Babita, 09, MBA(F)

What is Talent Management?

Talent management is an integral part of human resource management. Talent management can be
defined as a deliberate approach implemented to recruit or hire, develop and retain people with required
aptitude or skills to meet the present and future goals or needs of the organization.
It is the creation and maintenance of a supportive and pro-people organizational culture. Talent
management is, therefore, the commitment of an organization to recruit, develop, retain the most
talented and qualitative employees available in the job market.

Objectives of talent management

 1.Identify the key gaps between the talent in place and the talent required to drive business
success. 2.Develop a sound integrated talent management plan designed to close the talent gaps.
 3.Facilitate and support management to implement accurate hiring and promotion decisions.
 4.Develop talent to enhance performance in current positions as well as readiness for transition to
the next level.
 5.Develop a succession and retention plan to sustain organizational excellence
 6.Measure business impact and workforce effectiveness during and after implementation

Importance of talent management

Talent management is not just a simple human resource key term one will come across. It is also
committed to hire, manage, develop, and retain the most talented and excellent employees in the
industry. In fact, talent management plays an important role in the business strategy since it manages one
of the important assets of the company—its people.

That is why companies should make the effort to effectively manage the employees to help them develop
their skills and capabilities in order to retain them. Here are some reasons why companies should invest in
talent management.

 Attract top talent Having a strategic talent management gives organizations the opportunity to
attract the most talented and skilled employees available. It creates an employer brand that could
attract potential talents, and in turn, contributes to the improvement of the organizations’ business
performance and results.
 Employee motivation. Having a strategic talent management helps organizations keep their
employees motivated which creates more reasons for them to stay in the company and do their
tasks. In fact, 91 percent of employees shared that they wanted more than just money to feel
engaged and motivated, as revealed by Chandler and Macleod’s survey.
 Continuous coverage of critical roles. Talent management equips companies with the tasks that
require critical skills to plan and address the important and highly specialized roles in the workforce
to its employees. This means that the company will have a continuous flow of employees to fill
critical roles to help companies run their operations smoothly and avoid extra workload for others,
which could lead to exhaustion.
 Increase employee performance. The use of talent management will make it easier for the
companies to identify which employees will be best suited for the job that can lead to less
performance management issues and grievances. It will also guarantee that the top talent within
the company stays longer.
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 Engaged employees Talent management allows companies to make systematic and consistent
decisions about the development of staff, which guarantees the employees’ skills and
development. Furthermore, employees will feel more engaged when there is a fair procedure for
the development, which helps in increasing the retention rates that helps companies in meeting
their operational requirements.
 Retain top talent. Well-structured on-boarding practices create higher levels of retention which
saves the company on its recruitment and performance management cost in the long run.
 Improve business performance. Talent management helps employees feel engaged, skilled, and
motivated, allowing them to work in the direction of the company’s business goals, which in turn,
increases client satisfaction and business performance.
 Higher client satisfaction. A systematic approach to talent management means that there is an
organizational integration and a consistent approach to management. When systems are more
integrated, client satisfaction rates are usually higher, since they are dealing with fewer people and
their needs are met more rapidly.

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Babita, 09, MBA(F)
 Babita, 09, MBA(F)

Talent Management Process

People are, undoubtedly the best resources of an organization. Sourcing the best people from the industry
has become the top most priority of the organizations today. In such a competitive scenario, talent
management has become the key strategy to identify and filling the skill gap in a company by recruiting the
high-worth individuals from the industry. It is a never-ending process that starts from targeting people. The
process regulates the entry and exit of talented people in an organization. To sustain and stay ahead in
business, talent management can not be ignored. In order to understand the concept better, let us discuss
the stages included in talent management process:

 Understanding the Requirement: It is the preparatory stage and plays a crucial role in success of
the whole process. The main objective is to determine the requirement of talent. The main
activities of this stage are developing job description and job specifications.
 Sourcing the Talent: This is the second stage of talent management process that involves targeting
the best talent of the industry. Searching for people according to the requirement is the main
activity.
 Attracting the Talent: it is important to attract the talented people to work with you as the whole
process revolves around this only. After all the main aim of talent management process is to hire
the best people from the industry.
 Recruiting the Talent: The actual process of hiring starts from here. This is the stage when people
are invited to join the organization.
 Selecting the Talent: This involves meeting with different people having same or different
qualifications and skill sets as mentioned in job description. Candidates who qualify this round are
invited to join the organization.
 Training and Development: After recruiting the best people, they are trained and developed to get
the desired output.
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 Retention: Certainly, it is the sole purpose of talent management process. Hiring them does not
serve the purpose completely. Retention depends on various factors such as pay package, job
specification, challenges involved in a job, designation, personal development of an employee,
recognition, culture and the fit between job and talent.
 Promotion: No one can work in an organization at the same designation with same job
responsibilities. Job enrichment plays an important role.
 Competency Mapping: Assessing employees’ skills, development, ability and competency is the
next step. If required, also focus on behaviour, attitude, knowledge and future possibilities of
improvement. It gives you a brief idea if the person is fir for promoting further.
 Performance Appraisal: Measuring the actual performance of an employee is necessary to identify
his or her true potential. It is to check whether the person can be loaded with extra responsibilities
or not.
 Career Planning: If the individual can handle the work pressure and extra responsibilities well, the
management needs to plan his or her career so that he or she feels rewarded. It is good to
recognize their efforts to retain them for a longer period of time.
 Succession Planning: Succession planning is all about who will replace whom in near future. The
employee who has given his best to the organization and has been serving it for a very long time
definitely deserves to hold the top position. Management needs to plan about when and how
succession will take place.
 Exit: The process ends when an individual gets retired or is no more a part of the organization.

Talent Management process is very complex and is therefore, very difficult to handle. The sole purpose of
the whole process is to place the right person at the right place at the right time. The main issue of concern
is to establish a right fit between the job and the individual.

Talent Management ─ Methodology

Every organization has a different methodology for talent management. The following diagram shows the
complete cycle of talent management which involves Planning, Acquiring, Developing, and Retaining of
able and skilled personnel for the organization.
The steps are as follows:
1) Planning ─ It involves identifying, defining, and setting criteria for required capabilities as well as
examining the current talent levels.
2) Acquiring ─ It utilizes a varied range of strategies to attract talent.
3) Developing ─ It involves providing opportunities for career development and training, managing
employee performance, coaching and mentoring.
4) Retaining ─ It involves providing long-term incentive, a flexible and positive work environment, and
opportunities for advancement of good remuneration.

1) Planning Talent
In this methodology, the organization establishes defined competencies and sets criteria
to measure the talent skills.
i) Focus on Talent: Once you know what your organization needs, you can start thinking about what
type of talent potential to focus on.
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ii) Define Competence: Competencies are lasting individual attributes that cause high levels of
performance. In this stage, the organization clearly defines the specific and usable skills and talents
its employees need, so as to realize organizational goals and objectives.
iii) Measure Criteria: There should be a set of criteria to evaluate, measure, and develop specific
competency. You need objective criteria to measure competencies effectively.
iv) Talent Audit: An audit may include different types of activities designed to evaluate the level of
competence. Methods include psychometric tests and questionnaires, in-depth interviews, case
studies, and analysis of the most recent performance reviews.

