Military talent management

SERGEANTS MAJOR ACADEMY Department of Professional Studies

Lesson S301 Human Resource Management Processes and Systems

Reading A

Talent Management Chapter 9

Trends and Future of Talent Management

CHAPTER 9

CONTENTS 9.1. Introduction To Talent Management ................................................ 212

9.2. Why Does A Company Need Talent Management? ......................... 214

9.3. Importance of Talent Management .................................................. 217

9.4. Changing Trend In Talent Management ........................................... 218

9.5. Challenges And Opportunities Faced By Talent Management .......... 221

9.6. Next Generation of Talent Management .......................................... 223

9.7. Talent Management In Accomplishing Competitive Advantage ........ 226

9.8. The War For Talent .......................................................................... 228

9.9. Recruitment And Retention ............................................................. 229

9.10. Conclusion ................................................................................... 230

9.11. Case Study: Best HR Practices Of International Large Companies ......................................................................... 231

References ............................................................................................. 240

C o p y r i g h t 2 0 1 9 . S o c i e t y P u b l i s h i n g .

A l l r i g h t s r e s e r v e d . M a y n o t b e r e p r o d u c e d i n a n y f o r m w i t h o u t p e r m i s s i o n f r o m t h e p u b l i s h e r , e x c e p t f a i r u s e s p e r m i t t e d u n d e r U . S . o r a p p l i c a b l e c o p y r i g h t l a w .

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As there is a growing recognition of the importance of human resources in the or- ganizations by the employers, they have started to invest more time and money on the talent management departments of their enterprises. The trends in the talent management field have been growing and changing with a rapid pace, in the recent past years, the managers have started to employ better methods to look after the employees and their skill sets. This chapter brings the focus of the readers to the various trends that have been developing in the organizations and the future of talent management in the corporate setup.

9.1. INTRODUCTION TO TALENT MANAGEMENT Talent management is the most important topic in current times and holds a very important position in an organizational set up. The scope of human resources department in identifying high performing employees and retaining them with the organization is known as talent management. Money is not the only reason people join a company. Over the time, they also seek appraisal, incentives and extra income. Here comes the role of talent management team. Talent management aims to increase the performance of all the employees in a company by motivating and engaging them to get better output.

An experienced employee is an asset to the company; if they leave the organization both has to take a hit which can be controlled by retention of that employee. This is why talent management is important. The team knows which employee is important for the organization and ensures that they stay with the company for a longer time. With this action, companies can get a sustainable advantage of superseding their competitors with highly efficient staff.

Talent management is the set up, comprising human resources department to manage their assets specially the employees. The usage of human resource through proper planning to improve the business values, to reach out the goals, is called talent management. Starting from recruitment, development, appraisals, including retention every activity is required to be performed with a strategic planning and appropriate workforce.

For an outstanding result, the talent management should be in harmony with the business strategy as they both are very which inter connected. If the talent management team and business are not aligned the company will not be able to achieve their goal and will lose the market. Every company should have an efficient team of human resources to recruit hard working people and talent management team should be efficient enough to handle those employees.

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Finding hard working and good people with commitment towards work and ability to handle pressure is not an easy task, so a company should never let the employees go so easily. Every company wants to get the competitor’s employee; but it is not as easy as it may sound.

A hard-working employee is always required by the competitor’s company and they would always want to get them either by offering handsome salary or lucrative deals which an employee might fall an easy prey. To this, talent management should always try to get such employees stay with the company. If a company takes care of their employee, people are either satisfied, if not they start looking for better opportunities.

Diving a little to the history of how the talent management as a separate management branch was discovered. The credit would go to McKinsey & Co (1997) and (1998), was officially penned down. In the latter half of the 2000s it become increasingly popular despite the fact that it is still considered closely associated with the human resources activities. There are no boundaries for efficient people; they have always risen above the limits.

Talent management is not limited to a specific team or an activity that should be performed in collaboration with human resources department; rather managers in line should work on the developing skills of their subordinates. A talent management system has to be implemented throughout the organization and cannot be left out only up to the human resources department to attract and retain employee. It has to apply through all levels in an organization.

However, there has been observed that companies spend lots of effort in attracting people but do not spend much time in their retention and overall departments. This is a noticeable point which they tend to ignore because if the employees are not given attention after joining an organization, they feel left out and unwanted. Gradually they lose their interest in the company and start looking for new options of job.

Performance and potential are the two major factors through which an employee can be assessed. An employee’s performance can be assessed on the basis of work he is performing through key result area (KRA) and according to his/her potential. Primarily, assessment of an employee’s potential is important because depending on the current performance the future expectation in completing their targets can be set. Talent management decisions are often competency based as well, wherein along with the organizational competencies, positional competency is also important.

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The competency level includes various parameters like knowledge, experience and skills in addition to professional attitude towards company’s target. Few organizations also offer a talent market place where instead of forcing employees to do work as given by the company, they can choose the work themselves. It has been found to be productive and attainment of target is much easier in such scenario. However, it has its own limitations too.

Conceding the fact, that this type of market place option is not 100% successful because there is no fixed strategy on completion of the chosen work and an employee might not do the work according to business ethics.

