Talent management has become the hot career move for HR professionals. But how can they ensure it’s taking the organisation where it needs to be?
Demand for new business cards must be booming. Talent managers, directors of talent, and countless other related job titles are emerging all over the place as talent management fast becomes the specialism of choice for HR professionals.
Depending on who you ask, talent management can encompass a host of functions, both inside and outside of HR. Some organisations use it to describe their recruitment and attraction process; others their succession planning strategy; others the whole gamut of processes from bringing someone into the company to handling their exit interview when they leave.
Definitions aside, HR departments are being forced to do more with less when it comes to attracting and retaining staff. A survey earlier this year by Personnel Today’s sister title IRS Employment Review found that three-quarters of employers experienced recruitment difficulties during 2005-06, and more than half of the employers it surveyed had experienced a cut in their recruitment budget. On top of this, economists predict that the UK labour market will grow by just 0.5% between now and 2010, so the recruitment pool is tight.
Get savvy
This means that HR must get savvier about how it manages its existing workforce.
Building society Nationwide is just one employer that has put a greater emphasis on talent management in response to the shrinking employment market. “The financial services industry is more regulated than ever, yet we still need to provide great service in our branches and call centres,” says Ros Foster, programme manager for personnel operations. “We now do a lot of work with line managers and people on the front line, plus we look at our competitors.”
The company has outsourced some of its external recruitment to services provider Kenexa, enabling it to focus on retaining existing employees. And while some HR projects fail to get off the ground because it is difficult to prove their return on investment, talent management is one aspect of HR that never fails to get chief executive sign-off.
Research by the Economist Intelligence Unit, published in conjunction with global HR consultancy DDI, found that CEOs often spend more than 20% (equivalent to one day a week) of their time at work on managing talent, charging HR with the practical aspects of attracting, developing and retaining staff (see box opposite).
“The biggest surprise [about the research] wasn’t so much that CEOs were involved, but the degree to which they were hands-on in their involvement,” says Lucy McGee, a director at DDI. “There’s a sense that CEOs are held accountable by the board to create a strong people legacy. It’s a real indication of how much external pressure there is on them to answer questions on talent.”
With both financial and strategic sponsorship from the very top, talent management initiatives have certainly got bigger and more sophisticated. Companies such as cosmetics giant L’Oreal and hospitality firm Whitbread have gone as far as to create centralised talent, or learning and development functions, that nurture talent across their brands.
“We have HR managers in each division and their role is to get close to individuals, find out what their career drivers are, and how they can get to that point. Then there is a central learning and development team, which talks to HR in each of the divisions,” says Alex Snelling, director of recruitment at L’Oreal.
The benefit of this, says Snelling, is that HR business partners in each division can put forward their requirements, while a central learning for development department draws on its economies of scale to supply staff with the skills they need.
At Whitbread, centralising talent management has enabled it to view its whole talent pool rather than focusing on smaller, brand-led ‘silos’ of staff. It has also led to greater transparency.
“The only way forward is to be open,” says Stacey Hubbard, head of talent and resourcing at Whitbread. “We say: ‘This is where you are and this is where you want to be – here’s how you get there, even if you want to stay at the same level’.” The result is that three-quarters of managers are now recruited internally, compared to just half 18 months ago.
Looking ahead
Talent management is not only getting bigger, but also broader and more inclusive. Whereas early talent programmes tended to focus on identifying high-potential staff and fast-tracking them through the organisation, this is often just a part of more forward-looking initiatives.
“Employers need to ask whether talent management is something that’s discriminatory (that is, focuses on a small elite) or something that’s open to everyone,” says Michael Moran, chief executive of HR consultancy Fairplace. “Think about how you can get the top 5% of people for any one role, whether that’s the CEO or the receptionist.”
Abi Staines, client services director at recruitment outsourcing specialist Capital Consulting, agrees: “The organisations that are stealing a march in talent management are those who can link the two components – they can identify high-potentials, but still make their values visible to the whole organisation.”
Organisations also need to work out how they measure performance and potential, and more crucially, what they do with this information, adds Moran. “There’s a lot of market intelligence out there – there are companies that sell benchmarking data and there’s plenty of information in the public domain,” he says.
“But if you view data in isolation, it means nothing. In some markets, it’s easier to be successful. HR needs to ask how that information relates to its core market.”
And with that measurement must come guidance. Simply branding someone as a high-potential doesn’t mean they will automatically produce great things – their performance needs to be tracked and measured, and if there are gaps, HR should help to supply training or advice.
“Organisations need to support specific challenges, so if someone gets a new role, ensure they have the relevant support and the chance to reflect on what they have learned, plus provide them with some 360-degree feedback,” suggests McGee.
So what lies ahead for the new breed of talent specialists? Mobility will become a big issue, according to Staines at Capital Consulting – whether that is promoting greater geographical movement or boosting inter-departmental or even inter-company moves.
The key is to integrate talent management to bottom-line business demand, and this requires HR professionals to work more closely than ever with line managers at one end of the spectrum, and the executive board at the other. This creates real results, and the role of the talent manager becomes a lot more than just a job title. M
What CEOs think of talent management
Strong talent management leads to greater workforce productivity and other benefits. Companies cannot be successful unless they have a good strategy for developing talent.
Talent management strategy is so important that it needs to be driven from the top. CEOs and chief operating officers should oversee talent management strategy. HR professionals, in turn, should support and execute that strategy.
Talent management should be explicitly linked with overall strategic planning, delivering the quantity and quality of leaders the organisation needs to achieve
its goals.
Formal processes for identifying top talent, such as performance evaluations, should occur at least annually and incorporate written feedback.
Smart companies communicate effectively about the importance of talent management. Publicly recognise and reward deserving candidates with promotions and other awards, and you will create an environment in which talent flourishes.
Talent development programmes should combine both theory and practice in the form of structured learning experiences and off-site meetings, as well as day-to-day business experience. Support this on a daily basis with coaching and mentoring.
Source: The CEO’s role in talent management, Economist Intelligence Unit/DDI. Download a copy of the paper from the thought leadership section of www.ddiworld.com
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