2) Acquiring Talent
In this stage of methodology, the organization promotes its values to attract talented
people to apply and join the organization. It includes interviewing, selecting, and onboarding
employees.
i) Attracting: Organizations promote their culture and values to attract talented and skilled people
from the industries to work with.
ii) Recruiting: A recruiting brand reflects the core values of the organization and communicates the
advantages of working for the organization.
iii) Selecting: This process involves multiple steps such as interviews, tests, and background checks.
iv) Employing: It is the final stage of hiring the skilled and talented people in the organization.

3) Developing Talent
It includes talent management readiness, career development and training, performance
management, and coaching and mentoring. These are the core objectives of this phase.
i) Talent Readiness Training: These competencies help the organization attract, identify and develop
talent.
ii) Career Development & Training: Training program is useful for upgrading talent and skills of the
employees and prepare them for future challenges.
iii) Performance Management: Performance management incorporates setting goals, giving
performance reviews, and providing feedback.
iv) Coaching & Mentoring: Coaching and mentoring develops talent by encouraging people to excel at
their work and to learn on the job. These techniques engage people on a more emotional level.

4) Retaining Talent
The longer you retain talented people in your organization, the greater the return on your
investment. Retaining, the fourth phase of methodology, is to define several strategies
that can help retain talent.
i) Long-term Incentives: Long-term incentives such as stock options or paid vacation or other benefits
increasing over time can encourage employees to coupletheir careers and personal goals with a
long-term commitment or association with the organization.
ii) Career Planning: This involves providing genuine opportunity for advancement to the employees to
retain talent in the organization.
iii) Flexible Working Arrangements: When working arrangements are inflexible and fixed, the options
available to employees are limited – forcing them to choose between staying with or leaving an
organization.
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iv) Talent Culture: Positive work environment is a key factor to retain talent. Management needs to
monitor these levels of satisfaction so they can forestall problems before people leave an
organization.

Talent Management System

Talent management systems (TMS) integrate key areas of talent management, creating one hub for
recruiting, on boarding, performance and goal management, learning management, compensation and
salary planning, career development, and succession planning.

What is a talent management system?

Talent management in general focuses on the management of people within a company and bringing the
best possible value from employees. It’s the part of HR that is the most business oriented, and as such the
business has high expectations for its success. It’s no surprise then that most talent management activities
directly link with the business’ goals. They involve (but are not limited to):

 The hiring, on boarding and development of employees

 Connecting employees and driving collaboration
 Managing performance, career development and succession plans
 Providing learning and retraining to employees
 Performing employee assessments, appraisals and compensation management

Talent management systems aim to make these talent management tasks more unified and integrated for
companies. Typically, they integrate key areas of talent management, by using software to simplify and
create one hub for recruiting, onboarding, performance and goal management, learning management,
compensation and salary planning, career development, and succession planning. They also reduce the
admin time required from HR teams, and make talent management smarter through data, providing
reporting, analytics and machine learning on topics such as goal management, performance management,
talent pools, employee engagement, candidate management and more – all through one HR portal.

Since talent management is centred on the employees, talent management systems also provide a holistic
view of employees and anticipate the future talent and skills needs across the organisation. In
consequence, HR people in charge of talent management (often known as HR development managers), are
aided by talent management systems, as they can help answer questions such as:

 How can I ensure my recruiting attracts the best candidates?

 Does my on boarding contribute to higher retention?
 Does my internal mobility strategy reflect my succession planning needs?
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 Am I planning for the long-term to avoid skills gaps?

Talent management systems are, of course, used by employees too – not just HR, and so it’s important that
they are user-friendly. To be successful, any talent management software being implemented should have
an excellent user experience, be accessible through mobile devices – not just desktop, and be fast.
Companies should also think about elements that employees might be used to in their everyday tech
interactions – like chatbots and recommendations through predictive analytics, which could further
improve the talent experience.

So, what are the benefits of implementing a talent management system? If companies choose well and
integrate a successful system, they can expect benefits such as:

 Attracting top talent: recruiting systems will be simpler and more efficient for recruiters and candidates
alike, improving employer branding and reducing time-to-hire
 Boosted employee motivation and engagement: management will have a better means of identifying
learning needs among staff and supporting their career progression – ensuring employees have greater job
satisfaction and support. Management can also determine the best internal employees for leadership roles
and ensure they are on track for those positions
 Lowered risk of skills gaps: with a holistic view of employees, HR will be able to see where the company is
at risk of having skills gaps, where employees need to bolster their skills to avoid gaps, and what kind of
people may be best to hire to avoid talent shortages all together
 Improved talent retention: from an excellent hiring process, to slick onboarding, to seamless employee
management – a good talent management system makes for a great employee experience and can
improve retention. This also lowers costs associated with employee turnover and hiring
 Greater business performance and client satisfaction: more engaged employees perform better, and better
performing people keep clients happy and improve business performance
 Improved HR processes: for talent management to be strategic, HR processes like onboarding,
performance management, etc, must run smoothly. In addition, the talent management system has to
include the most modern methods to engage employees: AI-based recommendation in training and
succession, transparent mobility, ongoing performance reviews with regular conversations and social
feedback. This optimises processes making them more efficient and effective

Who uses a talent management system?

Talent management systems are used by any company that wants to better engage their employees. Since
many companies invest in people (starting with their salaries), it makes sense for companies to also invest
in a talent-centric approach that can bring consistency and broader benefits than a bigger pay cheque can.

Used properly, these systems can bring many benefits to management, HR, and employees generally such
as better talent attraction and retention, improved goal management, fewer empty job roles, better
business performance and more. All of these groups also feel the benefit of how the software-based
system can tie together formerly disparate systems into one HR portal – creating a single hub for people
management.
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So, how might different people in a company use talent management software to achieve these benefits?
Everyone uses it differently, but the below snapshot summarises the key users:

1. The employees themselves need talent management software to access the required learning in their
progression plans, share knowledge among each other, apply to open positions internally, give feedback on
their peers, and more. With so many of the talent management system’s benefits affecting this group, it’s
important that they have simple, convenient, user-friendly, and mobile-ready access to the system at all
times.
2. Managers need talent management system access so that they can have a clear view on their team,
evaluate people’s performance, give feedback to others, assign training courses and more.
3. The HR team needs an efficient system that gives them a comprehensive view of skills and competencies
across the entire organisation, an ability to plan global activities (training, performance reviews, and
more), a means to anticipate and plan for skills gaps, and a way to manage the future workforce and
recruitment for it
4. The C-suite uses talent management systems to have a consolidated view of all the company’s employees,
to perform advanced searches of people within the organisation and their abilities (e.g. who has the best
competencies to manage a new project?), and to plan a global talent strategy for the company
5. External partners, resellers and clients may also use a company’s talent management system in order to
access particular information and to communicate with the organisation (for example, to be trained on
new products or give feedback)

As is clear, talent management systems can be used in many different ways and by many different groups
within the organisation. From a strategic standpoint, HR and recruiting teams will use it the most,
alongside management teams, but every employee within an organisation will end up feeling the benefits
of it – not just HR. It’s important, however, for those buying talent software for a company to conduct a
proper assessment before investing in it to ensure they’re looking for the best possible system for their
organisation’s needs. Strategic HR is a competitive market and new companies are popping up every day to
help companies in the war for talent and employee engagement – so research is critical to make sure your
company doesn’t end up with something unsuitable.

