Human Resources: Executive Summary: Talent Management

Issues relating to talent management are among the primary concerns of U.S. HR executives, found a 2005 survey of 123 U.S. HR executives conducted by Deloitte Research, and understandably so. "Talent will be the defining factor in the future success or failure of U.S. companies ... workers may be the next great profit driver for U.S. industry," opines a Spherion study based on interviews with 502 U.S. senior HR executives and an online survey of nearly 3,000 U.S. workers.

Moreover, employment trends predict that talent management will grow in importance. The same Deloitte survey found that "more than 70 percent of the 123 respondents say incoming workers with inadequate skills pose the greatest threat to business performance over the next three years, followed by Baby Boomer retirement (61 percent), and the inability to retain key talent (55 percent)." Meanwhile, the Spherion survey found that "nearly 40% of workers plan to leave their current jobs in the next year," and though allowing for the possibility of wishful thinking on the part of many respondents hoping to move on, this portends a possible talent crunch accompanied by high turnover costs.

How are U.S. organizations approaching talent management? Many are focusing on high-potential talent. A majority of organizations (58%) have a process in place for identifying high-potential talent, according to the results of the September 2005 High Potential Talent Practitioner Consensus Survey of 96 organizations conducted by the Human Resource Institute with the American Management Association.

However, it is rare for these organizations to assess potential across all levels of employees, found the same survey. Only 12.6% extended examination to entry-level employees; 17.6% looked at supervisors for signs of high potential; 37.0% examined midlevel managers; and 32.8% began searching for high-potential talent only among those ranking at vice president or above.

This indicates that organizations can improve their talent management processes by broadening their focus. Some experts argue that companies that describe people as important assets are not living up to their own rhetoric if they practice talent management only on obviously high-potential employees. Deloitte's Robin Athey and Nick van Dam advise talent management practitioners to focus on "the overlooked people who create the value that leads to growth - educators, researchers, customer service professionals - whoever does the work for which the market rewards innovation and differentiation." The Institute of Management concurs, defining talent management (in Management-Issues' words) as "a means of identifying, releasing, and guiding untapped potential in people. This implies not only being able to manage those bright high-flyers that are hungry for success, but also adopting a flexible and developmental approach to all members of staff."

Where should companies begin with talent management? The Harvard Business Review advocates identifying "A positions," those jobs that disproportionately affect a company's ability to execute its strategy and that can reveal a wide variability in the quality of the work produced, depending upon who is in those positions. Employers should focus on identifying these strategic positions first, then use performance criteria so that A positions are staffed with A players, and B players occupying A positions receive the coaching necessary to become A players.

Helping employees become A players calls for training and development, and indeed, the American Society for Training and Development (ASTD) has found that talent management is tightly integrated with training and development in highly effective organizations. Training and development correlates with other talent management objectives, such as retention. The ASTD's 2005 survey of its 29 BEST award (the acronym stands for Building talent, Enterprise-wide, Supported by the organization's leaders, fostering a Thorough learning culture) winners found that "increases in retention and employee satisfaction were most often attributed to executive, management, and career development programs, with increasing focus on entry-level employees and new hires."

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The Institute for Corporate Productivity (i4cp, inc.) improves corporate productivity through a combination of research, community, tools and technology focused on the management of human capital. With more than 100 leading organizations as members, including many of the best-known companies in the world, i4cp draws upon one of the industry’s largest and most-experienced research teams and Executives-in-Residence to produce more than 10,000 pages annually of rapid, reliable and respected research and analysis surrounding all facets of the management of people in organizations. Additionally, i4cp identifies and analyzes the upcoming major issues and future trends that are expected to influence workforce productivity and provides member clients with tools and technology to execute leading-edge strategies and "next" practices on these issues and trends. i4cp is a for-profit company with offices in St. Petersburg, Florida.