• Developing employees.
• Redeploying employees.
• Retaining the best talent.

Yes, the prime focus of talent management is enabling and developing people, since the quality of an organization is determined by the people it employs and has onboard. After hiring and deploying we may say that retaining and nurturing talent is quintessential.

Talent management also known as human capital management is evolving as a discipline that encompasses process right from hiring people to retaining and developing the same. So it includes recruitment, selection, learning, training and development, competency management, succession planning etc. These are all critical processes that enable an organization to compete and stand out in the market place when managed well!

Talent management is now looked upon as a critical HR activity; the discipline is evolving every day. Let’s analyze some trends in the same.

• Talent War: Finding and retaining the best talent is the most difficult aspect of HR management. HR survey consultancies are one in their view that organizations globally are facing a dearth of talented employees and it’s often more difficult to retain them. Further research has also shown that there is clear link between talent issues and overall productivity.

• Technology and Talent Management: Technology is increasingly getting introduced into people development. Online employee portals have become common place in organizations to offer easy access to employees to various benefits and schemes. In addition employees can also manage their careers through these portals and it also helps organizations understand their employees better.

• Promoting Talent Internally: An individual is hired, when there is a fit between his abilities or skills and the requirements of the organization. The next step is enabling learning and development of the same so that he/she stays with the organization. This is employee retention. An enabled or empowered means an empowered organization.

  It is also of interest to organizations to know their skills inventories and then develop the right individual for succession planning internally.

• Population Worries Globally: World populations are either young or aging. For example, stats have it that by 2050 60% of Europe’s working population will be over 60! On the other hand a country like India can boast of a young population in the coming and present times. Population demographics are thus a disturbing factor for people managers. Still more researches have predicted that demographic changes in United States will lead to shortage of 10 million workers in the near future!

• Talent Management to rescue HR: HR has been compelled to focus on qualitative aspects equally and even more than quantitative aspects like the head count etc. Through talent management more effort is now being laid on designing and maintaining employee scorecards and employee surveys for ensuring that talent is nurtured and grown perpetually.

• Increase in Employer of Choice Initiatives: An organization’s perceived value as an employer as helps improve its brand value in the eyes of its consumer. Most importantly it helps it attract the right talent.

Technically these resources have been divided into two, non contingent and differentiating capabilities.

Whereas non contingent capabilities are basics that enable an organization to compete and exist in the marketplace, differentiating capabilities are those that differentiate an organization from that of the other and offer competitive advantage.

Effective marketing management, for example can be one of non contingent capabilities. Similarly many HR processes aspire to develop non contingent capabilities but they often fail to align with the strategy and offer competitive advantage. Most of these processes end up developing people in similar areas and similar capacities as their rival firms but this fails to provide any competitive advantage.

For organizations to develop competitive advantage through HR processes it is very important to define strategic differentiating capabilities and then develop a process for identifying and developing the same. This empowers the HR people to create an impact on the organizational strategy and also provides a link between talent management and strategy.

For HR to prove that talent management can be of strategic importance to organizations, the critical relationship between the two must be proven. Talent management specially needs to be projected as a differentiating strategic capability that can offer real and substantial competitive advantage.

According to research conducted by various bodies it was found out that creation of differentiating strategic capabilities signifies the relationship between business strategy and human resources.

Human resources, it was deduced are the primary sources of strategic advantage. The research study was primarily based on Resource based view (RBV) of an organization. This view has gained significant ground among HR practitioners as basis of models for formation and structure of resources.

Unlike other non contingent capabilities that can be developed easily and cannot contribute to a large extent towards the development of a sustainable competitive advantage, differentiating strategic capability such as strategic HR through talent management can. However for human resources to qualify as potential sources of competitive advantage they should fulfill the following criteria:

• Strategic Value: The resource has to contribute substantially and add value in his/her area of expertise.

• Rare: Unique in terms of skills, knowledge and abilities in order to qualify as rare.

• Appropriable: The extent to which the resource is owned by the firm.

• Inimitable: Such that the resource cannot be replaced even after the competitors having spotted the same.

• Cannot be Substituted: This means that the resource cannot be substituted by the rival firms and that there is no match for the talent!

There are not many things in the business environment that can fulfill all the above criteria and offer unique competitive advantage except human resources and that is under the jurisdiction of talent management. There is also a need to understand the strategic intent of the organization before defining strategic capabilities.

Different organizations utilize talent management for their benefits. This is as per the size of the organization and their belief in the practice.

It could just include a simple interview of all employees conducted yearly, discussing their strengths and developmental needs. This could be utilized for mapping people against the future initiatives of the company and for succession planning.

