Talent Management: maximising business opportunity, capability development and organisational learning
THINKPIECE | Maret Staron, Manager, TAFE NSW ICVET
This paper incorporates extracts from the research report Life Based Learning: A strength based approach for capability development in vocational and technical education. The researchers are Maret Staron, Marie Jasinski, and Robby Weatherley.
This think piece provides an overview of what the research is saying about talent management.
The companion article, which is an interview with Melanie O’Connor, provides a practical insight into how talent management is being
implemented in Australia.
We all know what it’s like to feel under recognised, under valued or to miss out on opportunities that could add significantly to our contributions at work. At the same time, many organisations are acknowledging the importance of rewarding and recognising excellence, encouraging potential and maximising the use of people’s gifts and skills that they bring to work. Yet, it is still very much at rhetoric stage within many organisations in vocational education and training (VET). However, a significant shift is taking place world wide with the growing awareness of the economic importance of talent management in times of increasing skill and talent shortages.
One of the most significant human resource implications is that front line leaders will need to become talent retention experts as the baby-boomers start to retire. (Frank & Taylor 2004) The impact of global competition for talent will be increasingly felt and leaders will need to focus on ways of creating organisational environments that attract and retain talent. The cost of staff turnover is huge and ‘organisations will want to be known as a place where talent is valued and grown’ (Frank & Taylor pg 37).
Views vary as to whether talent is for all or for some and there is no one agreed definition of talent management. The Conference Board (2005) research report defines talent management as ‘any individuals who have the capability to make a significant difference to the current and future performance of the company’. However in the Australian public service, there is an emphasis on equal employment opportunity and addressing inequity. This will need to extend to talent management as ‘treating talent fairly in all respects is critical for motivating and retaining employees’. (pg 36)
What is talent management?
Rhea Duttagupta in an article on talent management, says:
Talent management is about those thoughts and actions that, consistently, over time, become organisational culture. Talent management is more than something to do, it is something to be, a way of working and achieving both short and long term success. It is a belief that talent differentiates organisation culture and breeds competitive advantage, with benefits for both the individual and the organisation (Duttagupta 2005).
Harnessing people’s strengths for the benefit of both the individual and the business is the goal of talent management. Talent management is about delivering business success by appropriately identifying, valuing, guiding and nurturing the natural talents and aspirations of employees. While some talent management efforts target ‘high flyers’, there is a wealth of untapped talent at every level in an organisation. Developing talent that is exceptional, underutilised or latent is important to business outcomes — untapped talent is a wasted asset.
Changing nature of the workforce
Lack of attention to talent management can leave organisations vulnerable as the workforce landscape is rapidly changing. As Baby Boomers retire they are being replaced by a new generation of workers who expect to be talent managed. If an employer does not provide this option, they are quite capable of managing it themselves. Avril Henry (2005) highlights this in her ‘think piece’ on the intergenerational workforce. By the end of 2004, for example, 50,000 small businesses in Australia were run by people under the age of twenty-five — Generation Y.
To these savvy young workers qualitative factors such as values, management style, flexible work practices and the work climate are just as important as financial rewards. If they are unhappy in their present circumstances, they have no qualms in seeking alternative work arrangements. ‘They believe that the only job security is to be employable, that training is an entitlement and the loyalty is to themselves’ (Henry 2005).
To attract and retain the talent of young workers Henry suggests that it is in the best interests of organisations to set up a range of systems and opportunities including:
- Develop learning organisations — invest in developing a learning culture where learning is visible at all levels of the organisation and learning programs are personally designed.
- Cater to a mobile population — support working in different locations and time zones.
- Redesign jobs — move from rigid job descriptions to fluid ‘job families’, recognising that working and learning in the Knowledge Era is more about behavioural competencies than achieving tasks.
- Provide coaching and mentoring — especially in relation to people management and leadership skills.
- Invest in leadership and management training — tackle ‘softer skills’ such as conflict resolution, influencing and persuasion.
- Enable greater flexibility — design environments that accommodate work styles with a focus on getting the job done rather than hours of work.
