Why integrated talent management is the future of HR

HR should have a holistic view of all types of employees, regardless of how they come into the organisation.

By embracing an integrated talent model, HR can truly justify its seat in the boardroom, argues Michel Stokvis from Randstad Sourceright.

For years, HR leaders have battled for a place on the executive board. Now that numbers of board-level HR executives are growing, the big question is what will they do to justify their seat at the table?

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In today’s increasingly competitive and dynamic landscape, organisations need to deliver the talent that will help a business stay ahead of competitors. Access to, and engagement with, a wide range of talent communities is the new battleground for businesses.

Many HR leaders will argue that they have had their eye on talent building for some time, but have they been effective? Have they tailored their human capital strategies around the most dynamic aspects of labour today – the rise of the contingent workforce?

Keeping an eye on the gig economy

Temps, freelancers and contractors are an increasingly critical part of the resources needed to execute business plans, but do HR directors have adequate visibility and influence on how to source, attract and engage these workers?

This question has led to growing interest in integrated talent management, and a holistic approach to business leaders’ hiring needs.

Also referred to as “total talent management”, the principle is simple: knock down traditional silos that have separated the management of contingent and permanent workers.

In their place, establish a process that selects the best type of talent – permanent, temporary, freelance, contract or Statement of Work (SOW) – for the tasks at hand. The result is a more agile, cost-effective and engaged workforce.

Breaking down silos

Most companies today manage talent in a highly siloed approach – with different stakeholders responsible for different portions of the workforce. Contingent talent is often managed through procurement, while HR has responsibility for permanent employees.

Few companies coordinate the efforts or viewpoints of both functions to provide an integrated approach to talent, and HR’s detachment from the management of the contingent workforce can be problematic.

The phenomenon of the gig economy – McKinsey estimates that as many as 162 million people are gig workers in the US and Europe – combined with rising talent scarcity requires companies to adapt to new realities and be more agile.

Beyond tactical

In the past, savings were often prioritised over all other HR goals. Many organisations still look to outsource the management of their recruitment function or their contingent workforce primarily to drive down costs.

However, this kind of tactical thinking leads to short-lived results and often has the executive board asking: “What’s next?” The goal of an integrated talent management approach is to answer that very question.

According to Staffing Industry Analysts (SIA), deploying this model is a journey rather than an end goal. In fact, it points out, how businesses manage talent falls into one of six distinct states.

These states begin with a very low-level, tactical approach that encompasses only the permanent employee population and spans into five greater orders, culminating with fully optimised talent management. This is a longer-term commitment with more sustainable, ongoing benefits.

How it works

So how does an integrated talent model lead to an optimised workforce? Several critical elements provide the framework for achieving stronger controls and more effective use of talent.

Taking this approach also means extensive process and cultural shifts that some companies may find difficult. But if done properly, the benefits are myriad.

Randstad Sourceright recently surveyed more than 400 human capital leaders around the world on their understanding and experience with integrated talent management.

Of those who have implemented such a model, 93% said they were extremely or very satisfied. The remaining 7% were somewhat satisfied with no one expressing disappointment with the results.

Among the most cited benefits were “higher efficiencies in hiring”, “reduced time-to-fill” and “increased recruitment scalability”.

Talent advisers

Creating a talent adviser role to sit at the heart of the integrated talent management model can help achieve that success. The adviser works with the hiring manager to determine the right resources for their business needs.

For example, a function that historically required a team of five full-time equivalents (FTEs) may be better served with a staff of two FTEs, three temporary staffers, several contractors and a SOW employee.

The adviser is putting the right resources in place, while creating greater efficiency in costs and access to talent.

Tools for success

Technology is another critical component. In a siloed model, contingent workers are typically managed through a vendor management system, and permanent hires are managed with an applicant tracking system.

At most organisations, the two platforms almost never talk to each other. Under an integrated talent model, the two co-exist but are linked by an analytics platform capable of not only reporting, but also of providing predictive analysis.

In the wider technology arena, initiatives such as the connection and integration between workforce management tool Fieldglass and SuccessFactors, both owned by SAP, are a strong signal that this is the direction of travel.

However, the real challenge is in integrating this mix of talent data with the organisation’s core HR management system platform. IBM’s Watson analytics tool is probably the most well-known technology today that sits across all of these domains and data points. Crunchr is another alternative that could start driving both an integrated view on talent, and a strategic view around future workforce planning.

Finally, an integrated talent model requires a commitment to continuous improvement. Some organisations believe that once they have implemented the elements above, they have completed the journey. Far from it – they must continually identify gaps and opportunities inherent in their processes and map a path forward.

Gaining buy-in

Integrated talent management is an exciting concept, but it is also complicated and can be hard to sell internally. It requires true leadership to comprehend its impact and champion its value proposition.

In Randstad Sourceright’s quarterly Talent Intelligence Outlook report, organisations not sold on the idea had several reasons for their reluctance.

These include: having an existing talent acquisition process that already works well; investment being directed elsewhere; too many stakeholders to win over; a lack of expertise; and the high costs of implementation.

While these are all legitimate concerns, the truth is that over time, integrated talent management will deliver benefits well above the initial investments and internal efforts required.

The economics are well documented (Everest Group Research estimates recruitment costs could be reduced by 10% to 12%) and the benefits to hiring managers are clear (by enhancing quality of talent and access to talent).

The end result is achieving a business advantage in the market. There are no shortcuts to implementing an integrated talent model, but if HR is truly serious about holding on to its seat at the boardroom table, it would do well to consider undertaking what could be its most ambitious and strategic transformation yet.

To learn more, request the Randstad Sourceright Integrated Talent Playbook.

Michel Stokvis

About Michel Stokvis

Michel Stokvis is the director of the EMEA Center of Excellence at Randstad Sourceright.
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