Talent management

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Talent management (TM) is the anticipation of required human capital for an organization and the planning to meet those needs. [1] The field has been growing in significance and gaining interest among practitioners as well as in the scholarly debate over the past 10 years as of 2020, [2] particularly after McKinsey's 1997 research [3] and the 2001 book on The War for Talent. Although much of the previous research focused on private companies and organizations, TM is now also found in public organizations. [4] [5]

Contents

Talent management in this context does not refer to the management of entertainers. Talent management is the science of using strategic human resource planning to improve business value and to make it possible for companies and organizations to reach their goals. Everything done to recruit, retain, develop, reward and make people perform forms a part of talent management as well as strategic workforce planning. A talent-management strategy should link to business strategy and to local context to function more appropriately (Tyskbo, 2019). [2]

History

The precursor to "talent management" seen extensively in firms during the latter part of the 20th century was centered around internal talent development. An overemphasis was placed on the training and evaluation of managerial positions creating an excess supply of middle-management talent. Poor business forecasting of economic downturn in the 1970s combined with no-layoff policies for white-collar workers resulted in corporate bloat. Recession throughout the 1980s saw large increases in unemployment as firms restructured, placing less importance on internal development. As a result the hiring of outside talent largely replaced the internal development schemes seen in businesses earlier in the century and by the late 1990s had reached its limit. Firms found they were both attracting and losing experienced employees at the same rate and needed to explore new ways of retaining and nurturing incumbent employees. [6]

The term was coined by McKinsey & Company following a 1997 study. [3] The following year in 1998 "talent management" was entered in a paper written by Elizabeth G. Chambers, Mark Foulon, Helen Handfiled-Jones, Steven M. Hankin, and Eduard G. Micheals III. However, the connection between human resource development and organizational effectiveness has been established since the 1970s. [7]

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Implementation

A talent management system is suggested to be used in business strategy and implemented in daily processes throughout the company as a whole.[ need quotation to verify ] It cannot be left solely to the human resources department to attract and retain employees, but rather be practiced at all levels of an organization. The business strategy must include responsibilities for line managers to develop the skills of their immediate subordinates. Divisions within the company should be openly sharing information with other departments in order for employees to gain knowledge of the overall organizational objectives. [2] The issue with many companies and the military today is that their organizations put tremendous effort into attracting employees to their company, but spend little time into retaining and developing talent.

The talent management strategy may be supported by technology such as HRIS (HR Information Systems) or HRMS (HR Management Systems).

Talent recruitment

The importance of recruitment of the proper talent is crucial to the overall long term success of the organization. Recruitment processes are vital because if people do not appreciate the initial process, they will not be willing to stay with the organization. Technology has advanced greatly giving many corporations the ability to locate the correct people for the task at hand. Nearly, all multinational enterprises (MNEs) are faced with the challenge of curating a formidable arsenal of its workforce. It has been reported that nearly 75% of the CEOs of the world have pointed out the unavailability of the required skills and capabilities as the main obstacle faced by organizations aiming for their growth (Sen, 2019) [8] Companies need to decide whether it is correct to "buy" or "make" employees. Making an employee refers to teaching the individual certain skills needed for the job. However, it has to be determined whether or not the employee has the potential to learn the skills. Buying an employee is hiring an individual that already possesses the required skills needed for the job. If the person has the required skills, their starting wage will likely have to reflect the talent. [9]

Evaluations

From a talent management standpoint, employee evaluations concern two major areas of measurement: performance and potential. Current employee performance within a specific job has always been a standard evaluation measurement tool of the profitability of an employee. However, talent management also seeks to focus on an employee's potential, meaning an employee's future performance, if given the proper development of skills and increased responsibility. What goes into these dimensions has been showed to differ depending on local organizational contexts (Tyskbo, 2019). [2]