A talent management system is also the best way for HR to measure the impact of its workforce on the
business. Through advanced analytics tools, organisations are able to have accurate data and metrics on
their employees. Success measures can be HR-centric (for example, figures around retention, employee
happiness, recommendations, compliance risk reduction, etc) but also business-centric (for example, being
able to benchmark talent performance against other companies, being able to build a competency-based
project team, etc.)

How to implement a talent management system?

Implementing a talent management system is an excellent step for companies to improve their employee
engagement, management processes, recruitment and retention, and overall business performance.
However, the first step before implementing any talent management system is to identify what your
company truly needs it for. What are the goals of doing this implementation? What do you hope to achieve
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as a result of having talent management software? Using these questions as a basis will help inform what is
important, what your company needs to prioritise in choosing which vendor to go with, and whether you
need a complete overhaul of your existing system or just some ‘add-ons’.

Once you’ve set your goals, it’s also important to look at all vendors with usability and accessibility in mind.
You should always request a demo of the talent management software you are considering so you can get
a feel for the platforms first hand, rather than having to rely on the descriptions alone. Everyone is now
used to responsive, quick, easy-to-use technology, and your talent management system should be no
different. As a starting point, some things you may wish to ask yourself as you search through providers
and undertake demos are:

 Does the vendor provide a mobile-friendly platform?

 Is the interface and user-experience intuitive? Can I navigate this without instruction?
 Is the interface responsive and adaptable to desktops, tablets, and mobile?
 Can we customise or brand any elements of the system for our employees?
 What do the reports look like? Will it be easy to see and pull reports from the talent management system?
 How often does the software get updated with new features or products?
 How will this software be able to scale if the company’s workforce grows significantly in number or by
country?
 Is the software offering rich and flexible analytics, including measurement of HR performance and AI-based
recommendations?

Aside from goals and the interface itself, it’s also important to consider which vendors can best support
you through the talent management system implementation process. What help will they give you? How
long will it take? And can they recommend any partners to manage the project? These are very important
questions, as you don’t want to buy your talent software, only to find you’re left on your own to make it
work in the best way possible.

Talent management software can be a big investment, and the management team will expect a return on
investment. Without support on implementation and on the change management within your
organisation, you could be in hot water. The best software vendors will be sure to advise you on the right
system integrator for your implementation and will also continue to support you even after the initial
implementation is done. They’ll have a clear commitment to ensuring you get the most out of the software
and understand how to use every part. You may feel that you do not need or want such support, but it’s a
good idea to regularly engage in conversation with the software vendor and others to learn best practice
and optimise how you manage your company’s talent.

The Seven Components of Talent Management System

Talent management includes seven components that, when implemented strategically, combine to keep
an organization on the leading edge.

 Strategic Employee Planning. Developing your organizational goals and strategic plan is the first
step. Next you must think about how to reach your goals and implement the plan. More
specifically, you must identify the key roles and personnel who will get you there. You may already
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have the positions and people in place, or you may need to adjust the current structure to fill the
gaps.
 Talent Acquisition and Retention. Bringing new talent into your organization is important, yet
equally so is recognizing and cultivating talent you already have in-house. Hiring from within your
organization is more cost-effective, so when you’re working at talent pooling, remember to look
internally as well as externally.
 Performance Management. Aligning the right person with the right role is the heart of
performance management. Its ultimate goal is to ensure that roles align with business strategy to
achieve goals. It enables you to ensure that you’re aligning a talented employee with a role that
suits them, develops goals for success, supports their development, and moves the organization
forward.
 Learning and Motivating. Semantics become important here, because learning is more than
training. Learning is the acquisition of information and skills, which yields knowledge and
experience. Implement learning programs that include activities and tasks that support the
organization’s culture and initiatives. When employees see how their growth impacts the
organization, they’ll see just how valuable their role is.
 Compensation. Alignment remains the important concept. Aligning your strategic goals with
incentives means recognizing employees, rewarding contributions to success, and acknowledging
their value to the organization.
 Career Development. This ties back to the talent retention component and the notion that hiring
from within is not only an option, but often preferable. Nurture potential leaders by providing
professional development tools that can advance their career.
 Succession Planning. Knowing the talent within your organization is a start. Knowing the key roles
essential to its success is equally vital. Which roles are critical to success? Who currently fills those
roles? What happens when those positions become available? Having a plan in place means that
the decisions are already made, and that the organization will continue to run smoothly if a key
position must be filled quickly.

BENEFITS OF TMS
1.Connecting and Sharing Data The right TMS can integrate and align core HR processes. While much of
the data collected through a HRIS is stored in silos and can be difficult to reach and analyse, an integrated
TMS shares data across the entire system allowing for easy access. This gives a clearer understanding of
what that data means for your business and enables you to make informed, strategic business decisions.

2. Strategic Hiring Process Having a TMS can help you recruit those really talented candidates that
everyone is after. By integrating tasks such as posting job descriptions, tracking applicants and making it
easy to manage offers, a TMS streamlines your hiring process, allowing you time to focus on the
candidates.

3. Improved Onboarding Experience An organised and efficient approach to onboarding is achievable with
a TMS. You can create employee profiles which hold all of the information and data collected during the
recruitment and hiring processes. Automating the new hire paperwork can save both you and the new hire
time which you can then use to focus on the new recruit.
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4. Retain Top Talent Once you have the best employees, you need to keep them. With all of the employee
information hosted on one platform and neatly organised into an online profile, you can
track performance reviews, goals, skills and career aspirations to make sure your employees are happy and
on the right track. Having a TMS in place to capture all of that data makes it easy to analyse and report on
which employees need developing, monitoring or even promoting.

5. Employee Development A good integrated TMS should include options for employee learning and
development. It enables employees to take courses, develop skills and in some cases pursue certifications
relevant to their professional development. TMS solutions also collect data on what skills an employee has
and allows the HR team to assign training which the employee can then access from their personal profile.

6. Improved Employee Experience As we know, employee turnover is something to be avoided at all costs.
A TMS that integrates with payroll improves the employee experience by allowing access to payslips,
holiday requests and management of sick leave. Organisational charts can also be included, letting
employees know the reporting and management structure of the company.

7. Increase Employee and Manager Engagement If you’re looking to increase engagement in your
company, implementing a TMS can help. The employee profile empowers employees and managers to
interact with the employee’s professional career progression. An integrated TMS solution encourages them
to invest in the organisation and align their daily work with the business goals while also focusing on their
personal goals.

Talent Management System Challenges

1) Poor Hiring Strategies: The beginning of the talent management system begins with the filling of an
open position with a talented professional. To fulfill such a task it is essential for the company to
have a strong staffing management plan. A lack of good management and plan might result in a few
difficulties that affect the further talent management process. The businesses often face difficulty
in attracting talent and influencing them to accept their job offer. The major reason behind this is
the too long hiring process. Such ineffective hiring strategies make it difficult for the company to
source the top talent and to attract them to join the firm.

2) Encouraging Passion: The talented professional loves to be part of the firm whose environment
suits their values, attitude, and expectations. Good salary and hike is not only their primary
objective and the reason for being part of the company. The real talent does care for the firm that
cares for their talent in return. They like the firm that engages them in a worthy task. Most of the
employers do not consider such needs and fails to employ talented professionals in their
organization.

