Talent Management

Talent management is the process through which employers forecast and meet their human capital needs. It means getting the right people, at the right time, with right skills, into the right jobs and at optimum cost. Talent management was simpler in 1950’s and 1960’s in comparison to what it is today. With the opening up of the markets and the concept of global companies coming into picture there have come some challenging problems in Talent management. The present day world can be rightly called as VUCA (Volatile, Uncertain, Complex and Ambiguous). Especially in terms of matching Talent supply with Talent demand has become a very severe problem. To forecast the Talent Demand with accuracy is very difficult in certain industries. The uncertainty in business demands has led to uncertainty in Talent Demand so planning for Talent supply and Talent demand has become even more difficult.

Though the term Talent management can be applied to all jobs that are hard to fill but it mainly applies to managerial and executive level posts. The concept of Talent management came into picture when the organizations became complex and moved from family managed to professionally managed era. At this stage the owners needed the trained professionals who could run their organization in an effective and professional manner.

Traditionally the internal development of the Talent used to be the main source of Talent. Especially in American companies in 1950’s and 1960’s when the market demands were stable the scenario of employment was also stable. The employees would mostly stick to one company in the duration of their career. As a result of this it was easier for the companies to ensure the supply of talent through internal development. One of the reasons of this stability was the stability of business requirements because of lesser number of companies, lesser competition, lesser technology related innovation and the concept of globalization of companies was not much prevalent at that point of time.

With the passage of time the process of internal development of talent faced a few problems. Some of them have been listed below

• Considering the VUCA world there is uncertainty of currently developed competencies being useful in future
• Uncertainty of forecasted demand
• Change in Business strategy causing change in Talent demand
• Mergers and acquisitions and restructuring causing change in Talent demand and competencies required

Outside hiring has picked as a result of the above listed problems with the internal development. Now-a-days the Talent management has moved from the model of planning to the model of shopping. The concept of outside hiring is more prevalent in small companies in comparison to large ones. The more is the outside hiring at the key managerial posts the more is the change in the Business strategies which further gives push to outside hiring to acquire the most suitable talent matching the changed strategies. Online job searches have made the process of outside hiring even simpler. Executive search and consulting firms have made the task of finding people for executive level posts easier for the companies. Outside hiring also has a flipside to it. The employer employee bond that develops during internal development is missing in case of frequent outside hiring. It also has consequences for the economy as a whole. In the American companies the concept of outside hiring is prevalent to such an extent that very few firms have full-fledged internal development programs in comparison to 1950’s. As a result of this there is shortage of Talent at national level.

In some of the nations there are restrictions on the rights of employees to Layoff and retrench. At such places there is lesser workforce turnover and the average employee tenure is more. In most of the European countries there are such restrictions which make it difficult for an employer to retrench an employee. As a result of this the average employee tenure in European nations is more than what it is in America. Due to this the organizations pay more attention to internal development programs. Internal development programs are more prevalent in European companies in comparison to American companies. European companies pay more attention to career planning and succession planning. European companies stand between Organization man period and VUCA period.

In spite of the uncertainties in predicting the Talent Demand internal development of talent has its own advantages. There are certain competencies which are very specific to the organization and can only be developed. Talent having such competencies is not available in the market. Such competencies are critical for the success of the organization. Even for such competencies organizations need to plan meticulously. The costs of mismatch in this case also can be too high. The probability of mismatch and costs associated with it should be taken into account before going for such internal development programs. There are mainly two kinds of models that are used to make the forecasts. One uses the past data to predict the future and the other one makes forecasts on the basis of likelihood of future events. Now-a-days technology can be very handy in making forecasts. Simulation can help to analyze the impact of various future events on the forecast.

The cost related to mismatch is not the only cost that organizations should be concerned about.

The cost of internal development can be reduced by designing the development programs in

proper manner. Some of the design issues have been discussed below

• Problem of Decentralized Programs: The large organizations operate in decentralized manner. In such organizations it becomes difficult to identify and develop talent for corporate jobs. Work in one unit does not provide skills required at corporate level. The employees have to be rotated across various units but for this corporate leaders need to identify talent at unit level for which they need the help of the management at the unit level. The management at the unit level in most of the cases hides their Talent due to the fear of losing them to corporate. The organizations have now started declaring some employees beyond a certain level in units as corporate assets whose career is governed by corporate team. This has given rise to one more problem. The management at unit level does not let some of their talented employees reach that level from which on their career will be governed by the corporate team. Corporate ownership of the career planning of the talented employees at unit level should be promoted to solve this problem.
• Portfolio Solution: There are so many companies operating as different divisions and each running its own development program. There are mismatches in the Talent supply and Demand of each division. The organizations should run common or coordinated development program for different divisions in areas where talent needs are common. So the oversupply of Talent in some and shortage of Talent in others shall cancel out each other.
• Shorter Forecasts: Development programs based on shorter forecasts are less likely to suffer from mismatch in comparison to the development programs based on longer forecasts.
• Designing shorter development programs: The development programs should not span for a very long period of time. By the time such development programs complete the competencies that they develop in an individual are no longer required for that job