Talent marketplace

A talent marketplace is an employee training and development strategy that is set in place within an organization. It is found to be most beneficial for companies where the most productive employees can pick and choose the projects and assignments that are ideal for the specific employee. An ideal setting is where productivity is employee-centric and tasks are described as “judgment-based work,” for example, in a law firm. The point of activating a talent marketplace within a department is to harness and link individuals' particular skills (project management or extensive knowledge in a particular field) with the task at hand. Examples of companies that implement the talent marketplace strategy are American Express and IBM. [10] In today´s globalized economy, cultural agility is a behavioral trait that international enterprises especially value in job applicants at the time of hiring. [11]

Employee retention

The process of retaining employees to work in the organization on a long-term basis is defined as employee retention (Sen, 2019). Organizational resources are used to train new employees into skilled workers. This gives options to businesses that want to hold onto employees as long as they can. (Sen, 2019). By keeping a healthy long term relationship between employees and management, companies benefit from a skilled and talented staff that will cohesively work together to achieve long term goals. The most important factors involved in employee retention are compensation, workplace environment, growth options, and the support structure of the company (Sen, 2019). [12] One of the greatest drivers of employee engagement and retention are intangible assets, that are mostly related to the way a manager treats their employees. [13] The proper and fair treatment of all employees will increase their engagement levels and in the long run result in less of a need for micromanaging. [14] The main cause for talented people leaving their jobs is due to the fact they are not being allowed to do as much as they would like to do for their organizations. The right employees want to feel impactful and have a feeling of importance as they go about their daily work. Employees are more likely to stay if they have a good relationship and open communication with their immediate boss and have a feeling of importance in the workplace. [15] This is the main reason why frontline leaders should develop their employee retention skills as retention rates are likely to feature prominently in annual reports in the future. If management can hire and keep the right employees on board it will translate into positive and sustainable success in the future. [16]

In Talent: How to Identify Entrepreneurs (2022), economist Tyler Cowen and entrepreneur Daniel Gross suggest that modern societies lack the ability to detect talent and to provide a framework in which talented people can be retained and helped to flourish. [17]

Current applications

In adverse economic conditions, many companies feel the need to cut expenses. This should be the ideal environment to execute a talent management system as a means of optimizing the performance of each employee and the organization. Selection offers are large return on investments. Job analysis and assessment validation help enhance the predictive power of selection tools. Data points such as cost-per-placement or average time to recruit are critical in predictive analytics for talent management. These evaluation methods use historical data to provide insight.[ citation needed ] However, within many companies the concept of human capital management has just begun to develop. With more companies in the process of deepening their global footprints, [18] more questions have been asked about new strategies and products, but very few on the kind of leadership structure [19] [20] that will bring them success in their globalization process. [21] [22] “In fact, only 5 percent of organizations say they have a clear talent management strategy and operational programs in place today.” [23] The impact of globalization on talent management practices is specifically covered in several recent books. [24] [25]

See also

Related Research Articles

Human resources (HR) is the set of people who make up the workforce of an organization, business sector, industry, or economy. A narrower concept is human capital, the knowledge and skills which the individuals command. Similar terms include manpower, labor, labor-power, or personnel.

Succession planning is a process and strategy for replacement planning or passing on leadership roles. It is used to identify and develop new, potential leaders who can move into leadership roles when they become vacant. Succession planning in dictatorships, monarchies, politics, and international relations is used to ensure continuity and prevention of power struggle. Within monarchies succession is settled by the order of succession. In business, succession planning entails developing internal people with managing or leadership potential to fill key hierarchical positions in the company. It is a process of identifying critical roles in a company and the core skills associated with those roles, and then identifying possible internal candidates to assume those roles when they become vacant. Succession planning also applies to small and family businesses where it is the process used to transition the ownership and management of a business to the next generation.

Staffing is the process of finding the right worker with appropriate qualifications or experience and recruiting them to fill a job position or role. Through this process, organizations acquire, deploy, and retain a workforce of sufficient quantity and quality to create positive impacts on the organization's effectiveness. In management, staffing is an operation of recruiting the employees by evaluating their skills and knowledge before offering them specific job roles accordingly.