There are more benefits that are wide ranged than the ones discussed above. The benefits are:

• Right Person in the right Job: Through a proper ascertainment of people skills and strengths, people decisions gain a strategic agenda.

  The skill or competency mapping allows you to take stock of skill inventories lying with the organization. This is especially important both from the perspective of the organization as well as the employee because the right person is deployed in the right position and employee productivity is increased. Also since there is a better alignment between an individual’s interests and his job profile the job satisfaction is increased.

• Retaining the top talent: Despite changes in the global economy, attrition remains a major concern of organizations. Retaining top talent is important to leadership and growth in the marketplace. Organisations that fail to retain their top talent are at the risk of losing out to competitors.

  The focus is now on charting employee retention programs and strategies to recruit, develop, retain and engage quality people. Employee growth in a career has to be taken care of, while succession planning is being performed those who are on the radar need to be kept in loop so that they know their performance is being rewarded.

• Better Hiring: The quality of an organization is the quality of workforce it possesses. The best way to have talent at the top is have talent at the bottom. No wonder then talent management programs and trainings, hiring assessments have become an integral aspect of HR processes nowadays.

• Understanding Employees Better: Employee assessments give deep insights to the management about their employees. Their development needs, career aspirations, strengths and weaknesses, abilities, likes and dislikes. It is easier therefore to determine what motivates whom and this helps a lot Job enrichment process.

• Better professional development decisions: When an organization gets to know who its high potential is, it becomes easier to invest in their professional development. Since development calls for investment decisions towards learning, training and development of the individual either for growth, succession planning, performance management etc, an organization remains bothered where to make this investment and talent management just make this easier for them.

Apart from this having a strong talent management culture also determines how organization rate their organizations as work places. In addition if employees are positive about the talent management practices of the organization, they are more likely to have confidence in the future of their organization. The resultant is a workforce that is more committed and engaged determined to outperform their competitors and ensure a leadership position in the market for their organization.

In wake of the economic recession human resource professionals are under huge pressure to cut costs. Logically this is best time to validate the importance of talent management.

Hiring and compensating the best talent in the industry optimally and ensuring performance at the same time. The question that remains is ‘what exactly is the relevance in the current economic conditions’? Before trying to answer lets ponder on certain key issues.

• As per industry statistics only five percent of organizations possess a talent management strategy that is operational! In another ten percent the concept has just begun to develop.
• Aging workforce is another area of concern that has created vacuums in organizations leadership positions.
• Organizations also report shortage of talent business line managers.

All this has opened up avenues for HR professionals for vindicating their stand on talent management and once organizations understand that they need an integrated approach to talent management, the involvement of a top executive is important for driving success.

The top executive who now heads the talent management function is responsible for activities like succession planning, leadership development, career development, performance management, learning and development, recruitment etc. Having said this we again arrive upon the question of relevance.

Developing Leadership Pool: Succession planning and leadership development are two issues that have felt a sense of urgency after the recent economic downturn. Organizations have been seeking leadership positions to rescue them out of crisis.

Performance Management: After succession planning and leadership development, performance management comes next on the list. Without a thorough and standard way to measure performance it is not possible to promote right people to right positions and motivate them to perform for organizational growth and development.

Recruitment assumes significance: Recruitment becomes strategic so to say. Recruitment practices determine organizational effectiveness. In a tight labor market it a daunting task to attract the brightest talent towards your organization and then getting them onboard.

Internet has become an important source of external recruiting. Systems and standards have been laid down for the same. Here building an employer brand is important. Those who do, get right people onboard.

Skill based Manpower Planning: Manpower planning is a strategic HR process these days. Instead of a mere headcount based hiring; manpower planning now extends to the locating critical skills, roles and responsibilities and then ascertaining current and future talent needs for those roles.

These are vital processes that optimize the performance of the human capital management. What is required is to ensure that they are consistent in order to ascertain they meet the business objectives.

Talent management is in its nascent stage, there are still more processes that will be added in due course of time as organizations opt for more initiatives in the direction.

There is a war for talent going across campuses in India. With the placement season in full swing, the news these days is full of stories that report how the top tier students in IITs or the Indian Institutes of Technology and the IIMs or the Indian Institutes of Management in addition to the NITs or the National Institute of Technologies are being offered large starting salaries with sign on bonuses included.

Indeed, given the frenzy among recruiters for the top talent, it seems as though things have never looked brighter for Indian Students. However, the war for talent in the top campuses masks a grim reality wherein the institutes of management and the engineering colleges that are at the middle and bottom end of the rankings are scarcely able to attract firms and companies willing to hire their students.

