The positive upturn in the economy is significantly impacting the discussion of talent in business. The war for talent is back with a vengeance, but companies must focus on maximising and protecting their own internal talent as well as bringing in the right external talent. The business case for this is clear, as is the need for organisations to do it. Talent management is now a key focus for many organisations, but creating great talent management practices starts from within.
Why is this important?
Finding and retaining key talent is a major business challenge
Since the economy swung upwards in 2013, many organisations are now finding it a challenge to both find and attract key talent, but also to identify and retain the key talent they already have.
Resourcing and talent planning research by CIPD in June 2013 headlined with ‘the war for talent increases threefold as labour turnover slows down’. It concluded that ‘the most common approaches for addressing recruitment difficulties were to up-skill existing employees for hard to recruit for positions, and to recruit candidates from a different sector’.
Leveraging internal talent becomes more critical as war for external intensifies
Not only is the war for talent back, but it is escalating and becoming even more difficult to source those key positions externally. Leveraging your internal talent with targeted internal recruitment and development programmes has never been more important.
Research published in the Harvard Business Review shows this is a global picture, across all sectors and all geographies, albeit with some variations.
What should you do?
In our view, creating great talent management practices must start from within, maximising and protecting their own internal talent as well as bringing in the right external talent. Doing this successfully requires the following five strategies:
1. Recognise the role of your internal talent
Definitions of ‘talent’ vary across the globe. Are you talking about all employees or a selected subset such as executives and senior leaders, high performers, maybe graduate in-take and fast-track members? Or in some cases, a new concept, critical talent roles? Start by clarifying who you mean by talent and how you will identify them.
2. Link your internal and external talent sourcing initiatives
Historically, talent related functions such as recruitment, learning & development and performance and succession have been siloed in the way they work. That has made linking internal and external talent sourcing initiatives harder than it should be.
There is a strong business case for sourcing candidates internally, according to the Saratoga Institute, which estimates hiring externally costs on average 1.7 times as much more than filling positions internally.
3. Create an ‘engine room to develop internal talent
Learning and development is one of the central elements of the employee value proposition (for attracting and retaining key talent) as well as being the central pillar of talent development. So, make L&D the engine room of talent management. Whether you want to onboard new team members faster, raise current business productivity and performance, fill current skills gaps or develop strategic capabilities for the future – learning is key.
4. Create a clearly defined talent retention strategy
There is not much point in being great at talent acquisition or talent development, if you are not great at talent retention. Retaining key talent is one of the clearest returns on investment you can show related to your people, but money is only one of the factors at play here. For example, staff leaving can negatively impact your current performance, as well as reduce your current skilled capacity for work.
To retain your best people, you have to know who they are and to know why they might leave.
5. Collect the right data to support your talent development
Implicit to raising standards in talent sourcing, management and retention is having good data on the people concerned and their performance in the business, and being able to use it within the context of the business.
But reporting from talent and HR systems is notoriously poor – especially for the business itself. Improving this requires both an improvement in the accuracy of the data itself as well as better ways of presenting it. That doesn’t just mean in the HR and talent systems, it also means being able to contextually embed talent related data within work systems and vice versa. For example, being able to embed performance support and learning around sales and customer service processes.
Recommended Fosway Reading
For further Fosway analysis relating to this topic, please see the following papers or resources:
• Fosway Core Insights: Talent Market Consolidation
• Raising The Talent Bar
• Learning For Talent: Why Learning Is The Engine Room Of Talent Management
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