<span class="mw-page-title-main">Recruitment</span> Process of attracting, selecting and appointing candidates to a job or other organization

Recruitment is the overall process of identifying, sourcing, screening, shortlisting, and interviewing candidates for jobs within an organization. Recruitment also is the process involved in choosing people for unpaid roles. Managers, human resource generalists, and recruitment specialists may be tasked with carrying out recruitment, but in some cases, public-sector employment, commercial recruitment agencies, or specialist search consultancies such as Executive search in the case of more senior roles, are used to undertake parts of the process. Internet-based recruitment is now widespread, including the use of artificial intelligence (AI).

Human resource management (HRM) is the strategic and coherent approach to the effective and efficient management of people in a company or organization such that they help their business gain a competitive advantage. It is designed to maximize employee performance in service of an employer's strategic objectives. Human resource management is primarily concerned with the management of people within organizations, focusing on policies and systems. HR departments are responsible for overseeing employee-benefits design, employee recruitment, training and development, performance appraisal, and reward management, such as managing pay and employee benefits systems. HR also concerns itself with organizational change and industrial relations, or the balancing of organizational practices with requirements arising from collective bargaining and governmental laws.

Workforce management (WFM) is an institutional process that maximizes performance levels and competency for an organization. The process includes all the activities needed to maintain a productive workforce, such as field service management, human resource management, performance and training management, data collection, recruiting, budgeting, forecasting, scheduling and analytics.

Competence is the set of demonstrable characteristics and skills that enable and improve the efficiency or performance of a job. Competency is a series of knowledge, abilities, skills, experiences and behaviors, which leads to effective performance in an individual's activities. Competency is measurable and can be developed through training.

A chief human resources officer (CHRO) or chief people officer (CPO) is a corporate officer who oversees all aspects of human resource management and industrial relations policies, practices and operations for an organization. Similar job titles include: chief people officer, chief personnel officer, executive vice president of human resources and senior vice president of human resources. Roles and responsibilities of a typical CHRO can be categorized as follows: workforce strategist, organizational and performance conductor, HR service delivery owner, compliance and governance regulator, and coach and adviser to the senior leadership team and the board of directors. CHROs may also be involved in board member selection and orientation, executive compensation, and succession planning. In addition, functions such as communications, facilities, public relations and related areas may fall within the scope of the CHRO role. Increasingly, CHROs report directly to chief executive officers and are members of the most senior-level committees of a company.

The employee value proposition (EVP) is a part of employer branding, in that it is one of the ways companies attract the skills and employees they desire and keep them engaged. It is how companies market themselves to prospective talent, and also how they retain that talent in a competitive job market. The EVP is meant to communicate the values and culture of the organization, as well as take the focus off remuneration as the sole reason for working there. The benefits, when done correctly, are a more committed, happier, and productive workforce at a cheaper cost, which are the main goals of any employee-centered strategy. It may also have the side benefit of improving the company's perception in the eyes of consumers.

The Offshoring Research Network is an international network of researchers and practitioners studying organizations in their transition to globalizing their business functions, processes and administrative services. The ORN conducts annual surveys tracking global sourcing strategies, drivers, concrete implementations and plans across all business functions and processes.

The war for talent is a term coined by Steven Hankin of McKinsey & Company in 1997, and a book by Ed Michaels, Helen Handfield-Jones, and Beth Axelrod, Harvard Business Press, 2001 ISBN 978-1-57851-459-5. The war for talent refers to an increasingly competitive landscape for recruiting and retaining talented employees. In the book, Michaels, et al., describe not a set of superior Human Resources processes, but a mindset that emphasizes the importance of talent to the success of organizations.

Employee retention is the ability of an organization to retain its employees and ensure sustainability. Employee retention can be represented by a simple statistic. Employee retention is also the strategies employers use to try to retain the employees in their workforce.

