I was recently invited to be the guest editor of a HR magazine, People Matters, and worked on their cover story The Future of Talent Management.It was an interesting experience, and I discovered that magazine articles have their own needs and constraints compared to writing a blog post
Here's an excerpt. You can read the full article at the link below.
Read more at peoplematters.in
1. Predictive talent analytics
As more and more money is being spent in the areas of developing and acquiring talented people, organizations are no longer content with fuzzy ideas about their ‘Return on Investment’ (ROI). Forget return, some large organizations want to predict how people will behave before they spend their money on them. This is causing a few pioneering firms to look at data analytics and predictive analytics. Starbucks, Limited Brands, and Best Buy, can precisely identify the value of a 0.1 per cent increase in engagement among employees at a particular store. At Best Buy, for example, that value is more than $100,000 in the store’s annual operating income. In an HBR issue, Cognizant analyzed social media contributions on its internal social network, particularly internal blogs. It found that employees who contribute in the form of blogs were more engaged and satisfied than others, and performed about 10 per cent better, on an average.
An article in Businessweek magazine talked about an employee retention program developed by the software company SAS, which crunches data on employees who have quit in the past five years, detailing their skills, profiles, studies, and friendships. Then it uses this data to find current employees with similar patterns, and flagging them off as potential attrition risks. Another SAS program pinpoints the workers who are most likely to suffer accidents. The Wall Street Journal in May 2009 (iii) reported that Google was starting to analyze data from employee reviews, promotion, and pay histories in a mathematical formula to identify which of its 20,000 employees are most likely to quit. Google said that the algorithm had already identified employees who felt under-used, which is a key complaint among those who contemplate leaving the company.
This view is echoed by Sanjay Modi of Monster.com. “Technology will help organizations move from present analysis on what is happening, to futuristic analysis of what is going to happen. The more capable the organization is in predicting what is going to happen, the better are their chances to be competitive in the market”, he says.
CXOs and HR heads, at companies where employee expenses form a significant part of total costs, will increasingly need to think in terms of quantifying their employee initiatives – effectiveness of engagement programs, impact of engagement on performance, ROI from employee development initiatives, most likely profiles who need successor planning – and, act on the rational basis of such analysis.
2. Backward integration in the people supply chain
As organizations run into a shrinking or slow-growing talent pool, with increasing competition, the only thing they can do to stop the wage bill from shooting through the roof is to come together and build more skilled and talented people at the entry level.
This is the story that is being played out in the BPO (Business Process Outsourcing) as well as the BFSI (Banking, Financial Services and Insurance) industries. Organizations with large talent needs, like Genpact and ICICI Bank, have tied up with education providers like NIIT to create a highly skilled talent pool, to benefit themselves as well as most organizations in their respective industries. This is making organizations think long-term about collaborating with other organizations for developing talent pools while they simultaneously compete in the marketplace.
3. Focusing on Core Talent
Companies are increasingly looking at bringing exceptional talent on board for those roles that are core to their business as opposed to spending on talent across functions that are not so core to the business. There are two main reasons for that: one being a general scarcity of talent, and secondly, that companies are growing between 20 to 30% and cannot afford not having the adequate core talent.
Hence they tend to concentrate in recruiting those key people, and focus their attention and resources on developing them. The consequence is that a marketing company will look at bringing in the best talent in the areas of sales and marketing, and a technology company will look at bringing technology experts, and so on. This obviously requires the company to outsource non-core functions, to be handled by the external experts, who specialize in those processes. “We are seeing a clear trend of companies looking at outsourcing to ensure they also have the best talent and systems in those areas that are non-core to them” says Tiger Tyagarajan, COO, Genpact.
At the HR operational level, there are two challenges, on one hand, the mandate is to become more effective, while on the other, there is a need to enhance employee experience. As HR people focus more on strategic roles like talent management, they realize they have to farm away from the administrative routine tasks like payroll processing and employee records management to specialists who can reduce costs, as well as increase efficiency in turnaround times by using scale. As a result, the Indian HR outsourcing providers are seeing high growth by focusing on HR service delivery for large organizations.
4. Getting Social with Talent
As more and more students have grown up using Facebook and other social networking platforms through school and college, when they look at legacy email systems in large corporates with little or no external access to the internet, they get disengaged. Most of them then access these sites on their mobile phones.