The idea behind promoting talent management is due to its vast line of action which starts from hiring to developing hidden ability of the employee and boost their confidence level by nurturing them. Ironically, if employees think that the company is not offering them what they deserve, they quit. With the infinite number of job options available in the market, people are not worried about getting a new job. In fact, if an employee leaves it is more challenging for a company to find their best replacement, which needs time and energy and may result in delayed deliverance of the project also.

This has intensified the situation for the organization who can hire best people from the industry, but their retention and making them comfortable with the organizational culture has become the biggest challenge. Few organizations found the concept of talent management unethical; may be then, when they are at the losing end or they lose their high worth employees. Nevertheless, in the growing slit throat market the working pattern of talent management sounds really fair as everybody seeks their company growth. Nonetheless, it is not a charity but a quest of survival.

9.2. WHY DOES A COMPANY NEED TALENT MAN- AGEMENT? One might wonder! There are so many people out there who are more hard working than the ones already working in the organization, then why do we need to put efforts in retaining them? Or why can’t we sack the employees who underperform and hire new employee? The answer to this could be, we know that it’s the people who take the organization to next people.

To achieve the target set by the organization, every time they cannot rely on new employees; companies need to have experienced and trusted people who can manage the challenges on the way of its execution and deal with the related people. An organization is a profit earning entity and not an institute

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who would spare their money on underperforming employee or an amateur. Here the talent management system comes in the play, they scrutinize the new hiring, at the same time they keep a track of employee’s performance and recognizes the people who can accompany the organization in achieving the goals.

Talent management can be considered as big as human resources department in any organization. Different organizations have the strength and capable team according to the organization size to use talent management for their benefits. The talent management team can conduct survey, interview or may be group discussion to find out about employees working experience and how they are satisfied with their related jobs, how well they understand the organizational goals.

Such an activity also helps in identifying the potential employees and mapping them for the future investments of the company. There are various other reasons why it is important to have a talent management team in an organization namely- choosing right person at right place, timely rotation of employee, hiring the right people, professional development of employee, retaining talent and understanding employees. Detailed description is as mentioned below:

• Right person at right place: selecting a person is one thing but placing him at the right job profile is very important. It is of utmost importance that a person(s) professional qualification is scrutinized and well thought off before they are hired and ensured that they fit right in the position. It is only through the proper ascertainment of skills, strength and experience any employee can be fitted well in a position to deliver the best. Somebody who does not possess the quality to hold the position is a failure for the organization.

• Timely rotation of employee: If the organization has realized that an employee is not fit for the position he is at, it is important to rotate his designation according to the qualification and not as required by the organization. Importantly, from the perspective of organization and employee both, right person can be beneficial for the company and will also increase the productivity of employee.

However, an analysis of performance data can help in identifying the situation like this. Moreover, it increases the satisfaction level of employee as well.

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• Hiring the right people: How does a company progress? What are the strengths of a company? Where does the income generated from? These questions might look different with the words used but the answer to them is a single word and that is “employee.”

A company can make progress with its employees, the strength of every company is its employees, and it is the employees who are the income generators. The quality of every organization is the workforce they have and to have better hiring it is important to have better people to hire the employee. Primarily, that is one of the important reason talent management has become integral part of human resource processes.

• Professional development of employee: Organizations are of the opinion to make their employees confident of handling various projects individually. It is beneficial for the growth of organization and employee both. When an organization realizes the potential employee, they find it beneficial to invest in their professional development as well.

There are many organizations who conduct management programs on their own expenses and on completion they transfer the employees to related departments. The investment is not solely done on the employee rather it is for the enhancement of their growth, succession, performance and management skills which helps in goal achievement.

• Retaining talent: Foundation of every organization is the tenured employee. Retaining talented people of the organization is very important to have constant place in the market. It can certainly grow but cannot face a dip. With the growing global economy, attrition and retention have been simultaneously working at a faster pace.

No organization has been untouched with these aspects; every one of them is facing this issue. Companies are putting are efforts in retaining the top employees so that they do not rule out the leadership in market. Succession and employee’s growth are important factors through which employees can be retained and additionally timely rewards, incentives schemes are few others.

• Understanding employees: Analysis of data shows a clear picture on the performance chart of an organization. At the same time, it also highlights that how employees have proven themselves beneficial in achieving the company’s target as well. It is important to understand the need and expectation of

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employees and accordingly they can be nurtured and motivated. Since everyone seeks for a professional going career it is essential to understand their requirements in terms of monetary and progression.

9.3. IMPORTANCE OF TALENT MANAGEMENT Selecting an employee and their efficient placement is very important. Though it depends on the qualification and experience they possess to deliver the best in the role offered. It is to be remembered that a wrong placement of employee can double the problem, as it will hit the task in non-completion, wastage of time, money and resources. Irrespective of how genius and productive an employee could be, but a wrong placement will only worsen the situation.

The entire process of talent management takes a complete set back if the best talent is not chosen for the organization. Apart from a strong talent management system, culture of the organization also determines their rating suitability of the work place. Moreover, if the employees are satisfied about the talent management system of their organization, they become more confident and understand that they will be given importance and weight age depending on their working data.

