Five Building Blocks of an Integrated Talent Management System
What is an integrated talent management?
Integrated talent management (ITM) refers to the management of traditional HR sub- functions (recruitment and selection, workforce planning, performance management, learning and development, reward and recognition and succession planning) in an integrated fashion to strategically leverage talent. An integrated talent management strategy must be aligned with the business strategy of the organisation otherwise it will add no value to the business, regardless of how good the strategy is. The cornerstone of an integrated Talent Management (ITM) System is a robust competency model that guides talent management strategy and tactics.
There are five building blocks that make up an ITM system, i.e. Philosophy of Talent Management, Talent Management Processes, Integrated Talent Management Information System, Governance Structure, and Talent Management Metrics.
1. Talent Management Philosophy
Talent Management Philosophy refers to a collective understanding of what is “talent management” and also the school of thought (pertaining to talent management) the management team has adopted. We learn from organisational psychology that for any organisational change effort to be successful, it must be supported by the top management of the organization. It is therefore important that an acknowledgement of the challenges faced by the organisation from a talent perspective, and how the organization intends to respond to the challenges is expressed in a policy statement of the organisation. The leadership of the organisation must agree on the guiding principles that will be applied to manage talent in the organisation.
2. Talent Management Processes
Processes are used as vehicles to transform something from one form to another form. HR Practitioners should shift their mindsets from a silo based mentality of managing HR sub-functions to a mindset of using these functions as a vehicle to build an organisational capability to attract, engage, and retain competent and committed employees. Each process functions as a means to an end and not an end in itself. It is critical for owners of each process to understand the outputs of these collective processes, otherwise the benefits of an integrated system will not be realised. The following is a brief discussion of how each process contributes to building this organisational capability (strategically leveraging talent).
2.1 Talent acquisition
The Talent Acquisition Process serves as a lever to pull talent from the external and the internal talent pool, but it does not lose sight of the over-arching objectives of the collective processes (talent acquisition, talent engagement, talent development and talent retention). First and foremost, the Talent Acquisition Specialist (TAS) must understand the business strategy and translate it into talent outcomes (the quality and quantity of talent) for the short term (1 year) and the long term (3-5 years). The next step will entail establishing if the required talent will be available (internally or externally) when it is needed. Decisions will be made as to which talent to buy (attract and source externally) and which one to build (develop). The TAS will not be able to make these decisions (buy or build) if he/she does not understand the depth and breadth of internal talent and also what talent is available in the labour market.
If the organisation has the luxury of time and has identified potential talent to be developed, the Training and Development Lever will be engaged to start the process of preparing the identified talent for the future roles. In a case where a decision is made to buy talent for current and future roles, the TAS will embark on a recruitment drive to fill current vacant positions and identify talent earmarked for future roles in the organisation. A talent bank will be established where potential external candidates’ names to fill these future roles are recorded.
The TAS will not be able to discharge their duties if they don’t have a “Workforce Plan” and don’t know what the organisation’s Employee Value Proposition (EVP) is. These two documents will guide the Talent Acquisition Strategy and the tactics to implement the strategy. The outputs from this process (Talent Acquisition) will flow into the On-boarding, learning and development, and talent engagement processes. The EVP commits the organisation on what value employees will gain from working for the organisation, hence it is incumbent on the TAS and other role players like HR Business Partners, HR administrators, Line Management, Learning and Development Practioners, and Compensation and Benefits Practitioners to make this proposition a reality.
2.2 Talent engagement
Talent engagement is the extent to which employees commit to something or someone in their organisation and how hard they work and how long they stay as a result of that commitment (Corporate Executive Board, 2005). Employee engagement comes into effect from the point when an employee is on-boarded. The purpose of an on-boarding process is not just about an employee understanding the policies of the organisation and preparing their workstations before they join. The purpose of the onboarding process is to enable the new recruit to add value to the company in a short space of time by coaching and providing them with all the resources they need to feel engaged and valued in the organisation.
Talent Acquisition Specialists have a responsibility to ensure that they recruit the right person for the right job. If the new recruit does not fit the job profile and the culture of the organisation, the talent engagement efforts will not positively influence the new recruit’s engagement level. Learning and Development as a function must also understand the competency gaps identified from the new recruits during the selection process so that opportunities for competency development are immediately created and actioned. Other levers that are used to engage employees include Performance Management, Succession Planning, Recognition and Reward and Leadership Quality.
2.3 Talent development
The talent development strategy must be aligned with the business strategy. The Training and Development Practitioner (TDP) must translate the business strategy into Talent Development outcomes. The TDP should understand what organisational capabilities related to competencies (knowledge, skills, behavioural) must be developed to enable the organisation to execute its strategy. This does not mean that employees who have competency gaps related to their current positions are ignored, they too must be developed. Another source that feeds into the talent development space is the career development needs of employees, which must also be factored into the training and development strategy. The career aspirations of employees must be aligned with the long term plans of the organisation which are reflected in the career paths and the organisational structures of the organisation. You would not want to spend resources developing employees in a particular direction knowing that in the medium/long term, such skills will not be needed in the organisation.