3) The inexperience of Technology: Since today's world is technology driven thus it becomes essential
to remain updated. It is very important for the HR department and other employees to actively
participate in learning new technologies and software introduced in the company. The talent
management system uses an applicant tracking system that helps the hiring team to post jobs, send
emails to multiple people, and to organize the candidate's resume. The lack of knowledge about
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novel technologies and software results in ending up the talent management and put a hold on
businesses processes.

4) Ineffective Leadership: Good leadership quality is the foundation of talent management. The
manager and top employees play an effective role in hiring and retaining potential candidates. An
ineffective leadership among the managing department results in delivering improper guidance in
developing talent and inefficiency in carrying out talent management.

5) Employee Turnover: The major objective of talent management is to focus on the development of
an employee. Proper growth of an employee in terms of knowledge and skills help them to feel
valued, challenged, and satisfied with their jobs. If the talent management is not implemented in
the right way then a business could experience a high employee turnover rates, this might result in
employee resignation that increases the business needs and compel them to start over their talent
management process. This would be highly challenging if the list of employees leaving the company
includes manager and high-level employees. In such cases, there is an increasing risk of failure in
the talent management process.

6) Tightening talent market- When the unemployment rate skyrocketed back in the late 2000s,
employers were easily able to find talented new recruits because the pool of applicants was huge.
Now that it's fallen to less than 5 percent in some countries, however, it's much more difficult to
find new personnel. If you don't have the resources to offer the highest compensation package,
your company might consider other appealing job perks like flexible hours or remote positions.

7) Unappealing company culture- Younger employees (millennials, in particular) expect a different work
environment than their predecessors did. Most recent grads aren't happy to sit at a desk, fulfill
their job duties, and go home at the end of the workday. They're looking for jobs that offer perks
like a relaxed, open communication policy; flexible scheduling; and meaningful job tasks with clear
objectives. Companies that don't meet at least some of these demands will be hard-pressed to find
suitable employees.

Ways To Overcome Challenges

 Smart Hiring Strategies: Since the primary objective of the recruiter is to hire and retain the
potential and best candidate who played a major role in the growth of the company. For this, it is
essential for the recruiter to spend more time on shortlisting the candidates who can add to the
businesses. Follow the best hiring practices and invest time in learning hiring strategies that help in
attracting talent and in convincing them to work for your client.
 Enhancing Technological Experience: The recruiter must be aware of using applicant tracking
software. Such technology automates these processes with software and help in accelerating the
recruiting process and in searching the right talent for the company.
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 Developing Leadership Qualities: Although it is difficult to improve the current leadership it is
possible to find and hire the talented manager. A company with good leaders help in recruiting the
employee that fits best for the company. Also, the talented manager presents a good picture of the
company and enhances business qualities.
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Key takeaways from the survey:

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1. Talent planning is a powerful business driver.
The survey found that the fastest-growing, best-performing middle-market companies place more
importance on talent planning than their slower-growing peers. These companies were also more likely to
engage in a full suite of talent planning activities.
Researchers found that companies with an annual revenue growth of 10% or more were significantly more
likely than slower growing organizations to say they performed “very well” or “extremely well” at talent
planning initiatives. Those initiatives include identifying critical positions and can’t-lose players within the
organization and engaging senior and line management in the talent planning process.
Fewer than half of middle-market firms reported that they are currently implementing critical talent
planning strategies.
2. The size and structure of an organization has a significant impact on how talent planning is conducted.
The survey found that, as firms grow, they tend to put greater emphasis on talent planning and to adopt
more formal talent planning processes. Businesses with private equity investment were more likely to
follow guidelines for talent planning. By contrast, many family-owned businesses reported that they have
kept their talent planning processes relatively informal.
Researchers found that challenges among firms vary by revenue segment. Large middle-market firms tend
to be more concerned with aligning talent and business strategy. Smaller middle-market companies tend
to focus more on identifying and retaining their can’t-lose players.
3. There is room for improvement in the talent planning process.
On the survey, many middle-market leaders gave their companies less-than-optimal ratings on their
current talent planning programs. Only 14% of firms gave themselves an “A” grade for overall talent
planning effectiveness. More than four in 10 companies graded themselves a “C” or lower.
The most common weaknesses reported were succession planning, identifying skills gaps, and having
processes in place for identifying/developing high potential employees.
4. The single most important thing companies lack is a systematic framework for talent planning.
The study found a clear correlation between process formalization and how well companies perform at
talent planning. It also discovered a well-defined link between the number of activities implemented and
overall talent planning performance.
Only 22% of all middle-market firms reported having a formalized talent planning process in place. Among
companies that considered themselves the best at talent planning, 39% said that they relied on a
formalized process.
The survey also found that the fastest-growing, best-performing middle-market firms are more likely to
have a defined process and to coordinate multiple talent planning activities.
5. Successful talent planning involves four core elements.
Based on survey results, the researchers developed a framework for effective talent planning. This
framework includes a comprehensive list of talent planning activities, which can be divided into four main
categories:
• Aligning talent strategy with corporate strategy
• Building sufficient processes to ensure systematic talent planning efforts
 Babita, 09, MBA(F)
• Involving leadership in the process as opposed to handing off to human resources
• Engaging employees in talent planning and ensuring they recognize the value of the process
6. Succession planning, programs for high potential employees, and identification of skills gaps are critical
areas for improvement.
The study found that middle-market companies view these activities as important to the success of talent
planning. However, the performance of companies in these areas was found to be lacking. Researchers
concluded that making improvements to these aspects was likely to have the greatest overall impact on
talent planning success in middle-market companies.

Succession Planning and Management Five-Step Process

Succession planning is a process for identifying and developing new leaders who can replace old leaders
when they leave, retire or die. Succession planning increases the availability of experienced and capable
employees that are prepared to assume these roles as they become available. Taken narrowly,
"replacement planning" for key roles is the heart of succession planning.

Succession planning is the process of developing talent to replace executive, leadership or other key
employees when they transition to another role, leave the company, are fired, retire or die. It is relevant to
all companies, from the largest to the smallest, in both the for-profit and not-for-profit sectors. The
planning process is meant to create a talent pipeline of successors that will keep the organization running
with little to no interruption when inevitable staff changes occur.

STEP 1. Identify Key Areas and Positions

Key areas and positions are those that are critical to the organization's operational activities and strategic
objectives.

 Identify which positions, if left vacant, would make it very difficult to achieve current and future
business goals
 Identify which positions, if left vacant, would be detrimental to the health, safety, or security of the
Canadian public

STEP 2. Identify Capabilities for Key Areas and Positions

To establish selection criteria, focus employee development efforts, and set performance expectations,
you need to determine the capabilities required for the key areas and positions identified in Step 1.

 Identify the relevant knowledge, skills (including language), abilities, and competencies needed to
achievebusiness goals
 Use the Key Leadership Competencies profile
 Inform employees about key areas and positions and required capabilities

STEP 3. Identify Interested Employees and Assess Them Against Capabilities

Determine who is interested in and has the potential to fill key areas and positions.
 Babita, 09, MBA(F)
 Discuss career plans and interests with employees
 Identify the key areas and positions that are vulnerable and the candidates who are ready to
advance or whose skills and competencies could be developed within the required time frame
 Ensure that a sufficient number of bilingual candidates and members of designated groups are in
feeder groups for key areas and positions

STEP 4. Develop and Implement Succession and Knowledge Transfer Plans

Incorporate strategies for learning, training, development, and the transfer of corporate knowledge into
your succession planning and management.