The selection of people with appropriate skills required for the organization and utilizing their potentials to the fullest is the work of talent management. Starting from attractive pay outs, rewards and recognition, timely incentives, compensation is also considered to be a prime factor in talent management. This comes only when the right people for the designation have been selected and the monetary benefits work on the competitive facet which compels employee to earn more by performing extra ordinarily.

More importantly, in today’s time people are of the mindset that they should deliver less and get more. This more can go up to the benefits of health insurance, reimbursements of unused paid leaves and so on. On the contrary, in the present times, organizations are not bothered of giving extra benefits to their employees but want the maximum output from them.

However, this has to be taken care by talent management that a deserving candidate gets the most in comparison to others, which further helps, in retaining them with the company and encouraging for good performances. The most important functions talent management has to perform are:

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• Increase in the organization’s productivity; • Growth and innovation both for the employees and the

organization; • Employees skill and competency development while ensuring

high performance; • Getting top talents for the industry into the organization and

giving timely benefits; • Recruitment of right person to save time; instead of carrying on

with an unskilled workforce which leads to wastage and delayed in project delivery and can be high at cost.

Poor employee engagement has direct links with retention issues later which can be at cost of the business. Addressing staff and understanding their concerns, challenges they face results in better retention when required and considerate level of motivation and commitment towards work. Until now we have understood that with highly skilled workforce, business can be benefited and a vice versa situation can land the organization in difficult position.

With an ineffective talent management team, the business can suffer in terms of taking more time in completion of task and might involve errors which could be irrecoverable. However, there is always a chance wherein the training can also not help in delivering the project if the employees are not skilled. Hiring skilled employees and boosting up their confidence level both go side by side.

9.4. CHANGING TREND IN TALENT MANAGEMENT Organizations have reported a major area of concern in finding suitable candidates for their organization. By the time people walk out for an interview they expect companies to hire them irrespective of whether they fulfill the requirement of the job or not and train them accordingly. Perhaps it is the most difficult way of hiring because it involves a lot of risk.

It is being observed that once people learn the skill of a particular profession and instead of staying with the company, they start looking for new job opportunities. In today’s time, where the competition is on rise, companies find it difficult to hire people with less qualification and they do not intend to put effort in clearing their basic concept.

Steven Hankin from McKinsey & Company first used the term “War of Talent” in 1997 which highlighted the growing competitive scale for

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recruiting and retaining the talented employees. However, talent poaching is also done by solvent firms who tend to gain more market share. The scarcity of skilled employees is not restricted to starting level but it starts from top to bottom. In the competitive world recruiting right people is as difficult as maintaining company’s place in market.

Every single step is equally challenging and calls for better management skills to follow them. Development, deployment and retaining employees are three major factors that are in high action in almost all the organizations. Primarily, the main objective of talent management is to enable and develop people, as the organization is recognized more by the staff they have.

Talent management is looked upon as an important part of human resources department and growing every day as a discipline. Few trends that have been seen over few years are talent promotion, pool of talent, interconnectivity between technology and talent management and growing population demands more jobs. An elaborated description is mentioned below.

9.4.1. Talent promotion With the skills that matches the requirement of organization a person is hired. When they fit into the skill set bracket; their process of development starts and their evaluation too.

No employee would like to stay on a designation for a longer time. If the talent management finds him/her potential enough to stay with the organization they start putting retention efforts and so as their growth cycle. Empowered employee means empowered organization.

9.4.2. Pool of Talent People say that the world is full of talented pool; they might be true but you cannot hire all the talented people into your organization. Human resources department has to identify who among all the options available is best suitable candidate for their required skills from this pool of talent.

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Figure 9.1: There is a big pool of talent from which the managers can select the talent, and this is increasing in terms of skills.

Source: https://media.defense.gov/2019/ Jul/26/2002163108/600/400/0/190724-N-QL258–0073.JPG

9.4.3. Interconnectivity between Technology and Talent Man- agement Technology has increasingly added comfort to people life. With access to online portals employees can raise their concerns and apply for various beneficial schemes introduced by organization. Same is the case with reporting concern and share feedback about the company.

This activity saves a lot of time both for the employee and the concern talent management department as they do not have to meet them personally, instead can handle the situation through online communication. However, it might differ depending on different situation.

9.4.4. Growing Population Demands More Jobs Increasing population is directly influencing the demand of jobs across the globe. For instance, India has the maximum number of youths, and certainly they need to create more jobs to have everybody working and get them recruited. But how many of them get success in getting a job.

The numbers are limited due to educational qualification, technical knowledge, and skill set. Even in the near future United States of America

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will have shortage of 10 million workers, as suggested by reports.

9.5. CHALLENGES AND OPPORTUNITIES FACED BY TALENT MANAGEMENT There is no deficiency of professionals but there has been a shortfall of talented professionals. This fact has been globally accepted and has emerged as an area of big concern. Every year across the world huge numbers of management students pass out from schools and start looking for job as professionals.

Figure 9.2: Challenges and opportunities that are faced by the talent manage- ment.