The fact that many corporates complain that the quality of graduates from institutes that are in the top bracket is so poor that employability or the aspect of employing them becomes difficult since they neither have the technical knowledge nor the soft skills to be able to transition from being students to professionals.

What the Government Ought to Do

Given these aspects, the government should take steps to address the imbalances and the differences between the students from the top institutes and the bottom ones.

It is also the case that the best and brightest have never had it good as the present with foreign multinationals and premium domestic firms vying with each other for them. Thus, it is clear that the Indian Education sector has come a long way since the earlier decades where even top-tier colleges used to be mostly recruiting grounds for PSUs or Public Sector Undertakings and a few premium firms.

Indeed, since the Indian economy was liberalized and opened up to foreign investors, there has been a steady evolution in the way Indian students are perceived both internationally as well as domestically.

Perhaps the most important consequence of liberalization has been the development of the NITs and other second-tier institutes into centers of excellence which means that another round of reforms can help the institutes that are further down the rankings to attract the recruiters.

Indeed, if not anything else, if the Indian Government undertakes another reform of the education sector, then there would be much scope for such institutes and their students to be placed before graduation.

Implications for Aspiring Students and Graduates

Thus, if you are a student who is entering the job market or an aspiring graduate who is about to embark on higher education, the implications are clear and they are that you need to ensure that you get into a good institute that is worthy of the time and effort and more importantly, the money that you spend on your education.

While this creates pressure for you to strive to stand out, you need to remember that excellence comes only through hard work and due diligence and hence, you need to know that there are no shortcuts to success.

Moreover, you must be prepared to burn the midnight oil once you start your degree so that the chances of you bagging a good job increase. Indeed, be ready for the grind and do not let your focus waver and your aims diluted from the ultimate goal of graduating with a good job offer.

Also, ensure that your soft skills are up to the mark as far as recruiters are concerned and we suggest enrolling in courses that enhance your soft skills as well as learn a foreign language such as French or Mandarin to increase your chances of being placed globally.

No Room for Complacency

On the other hand, the fact that the best and the brightest across Indian Campuses are being wooed should make neither the campuses nor the students waiting in the wings complacent needs to be mentioned as well, for instance, there are many campuses in India that have fallen further in the rankings since they did not upgrade their infrastructure or their facilities once they saw that recruiters were flocking to them initially.

In other words, there is no room for taking it easy even for the best campuses since one never knows when the next recession might strike or when recruiters would choose other campuses instead.

Given the fact that recruiters go by past experience as well as rankings published by reputed agencies, it is incumbent upon the campuses to develop an extensive Alumni network that would vouch for them as well as ensure that they score well on the parameters on the basis of which the rankings are published.

Moreover, it is also the case that the government strives to develop the education sector by making it more market-friendly in addition to not losing the aim of assisting those that need assistance in the form of loans and funds.

Conclusion

In other words, the government has a balancing act to do when it sets aside funds for the education sector and this can take the form of keeping an eye on what global ranking and research firms favor when they rank institutes and at the same time, ensure that needy and less privileged students are provided the necessary assistance.

To conclude, there is a need for concerted action by all stakeholders so that the future of the Indian Campuses remains bright and that the best and the brightest are rewarded for their efforts.

Indeed, the situation now is such that in b-school and engineering campuses, the fight is on for which company gets the day zero slot as that company would have access to the best talent. Often, we read about how Facebook or Google has hired a yet to graduate student for annual salaries that make one’s head reel. This is the direct result for the need of these and other companies to get the best possible talent.

Of course, with the onset of the global economic crisis, it was reported that millions of people were thrown out of their jobs including a hundred thousand well-paid Wall Street employees. This has somewhat leveled the playing field as these out of job workers jostle with the fresh graduates for employment.

However, global multinationals are yet to hunker down on their hiring strategies, as they want graduates from Asian business and engineering schools for their operations here and in the United States. The reasoning behind this is that the linkage between brainpower and corporate success has been proved repeatedly and hence, the perceptions of the multinationals that the best brains are to be found in these countries. This has made the business school graduates from countries like India much sought after. The moot point here is that the combination of skill, training, aptitude, and motivation is what sets apart the graduates from these countries from the West.

This situation has become worrisome for domestic companies that find themselves in later day slots on graduate schools’ placement sessions. Of course, they have not given up entirely since the labor pool is so large that it can provide enough employees for any number of employers. Though we have discussed the positive aspects of the war for talent, it needs to be mentioned that concerns over employability of the graduates or their suitability for jobs have been raised by many companies. Which means that the graduates in the workforce who are employable and who have the traits discussed above are at a premium when compared to other graduates? This is the real war for talent, which can be rephrased as the war for the creme-de-la-creme of the available talent.