 Define the learning, training, and development experiences that your organization requires for
leadership positions and other key areas and positions
 Link employees' learning plans to the knowledge, skills (including language), and abilities required
for current and future roles
 Discuss with employees how they can pass on their corporate knowledge

STEP 5. Evaluate Effectiveness

Evaluate and monitor your succession planning and management efforts to ensure the following:

 Succession plans for all key areas and positions are developed;
 Key positions are filled quickly;
 New employees in key positions perform effectively; and
 Members of designated groups are adequately represented in feeder groups for key areas and
positions

DESIGNING A SUCCESSION PLANNING PROGRAM

1) Step One: Identify Your Talent Management Business Goals

Before you can create a valid talent management strategy, determine the one to three primary reasons
you are implementing (or updating) a talent and succession management program in the first place,
because the way you will design and measure the program will be very different based on your business
goals, as shown in Table 13-1.
 Babita, 09, MBA(F)

Table 13-1 Business Goals and Focuses

To identify and validate your primary succession planning goals, you will want to work with executives, line
managers, HR business partners (especially the recruiting and organizational development professionals in
the company). To begin planning a successful succession planning strategy, some organizations form a
talent steering committee, composed of business leaders and HR professionals, to work together to create
the strategy, to monitor the progress of the program, and to provide feedback, review results, and make
continuous improvements.

2) Step Two: Establish Metrics and Baseline Data

It may seem odd to establish metrics as a Step Two phase of the process, but in order to be able to
demonstrate the business results and cost savings of your succession planning process, this is the time to
identify the metrics to be used and to gather “before” baseline metrics, to create a comparison starting
point. Before starting your succession planning process, you will want to gather the following baseline
data:
• What is the current internal fill percentage of open leadership positions? For example, currently open
leadership positions are filled with internal candidates 25 percent of the time and with external candidates
 Babita, 09, MBA(F)
75 percent of the time. You might then set a goal to increase the internal fill of leadership positions by 10
percent over the next 12 months as one of your succession planning metrics.
• What is the current percentage of leaders who will be eligible to retire each year? For example, 10
percent of your leaders will reach retirement eligibility in the next 12 months, 5 percent more will be
eligible to retire within two years, and 25 percent more will be eligible to retire within three years, then
you know the time period to prepare and develop successors, and you can look at the lines of business
with the highest retirement eligibility percentages in order to focus efforts in the areas with the highest
vacancy risk issues.
• How much does it cost to replace a leader with an external candidate at the manager level, at the director
level, at the vice president level, and at the executive level? This information is needed to calculate the cost
savings to be achieved through your succession planning program.
• What is the current turnover rate of employees in leadership positions in the organization? Compare the
retention rate of high-potentials, successors, and experts identified through your talent review and
succession planning process to the overall retention of leaders across the organization to ensure top talent
is retained at the highest possible rate. It is important to obtain this basic measurement to compare
retention changes over the coming years as succession plans and high potential development programs are
executed.
• What are our basic leadership statistics? Gather and document all the basic information about your
leadership population, such as the ratio of leaders to employees in each department, in each geographic
region, at each organizational level, and so on. This basic information may be needed at a later point in
conjunction with one of your other metrics in order to formulate business results and conclusions.
• What will our leadership staffing needs look like in the next year, in two years, and in three years? In
addition to replacement planning to address vacancy risk issues, a succession management strategy should
factor in the leadership staffing changes and/or growth needs expected within the next few years, at
minimum.
As part of your metrics and planning process, you will want to interview leaders and work with the
recruiting management team to understand the workforce staffing strategy and the leadership
competency and position needs for the future of the organization.

3) Step Three: Develop Your Scope, Criteria, Definitions, and Policies

Formulate at least a three-year plan to define the scope of your succession planning efforts and to define
successors and high-potential categories and selection criteria. This action will set appropriate
expectations and create a workable plan that fits the most urgent talent and business needs.
Even though it would be ideal to be able to create succession plans for every leader in the organization
within the first year, for most companies this type of goal is too large to accomplish successfully. It is more
important to implement a smaller scope succession strategy in the first year, allowing sufficient time to
develop plan actions for these successors.
A sample three-year plan might look like that in Table 13-2 (depending on the size of your company and
the talent management resources, budget, and staff available).
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Table 13-2 Three-Year Plan

Notice how the scope of the succession planning strategy (and the amount of work, budget, and resources
involved) increases each year. Many organizations make the mistake of thinking that they can hire one
talent management professional to handle the succession planning and leadership development strategy
for multiple years. In reality, as successors and high- potentials are identified, more demands are placed on
the talent management professional to not only complete talent review and succession planning processes
but also work with internal recruiting professionals for internal placement and work with leaders and
organizational development professionals to develop the successors and high-potentials. It is important to
identify the budget, tools, and people resources needed within the three-year plan to ensure the program
continues to be successful and sustainable.
During this phase of the planning process, it is also time to identify the categories of successors by
readiness level and/or by leadership level, and creating behavioral definitions for each category to enable
leaders to accurately identify successors based on valid performance and potential factors. If high-
potentials or experts in the organization will be identified, you will need to create (or purchase) behavior
definitions, assessment tools, and criteria for leaders to use as they are nominating individuals for these
talent categories.
 Babita, 09, MBA(F)
Documenting and communicating successor categories and definitions also increases the consistency of
your processes and provides a fair and legally defensible succession planning strategy. All leaders in the
organization will be referring to the same definitions and criteria as they are selecting successors, resulting
in the identification of successors and high-potentials that will also be more successful moving across the
organization rather than just moving and growing in a silo fashion within one department or division.

Table 13-3 Behavior Definitions

An example of a successor category with a behavior definition is shown in Table 13-3.

Don’t forget during this phase to also discuss and update your internal recruiting policies with business
leaders and the recruiting department to help avoid issues and misunderstandings after your first
succession planning cycle is complete.
For example, once successors for leadership positions have been identified, will you still post these
positions to all employees when they become vacant or will the successors have the first opportunity to
interview and fill the positions? To avoid a “cherry-picking” problem where managers start to directly
recruit individuals who have been identified as high-potentials, does your current internal recruiting
procedure require managers to talk with each other before contacting the internal candidate directly?
These are the types of policies you will want to either create or update to align with your new succession
planning design.

4) Step Four: Creating Tools for Assessment and Successor Tracking

During the preparation phase, either create or purchase tools and systems to assist leaders with the talent
assessment and successor identification process, and create or purchase tools and systems to store the
successor information, along with talent profiles and the development plans for the selected successor
candidates. Your decision to create or purchase these tools will depend on your budget, your company
size, the complexity of your organization, and the geographic spread of your organization. As another
option, you can use either an internal technical team or an external software development designer to
create custom tools that specifically meet your needs. Even if assessment and tracking tools consist of
basic spreadsheets, you will need to design these tools and determine the best method of delivering the
tools (along with instructions and Help information) to the business leaders.
There is the school of thought that you should first create your succession planning design and wait to
purchase a talent and succession planning and tracking system to match your design. There is another
 Babita, 09, MBA(F)
school of thought that it is much easier to purchase a talent and succession system that already provides
much of the structure, tools, and definitions needed for your succession planning design. The right decision
for your organization will depend on your budget, previous experience in succession planning, the
complexity of your organization, and the urgency level of your succession planning needs.