This is applicable to other professions too and not only for management. The situation is similar in developed countries as well; as the increasing number of populations the demand for jobs is also increasing every year. The differential gap is not because of the increasing population but the growing gap between new generation and retiring people. A survey suggested that East Asian countries have the maximum number of young people but they lack the requisite quality of education and skill set. This has given birth to demographics challenges which are majorly faced by companies in the present time.

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Demographic challenges are more problematic in global context and simpler in local. Nevertheless, be it a global issue or a local challenge, problems faced by talent management is similar in both the aspects. The details analysis of challenges faced by talent management is namely- recruiting the talent, training and development of talent, retaining talent, developing leadership talent and creating ethical culture. Elaborated version as mentioned below.

9.5.1. Recruiting the Talent The recession in last decade made us witness the biggest economic downturn and job cuts globally. Only those who were the most important to the organization were retained while rests were asked to leave. It happened across all the levels of management in every organization.

The retained employees were considered as those who did not leave the sinking ship and stood with the company in the toughest phase. There is no denial to the fact that recruitment of such talent is necessary by talent management in identifying the people who can be beneficial for the company in its thick and thin.

9.5.2. Training and Development of Talent The decade old economic downturn also highlighted that organizations can focus on newer model of employment like part time jobholders, or job on contractual basis or temporary workers. However, it is challenging to increase their stake in the business and complete the work on time.

9.5.3. Retaining Talent Primarily, the objective of organizations is to achieve their goals. In order to do so the talent management team has to identify which employee to retain and which one must be sacked so that they can get good returns. Though it is in best interest of the organization but every employee thinks of himself as the most talented one among all.

No employee will welcome the decision of retention of their colleague and he/she being sacked on performance grounds. This spreads an uncertainty even among those who have been retained that one day they might also face the same issue. To overcome the situation, it is important to train and invest in the crisis management development of the employee to control retention.

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9.5.4. Developing Leadership Talent Having an effective leader can help any organization to come out of crisis situation, deal unplanned issues with efficiency, set goals and meet them on time efficiently. Talent management identifies the people from within the organization who can stand in critical situation.

9.5.5. Creating Ethical Culture Having a healthy professional environment in an organization is the sole responsibility of talent management because an ethical and cultural ambience creates positivity among the employees. This becomes challenging if different line of managers is not in harmony with their subordinates and the targets are not achieve.

They receive huge amount of pressure from the management which results in disturbing culture as it increases frustration level of the employee.

9.6. NEXT GENERATION OF TALENT MANAGEMENT

Figure 9.3: A layout showing the things that are coming up in talent manage- ment.

The challenges faced by HR department are gaining much attention. Though human resources study has been well acknowledged and duly

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accepted as separate field in academics but its challenges are also gaining attention. Acting as an integral part of every organization, people are hired within the department with utmost care and the expense companies bear on the development of the department is all time high.

The idea behind human resources department is to recruit efficient people at vacant positions. Further the companies might ask for infinite number of activities to be completed by them. On the contrary, talent management system has become more of a boardroom discussion as it demands the employee of this department to be a strategist, recruiter, coach, and a governing authority for the organization.

The next level of talent management is viewed in the light of processes that are attractive and can be applied in the organizations. Companies are aiming to make the best use of different processes of performance, talent management, leadership and recruitment together to gain success. People in today’s time possess all type of information of any topic they may be asked about which in turn works as an asset for the company in the competitive atmosphere.

This has also increased the amount invested by organizations by two third in comparison to the other resources of the company. Talent management has a diverse success future as it is helping organizations in gaining recognition and goals are achievable.

The trends like workforce demographics, clarity in job specification, strategies for recognition and development and training strategies; organization can boast up their skills for future is mentioned below.

9.6.1. Workforce Demographics It has been very well taken, that second to the capital involved in the business, employees are the important resources that has to be taken care of, motivated, and retained. Talent management is expected to have a futuristic view and better understanding of workspace demographics. Main objective of the organizations is to have huge return on investments and it is through improved human resources that the investment can be achieved in high numbers.

Talent management can help in reducing the cost in such cases. Talent management team can do analysis of data in understanding the workforce demographics like gender, age, position, and so on. This analysis of data can help identifying the employees who can be retained in longer run as

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their performance is measured and the generation changes. With constant and regular checks on workforce demographics organization can identify the gaps in talent for the critical positions.

9.6.2. Clarity in job Specification This is increasing with increase in employee’s awareness of what they want from their employers. Employer thrive hard in finding a suitable person for the position, effectively it is important to provide detailed description of job profile to the new recruitment and ensure clarity on the subject matter. Well- defined description only helps in job satisfaction of the employee and high return of productivity.

By a clear explanation of job profile there is more job satisfaction and also it shortlists the right candidate for the profile which saves time. Hence, it makes the recruitment process more straight forward. This is gaining more popularity due to the multiple data analytical tools available for the identification of right talent.

9.6.3. Strategies for Recognition Every management team needs to have a strategy before taking any decision. So, as it is required by talent management is finding future talent, their engagement and rewarding employees. There has been sudden development in shifting of focus from a generalized way of dealing all the employees to personalized dealing of a single employee.

