Talent management: Hold on to your rising stars and heroes

Organisations are beginning to wake up to the fact that they need a long-term talent management strategy if they are not to lose their high performers. Joining up technology systems to get the bigger picture can help you to hang on to the best employees, says Nina Mehta.  

According to a global survey by Halogen and Cranfield University, only one in five organisations are adequately prepared for the departure of senior managers and 17% of organisations feel that HR technology is supporting their talent management strategy.

The audit highlights that nearly one-third of organisations (32%) are planning to introduce a talent strategy in the next two years. But is this initiative perhaps too little too late? Figures released by the CIPD earlier this year indicated that more than one-third of employees plan to change jobs in 2015.

This seems to suggest that if organisations do not take more immediate action, key staff will inevitably leave – and this is likely to cause additional costs in hiring, on-boarding new employees and disruption to performance and customer service.

Organisations need to adopt both short- and long-term strategies to embed a talent management strategy.

For example, there are indications of a shift in emphasis from recruitment, sometimes used reactively to plug gaps in talent, to focus on training and development instead.

Taking a long-term view

There are encouraging signs that organisations see value in investing in their existing talent pipeline –19% of respondents expect to reduce their expenditure on external recruitment and 57% expect to increase their expenditure on training and development.

Performance management and succession planning were also priorities for talent management spending, with 47% and 46% of organisations respectively expecting to increase their spending in these areas in the next three years.

Organisations have woken up to the need to focus on retention of key talent and globally that was the top talent management priority (47%), followed by recruitment of key talent (37%) and succession planning (37%).

The focus of UK organisations on retention was similar to the overall average at 47% but a higher proportion of UK organisations saw recruitment of key talent and succession planning as a priority (48% and 47% respectively) than elsewhere in the world.

In Australia and New Zealand, for example, retention of key talent was also the most commonly stated priority issue for talent management (42%) but proactively managing organisational culture was seen as almost equally important at 37%.

Organisations need to pay immediate attention to initiatives that stop high-performing staff from jumping ship.

That starts with identifying and tracking high performers and includes planning for the eventuality of the departure of senior leaders – almost a quarter of organisations surveyed have made no preparation for the loss of senior staff.

There are signs, however, that organisations are starting to address the problem, with almost half (46%) increasing their spending on succession planning.

HR departments often have technology that could help them with this but in many cases they are failing the get the best out of it.

Technology use is still focused mostly on administrative or transactional activities such as time and attendance, training administration and e-learning, rather than more sophisticated uses such as succession planning and performance management.

Sometimes this results from a lack of integration between talent management and other HR or business systems.

Without that integration it is difficult to get a broader view of talent needs in both the short- and long-term.

Where to start?

With so many issues demanding attention and investment – from training and development, performance management to succession planning – organisations are struggling to know where to start and how to prioritise.

In terms of technology to support talent management, spending on HR technology in the near future is set to focus mostly on performance management (59%), compared to 46% on training administration and 42% on e-learning.

Effective performance management is critical in being able to identify, develop and track top performers and puts the need to retain top employees in sharp relief.

HR departments looking for board-level buy-in to investment in initiatives to develop rising stars and retain the best performers know that return on investment is a key metric but that it can be difficult to provide.

It is possible to produce HR analytics that link HR initiatives to business performance but few organisations have reached that level of sophistication.

Less than one-fifth of survey respondents globally said that they used HR analytics to connect HR practices with business performance and that fell to 8% in the UK. Many say that they would like to improve this and would start by being able to extract more useful data.

While most organisations would assert that their people are their most valuable asset, they could do more to hang on to their best employees. Many organisations do have a talent management strategy but it does not go far enough.

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There is a dawning recognition that developing talent management practices to create more sophisticated performance management and succession planning will show real return on investment in the shape of a stable engaged workforce that delivers growth and competitive advantage.

The fact that organisations are prioritising investment in performance management systems is promising, as that will provide the data needed to feed talent programmes from training and development to succession planning that will contribute to retaining your rising stars.