5) Step Five: Communicate and Launch! You Cannot Communicate Too Much!
Put together a documented communication plan that includes online tools and information, opportunities
for training and presentations for leaders (virtual sessions or in-person meetings), and hardcopy materials
as applicable to your culture and needs. A sample communication plan is shown in Table 13-4.

Table 13-4 Communication Plan

A common mistake in the succession planning design process is to forget the importance of the
communication plan and tools that can result in confusion, inconsistencies, and even suspicion of the
succession planning strategy. Allow four to six weeks just to implement your communication and training
plans.

Ready to Go!
Now that you have completed a thorough design process, you are ready to implement your strategy and
procedures with confidence. Although it may seem a lot of time is spent on the planning process, creating
a solid foundation before launching your succession planning program will enhance the reception from
business leaders, the consistency of procedures, and the results achieved.
 Babita, 09, MBA(F)
TALENT DEVELOPMENT BUDGET

For growth, the talent development budget is more important than any other budget. All organizations,
regardless of size, should prepare a TDB for the long term as well as for the short term. The long-term TDB
may be prepared for more than one year to allow sufficient time to plan major expenditures for acquiring
Talents, keeping Talents, and training Talents. This budget may help to determine the goals of the
organization.

By preparing a TDB, organizations improve effectiveness and avoid poor allocation of resources. After an
organization sets its goals, it can estimate how much to spend on acquiring, holding, and developing the
Talents to meet the goals. A shortage of key Talent will lead to severe problems. If management spends
more money in one low-priority area of business, the whole business suffers. Often Internet startup
companies spend lots of money in advertising, which puts a company into a deep financial hole. Similarly,
organizations cannot bear excessive costs on Talents.

A TDB is not the same as a training and development budget. A training and development budget is not
allocated for attracting and holding Talent or replacing Talent. For example, if your CEO quits and goes to a
competitor, and you have no budget to replace that CEO, you suddenly must incur a significant,
unbudgeted expense. If you don’t have the budget, you don’t know what to do when you suddenly lose a
key person. And yet it is foolish not to anticipate losing key Talent occasionally. For example, when a
Fortune 10 company announced its new CEO after one of its most successful CEOs retired, three other
people in consideration quit immediately. They assumed that in the next ten to twenty years they might
not have a chance to become the CEO of the same organization. So, they accepted positions in three
different organizations. The company might have anticipated this, but if it did not have replacement costs
budgeted at that time, it would have had to use unbudgeted funds, which is always awkward at that level.
Even if it promoted internal executives to fill those positions, it would still incur a heavy replacement cost.
Flawless hiring of key executives is one of the critical factors for success. To achieve flawless hiring, you
must dedicate sufficient time to select the right people, hire them, and bring them into the organization.
You have to invest a lot of money. You can’t just put an advertisement in Fortuneor the Wall Street
Journal and be done. The CEO needs to be involved in interviewing candidates and talking with their
references. If you are considering hiring me, for example, and I listed someone as a reference, I would
expect you to call my reference and say, “I have interviewed Mr. Chowdhury. He listed you as a reference.
Could you please spend a few minutes with me about him, or could I meet you in person to talk about
him?” Most senior managers don’t do that because it costs money.

Senior managers should have access to money in the TDB to recruit Talents or replace Talents who leave.
The cost of attracting and holding Talent and the cost of replacing Talent are two critical costs beyond
training and development. Typically companies place training and development costs within human
resources; but they should spend more money to attract, hold, and develop Talent.

High-potential Talent should receive the lion’s share of the Talent development budget. Suppose seven of
us work at a manager level in seven different divisions. Of the seven, maybe two of us are identified by the
company as very talented people. So, rather than allow each of us $5,000 each for training and
development, the organization should spend more money on the more talented of the seven. Give them
growth opportunities. Make a special case for top performers who are the future of the company. Of those
seven people, if the five other people leave, the organization may not suffer as much as if the two more
 Babita, 09, MBA(F)
talented were to leave. The Talent development budget can be sufficiently flexible to allow different
spending levels for different people. The resulting disparities may cause the human resources manager
some difficulty because of the apparent inequities. But that is the nature of attracting and keeping Talent.
Talents are free agents.

After a company sets its goals and knows its capability, its management can prepare a TDB and plan to
fund its key resources to meet the goals. For example, if a company plans to implement a Six Sigma
initiative, its management may set goals to train three thousand employees in two years, spend $2 million
on training and developing key Talent, and save $20 million on the projects. After the company sets such
performance goals, management then allocates budget money to be spent in that way.

Corporations now prepare production budgets, sales budgets, cash budgets, and capital budgets. It is very
easy for managers to prepare those budgets because they can easily determine the value of hard assets
such as machinery, buildings, land, and other physical resources. But they cannot so easily prepare a TDB
because the value of Talent is hard to quantify.

Talent can make a significant difference in any business. For example, if you give the same brush and paints
to an ordinary person and to a very talented painter, you will see the difference in their artwork. Similarly
in business, outstanding Talent can produce outstanding results using the same resources. To meet their
goals, managers should decide if they should bring in new Talents or train existing Talents. They should
calculate the return on investment in attracting, holding, and training Talent.

A TDB has three parts:

1. The cost of attracting, hiring, and holding Talent

2. The cost of replacing Talent
3. The cost of developing and training Talent

The costs of attracting and hiring include salary, benefits, and recruitment costs. Holding costs include
salary, compensation, and all other benefits related to retaining Talent. Replacement costs include
severance pay and all other benefits paid to Talents who will be replaced and all other costs associated
with bringing in new Talents to those positions. Development and training costs include all costs related to
training Talent.

The first part of the Talent development budget is the cost of attracting and holding Talent. A Talent may
say, “I am doing this much work” and challenge you or threaten you, saying, “If you don’t give me this, I
will quit today. I have a much better offer.” If you need that person in your organization, that is a sudden
and unnecessary cost. If you don’t have a budget, how can you spend the money? Often managers lose
some of their best people over a small amount of money.

Spend money to keep a key Talent. If the Talent is demanding—if somebody with a high performance
rating threatens to leave—management should spend money to keep that Talent. This “retention bonus” is
like a re-signing bonus. If a Talent has been working with distinction for an organization for five years and
has not been well rewarded for her achievements, she will look for a better offer. When she receives one,
she may use that offer to negotiate a better deal with her current company. A retention bonus is not a
bribe but more of an incentive to stay.
 Babita, 09, MBA(F)
Employees who ask for more money must present a solid business argument. If you feel the argument is
valid, then use the budget and spend the money, especially if you cannot afford to lose that Talent right
now.

Calculating the true value of a Talent is not easy. Management should decide the value of a Talent based
upon performance, success, and goodwill. Hiring and holding good people with the right value are
challenging. It is difficult to determine, for example, the exact value of your company’s president. Difficult
though it may be, the art of determining the value of Talent and preparing a TDB will be the key to success.

Value-Driven Cost Structure

You can determine the acquisition and replacement cost of Talent using a value-driven cost structure. The
cost of Talent is a variable cost because Talent cost always changes. For example, the quality of work
performed is more important than the quantity of work performed.