Apart from design issues there are other ways through which we can reduce the cost of the development programs. Some of them have been discussed below

• Peer Learning: Arrangements should be made where employees can learn from their peers the skills that they need for their current job or for future requirement. In such arrangement some of the brightest of the lot would be trained and given the responsibility to train others.
• Separating the work from Job Title: The work should be separated from the job title. This approach of job designing will help to rotate employees across various jobs easily which help them in enhancing their skills and broaden their experience. Job titles should be based on hierarchy and not work.
• Opportunities outside the organization: In case of small organizations and sometimes even large organizations do not have enough development opportunities within the organizations. In such cases work related experiences outside organizations should be considered. Some organizations lend their executives to some charitable organizations to do some project which not only helps its employee in developing but also enhances the brand value of the organization. Some organizations also allow their employees to work on the payrolls of its clients which not only enhances their relationship with client but also the experience of its employees.
• Getting Employees to share the cost: Sometimes some development programs help employees in gaining such skills which are very much in demand in the outside market. There is high probability of employees leaving the organization after undergoing such development programs. In such cases sometimes employers make the employees to share the cost of such development programs. Employees happily share some percentage of the development cost as it increases their market value
• Tuition assistance: In this arrangement employees take tuition in their own time. The cost of such tuition is shared by both employer and employee. It has two main advantages. One is the development process does take place at working hours, so it does not affect productivity in the current job. The second advantage is the productivity of the employee increases gradually and it helps him to increase his productivity in his current job. By the time he completes his tuition course he has given back some amount of investment in terms of increased productivity during the course of tuition. Now even if he leaves the organization some cost of investment made on him has been recouped.
• Education and development contracts: Some companies pay for the higher education or specialized courses of their employees and sign contract with them to serve for a minimum amount of period in lieu of that to enable the organization to recoup the investment made on him.
• Training before Hiring: In some recruitment drives the companies keep conditions that candidates having the specified certifications should apply. This way they shift the cost of development to the employee even before he is hired.

Merely controlling the cost of development programs is not enough. Steps should be taken to retain the developed talent to maximize the benefits of the development programs. Following steps should be taken to retain the trained and developed.

• Better Matches: The organizations should ensure that no employee leaves the organization just because he wanted some other job at the same level and it was available within the company. Just because of this reason no employee should go to the competitor. So the companies should ensure best employee job match
• Social Relationships: It is said that employees don’t leave organizations they leave managers, supervisors or superiors. So superiors should ensure they maintain healthy relations with their subordinates and help the company in reaping the maximum benefit out of a development program.
• Compensation:  Giving strategic and attractive compensation can be one of the ways to retain the competent workforce
• Preventing poaching: Such measures should be adopted which make the star performers of the company less visible to its competitors. This measure can prevent poaching. The employers should not offer those courses normally which increase the visibility of the employees in the outside world.
• Development in pieces: The organizations should divide their development programs in different chunks. So that when the employee finally gets certified he/she will have already spent great deal of time with the organization
• Making Turnover Predictable: If the companies can make the turnover predictable by signing some bond with respect to tenure then they can manage talent in a better way.
• Leaving without letting go: Companies should keep the relationship with their alumni intact for they may anytime in future join the back with new skills

The companies can maximize the value internal development by spotting talent through high potential programs and other opportunities at an early stage. Self-nomination can also be one of the ways but subject to certain conditions. Internal market for opportunities can also be created to identify talent. Internal job market can be managed through internal job boards. Employees feel empowered through such things which also help in employee retention.

There are some challenges ahead on the way of talent management. The Talent management requires a comprehensive and consistent support from the higher level management to be able to support the strategic business decisions. Approaching talent management without a proper vision will lead to wastage of money. Also the approach to buy talent from outside whenever required will not take nations ahead for a longer period of time. If every organization starts purchasing talent and no body develops then where will talent come from. There will be acute shortage of talent then. Organizations need to strike a right balance between hiring and developing talent.

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