Finally, with globalization of the world economy, talent need not be hired from the domestic market alone and this is another factor that is contributing to the war for talent.

In other words, the various aspects described here are the business imperatives that are driving this phenomenon. The ones who are laughing all the way to the bank are those graduates who have invested in themselves and acquired the necessary traits to perform in a global economy.

In this write up we try to unravel some of those myths and solutions of the same.

• Myth 1 – Paying higher compared to Rival Firms will stop the Employee from Leaving: Offering more compensations than rivals or above industry standard will prevent employees from leaving and will also attract the best talent.

  Reality: Paying higher than rival firms may help to a certain extent in retaining your employees. It may also help you poach certain employees from your rivals but in the long run, money fails to motivate people. Money is a hygiene factor; its absence may be a de-motivating factor but presence surely cannot be motivating for long.

  Solution: It is the day to day work, organizational culture and career progression that motivates people more on a daily basis. Analyze each employee on what motivates whom and try to align their career interests with their growth in the organization.

• Myth 2 – Rewards and Incentives only Motivate People: The first myth that we discuss here is that its rewards and incentives only that motivates people to give their hundred percent and work more productively. Consequently it’s the rewards and incentives that is at the focus of HR people.

  Reality: It is the attributes and the culture of the organization that is most likely to motivate people to work better and be happy with their jobs. Leadership and job empowerment are other factors that contribute to that happiness of employees.

  Solution: Work on making the organization a better place in terms of enriching the culture, improving senior junior relationships and of course laying due emphasis on how the employees are being compensated.

• Myth 3 – Employee Engagement is Useless: In industries where the attrition rate is low there is a common feeling prevalent that employee engagement programs are of no benefit. Further there is also a feeling that employee engagement helps only the employees and not the organization.

  Reality: There is no direct connection between levels of attrition and employee engagement. In fact employees who are engaged well are more productive and take ownership of their work. Since organizations about people, well engagement not only improves employee performance but also organizational or corporate performance. According to one recent research engaged employees perform 22 percent better, have lesser rates of absenteeism, and produce greater customer satisfactions.

  Solution: Customize engagement strategy for each employee and show the connection between employees work commitment and organizational success. Improvise key drivers such as manager’s expertise and future career opportunities and development.

• Myth 4 – Low Growth Periods do not require Employee Engagement: Organizations typically believe that low growth is an industry wise phenomenon and does not demand employee engagement. Employees are naturally left with lesser options to switch jobs.

  Reality: In absence of employee engagement the organizations stands at the risk of losing projects in hand. Continued absence of employee engagement may in fact de-motivate an employee to contribute his best.

  Solution: Employee engagement is critically required to retain and polish talent that is essential for future growth and opportunities.

They is an ever increasing emphasis on developing training and development strategies in organizations. When such a strategy is developed and put in place, it is then called a talent marketplace. The purpose is to align people skills and extensive knowledge with the task at hand.

American Express and IBM are two very good examples of organizations that implement a talent marketplace strategy. The most productive employees are allowed to choose projects and assignments that are most suitable to their area of expertise.

Not many companies like the ones above mentioned are able to harness people skills in an effective way. Organizations in the name of talent management pay far more attention to searching for and recruiting people from outside. Little emphasis is laid on locating talent within. Even the work experience for such people is not enriching that helps them to feed and develop their expertise. This is in fact how most organization loose talent to rival organizations.

In the current business scenario it’s your intangible assets like people skills, people perceptions or reputation and relationships that count more than your tangible assets like the plant the machinery. More than anything else talent mobilization helps you unleash the power of people you have onboard. Providing them more opportunities to grow themselves and find work and skills that help them realize their potential counts far more than simply engaging them in repetitive jobs.

Talent deployment is another factor that needs to be taken care of well. Organizations have to be flexible in talent deployment across the length and breadth of their structure. Value creating initiatives need to be developed on a war footing in any organization if it wants to survive in the long run and therefore the need to developing talent.

In talent marketplace it is the internal talent mobilization that is the keyword. By mobilizing talent internally, organizations are offering freedom to their managers to use talent from across the length and breadth of organization for success. This also acts to increase the ownership of employees towards their work and get work done more effectively.

Hindrances to Talent Marketplace: Typically most organizations are structured such that managers find it difficult to locate a single individual from among a company’s talented workers for a single job.