When Talents are seen as a fixed cost, they will leave. Talents should be seen as a variable cost. Most year-
end bonuses depend on how many problems you solve temporarily, but talented people who create long-
term value should be rewarded more than those who create short-term value. Most organizations give a
big bonus to the firefighters. Suppose I am a firefighter, and you are a fire preventer. You are trying to
design the product in such a way that the defect would not exist in the first place. Both of us report to the
same boss, and he comes to me saying “This is a problem. Can you please solve it within six months?” I
solve the problem. You say, “I can’t solve this problem in six months. I need nine months to a year.” But
when you solve the problem, that defect will never come back because you will solve it by eliminating the
defects from the root. In most cases, our boss will reward me instead of you. Your reward should be five
times more than my reward. As it is, there is no reward for you, even though you are the true Talent.

The cost of Talent is highly variable. Organizations should pay their people based on a performance
measurement unit, the evaluation of performance being the key element for determining salary.
Performance should be based upon the quality and quantity of work. Often, managers analyze short-term
operating performance but don’t assess long-term value, and so they don’t know how much to spend to
bring in talented people. Value here means the price you pay for Talent relative to returns on your Talent
investment. Because there is no definitive market value for Talent, it is hard to hold good people with the
right value (price tag).

Performance measurement varies for different activities. For example, you cannot use the same
measurement or “metrics” in design engineering as you use in sales and marketing. In the design and
engineering department, performance is measured against optimization of design, defects rate, customer’s
preference, and satisfaction. In the sales and marketing department, performance is measured against
percent of sales volume increase against cost of sales.

Determining the acquisition and replacement cost of Talent and the total value of Talent is an art, not a
science. It’s never easy to determine the value of the people in an organization. When an organization
wants to acquire new Talents, management should estimate how much it should spend to acquire those
Talents by calculating the value of those Talents from past success and any goodwill created by the Talents.
Organizations should measure the performance of their Talents. Based upon the performance and past
 Babita, 09, MBA(F)
success and goodwill, management should put a price tag on Talents. If managers want to acquire new
Talents who don’t have any experience or past success, they should implement a flexible, performance-
based salary structure.

Contingency Plan for Talents

Hiring talented people is costly; in fact, the hiring process itself is costly and time consuming. There is a
time gap between losing and hiring Talent. Opportunity loss is large for an organization. As the gap
becomes bigger, loss becomes bigger. An organization’s goal should be to minimize this gap.

Managers can minimize losses that occur during this time gap by having a standby team, making a proper
contingency plan, and accelerating the hiring process. If you don’t have a contingency plan, you will lose
much time and money. The time gap between when you lose a person and when you hire a person will
widen. It might widen to even three or four months. This gap represents a high opportunity cost, a huge
opportunity loss. A contingency plan can reduce the damage from a loss of a key Talent. Once a friend
called to tell me his number one man in Japan had just quit. My friend had a meeting with a client, and the
employee who just quit had managed that client’s account. “We are trying to expand our consulting
service within this client, and, now, our lead guy is gone. Can you assist me in any way?” Luckily, I found
somebody from our office to support my friend. If he had had a contingency plan, he would not have been
so desperate. He would have just sent another person he was developing in the event that such a situation
arose.

Management has to be ready for Talent shifts by having an alternative plan for key Talent. If you lose key
Talent, you need to know what immediate actions you can take. If you have an alternative plan, you can
minimize the impact of losing key Talent dramatically in terms of both time and cost.

In preparing a contingency plan, management should first identify its key Talents in each area. Then
management should identify the next-level coworkers of those Talents. Encourage key Talents to share
their knowledge and strategies with coworkers by facilitating learning. Involve next-level Talents in some
critical projects to develop their strengths. Each organization should have a contingency plan so that if it
loses people in key positions, others can step in immediately until the organization finds new Talent for
those positions or those positions can be run without bringing in new Talents.

Well-conceived contingency plans will take care of most unanticipated staffing problems. How much
money would a contingency plan save a large company like General Electric or Ford? It could save them
millions of dollars. After one manager quit one of the leading U.S. automaker’s profitable division, it
suffered badly.

The Power of Developing Talent

When John Martin, CEO of Taco Bell, applied the power of developing people, his company grew
exponentially. He notes:

Every business is faced with a mandate of reducing costs while improving service. To become more service
oriented and competitive, you need a workplace full of people who are empowered, self-sufficient, and
 Babita, 09, MBA(F)
highly motivated. Where can you find a work force like this? The answer is that you don’t find it—you build
it by providing your people with the tools, training, environment, and freedom they need to take charge.
You build it by trusting that people have a strong desire to succeed. Why don’t more companies do this?
Fear. I know firsthand what this fear feels like. At Taco Bell, we spent years doing everything possible to
keep our workers “under control,” which resulted in high turnover, low morale, and slow growth.
Fortunately, we recognized that our company would only go as far as our people would take us.

Martin recalls that in the 1980s, Taco Bell was in trouble. The company had experienced several years of
negative sales growth. The stores were dark, menus limited, and advertising flat. The industry joke was
that Taco Bell was such a well-kept secret that most people thought it was a Mexican phone company.
“When my management team came on board, we began a change, starting with the way we listened to
and responded to our employees and customers. We asked them what they wanted, we listened, and we
realized that the products, systems, and prices that may have served us well in the past wouldn’t satisfy
our customers in the future. Following extensive market research, we implemented the first phase of our
value program and turned our business upside-down to give our customers better quality, better service
and greater convenience—and all at a lower price.”

With the help of new technology, Taco Bell moved much of the slicing, dicing, and cooking that took place
in the back of its restaurants to consolidated sites to allow employees to focus instead on final product
assembly and service. Martin reports:

These initiatives helped ensure food quality, order accuracy, speed of service, enhanced safety, and
improved quality of life for our people. The key to our success is the empowerment we have given to our
people. Our empowerment philosophy is based on the premise that to change what people believe they
can do, you must first change their experience. We felt that our people could do far more than our industry
gave them credit for. If we were serious about reaching our goals, we could either build a work force of
unmanageable proportions, or we could create an environment that encouraged self-sufficiency and
empowerment. We chose the latter. We committed ourselves to leveraging the talent of our people, and
the more responsibility we gave them, the more they wanted. At every level, our people exceeded our
expectations. They were turned on by the opportunities we presented and inspired by the challenges.

We are striving to break down the functional silos that limit what our people have been told they can do.
Today we are seeing more initiatives coming from the field. By empowering our people, we have sent the
message that everything within our business is fair game.

We are creating a rich pool of highly-confident, self-sufficient, empowered individuals. I urge you to instill
an entrepreneurial spirit within your organization. And when you do, you’ll discover a tremendous new
world of performance, prosperity, and personal reward.

Strengthen Your Future: 4 Steps to Identify and Develop Your High-Potential Talent

According to a 2011 study by Harvard Business School, only 15 percent of companies in North America believe
that they have enough qualified successors for key positions. Is your company one of the 85 percent that will
face a shortage of talent for key positions in the coming years?

How can you ensure your company is ready? Develop the talent you already have.
 Babita, 09, MBA(F)
Development cannot be solely an HR or training function. Alignment must come from the top down and
across all areas of the company. Influencing business operators to see the benefits of investing in a long-term
development program will be necessary for all support roles. The reduced turnover, lower recruiting and
training costs, and deeper engagement will only serve to fund the growth of your best people.

Development cannot be solely an HR or training function.