A competency architecture is a framework or model of predetermined skills or "competencies" used in an educational setting. Competency architectures are a core component of competency-based learning.

Competency-based recruitment is a process of recruitment based on the ability of candidates to produce anecdotes about their professional experience which can be used as evidence that the candidate has a given competency. Candidates demonstrate competencies on the application form, and then in the interview, which in this case is known as a competency-based interview.

Human resource planning is a process that identifies current and future human resources needs for an organization to achieve its goals. Human resource planning should serve as a link between human resource management and the overall strategic plan of an organization. Ageing workers population in most western countries and growing demands for qualified workers in developing economies have underscored the importance of effective human resource planning.

Human resource metrics are measurements used to determine the value and effectiveness of human resources (HR) initiatives, typically including such areas as turnover, training, return on human capital, costs of labor, and expenses per employee.

Potential analysis describes the structural examination of specific characteristics and competencies. Potential analyses provide information about abilities of employees, future events, methods or organizations. Due to that the analysis of the branch of production, the financial sphere, the research & development and the human resources is differentiated.

A human resources management system (HRMS), also human resources information system (HRIS) or human capital management (HCM) system, is a form of human resources (HR) software that combines a number of systems and processes to ensure the easy management of human resources, business processes and data. Human resources software is used by businesses to combine a number of necessary HR functions, such as storing employee data, managing payroll, recruitment, benefits administration, time and attendance, employee performance management, and tracking competency and training records.

An international assignment is an overseas task set by a company to an employee. Companies that engage in international assignments are mainly multinational corporations (MNCs). MNCs send employees from the home country to a different country for business operations at overseas offices or subsidiaries. These employees are called expatriates. International assignments can fulfil a number of key organisational functions and are viewed as development opportunity for organisations to build a global and mature workforce. As a result of globalisation and the saturation of domestic markets, international assignments are a strategic tool for organisations to compete successfully on the global stage and achieve specific organisational objectives. These organisation missions are a key way of developing global perspectives. They can encourage diverse inputs into decision and develop shared values within the Headquarters, home country and subsidiaries. International assignments are a component of the training and development activities of international human resource management. Other main activities include human resource management in the global environment, selection, performance management, compensation and repatriation.

<span class="mw-page-title-main">Paula Caligiuri</span> Psychologist, author

Paula Caligiuri is an American academic, talent management specialist, psychologist, book author, and entrepreneur. As a Distinguished Professor of international business and strategy, she is on the faculty at D'Amore-McKim School of Business, Northeastern University. Her published contributions in the field of international human resource management have won academic distinctions, and been endorsed in scholarly literature and in wider professional circles. Among her books, Get a Life, Not a Job, Managing the Global Workforce,Cultural Agility: Building a Pipeline of Successful Global Professionals, and Build Your Cultural Agility: The Nine Competencies of Successful Global Professionals, received attention by qualified media. In 2023, she wrote Live for a Living: How to Create your Career Journey to Work Happier, Not Harder with Andrew Palmer (Technologist), which focuses on career development. She is ranked # 392 among the best business and management scientists in the US, 810 worldwide.

