The talent challenge

Phil Smith and Shaun Tyson explain how employers can meet the expectations of their most exceptional employees

Five years ago, only a handful of very large organisations were using the term ‘talent management’. Now, in most medium and large organisations there is a person or even a function dedicated to it. In fact, in a few companies, talent management is the only HR strategy.

Although there is no consensus about exactly what differentiates talent management from business-as-usual, for most organisations it means heavy investment in the development of high-potential individuals. But if you are hiring or developing somebody for their extraordinary potential, you need to be sure that you have thought about how to realise it.

Finding and recruiting capable people is often disproportionately expensive, as their jobs are often of high strategic value, they are difficult to replace and their roles and reputations frequently have a high impact on everyone else.

The past five years have seen the steady growth of recruitment difficulties in a tight labour market, especially for executives with senior roles in marketing, engineering, sales and IT, according to the Recruitment Confidence Index (RCI) – a quarterly survey developed by Cranfield School of Management and produced with the Daily Telegraph in association with Personnel Today. This trend reflects both the shortage of well-trained, and experienced senior staff as well as the expansion in demand for managerial, professional and technical employees.

But once you have found your potential star performers, how do you engage and motivate them long enough for them to actually repay your investment in them with interest?

Devising interesting, engaging and truly stretching learning experiences is a major challenge. And while learner-centred, learner-directed, interactive and non-conventional learning technologies are developing very quickly, their usefulness in the context of talent management is still largely unexplored.

Retention, however, has also been a problem in junior management, middle management and clerical, administrative roles. In autumn 2004, the RCI reported that 45% of organisations had experienced an increase in labour turnover (particularly in the private sector and in larger organisations). Respondents also reported that HR initiatives in compensation and benefits, corporate culture and in creating more career opportunities were the most effective tools for retaining staff.

At issue here is the extent to which the organisation can meet the expectations and aspirations of its most important contributors. And there are three main areas of importance: the employer brand, the potential career path, and the job itself.

The employer proposition is that element of the employer brand which envisages the kind of employer an organisation needs to be to attract the right type of person and then fosters the kind of employee behaviour that will fulfil customer expectations. However, the employer brand, while effective for recruitment, has little impact when it comes to retaining talented people.

At a more specific level is the question of the kind of future you are offering. This is the career proposition, and it is a very difficult area in which to second-guess people’s aspirations early in the 21st century as very capable people may be less interested in long-term propositions insofar as they consider themselves to be marketable. The question then becomes, ‘What can you do to keep them marketing themselves to your organisation?’.

Finally, there is the job proposition – what do you actually want them to do? While the list of motivational factors to consider in the case of talent management is no different than for any employee, highly capable people frequently need more challenges, more variety, more choice and autonomy and, sometimes, more reward and recognition than others.

These motivational considerations all pose the same general problem: that we need processes, policies and practices which cater for the exceptional without upsetting everyone else. The struggle to deal with this conundrum is producing some of the most stimulating new thinking in HR today.

The last challenge we consider here is that of opportunity. We have met countless executives who recognise the need to give truly talented people responsibility and authority… up to a point – because the people who have got used to being the beneficiaries of a lot of attention and development may not be very helpful when they are suddenly expected to provide the attention and to develop others.

If your talent management initiatives are successful, it is likely that the people in your incubator will emerge with more capability than the existing leaders. Will they be ready to engage with them as their own leaders? Unless the answer is ‘yes’, most of the time and effort invested in talent management will have been wasted.

Shaun Tyson is professor of HR management, and Phil Smith is director of the talent management programme at Cranfield School of Management

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