It is a worldwide fact that the pay packages of employees even at a same level differ and they are expected not to be disclosed. This is yet another wonderful management strategy to pay differently depending on the skills of different employees.

9.6.4. Development and Training Strategies The training and development strategies are very important to prepare employees for the future. Talent management teams should organize more such programs which can enhance the development skills of the people in the organization.

Development and training should be on the top most priority list to ensure the competitiveness of organization in the market and high satisfaction level and thirst for progression of the employees. Mentoring, motivational

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and experience developing programs should be implemented as the part of employee’s development.

9.7. TALENT MANAGEMENT IN ACCOMPLISHING COMPETITIVE ADVANTAGE Competitive advantage is a circumstance that puts a company on a much higher position than its rival. The main objective of organization is to achieve the mission and send out a clear indication about the vision of the company. In order to achieve the objective, it is important to understand the resources of the company and make every employee a part of this mission.

Be it the improvement plans of the company or seizing the competitive advantage, the common among both is the denominator which is the employee. It completely depends on the caliber of an employee whether a plan would be successful or a failure. In almost all the company’s payroll department is the highest expense recurring section. Though it is their sole responsibility to make optimum use of monthly investment and minimize the expenditure.

Figure 9.4: The various aspects of talent management for accomplishing com- petitive advantage.

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In order to have a competitive advantage through the human resources department it is important to have differentiating strategic capabilities, identify them and then later find a process of developing those strategies. This process helps human resources department in making impact on organizational strategy and relates it deeply with the talent management.

Talent management needs to be valued for its differentiating strategic capabilities as it offers substantial competitive advantage. Making improvements in organization through talent management practices, it helps improving four major challenging areas which are recruitment, performance and learning, leadership development, and bottom up communications.

9.7.1. Recruitment The first and the foremost step to start on talent management lineup are to understand the practices followed for hiring process. Is the job posted by a company reaching the right candidate? Is the selection process strong enough to estimate the correct value of the vacant position on how important that designation is for the betterment of the company? Do managers have the ample training samples and staff to provide training to new joiners and judge their level of motivation?

Anyone can hire a person but it takes special skill set to get best talent out of the crowd who is suitable for the organization. Competent and motivated hiring is of supreme importance for the organization as it can deliver high compounding dividends in future.

9.7.2. Performance and Learning Those employees without goals are burden on the company whereas those with performance and learning capabilities are advantage. Talent needs to be tangible and should be empowered with relentless supply of performance development and training through which employee can be empowered.

9.7.3. Leadership A leader can be successful only when his subordinates work together with him or her. In an organizational step a team achievement is not only the success of manager alone, it is the achievement made by team effort, so is the failure. Managers need their subordinate more than the team needs their manager.

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9.7.4. Bottom Up Communications Feedback is the basis to survive in the competitive market. Even after the product is launched companies send out their representatives to talk to customer and take their feedback and responses on the basis of which decisions can be taken.

Same should be the communication level in an organization. On the contrary, the communication flows from top to bottom which is 80% of the times reached but when it comes to bottom up only 20% is reached out. With an improper communication pattern and without understanding the concern of ground root level policies are made and implied.

Only the companies that can identify the actual talent of its employee in connection with the culture and vision can enjoy competitive recruitment advantage. Talent is a valuable essence of an individual that needs to be nurtured, praised and used fully to get the favorable results. Certainly not with forced policies and employee exploitation. When an organization offers a trustable career path, they get loyalty and commitment towards work by the employee. Competitors generally produce same products and later deploy them for another product and services some gain success for being the early adopters while some lay behind due to technological standpoint.

9.8. THE WAR FOR TALENT It is now a globally accepted fact that finding suitable talent for a position in an organization has become challenging and tedious task. Though there is a separate department working as an organization itself but it has created a hunt to get the employee in their organizations. Everybody is running to get the most talented employee recruited for the betterment of their company. This search of perfect employee has turned into a war like situation fought on both the sides.

On the one hand companies are fighting to get best talent for the companies and on the other hand workforce is striving to get maximum advantage from the companies. With the increased existence level of multinational companies like Google, Microsoft at global stage, the war has fueled up rest of the organization; and as a result, their employees are demanding increased salaries, perks and incentives. Few are offering work from home advantages and crèches for their children as well. The expectation level of employees has up surged the need to develop stronger talent management system so that the best employee stays with the company at what so ever benefit is required.

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It is common news these days, where we hear about how these multinational firms hire yet to be graduated students on high salaries. This shows how important a company finds the process of hiring the best talents of the industries even before they complete their education. A study suggested that in United States people from Asian business industries are preferred more for the reason of successful history of Asian clans in the US.

This has made business schools more centered and targeted to get their students hired by foreign countries more than that of their owns. The other probable reason could be skill set, training and aptitude which have created difference among graduates of eastern to western countries. On the contrary, this has created a troublesome situation for companies in national set up as they are given less weight age by these institutes. However, the recruitment pool is so large that all of them get accommodated but domestic organizations are given later dates when the best are already sorted out.