References

  1. ↑ Carpenter, Mason, Talya Bauer, and Berrin Erdogan. Management and Organizational Behavior. 1. 1. Flatworld Knowledge, 409. Print.
  2. 1 2 3 4 Tyskbo, Daniel (2019). "Competing institutional logics in talent management: Talent identification at the HQ and a subsidiary". The International Journal of Human Resource Management. 32 (10): 1–35. doi: 10.1080/09585192.2019.1579248 .
  3. 1 2 The War for Talent, McKinsey Quarterly
  4. ↑ Tyskbo, Daniel (2021). "Conceptualizing talent in public sector municipalities". International Review of Administrative Sciences. 89 (2): 519–535. doi: 10.1177/00208523211065162 . S2CID   245399074.
  5. ↑ Michaels, Ed; Handfield-Jones, Helen; Axelrod, Beth (2001). The War for Talent . Harvard Business Press. ISBN   9781578514595.
  6. ↑ Cappelli, Peter (March 2008). "Talent Management for the Twenty-First Century". Harvard Business Review. 1: 2–8. Retrieved 30 October 2020– via ResearchGate.
  7. ↑ Schein, Edgar. "Increasing Organizational Effectiveness through Better Human Resources Planning and Development". Sloan Management Review, 1977, 19:1 p. 1.
  8. ↑ Sen, Sushmita (2019). Talent Management. Society Publishing. p. 2. ISBN   9781774075333.
  9. ↑ Sen, Sushmita (2019). Talent Management. Society Publishing. pp. 14, 15. ISBN   9781774075333.
  10. ↑ Making a Market in Talent Archived 2011-07-27 at the Wayback Machine
  11. ↑ CALIGIURI, PAULA (2021). BUILD YOUR CULTURAL AGILITY : the nine competencies you need to be a successful global professional. [S.l.]: KOGAN PAGE. ISBN   978-1-78966-661-8. OCLC   1152067760.
  12. ↑ Sen, Sushmita (2019). Talent Management. Society Publishing. pp. 162, 165. ISBN   9781774075333.
  13. ↑ Blass, E. (2009). Talent management: Cases and commentary. Basingstoke: Palgrave Macmillan.
  14. ↑ Branham, L. (2005). The 7 hidden reasons employees leave how to recognize the subtle signs and act before it's too late. New York: American Management Association.
  15. ↑ Branham, L. (2005). The 7 hidden reasons employees leave how to recognize the subtle signs and act before it's too late. New York: American Management Association.
  16. ↑ Bannister, M. (2005). Rural social work practice. Wagga Wagga, N.S.W. New York: American Management Association.
  17. ↑ Paris Aéroport, Paris Vous Aime Magazine, No 13, avril-may-juin 2023, p. 72
  18. ↑ Arp, Frithjof (2014). "Emerging giants, aspiring multinationals and foreign executives: Leapfrogging, capability building, and competing with developed country multinationals". Human Resource Management. 53 (6): 851–876. doi:10.1002/hrm.21610.
  19. ↑ Arp, Frithjof (2013). "Typologies: What types of foreign executives are appointed by local organisations and what types of organisations appoint them?". German Journal of Human Resource Management. 27 (3): 167–194. doi:10.1177/239700221302700302. hdl: 10419/85280 . S2CID   56210528.
  20. ↑ Arp, Frithjof; Hutchings, Kate; Smith, Wendy A. (2013). "Foreign executives in local organisations: An exploration of differences to other types of expatriates". Journal of Global Mobility. 1 (3): 312–335. doi:10.1108/JGM-01-2013-0006.
  21. ↑ "What does globalisation mean for your leadership culture? - YSC". Archived from the original on 2016-08-18. Retrieved 2 December 2016.
  22. ↑ Frithjof Arp (16 October 2012). "For success in a cross-cultural environment, choose foreign executives wisely". Global Business and Organizational Excellence. 32 (1): 40–50. doi:10.1002/JOE.21462. ISSN   1932-2054. Wikidata   Q56699508.
  23. ↑ "Talent Management:State of the Industry" . Retrieved 2 December 2016.
  24. ↑ GLOBALIZATION OF PROFESSIONAL SERVICES : innovative strategies, successful. [Place of publication not identified]: SPRINGER. 2016. ISBN   978-3-662-50953-1. OCLC   1005124406.
  25. ↑ Global talent management. David G. Collings, Hugh Scullion, Paula Caligiuri (Second ed.). New York. 2019. ISBN   978-1-351-77827-5. OCLC   1057341407.{{cite book}}: CS1 maint: location missing publisher (link) CS1 maint: others (link)
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