Have you heard the new human resources term “talent management”? Do you wonder what it really means and how you can use it?
The term and concept emerged several years ago in the business sector as competition for high-performing employees intensified. Today, the practice of talent management is being embraced in the nonprofit sector as well. Managers everywhere are scrambling to hire the best people, entice them to stay and optimize their potential. Talent management calls us to realize that our philosophy around managing people needs to be the cornerstone of all organizational strategy, rather than just a department within the organization.
You may wonder how the terms “personnel,” “HR” and “talent management” differ. In the 1970s and 1980s, the personnel department was responsible for hiring people, paying them and making sure they had the necessary benefits. By the 1980s and 1990s, organizations realized there was more to managing employees than just hiring and paying them. So the title vice president of HR replaced personnel manager and had a much larger role: recruiting the right people, training them, helping the business design job roles and organization structures, developing total compensation packages, and serving as a central point of communication for employee health and happiness.
The HR department now became more than an operational function: It was fully integrated into the organizational strategy and framework.
In the 2000s, as business competition increased and the business environment became more complex, people began to realize there was even more to the HR picture. To be competitive in the new environment, organizations had to work smarter, not just harder. People like Southwest Airlines CEO Herb Kelleher discovered that if he put the employees’ concerns above all else (including shareholders and customers), his airline was more productive.
Why? It’s costly to hire or replace employees, costing up to twice the annual salary and taking nine months before the employee is completely productive. If people are happy and not worried about basics such as pay or respect or job conditions, they do better work. If they do better work, they stay longer and the company is more cost-effective — and more competitive in the labor market — attracting higher quality employees. So organizations began to embrace this phenomenon through planning and strategy. The result: talent management.
Jim Collins, author of the highly acclaimed business book Good to Great, simply calls it getting the right people on the bus and making sure they are in the right seats. In fact, Collins says, “If you have the right people on the bus, the problem of how to motivate and manage people largely goes away ... they will be self-motivated by the inner drive to produce the best results and to be part of creating something great.” Great organizations start with a clear philosophy about the role employees play and how they are treated.
Talent management is more than the latest buzzword; it’s a forward-looking process that improves an organization's flexibility and performance and gives its leaders the tools to plan for growth and change. Nimble, robust organizations will be the ones to successfully adapt to the rapidly changing environment. Inc Magazine’s recent report on talent management tells us the top organizations are now asking questions such as:
» How can we make our recruiting process more efficient and effective by using competency-based recruiting instead of sorting through resumes, one at a time?
» How can we better develop managers and leaders to reinforce culture, instill values and create a sustainable leadership pipeline? (This speaks to leadership training and succession planning.)
» How do we quickly identify competency gaps so we can deliver training, e-learning or development programs to fill these gaps? How can we use these gaps to hire just the right people?
» How do we manage people in a consistent and measurable way so that everyone is aligned, held accountable and paid fairly?
» How do we identify and reward high performers and successors to key positions throughout the organization to make sure we have a highly flexible, responsive organization?
» How do we provide learning that is relevant, flexible, convenient and timely?
Josh Borsin with the Workforce Talent Management Process outlines this eight-step process for optimizing talent management: workforce planning, recruiting, onboarding, performance management and recognition, training and performance support, succession planning, compensation and benefits, and critical skills gap analysis. Let’s look more closely at two of the most important steps in this process: onboarding and performance management.
» Onboarding: This term indicates a broader approach to the traditional “new employee orientation.” Onboarding ensures that new employees are quickly integrated into the company culture, feel welcome and appreciated, and learn to navigate the various internal systems.
Effective employee onboarding has a positive domino effect: it ensures that new hires feel welcome and prepared in their new positions, in turn giving them the confidence and resources to make an impact within the organization, and ultimately allowing the organization to continue carrying out its mission.
But there’s a lot to cover and the process can be overwhelming, so let’s break it down. Successful onboarding programs share three main components: an introduction to company culture and norms by the employee’s supervisor, a schedule of meetings with key employees in various departments, and follow-up discussions to answer any questions the employee has and probe deeper to ensure mutual understanding. The meetings with key employees communicate a strong message to existing employees that they are valued as an integral part of the team, thereby strengthening the entire organization.
Intentional onboarding increases morale and reduces turnover by showing the employee s/he is valued. It represents the most important teachable moment your organization will ever have. If you can plan and use onboarding to put each new employee and the organization in full alignment, you will make a material difference in executing your mission.
» Performance management: Executing Peter Drucker’s popular quote, “What gets measured gets done,” will define the success of your performance management practices. By measuring and rewarding the desired behaviors and competencies, managers can mold their organizational culture and build a high-performing workforce.
Begin by determining what’s important to your organization’s success. What behaviors do you value? What actions do you want to increase? Does your organization place a high value on teamwork? Then be sure to measure and reward employee teamwork behaviors.
A recent Inc. Magazine article, "The Build Network," found that the majority of high-performing companies hire employees with a superior level of innovation and a strong value for customer service. If these traits are important to your organization, set some benchmarks for measurement and find ways to reward employees who display innovation and customer service.
Measuring effectiveness of leadership is also important. A supervisor’s leadership style dramatically influences the direct report’s job satisfaction and performance. James Macgregor Burns in his book Leadership explains that transformational leadership “raises the level of human conduct and ethical aspiration of both the leader and the led, and thus it has a transforming effect on both.” Studies show that a carefully-crafted combination of transformational and situational leadership modalities is most effective. Using an appropriate amount of transactional leadership can add clarity to expectations as long as it’s not too heavy handed.
In summary, talent management differs from human resources by focusing on the manager's role as opposed to reliance on the HR department for the life cycle of an employee. Research from the Institute of Work Psychology emphasizes the important role of the supervisor in determining the effectiveness of employees. In fact, 82 percent of employees interviewed said their decision to leave or stay is directly dependent upon the relationship they have with their direct supervisor. Therefore, successful performance management processes will train for, measure and reward high-functioning supervisor behaviors.
So, take a look at how you can incorporate talent management principles into your organization’s human resources practices. The result will be improved morale, higher employee performance and a more effective organization. Ultimately, it will mean enhanced execution of your mission which will benefit our entire community. For more information on optimizing leadership and sustainability for your organization, click here to visit Nonprofit Kinect.