Talent Management is a Mindset, not a HR programme

 

 

Talent management has been at the forefront of business articles since the seminal book “The War for Talent” (Michaels et al) was published in 2001. However, the term has since been hijacked by so many self serving product suppliers and consultants that there is now significant confusion as to what talent management actually is.

 

This confusion has been often replicated within organisations where talent management has become a re-branding of the Learning and Development or Resourcing functions and / or their programmes. 

 

Talent management is however, an organisational mindset and not a programme.

 

A simple change of name of the Learning and Development or Resourcing functions will not produce different results. To implement a successful talent management strategy, organisations have to start with the critical examination of their values and perceptions about the role of their employees.

 

Talent management is about recognising that people are critical to an organisation’s performance and success. Talent management is about how an organisation values its employees and how it places its people at the centre of its decision-making processes.

 

 

“Talent” came to the forefront of management thinking as a result of the late 90’s when the economy was buoyant, share prices were soaring on the back of the dot com era and companies were keen to get any ‘human resources’ through the door. Since then, a downturn in economic conditions, corporate scandals at companies once touted as role models for talent management and global security concerns have made organisations more cautious about spending on employees. 

 

However, despite these short-term setbacks, the Information Age has become a corporate reality and there is an increasing global need for knowledge workers. ‘Globalisation’ has come from a worldwide move towards deregulation, increasing use of technology and the emergence of instant communications and organisations often now face a marketplace experiencing rapid and constant change. This change has brought requirements for different skill sets not previously found in organisations e.g. while many organisations have responded to market changes by outsourcing, off-shoring and divesting non-core activities, the need to proactively manage these new relationships has become critical and requires relationship and project management skills not previously considered important in ‘support’ functions.

 

In addition, the relationship between organisations and its employees has reached new lows in trust. Following decades of cuts in employment levels to meet the economic downturns, the continued growth of CEO pay in relation to average earnings (and seemingly unlinked to corporate performance), the aging of Generation X and Y into positions of management and growing concern about the impact of our existing capitalistic culture on global environmental changes, old concepts of employee loyalty and employer security are being challenged at every turn. As a result, more employees are becoming disengaged from their organisations and the seemingly ‘out of touch’ senior management who run them. 

 

These employment relationship changes continue to be reflected by the growth of small niche businesses, the continued debate about work-life balance and employees who are demanding a voice in the running of organisational affairs. 

 

Changing workforce demographics also suggest that as Baby Boomers reach retirement age over the next ten years, there will simply not be enough people to replace them.

 

In an environment where organisations face greater pressures to build revenues whilst cutting costs, where more employees are demotivated and less people are entering managerial ranks, I believe that talent management is even more important to organisations today that it ever has been.

 

Organisations that can increase the number of high performing employees, who can engage their workforce and attract and develop managers who understand the changing needs of their workforce and society, will have a key competitive advantage in their industry. 

 

 

Why is talent management a mindset and not simply an Human Resources programme? Traditional talent management programmes typically focus on selected employee groups, but when an organisation embraces a talent mindset, it is capable of truly reaching every employee and understanding what they are capable of. Unless an organisation can constantly demonstrate that talent management is both an integral part of the culture and inclusive of all employees, it will not engage the broader workforce and reap the benefits of higher performance, greater flexibility and increased motivation. 

 

What does talent management as a mindset look like? The implications of placing people at the heart of an organisation can be far reaching in terms of strategy, objectives, organisation structure, policies, processes and tools.  For example:

 

1.      The role of senior management becomes more focused on strategy implementation, not strategy creation,

 

The most common reason for why organisations fail is not the lack of a strategy but the ability to implement the strategy they have. A talent management mindset recognises that people implement strategies and that a key role of senior management is to both ensure that their employees understand the strategy and are aligned and engaged with it.

 

2.      The role of the manager changes from the application of Human Resources owned policies to being an integral part in the creation and management of the organisation’s ‘human resources’,

 

When managers are held accountable for the talent within their team and talent measures are a driver of their reward, ownership of the talent management programme becomes too important to be left with Human Resources. 

