so that opportunities for competency development are immediately created and actioned. Other levers that are used to engage employees include Performance Management, Succession Planning, Recognition and Reward and Leadership Quality.
Talent development
The talent development strategy must be aligned with the business strategy. The Training and Development Practitioner (TDP) must translate the business strategy into Talent Development outcomes. The TDP should understand what organisational capabilities related to competencies (knowledge, skills, behavioural) must be developed to enable the organisation to execute its strategy. This does not mean that employees who have competency gaps related to their current positions are ignored, they too must be developed. Another source that feeds into the talent development space is the career development needs of employees, which must also be factored into the training and development strategy. The career aspirations of employees must be aligned with the long term plans of the organisation which are reflected in the career paths and the organisational structures of the organisation. You would not want to spend resources developing employees in a particular direction knowing that in the medium/long term, such skills will not be needed in the organisation.
Inputs and outputs process
There are three inputs (HR functions) that feed into the Talent Development Process, i.e. performance management, succession planning and workforce planning. At the end of the performance appraisal period, the competency gaps of the relevant employees are collated and fed into the Learning and Development platform. The potential successors’ development needs are also transferred to the Learning and Development platform. The LDP is a critical role player in ensuring that talent is developed for future positions. It is needless to say that the LDP should understand the organisation’s workforce plan so that he/she, in conjunction with line management sets a strategy in place to develop future talent.
Talent retention
The employee engagement index (a measure of employee engagement levels) serves as a leading indicator for retention. There seems to be an inverse relationship between employee engagement and labour turn over. A decrease in employee engagement scores increases the labour turnover rate if no action is taken to improve employee engagement scores. Your employee engagement initiatives must be targeting what is most important for the employees you want to retain. Retention risk assessments must be conducted with all employees (those you want to keep) in critical positions and the High Potential Employees (HIPO). If you know what risk you have of losing them, you will develop a strategy to keep them and those that you can’t keep, a backup plan must be put in place so that you have cover when they leave. Talent retention is not a once-off intervention; it is an ongoing process that aims to influence how employees feel about their jobs, managers, colleagues, and the organisation. The quality of leadership has the most influence on the commitment level of employees in the organisation, hence, organisations must invest resources to constantly improve the quality of their leaders.
Talent Review Committees
Talent management is the responsibility of line management and HR supports line by making the tools available and also giving them training and guidance on how to apply the tools. Talent management should be a standard agenda item in the Board and Executive Committee (EXCO) meetings. Talent Review Committee’s (TRC) function is to keep the focus on talent management alive and to understand the talent risks the organisation is facing and develop and implement a risk mitigation strategy. Governance structures take different forms depending on the size and complexity of the organisation. For an example, a global organisation will have a TRC at a corporate level focusing on the senior executive bench strength, several TRCs per division, another TRC which comprises divisional representatives that focuses across divisions and functional TRCs. These committees will focus on different levels and different types of critical positions talent pools.
Integrated Talent Management Information System
Different HR sub-functions (recruitment and selection, performance management, succession planning, training and development, reward and recognition) are applied in various processes of talent management and each HR sub-function generates data that is used for managing talent. An integrated Talent Management System enables users to pull all this information (from different HR sub-functions) together to assist decision-makers to understand the depth and breadth of talent at their disposal and talent risks that they should mitigate. There are various talent management information systems available in the market. Some are offered as part of the Enterprise Resource Planning, and some are standalone systems.
Talent Management Metrics
The old management adage popularised by Professor Deming that says “you can’t manage what you don’t measure” also applies to managing talent in organisations. There is a myriad of measures that one can use to measure the impact of talent management initiatives, but before deciding on measures to use, you need to establish from your clients (line management) which measures matter most for them. Internally, you will also want to measure the outputs per process so that you can determine if all the processes are adding value to the outcome (business performance). Two types of indicators must be used when measuring the outcomes of talent management initiatives, i.e. lagging and leading indicators. Leading indicators (e.g. Employee engagement scores) predict the outcome while lagging indicators are historical in nature (e.g. labour turnover rate). As far as talent management is concerned, the measures must help you answer the following questions:
- What is the breadth of our talent ( Bench strength/succession cover for critical positions)?