War for talent is also closely related with demographics as well. Most companies do not accept the fact of attrition and certainly not with the retention. However, attrition at the top managerial level is always very low. But at the ground level, the reality of attrition and employee retention is always happening. But the war for talent is always going on with demographics basis.

Recruitment and retention of the best people is essential, but the competition is extreme wherein employees may feel less loyal to the company and quick opt for changing the job the moment a tough situation occurs in their organization. Other recruiters from the competitors company try to take advantage of this situation by hiring the unhappy employee in their organization. Of course, they look out for the best in the competitive firm. To avoid such a situation companies must ensure to keep the people engaged and do not leave the organization for better opportunities.

9.9. RECRUITMENT AND RETENTION Recruitment and retention both work simultaneously. Someone who is hired today in an organization would definitely look out for new opportunities and the human resources department will try to retain them. Only if he/she is the best talent of the industry and can deliver best results. In the hiring process, human resources department come across several individuals who are different from each other on the basis of educational qualification, attitude, knowledge, experience and so as their motivational scale. One might be motivated by the incentives and the other might look for professional growth.

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How does the talent management team identify such factors and deal with it? A different strategy is required for every individual as they cannot be judged on one single scale. Well the ratio of people who are more money focused needs regular rewards and appraisal system; failing this they often switch jobs who offer them additional perks and benefits irrespective of growth and professional development.

Such people can be identified by scrutinizing their resumes and finding out how frequently they have been changing job and their salary increase pattern. Moreover, employee with money motivation can no longer be considered as asset for the company, in fact there are more chances of them leaving the job at any point.

Understanding the stability of an individual can be cross-verified with what is mentioned on their resume. People with knowledgeable and experienced background are more likely to be hired by different organizations. However, the spontaneity will speak of the talent the moment their work with the organization starts.

Past experiences and average tenure of a prospective employee can tell a lot about their professional skills and competencies. When an employee joins an organization that orientation and induction are inducted; in those few hours of official joining employee take a decision on how long they intend to continue with the company. This has been studied in a report conducted on the surveys of Indian IT companies. It is high time for the company to put lasting impression on the new joiners of the company on the first meeting itself.

In an organizational set up every single individual is an employee; the difference is their work area and deliverance. Recruiters are not the owners of the company yet they have to ensure a cultured, motivating and refreshing environment to the employees. They add mentorship to their profile and pacify annoyed employees and often suggest ways to come out of the difficult situation. Recruitment process might end once the person has been hired but the task never ends up.

9.10. CONCLUSION In a more understandable language, talent management is a process which aims to drive performances through integrated management practices with employees. Talent management is not just attracting people to a company, rewarding, appraising and so on, it is a never-ending process and requires lot of actions with continuous efforts.

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Even if a company has managed to hire best employee their work cannot be considered as done, they need to ensure to offer something beyond his/ her expectation and then to make him/her stay in the organization. Only hiring is not the task done, it involves more than the hiring.

9.11. CASE STUDY: BEST HR PRACTICES OF INTER- NATIONAL LARGE COMPANIES Knowledge put in context carries enormous power. The context not only teaches and gives a model example, but also inspires and energizes. You will often learn more from a case study than from a lengthy theoretical article. The goal of this paper on the Best HR Practices of International Large Companies is to tell instructive and inspiring stories, the success stories told by our interviewees, from which other HR managers and senior managers interested in HR can draw ideas for the development of their own organization.

9.11.1. How to attract and keep talents? Most dilemmas and questions of the HR managers and senior managers involved in the research could relate to the topic of talent management. Obviously, attracting and keeping talents is an issue of high concern today for most Hungarian companies. With the ageing of the population and the parallel decline in the supply of young and talented labor, the fight for the talented is becoming keener among the companies.

9.11.1.1. Satisfied HR Managers Most of the interviewed large companies have some type of programme to identify and develop “talented” staff members. According to the conclusions of the questionnaire survey, the majority (70%) of HR managers are satisfied with the talent management system operated at the company. Nevertheless, they are most interested in further new methods.

The HR staff and the management obviously consider talent management a field where development must not stop. However, satisfied you are with your established talent management system, you must keep looking for new and even better options, as witnessed by the questions and dilemmas shown above the title.

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9.11.1.2. Half of Hungarian Companies Are Given Carte Blanche There is a major gap between the Hungarian subsidiaries of multinational companies in terms of the degree of freedom provided to them by the regional and global headquarters in the development of the talent management system. Around half of HR managers completing the questionnaire declared that the Hungarian subsidiary had relative (or absolute) freedom to make decisions on the issue, and only a single one said that the corporate talent management system was absolutely centralized. Apparently, that is, most Hungarian multinational companies have some liberty in the development/ upgrading of the talent management system.

9.11.2. How do CEOs See the Issue? Our experience – confirmed by the respondent HR managers – is that the personal commitment of the No1 leader is one of the main preconditions of an effective talent management programme. Several interviewees agreed that winning the senior management for the cause and raising their attention were key success criteria. At some places this is a given, at others, however, the support of the senior management is the result of the persistent efforts of the HR manager.