- Create more inclusive, collaborative work environments — move from a ‘command and control’ leadership model to one of ‘inclusion and collaboration’ (Henry 2005).
While there is a huge amount of interest in the implications of the X and Y generations entering the workforce, the significance of the ageing workforce should demand equal attention. This is the message from Robert Critchley (2005), whose ‘think piece’ on the ageing workforce counterbalances the emphasis on young workers with a statistical reality check. Around 80% of workforce growth in the next decade will come from people older than 45 years of age.
Critchley’s challenge for capability development and managing the talent of older workers is that:
If the full potential of the older worker is to be maximised, then employers must develop an open and positive attitude, as well as implementing appropriate human resource policies and practices that encourage, appreciate and support diversity and continuous learning and development (Critchley 2005).
Anna Rappaport et al (2003) suggests that if you are to retain key talent, old and young, you must have attractive economic incentives. ‘The employer needs to nurture a culture that accepts the value of all employees and provide an environment where all employees are encouraged to contribute to the maximum of their abilities’. (Rappaport et al pg 66)
What organisations need to focus on
Craig Donaldson (2006) refers to a Ernst & Young report on talent management which states that:
Innovative talent management strategies will be an important source of competitive advantage for Australian companies. A key message for organisations is that they need to consider their buy, build or move formulas. Look at where your skill strengths are, how you can build them, what skills are core to the business and how they can be developed. Organisations need to think about all three of those mechanisms to maximise their talent strategy. (Donaldson, pg 3)
Part of this process involves identifying future key positions and talent requirements, as well as determining future work requirements if organisations are to be successful in preparing individuals to assume key positions. (Rothwell, 2005) According to Rothwell, there is no foolproof way to do this. He suggests that the best way to do this is to carefully review changes in work and people and draw some conclusions about the likely consequences of change. A suggested process is:
- Apply environmental scanning- ie. systematically examine external trends.
- Apply organisational analysis – ie. systematically examine how an organisation is positioning itself to address future challenges.
- Prepare realistic future scenarios – ie. compare the results obtained from environmental scanning and organisational analysis.
The comprehensive Conference Board (2005) research report on talent management focuses on integrated talent management. The report suggests that there are eight categories of initiatives that need to be integrated to create a holistic approach to talent management – recruitment, retention, professional development, leadership/high potential, performance management, feedback/measurement, workforce planning and culture.
The key findings of the Conference Board research is that you need to:
- Know what jobs are critical.
- Build the skills of all managers.
- Develop and communicate the specific behaviours expected.
- Determine ways to provide rotational assignments.
- Evaluate annually performance and potential.
- Inform employees of possible career paths.
- Use talent management as a way of embedding diversity.
- Use talent management in tandem with change management.
- Set retention goals.
- Use assessment centres.
- Tie a meaningful percentage of employee satisfaction ratings to goals and rewards.
- Look for causal connections between leadership competencies and business outcomes.
- Include human capital measures in performance evaluations.
- Share talent management measures with board of directors.
- Create diversity measures.
- Increase the percentage of employees with performance development plans and documented developmental conversations with managers.
- Establish measures to guide ‘build vs. Buy’ decisions.
- Identify quantifiable opportunities for improvement.
- Track the size of the talent pool.
- Establish a central unit or person to measure talent management effectiveness.
An emerging aspect of talent management is the impact of learning technologies and the internet, which will continue to transform talent management (Frank & Taylor). Not only can employees now have far greater knowledge about job opportunities, but during employment, the use of learning technologies is pervading every aspect of learning and development, the latter being fundamental to talent management. ‘The future of talent management may well be about embracing and leveraging connectedness’ (Frank & Taylor pg 40).
Success factors for talent management
The signs that talent is being managed well in an organisation include:
- Success in meeting business targets and objectives.
- Having a talent strategy as a high business priority.
- High employee satisfaction and morale.
- Little problem recruiting staff.
- Employees want to stay.
- Excellent branding — the business is known as a great place to work.