What are the inputs and outputs of this process?
There are three inputs (HR functions) that feed into the Talent Development Process, i.e. performance management, succession planning and workforce planning. At the end of the performance appraisal period, the competency gaps of the relevant employees are collated and fed into the Learning and Development platform. The potential successors’ development needs are also transferred to the Learning and Development platform. The LDP is a critical role player in ensuring that talent is developed for future positions. It is needless to say that the LDP should understand the organisation’s workforce plan so that he/she, in conjunction with line management sets a strategy in place to develop future talent.
2.4 Talent retention
The employee engagement index (a measure of employee engagement levels) serves as a leading indicator for retention. There seems to be an inverse relationship between employee engagement and labour turn over. A decrease in employee engagement scores, results in an increase in labour turnover rate if no action is taken to improve the employee engagement scores. It is important that your employee engagement initiatives are targeting what is most important for the employees you want to retain. Retention risk assessments must be conducted with all employees (those you want to keep) in critical positions and the High Potential Employees (HIPO). If you know what risk you have of losing them, you will develop a strategy to keep them and those that you can’t keep, a backup plan must be put in place so that you have cover when they leave. Talent retention is not a once off intervention; it is an ongoing process that aims to influence how employees feel about their jobs, managers, colleagues, and the organisation. The quality of leadership has the most influence on the commitment level of employees in the organisation, hence, organisations must invest resources to constantly improve the quality of their leaders.
To retain talent, an employer must understand what employees value, and align its practices with the EVP. A culture of “Employee Value ” where everyone in the organisation, from an employee on the shop floor (quality of team members) to the Chief Executive Officer understands and contributes to an environment where the organisation’s EVP becomes a reality.
3. Integrated Talent Management Information System
Different HR sub-functions (recruitment and selection, performance management, succession planning, training and development, reward and recognition) are applied in various processes of talent management and each HR sub-function generates data that are used for managing talent. An integrated Talent Management System enables users to pull all this information (from different HR sub-functions) together to assist decision makers to understand the depth and breadth of talent at their disposal and talent risks that they should mitigate. There are various talent management information systems available in the market. Some are offered as part of the Enterprise Resource Planning, and some are standalone systems.
4. Talent Review Committees
Talent management is the responsibility of line management and HR supports line by making the tools available and also giving them training and guidance on how to apply the tools. Talent management should be a standard agenda item in the Board and Executive Committee (EXCO) meetings. Talent Review Committee’s (TRC) function is to keep the focus on talent management alive, and to understand the talent risks the organisation is facing and develop and implement a risk mitigation strategy. Governance structures take different forms depending on the size and complexity of the organisation. For an example, a global organisation will have a TRC at a corporate level focusing on the senior executive bench strength, a number of TRCs per division, another TRC which comprises divisional representatives that focuses across divisions and functional TRCs. These committees will focus on different levels and different types of critical positions talent pools.
5. Talent Management Metrics
The old management adage popularised by Professor Deming that says “you can’t manage what you don’t measure” also applies to managing talent in organisations. There are a myriad of measures that one can use to measure the impact of talent management initiatives, but before deciding on measures to use, you need to establish from your clients (line management) which measures matter most for them. Internally, you will also want to measure the outputs per process so that you can determine if all the processes are adding value to the ultimate outcome (business performance). There are two types of indicators that must be used when measuring the outcomes of talent management initiatives, i.e. lagging and leading indicators. Leading indicators (e.g. Employee engagement scores) predict the outcome, while lagging indicators are historical in nature (e.g. labour turnover rate). As far as talent management is concerned, the measures must help you answer the following questions:
1. What is the breadth of our talent ( Bench strength/succession cover for critical positions)?
2. What is the depth of our talent ( Readiness levels/ percentage of employees who are ready now, ready in the next year, ready between 1 and 3 years)?
3. What are the retention risks (Percentage of employees in critical positions who may leave in the next year, 2 years, or 3 years; Labour turnover rate of critical talent; employee engagement scores; leadership quality)?
4. Do we attract the right talent (Number of potential candidates per critical vacancy)?
5. Are we developing our own talent (Number of employees with development plans, cross functional moves)?
There are different role players in the whole process of managing talent (from talent acquisition to talent retention) and to make sure that they all function as one team with the same objectives, they must all be measured against the same set of measures.
A framework was presented in this article on how to apply an integrated approach to talent management. There are a lot of frameworks available in literature with varying degrees of complexities. What is important is how you adapt these frameworks to your unique environment.