- What is the depth of our talent ( Readiness levels/ percentage of employees who are ready now, ready in the next year, ready between 1 and 3 years)?
- What are the retention risks (Percentage of employees in critical positions who may leave in the next year, 2 years, or 3 years; Labour turnover rate of critical talent; employee engagement scores; leadership quality)?
- Do we attract the right talent (Number of potential candidates per critical vacancy)?
- Are we developing our own talent (Number of employees with development plans, cross-functional moves)?
Pillars:
Talent Development:
Once you have hired the right set of employees into the organization, it is imperative to develop them in the areas that are important to the organization. Some competencies are stable whereas some are dynamic competencies. The stable competencies include the enduring characteristics of individuals which remain more or less the same over time and the dynamic competencies include knowledge and skills that are continuously changing.
Talent development primarily aims to develop the dynamic competencies of individuals through interventions such as formal training programmes, coaching and mentoring by senior leaders of the organization, job rotations, on the job learning, special assignments, action learning, committee work, stretch assignments, developmental assignments, job shadowing, etc.
There is a myth that training programmes are the most popularly used methods for developing skills of employees. On the contrary, only about 10-15% of learning happens through formal training programmes and the rest happens through methods such as those mentioned above.
Talent Engagement:
Hiring and developing talent does not ensure that we have engaged employees. Having employees who go out of their way to help others, having employees who do not restrict their work tasks to their job descriptions and having employees who are more willing to work on holidays or extra time is a blessing in today’s competitive environment. These things will happen only and only if the employees are truly engaged with the organization.
Having engaged employees is truly an asset to the company and a success story towards talent management. With organizational citizenship, behaviour is often used as a parameter to gauge employee engagement, what is often overlooked as a factor has increased engagement in mentoring the employees. Mentoring is when senior and more experienced individuals in the organization take keen interest in the personal and professional development of junior and less experienced individuals in the same organization.
These senior leaders act as a friend, philosopher and guide to fresh recruits who get roped into the organization culture and systems very strongly through these informal channels. Apart from mentoring relationships, what all helps organizations to engage talent is managing and measuring performance and potential of employees. Managing performance is way beyond just performance reviews or performance appraisals.
It also includes performance planning, performance coaching, and performance counselling, drawing up professional development plans and linking all of these to individual career development plans. A well-designed and well-executed performance management system goes a long way in engaging employees.
Talent Acquisition:
All organizations today want the sun and the moon and the stars but often land up only reaching the tree tops. Business firms are looking for employees who have excellent functional skills, social skills and strategic skills but, it is almost impossible to find one candidate who has best of all skills. Hence organizations make do with what they get. Identifying and acquiring talented workforce is one of the most important stages of talent management as they say, “Well begun is half well completed.”
Jim Collins, in his book, Good to Great talks about the importance of getting the right people on the bus. Identifying the right talent depends on employer branding activities, employer value proposition, the sourcing mix used by the company and acquiring the right talent depends on the selection criteria and selection process deployed. Some newer methodologies used for identifying and acquiring talent include extensive use of employee referrals and use of assessment centres.
Talent Retention:
Hiring the right talent, investing in further developing them and engaging them is a futile effort if it does not lead to talent retention. All the hard work and efforts of the HR team go in vain when employees want to exit early from the organization. Not all exits are bad but when employees want a separation without having contributed enough, is where the problem lies. Some companies especially in the Information
Technology sector are trying to remedy this situation by asking employees to sign a bond. A bond that is a contract between the employer and the employee that makes them agree to terms and conditions stating that they will not leave the organization for a minimum period of xyz years as decided by the company. In case they violate this clause of the Memorandum of Understanding, there is a huge monetary fine associated with the same.
IT companies try to justify this by saying that they spend a lot on the college pass outs and they have every right to recover that cost. This is a never-ending debate. Let us go back to the original discussion on talent retention. Organizations can maximize the possibility of low employee attrition by optimal reward management and by ensuring they provide a work environment which is enabling, open, collaborative, trusting, proactive and encouraging.