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Talent management: The next wave

Published on Sunday, 17 Apr 2011
Brenda Wilson
Asia Pacific leader for talent management consulting, Mercer

In our recent Future of Talent Management Survey, we found that Asia Pacific employers are planning to reshape their talent programmes in anticipation of a greater emphasis on talent management and increasing competition for key talent.

To be most effective, however, organisations must embrace next-generation talent management thinking and approaches. This means building a robust talent infrastructure which includes four key factors: sustainability, a focus on distinct populations, alignment and shared ownership.

If talent is an organisation’s most sustainable competitive advantage, it cannot be approached by managing a collection of programmes or events targeted at those that are hoped to “have the right stuff”. Talent development is a long-term proposition which requires a systemic approach and a sustainable set of interwoven solutions.

Organisations that are serious about grooming their pipelines develop an approach that includes five components. Foundational processes involve embedding the right tools, processes and HR support. Organizational commitment requires creating engagement and governance from the top to the bottom, while having the right data and technology means using diagnostics, decision tools and dashboards to make evidenced-based decisions. Meanwhile, to establish manager capability, one must provide training, feedback and assign accountability. Finally, employee relevance will help ensure solutions have relevance to each employee to drive adoption.

Fundamentally, however, companies over-invest in the foundational process and under-invest in the rest. Organisations need to focus on and get right the other four components if they are expecting a sustainable result.

Most talent projects start with and focus on isolated programmes or practices – such as performance management or development – but don’t consider the unique needs of distinct talent populations. This is taking a view from HR, out to the business. Given this one-size-fits-all approach, these methods are unlikely to deliver uniformly high results.  What is more effective is taking a view from the business, into HR. Start with the workforce population and work down to the practice. This means doing two things: segmenting employee populations and targeting investments. Think about the company as a portfolio of workforces, each one has a different impact on the business and requires a different level of investment.

The investment needs to be targeted to fit the size, performance, engagement and capability of the population. All talent gaps can be thought of as some combination of these four qualities.

A size gap looks at whether more or less people are needed in the role going forward based on different revenue and growth assumptions. A performance gap examines whether the people in the role are performing at a high enough level or are productive enough. An engagement gap is about whether more discretionary effort, more retention or more commitment out of the role is needed. It also addresses attraction and retention issues. Finally, a capability gap investigates whether the people in the role need more, deeper or different capabilities to meet future business needs.

Always intended but rarely effectively executed, all stakeholders in the organisation from the bottom up need to be aligned.  Further, if you study the distribution of talent results by different organisations, one will note that there is a wide range of results from the very high to the very low. Yet, when evaluating the distribution of practices, there is a relatively small variation in what organisations actually do. In fact, most companies’ talent programmes are fairly similar. So the idea of driving higher levels of performance by adopting more and more best practices is a fallacy.

In addition to stakeholders, alignment is also achieved through congruent talent programmes linked to the business strategy and to each other so that people are recruited, developed and compensated on the same evaluation factors, for example.

Talent management is an essential part of leading an organisation. Managing talent needs to become a skill and an accountability shared by leaders at all levels. To do this, leaders need three things: accountability for talent across the organisation, a shared mind-set and the right capabilities. HR changes leaders, leaders change organisations.

In our recent Future of Talent Management Survey, respondents indicated which programmes required the most change. The top four were leadership training, workforce training, employee engagement and succession planning. When thinking about these changes, there are four key factors that are recommended to introduce next-generation talent management thinking and approaches. A sustainable advantage requires a sustainable approach. It’s about populations, not practices. Alignment beats best practices. And, it’s about fostering a shared ownership: HR changes leaders, leaders transform talent management.

As the old Chinese proverb says: “If you want one year of prosperity grow wheat, if you want 10 years of prosperity grow trees, if you want 100 years of prosperity grow people.”

Brenda Wilson is Mercer’s Asia Pacific leader for talent management consulting. She has been based in Hong Kong for six years and in the field of human resource management for the past 18 years. She can be contacted at brenda.wilson@mercer.com.

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