The reason – companies are not prepared or flexible enough to accommodate anything that is new and seeks time. Again most of the companies spend lots of resources improving the quality of line staff. They are better off spending resources developing people for moving up the line management ladder. Formal job-rotation and career development policies are given precedence and the same organization gets stuck when a situation demands a cross job rotation.

The ‘push resources’ strategy of the conventional models may not survive long enough considering the inefficiencies involved. ‘Pull talent and knowledge’ on the other hand is gaining more weight in an era where uncertainty in business looms large.

Talent management systems also referred to as applicant tracking system (ATS) can either be a standalone application or embedded as part of the ERP and other HRMS system. Whereas as applicant tracking system or ATS is software typically meant to handle the recruitment needs, a talent management system or TMS may be a suite of various coherent or disparate modules that covers diverse areas rather than just one. Both are an important feature of a large number of organizations these days.

Applicant tracking system is a regular feature of all HRMS software of many large and small organizations globally. The software allows for tracking recruitment needs. This may include the database of CV’s received, shortlisted, reasons for rejection, list of interviewees, and finally those selected. ATS thus acts as a central location and database for an organization’s recruitment needs. They are developed and designed to assist organizations in better resume management. Major recruitment portals like Naukri.com, monster.com etc have tie ups with ATS software providers for support and data migration.

The software exists as a standalone module in small organizations where it takes care of their recruitment needs or it may be integrated into other HRMS in large corporations. The software is currently entering into small and medium enterprises by software as a service offerings (SaaS) also called as open source.

In organizations talent management system solutions typically take care of the following:

• Performance Management
• Goal Management
• Talent acquisition
• Learning management
• Succession planning
• Learning management
• Compensation management

The role is thus wide and farfetched compared to the Applicant tracking system (ATS). Both are however used interchangeably. Nowadays however its talent acquisition and performance management that seems to have gained more weight in the talent management market. The focus is now more on developing integrated talent management systems.

The problem with talent management system may be that of integrating talent management systems with other HRMS applications or software. Many vendors have so far promised varying degrees of integration of with other enterprise management software, the credibility of which still remains questionable. Many vendors also nowadays offer certifications for their claims.

Like ATS, talent management systems also became popular through the channel of software as a service (SaaS), earlier however these were typically delivered through the standard applicant service provider (ASP) delivery model.

As Steven Hankin of Mckinsey and co. described it aptly as a war for talent, lots of vendors are entering the domain of talent management to assist and integrate the same with their strategic human resource applications. Though SaaS model is affordable and less costly other channels are equally lucrative and offer more competitive avenues.

Formulation of a talent management strategy is the responsibility of the HR function. This is often done in consultation with the business function. Be it talent mapping and planning or performance, recruitment and retention the human resource professionals of the day are seeking out ways to streamline and integrate their functions with the broader business functions.

In Aditya Birla group, for example there is huge dearth of leadership positions at the top. The company is expanding globally and at a rate faster than it can grow its human capital. This has lead to talent deficit and this is common in many organizations. The problem requires a comprehensive set of solutions.

Again in the same organization as mentioned above, people are empowered very early in their careers to give them more responsibilities and build more competencies in employees. This enables to develop high potential personnel. The organization runs an internal programme IDventure where they promote entrepreneurship. You have an idea; you come forward, share and develop a comprehensive business plan. The best plan receives a support from the organization!

Needless to mention now, organizations require an integrated approach to talent management. There is a need to strategize in HR functions to enable and support the business functions. Some strategies in this direction could be:

• Aligning Business strategies with the HR strategies: Business HR is one function that is developing fast as part of the human resource department. The person is responsible for ensuring a smooth relationship between business and HR functions. They work with business heads to develop people strategies to support both short term and long term business objectives.

• Performance Planning and Evaluation: An integrated HR approach means that are uniform and standard procedures for employee performance evaluation and compensation, up and down the organization. Performance is linked to growth and the process adds value for employees to evaluate their work on their own. Indian digital disk giant Moser Baer employs such process.

• Strategic Manpower Planning: HR and Business function are interrelated. None can exist without the other. HR functions need to work in collaboration to assess current and future manpower requirements are plan for the same. They need to strategize on the approximate manpower requirements, the relevant skills and educational qualification, compensation and the like. This has to happen well in advance. Recruitment itself means a host of other activities like training and development, compensation, induction and orientation etc.

• Mapping your Talent: An ever increasing emphasis is being laid on identifying the top performing and talented employees to think of ways to develop, nurture and retain them. Further organizations also like to keep skill inventories for contingencies. As organizations realize the skills and abilities of individuals, they can then be more focused on devising means and strategies to attract, develop and retain these people.