In fact, there are quite a few Indian players, like Infosys’s iEngage product to Qontext, MangoSpring, Cyn.in and KineticGlue, who offer SaaS (Software as a Service) based “social environments” to worldwide clients. World leaders in this space are Socialtext, Jive, Yammer and Socialcast. Now even large ERP vendors like Oracle and Salesforce, and software firms like IBM and Microsoft are building a social layer around their products, to enhance collaboration and communication.
Organizations which have to work with and engage today’s generation will need to provide them with a technology ecosystem that is similar to the technology ecosystem they access in their personal lives. Clunky email systems and static intranets will cause a workplace to be labeled “not cool”.
However, it is not just about the technology, but the values behind these tools, that organization would be wise to heed. These technologies accord primacy to the value of the great idea, co-creation, the wisdom of the crowds, and radical transparency. These values are what compete directly with most organizational cultures - based on command and control. Tomorrow’s talent would want both the values to be congruent - old values along with new technology will merely work in the short-run. In the long-run it would be a waste of money.
5. Leveraging Technology
As employees spend more and more of their work on technology platforms, they are going to leave digital trails about what they do and how they perform. The activity stream of the social intranet will meet the traditional talent management suite, and unless all aspects of an ‘Employee’s Life Cycle’ can be represented in it, the dollars spent on it would be a waste. For example, an employee referral application on the company social network should tie into the Applicant Tracking System, or the recruitment process module of the HRIS, seamlessly. And perhaps in the future, should also look at mobile integration, for the employee to easily check the progress of his referred candidate.
Most talent management systems are strong in one aspect of talent management, having grown from one module, and then developing the other modules. However, what employees and HR professionals need is an integrated system that seamlessly combines talent acquisition, talent development and career development modules, and where the data is dynamically kept alive by constant updation by the employee and mentors/supervisors.
6. Just-In-Time Talent
This refers to talent brought in to address specific tasks for really short periods of time. Some examples of such just-in-time talent could be for getting their inputs on tactical choices or designing or focused answers around an industry. Small and medium businesses in the US use websites like Elance.com to invite freelancers to pitch for small jobs. On the other hand, firms like Gerson Lehrman Group act as platforms where large investment firms can tap rare experts across the world - for an affordable sum like $100 for an hour’s conversation.
We expect large firms to increasingly need short-term talent and expertise, and will need to start building their own “expert networks”, or partner with other firms to build such networks. In the future, the ability to attract creative individuals for specific consulting engagements will be critical for organizations.
7. The CEO as the Chief Talent Officer
In themselves, the ideas suggested in McKinsey’s ‘The War for Talent’ article were not revolutionary. Many of the most admired firms which were great places to work have been following these practices since a long time. The difference that the article did was that it made talent management a CEO-level priority. And it showcased that organizations which did not have a talent mindset could stand to lose as the “War for Talent” intensifies in the future.
And this made CEOs look at the HR function with new eyes. The talent imperative is forcing CEOs to increasingly discuss people issues - who are the people ready to lead businesses, who are ready to take over from them, and who are being groomed for business lines of the future. He will also need to know who the key talents are, without whom the competitiveness of the firm will erode. Is it the hot-shot sales overachiever, or is it the R&D scientist who is getting his fifth patent this year? Or is it someone else?
The trend in companies is to identify who key people who have special skills and losing them would set back the organization. Is it the DBA who knows the innards of the database unlike any one else? What’s the risk mitigation strategy if he decides to leave? HR professionals and general managers will need to have anticipated questions such as these.
Sanjay Modi of Monster.com shares this sentiment. “30 to 40 per cent of the of the CEO’s time will be spent in people-related issues and decisions. The reason is that talent is a business driver, so the CEO cannot take an eye away from people issues. The need for HR and the CEO to work together will intensify because the war for talent, like we saw in 2007, is back. Overall, I think what is new is the mind shift; issues like retaining talent, use of technology, focus on communication, will become central, to both the HR and CEO, in terms of understanding and sincerity to execute.”
Talent Management is more and more business critical to organizations, bringing with it, new visibility and challenges, for HR people. This new age also means that other business leaders and the CEO will seek to influence the ‘Talent Agenda’. HR must welcome this reality and work to create an organizational culture where talent is accorded top priority. HR must facilitate members of the leadership team to act as talent ambassadors, constantly thinking of new innovative ways of building their talent and keeping a track of external talent. These factors are fast becoming crucial requirements in the process of creating “talent magnets” in each industry – companies with the best employer brand among peers will ultimately contribute to market leadership.