What practitioners are saying
TAFE NSW ICVET (International Centre for VET Teaching and Learning), as part of the research on life based learning, conducted a number of national forums during 2005 – 2006. While talent management was not a structured topic for these national forums, it nevertheless generated much interest. The advice to us was that talent is not well managed in VET contexts and tended to look after itself, rather than being an integral part of a capability development strategy. The development of talent is most often self-initiated, relying on goodwill and champions rather than any clear strategy. One forum participant commented:
It is vitally important that individual aspirations and organisational goals are delivered together. Too often, these seem to be unequal partners. However, organisations that genuinely focus on each person’s own natural talents tend to achieve corporate success.
From their own experiences or observations on how talent was managed within their own VET contexts, participants identified three approaches to the talent issue:
- Leveraging — talented people had champions who ensured that they grew their jobs or had extension opportunities. Mentoring was mentioned as the key to leveraging talent.
- Languishing — talented people were left to own their devices and relied on goodwill and advocates for growth opportunities. This often resulted in motivation problems, low morale and disengagement as people felt vulnerable.
- Leaving — several incidents were mentioned of people who actively sought alternative employment when growth opportunities were not forthcoming.
The following ideas emerged from national forum discussion regarding more effective management of people with talent:
- Identify development opportunities to deepen knowledge.
- Listen to the voices — the viewpoint of the employee needs to be heard.
- Focus on strengths.
- Undertake new challenges to keep a fresh perspective.
- Design your own development plan.
- Offer appropriate incentives.
- Mentoring — helping build skills to become more savvy.
- Build a culture that provides a sense of purpose, accomplishment and fun.
Principles for talent management
Talent management strategies are required to understand not only what talent is needed to achieve business goals, but how to recruit, retain and develop that talent. Four major principles for talent management have been identified by Duttagupta:
- Build a winning environment that people want to belong to — create opportunities to excel by using strengths, personal and professional challenges, constant new projects to work on, teams and leaders who provide a rich mix of strengths and lifestyle considerations.
- Establish a talent management mindset, which enables ownership and accountability for optimising talent and potential — coaching, mentoring, empowerment and sponsorship.
- Create tangible means to identify, select and deploy people of outstanding talent — identify the talent needed and how to source it and use it for optimal effect.
- Fully engage talent, use it and manage it intelligently — use talent wisely to achieve both personal and business goals (Duttagupta 2005).
As a business imperative
Talent management makes good business sense for a number of reasons:
- It leads to effective business processes as well as motivated and effective people.
- It means having the right people to fill an opportunity when one appears.
- Losing talented employees is very expensive: recruiting, inducting, training and developing new staff is a major investment.
- Talented people help generate innovative ideas and fresh perspectives that are critical to competitive advantage and business success.
- The key measure of an effective management system is having the talent it needs to execute its business strategy.
Talent is a strategic resource for achieving business success and requires a refocus on the people agenda. Talent should be harnessed, not taken for granted, and the talent within the organisation should never be ignored. ‘Attracting, motivating and retaining talent will take all of the energy and creativity we can muster’. (Frank & Taylor pg 40)
References
(retrieved 16/03/06)
Critchley, R.K. (2006) The Ageing Workforce – to rewire or rust. Paper prepared for the TAFE NSW International Centre for VET Teaching and Learning
Human Resources, 31 October
. Intellectual Asset Magazine
Human Resource Planning, Vol 27, pp 33 – 41
Henry, A. (2006) The changing face of the workforce and intergenerational impact. Paper prepared for the TAFE NSW International Centre for VET Teaching and Learning
final report on the national research project Designing Professional Development for the Knowledge Era conducted by TAFE NSW ICVET with Department of Education, Science and Training (DEST)
Executive Summary
Full Report
Rappaport Anna, Bancroft Ed, Okum Lauren. (2003) The aging workforce raises new talent management issues for employers. Journal of Organisational Excellence. Vol 23, Issue 1 Pg 55 - 66
USA. American Management Association.
The Conference Board, USA