9.11.2.1. Talent Management is not in the Focus of the CEOs According to the lessons of PwC’s 2012 research, Hungarian HR professionals are in a more difficult situation in that regard than their colleagues abroad. Whereas the CEOs participating in global surveys ranked talent management highest when they had to indicate the area that was most important in the life of the firm, Hungarian ones gave it the 10th, i.e., the last place. In the international sample, 78% of top managers were of the opinion that talent management was on the brink of great changes. In Hungary, however, only 3% of CEOs think that the accessibility of talented people will change in the future. The above data and findings make it clear that talent management represents a problem of utmost importance for the international market, but Hungarian company managers do not consider the issue particularly urgent. What could be the reason for that? There are several possible explanations.

9.11.2.2. Short-Term Thinking Talent management programmes do not promise a spectacular increase of company profits in the short-term, so they may easily be outside the focus

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of senior managers thinking in a perspective of 1–2 years. Cost-cutting strategies may seem a simpler and more efficient solution since their results manifest themselves at the time of next year’s closing. Furthermore, everyday operation always raises many urgent/important tasks for the managers, so focus on talent management may get lost. Serious problems due to the lack of talent nurturing will probably appear in 3–4 years’ time. And, in Hungary, few company managers think in terms of such a long time perspective.

Thus CEOs often fall into the classical Eisenhower matrix trap: they relegate into the background/postpone the topic of talent management as one that is important, but does not appear to be urgent at the moment.

9.11.2.3. Be Glad You Have A Job With the protraction of the crisis, many CEOs assume that employees will not quit under such grave circumstances or, if they do, it is easy to replace them with other professionals from the labor market. This logic, however, does not apply to the really talented employees, i.e., those who produce outstanding value for the employer firm through their work. For, they are the persons who the head-hunters seek out even at times of crisis and who, if they are dissatisfied with their employers, can easily change jobs and be certain of being in demand in the labor market due to their gifts.

9.11.3. Criteria for Developing a Successful Talent Manage- ment Concept Before the presentation of Hungarian best practices that came to light during the research, let us highlight some criteria and trends to be taken into account when a corporate talent management programme is being introduced.

9.11.3.1. Generation Y – Other Demands To design an effective talent programme, you must take into consideration the typical features of the target group. What do the young talents of our days aspire for? How can they be motivated, how could they be retained by the company in the longer term? Note that the demands, motivations, ambitions of Generation Y may be different, even significantly, from those of the professionals and managers, typically members of Generation X, who initiate the talent programmes. This is why programmes designed for young talents often comprise components that would be attractive to a member of Generation X, but do not meet the demands of one of Generation Y. The same error is frequent also in recruitment strategies: the recruitment

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tools and the relevant communication are not adjusted to the needs of the targeted generation. A thorough knowledge of Generation Y is imperative for effective talent management. We shall devote a separate chapter in the paper to Generation Y.

9.11.3.2. Some Features of Generation Y • On the lookout for novelties • Deliberate career-building • Influenced by brand names • Demands immediate feedback • Finds it important to be involved in decision-making • Appreciates value-generation • More loyal to own career than to the company • Driven by the experience of work

9.11.3.3. Raise the Returns; Keep in Touch with Those Who Leave You Talent development and training is not a cheap business. It requires major investment on behalf of the firm, which will produce returns only if the staff member participating in the talent programme stays with the company to generate profits there based on the knowledge and skills acquired during the training period. The members of Generation Y, however, are increasingly mobile; they change their workplace more easily, and hence there is little guarantee for actually collecting the returns.

A classical method for boosting the ROI is to have study contracts signed, but this carries a negative message for many young people who regard it as a measure limiting their freedom. A growing number of companies has realized that the returns on talent programmes can be enhanced also by nurturing intensive contacts with the talented staff members leaving the company, and by leaving the gate open for their return – maybe to a definitely higher position. Contact keeping (in the form of regular e-mails, news about the results of the company, targeted information on open positions) imply lower costs than the identification of new staff members.

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9.11.3.4. Talented, But How About Commitment? Many companies commit the error of assuming automatically that staff members with outstanding abilities will also be loyal and committed to the company. However, according to the 2009 survey of the Corporate Leadership Council (CLC) (which interviewed a total of 20,000 young talents of more than 100 companies)

• One-quarter of the talents plan to leave the company within 12 months,

• One-third of the talented admit they do not work at 100%, • Four-out-of-ten talents do not trust their colleagues and even less

the senior management. The reason for this phenomenon is that these persons are aware of their

own abilities and the availability of alternative options at other companies. Their expectations match their outstanding talents. According to the relevant researches, recession has decreased the loyalty of the talented for their company, but that, in turn, has been conducive to a decrease in performance, since it is difficult to produce maximum performance without commitment to your company.

What lessons does that offer for talent management? The main conclusion is that talent programmes should have a positive impact not only on competence development, but also on attitudes and on commitment to the company, or else the investment will yield no returns.

9.11.3.5. Career Development Paths Talented employees are educated/trained and developed in vain if no career development options exist for them at the company. As shown already, the members of Generation Y assign particular importance to their professional career, so in order to keep the best, you must be able to offer them, realistic career options. Multinational companies have an advantage in this respect over Hungarian ones, since they can offer a stay abroad to Generation Y members open for that.