 

3.      Measurement of employee activity and how it links to organisational strategy becomes a core requirement,

 

Without measurement change cannot be sustained. Turnover, productivity and employee satisfaction are all easily measured and are indicators of the health of a workforce. However, the measuring of ‘talent’ often requires the creation of a baseline of a common language and structure e.g. competency and performance management frameworks, as well as a system to record and manage the information.  

 

4.      The importance of ‘brand’ extends to employees, candidates and third parties who act as ambassadors for the organisation,

 

At the heart of the concept of employee brand is that communication to employees and candidates is an extension of the organisation’s marketing messages. Not only is the candidate pool a potential customer base (or can influence a potential customer base) the messages it uses to attract and select employees can reinforce the messages it sends to employees internally.

 

If there is conflict between the marketing and employee brands or between the employee brand and organisational reality, this can create significant distrust with not only employees but also external stakeholders such as investors. 

 

5.      The role of Human Resources changes significantly,

 

Human Resources moves from a risk management and administrative processing role to a value added function. The ability to link organisational strategy and employees through psychology, team dynamics, organisational and cultural insight; and managed through change and project management expertise creates a unique and valuable position for Human Resources within the organisation.  

 

However, existing Human Resources boundaries – recruiting, training and development, reward – might become irrelevant at best, counter productive at worst.

 

o       Recruiting becomes a marketing activity, not a procurement chore. 

 

Linked to the employee brand, it is an opportunity to reach the marketplace through the candidate pool and reinforce key messages about the organisation, its products and the employee environment. This in turn reinforces the core marketing messages, increases the impact of the marketing spend and potentially reduces future attraction and selection costs.  

 

o       Training becomes focused on the development of potential and current high performance employees.

 

While training will continue to have a role within organisations, the focus moves to the identification and development of talent. Based on organisation wide frameworks e.g. competency and performance management, which provide the baseline for assessment, development spend will be focused on identifying and developing those individuals who are thought to be critical to the success of the organisation. 

 

o       The role of Reward is to engage productive employees, not compensate them in relation to their peers.

 

Reward has traditionally focused on establishing rankings and ensuring parity according to some measure, typically performance. This approach makes the assumption that all employees are interested in only financial return. However, with a talent management mindset, employees become individuals and while a degree of financial parity remains important, the role of Reward is to meet personal needs. The emergence of cafeteria-style benefit systems attests to the growing importance of this approach.

 

6.      Communication becomes critical,

 

Communication has always been important within organisations. With a talent management mindset however, the importance of treating employees as individuals and not ‘resources’ becomes a core organisational tenet and a key part of the employee brand. 

 

When organisations seek to truly engage with employees they enter into an adult relationship with them, creating an environment and processes that enable real two-way communication. 

 

7.      Employees are not all equal.

 

Talent management organisations do not treat all employees the same. All employees are valued for their actual and potential talent, but some talent is more appropriate to the organisation’s success than others. Organisations with a talent management mindset invest more time and resources in those employees who are critical to its success, but recognise that change is inevitable and that the solid performers of today may have the unforeseen talents to be the critical talent of tomorrow.

 

 

A talent mindset is a deep seated organisational belief that having better talent leads to greater success. It is a belief that successful organisations place people at the heart of their strategy and recognise that talent management is just not a Human Resources programme. 

 

If an organisation can constantly demonstrate that talent management is both an integral part of the culture and inclusive of all employees, it will engage the broader workforce and reap the benefits of higher performance, greater flexibility and increased motivation. 

 

A talent mindset takes many forms but typical signs include senior management becoming focused on strategy implementation, managers becoming involved in the creation and management of ‘HR’ policies, measuring employee activity is standard practice, the employee ‘brand’ is an important part of the marketing mix, the Human Resources function has changed significantly, employee communication becomes two-way and the organisation recognises that not all employees should be treated equally.

 

With the demand for talent likely to increase, organisations need to embrace a talent mindset in order to develop and retain a competitive advantage in the constantly changing environments that they already find themselves in.

 

Guy Ellis

+44 (0) 7799 862 693