Nevertheless, many companies do not profit from this option: • They do not establish appropriate contacts with the parent

company and with other subsidiaries that would let an increasing number of young Hungarians work abroad.

• They do not support their talented colleagues in becoming visible in the international arena.

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• They do not make it clear during recruitment that the company offers an option to work abroad.

• They are worried for the talented staff members (lest they should be “taken,” e.g., by the Germans), as a result of which the talents often end up at their rivals.

• They do not keep in touch with colleagues working abroad, and often lose their chance to re-employ them and make them put their talents at the service of the Hungarian company.

Enlightened companies treat the domestic and foreign career options with deliberation, and this is a considerable asset in keeping their talents.

9.11.3.6. Only One-Third of High Performers Are Genuine “High-Potential” Staff Members As mentioned already, commitment is a major criterion to be taken into account when designing talent programmes. Let us add that ambition is at least as important when it comes to deciding whether to invest in the development of a certain person to help his/her progress to the next career level (e.g., a higher managerial position).

According to the CLC research quoted above, only one third of staff members performing well in their actual position can be regarded as having high potential. As for the remaining two thirds, one of the following three constituents is mission: abilities, commitment or ambition needed for progress.

Committed dreamers: These persons are characterized by high commitment and high ambitions, but their skills needed for progress are poor. About 7% of employees showing good performance in their current position fall into this category. If the committed dreamer is raised to a higher position, and he cannot enhance his skills radically within a short time, the probability of success in the new position is practically zero.

Stars with no commitment: 30% of persons showing good performance in their current position fall into this category. They command the skills and ambitions needed for progress, but their commitment to the organization is low. This profile warrants success in case of progress in 13% of the cases only. If, however, the company takes deliberate steps to enhance their commitment, these starts may later become highly successful leaders.

Stars without ambition: They are talented and committed, but do not aspire to be promoted. 33% of the current high performers can be assigned

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to this category. If they are nevertheless promoted, the probability of good performance is 44%, that is, much higher than for the previous two profiles. This is attributable among other things to the changes in ambition and individual goals with time. Therefore, it is important for the company to obtain a correct picture of the ambitions and goals of the talents and to take promotion decisions accordingly.

The main conclusion is that the assessment of the skills and abilities, but also of commitment and ambition are indispensable for the development of a talent management concept and the planning of the career paths of the talented. Often the methodology applied for selecting someone to be included in the talent pool (typically DC) focuses exclusively on the assessment of skills and abilities, disregarding commitment and ambition. The negative consequences of this attitude are frequently experienced, e.g., when

• a talent selected for the management replacement programme leaves the company after the completion of the programme to use knowledge acquired there elsewhere (star with no commitment).

• the negative attitude of a promoted talent has a destructive effect on the team (star with no commitment).

• a colleague terminating the management replacement programme successfully does not agree to be promoted (star without ambition).

It is crucial for every company to reduce the number of such cases to the minimum.

9.11.3.7. Networking Many firms have realized the key importance of the extent of one’s system of contacts within and without the enterprise in keeping and developing talents and in enhancing the effectiveness of their work.

• Networking with the leaders. Some companies give an opportunity to staff members under the programme to establish contacts with higher-level managers (e.g., such managers are regularly invited to training programmes organized for the talents).

• Networking among the talented. Others put the emphasis on the closest possible networking of the talents themselves, establishing thereby something of a talent programme alumni system, which supports the flow of information within the company to an outstanding extent.

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• Female network. Many companies have realized that the potential of female employees can be put to use best if the company creates an opportunity for them to mutually help one another both professionally and as private individuals. Facilitating female networks within the organization tends to become part of the management of female talents more and more frequently.

• Networking between the sales personnel and the clients. There are also examples where a firm assists its talented employees in external networking, as in initiatives to bring the talented sales colleagues in contact with the representatives of the key clients (their talents) by organizing joint development opportunities where they can mutually support each other.

9.11.3.8. Communication at Strategic Level Many staff members of Hungarian workplaces feel they have little information on the strategy of the company, i.e., on where it is heading. The demand for being involved at strategic level is more acute for staff members with outstanding abilities.

Moreover, if care is taken that they should regularly acquire relevant information on the strategy of the company, the main market trends and the key corporate projects, that will not only make them more motivated, but also prepare them for filling a higher managerial position later on.

That is, strategic-level communication through various channels is an important component of successful talent programmes:

• Trans-hierarchical meetings. Regular discussions of senior managers with talented staff members from lower levels of the corporate hierarchy. This method has the advantage that contact between the management and the talent is direct and personal. Care should be taken, however, that the trans-hierarchical efforts should not weaken the medium management, i.e., that it should not be applied instead of consulting them.

• Strategic information by e-mail expressly for the selected talents. • Access to certain senior management, where those concerned

consults on strategic issues. This solution makes the talents more committed and, in addition, the senior management may access useful information coming from the “ends.”

Now that we have collected the key factors to be taken into account in the development of a talent management concept, let’s present some of the

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Hungarian best practices shared with us by the respondent domestic senior managers and HR managers.

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