Involving the business unit leaders in all stages of talent development, including specific follow-up roles, is vital
to creating commitment to the success of your company’s programs. These team members are your
foundation for exceptional long-term results.

Most organizations have some way of identifying their high potential associates, but identifying talent alone is
not enough. The following four steps will help your company create a culture that fosters and grows potential
into quality leaders for the future.

1. Implement a Formal Identification Process

Make it an annual or twice-yearly event in which all areas of your organization can participate simultaneously.
It needs to be a simple yet thorough process that business unit leaders can calibrate to identify their top
performers. The criteria should be well-rounded. Avoid using only financial or performance metrics; include
the behaviors that represent your company values and the competencies required for future initiatives.

Include the behaviors that represent your company values and the competencies required for future
initiatives.

Ensure that everyone knows what the criteria are and how people are identified as high potential. Make this
identification something people aspire to achieve . Once selected, ensure they are formally told that they have
been identified and the specific reasons why. This process serves as recognition of the hard work and
commitment they have already shown.

2. Build a Personal Development Plan

Identifying your high potentials should jumpstart the process for their individual growth. Begin the discussion
about their long-term goals. Assign a mentor to work directly with them on their development. Capture the
actions and steps they will take to continue their progression. Identify what they are already doing for
themselves and incorporate that development as well. Define what success looks like, the competencies for
the next level and a time frame for each step’s completion. Schedule regular update meetings to discuss what
they are learning, how they are applying it and why it matters for future roles.

Identifying your high potentials should jumpstart the process for their individual growth.

3. Challenge Them

Give your high potential talent new and unique opportunities. Assign them bigger, more meaningful projects
as they become available. Invite them to meetings or discussions, and ask for their input. Expose them to
 Babita, 09, MBA(F)
situations that will stretch and engage them to think in innovative ways. Debrief after these sessions to
understand their takeaways and progress.

4. Establish a High Potential Program

Build high-potential talent groups to expose them to other top performers outside their day-to-day work
areas. Create an environment for these groups to share ideas, their learning and successes. These groups are
an excellent way to show that you see them as different from other associates. Establish six- to 12-month
development programs that hit on key leadership or competency topics. Tailor the groups and programs
based on development need and current level. Create a system that allows for ongoing growth and graduation
to higher courses of learning. The use of external resources can be a wise investment for these programs,
especially if your company does not have the internal resources to support them. A third-party firm can also
provide insights and connections from outside the immediate industry to further round out your best players.

Build high-potential talent groups to expose them to other top performers outside their day-to-day work
areas.

The benefits are numerous for having a process for identifying your high-potential talent, building a
development plan, exposing them to new areas and including them in a dedicated program for their growth.
These top associates will recognize your commitment to them and reward you with deeper engagement, long-
term loyalty and higher productivity. Solidify your company outlook and fill your future key positions with
quality leaders.

FIVE STEPS TO INTEGRATING COACHING INTO YOUR TALENT MANAGEMENT

STRATEGY

Coaching means many things to many people. Many times a certain technique that is referred to as
“coaching,” isn’t really coaching at all; it’s actually counseling or feedback. For example, you may have
heard or had this happen to you – a manager will say, “Let me give you some coaching around ABC,” and
they proceed to explain to an employee why the employee failed to accomplish a task. The manager then
explains the way ABC needs to be done. More times than not, the recipient of this so-called “coaching”
walks away disillusioned by what they think was a coaching experience and perhaps, deflated and
unmotivated. As a result, coaching can get a bad rap and employees may begin to disengage. So what does
a real coaching conversation look like? Well, something like this: “So, how do you think your presentation
on ABC went?” The employee is given time to reflect, respond and be an active participant in the
conversation. The manager continues to ask thoughtful questions such as: “What would you have done
differently?,” ”What actions will you take?,” or “How can I support you?” Do you notice the difference?
This is a coaching conversation—the employee is empowered to act while being supported by their
manager. The employee gains confidence knowing that they own the outcome while feeling acknowledged
and supported by their manager.

Now more than ever, there is a great opportunity to bring coaching into organizations. According to
Gallup’s study on the global workplace, only 13% of employees worldwide are engaged at work or are
psychologically committed to their jobs and likely to be making positive contributions to their
organizations. Therefore, 63% are “not engaged.” If this is the case, then why not integrate coaching into
your talent management strategy, not only to increase employee engagement, but to achieve other talent
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development goals such as developing certain competencies like problem-solving, strategic thinking or
filling your talent pipeline with ready-now talent for upward or lateral assignments?

In order to integrate coaching into your talent management strategy, the following five steps should be
taken:
1. Educate Your Leaders: Start at the top and educate your executives on the differences and benefits
of coaching versus counseling. Interview them on their perspectives on coaching and assess their
willingness to participate and support a coaching initiative. Explain the benefits of coaching and ask
them where they see applications for coaching inside their organizations.
2. Identify Coaches, Participants and Executive Sponsors: Look for individuals and managers that can
become trained to be internal coaches inside your company. These individuals may be inside your
talent management and organizational development areas or could exist inside the business itself.
Consider having talent management or Human Resources executives trained and credentialed by the
International Coach Federation as professional coaches. As a result, they will be in an excellent
position to coach executives in the company. Alternatively, you may choose to utilize external
coaches. If so, you can submit a request via the International Coach Federation Coach Referral Service
website or ask colleagues for recommendations.

Simultaneously, you will want to identify candidates to participate in the coaching program. Therefore,
review your succession planning and consider top talent managers, directors and executives.
Participants should be excited to be part of the program and willing to make a commitment. Just as
important as identifying the coaches and participants is to make certain that you have executive
sponsorship. Determine which executives would like to sponsor the program and be a participant.
Request that they support you in your coach and participant identification, marketing efforts, during
participant enrollment and throughout the program’s life cycle.

3. Manage Expectations: Be sure to clearly set expectations with your internal coaches, individuals
being coached, the executive sponsors and, of course, your managers and colleagues. It is best to run
the initial program as a pilot and build upon its success. Make certain everyone is clear on the goals of
the program, time commitment and their roles and responsibilities.
4. Train: Enroll your internal coach candidates in a coach-training program that is designed to train
individuals that work inside companies as a coach. If you choose to enroll internal employees to
become coaches, ensure they’re being coached by a coach with experience coaching internal coaches.
In addition, be sure to train the individuals who are to be coached on the role and responsibilities of
the participant. While training your coaches, be sure to establish a clear and consistent process for
enrolling clients, coaching time and exiting clients. The key here is to ensure that everyone
participating has a similar experience.
5. Measure Success: Prior to starting the program, determine how you will measure its success. It may
be done simply by using a Net–Promoter score or setting up a simple impact study. It doesn’t have to
be a rigorous measurement such as ROI. If your program is embraced and utilized (coaching clients
show up and participate in the coaching), then that’s a great sign. Interviewing them or surveying
them on the benefits they received is also an excellent idea. In addition, be sure to ask the managers
of the program’s participants about the changes they may have noticed in their employee’s behaviors
after being coached.
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In a time where we’re surrounded by change and have so many demands on our personal and
professional lives, the need for coaching is at an all time high. Coaching is a model for engagement,
empowerment and accountability. It teaches those being coached to be responsible and to “own”
their results. By engaging in coaching, you’re making a decision to replace mediocrity with high-
performance. So let’s ask ourselves, who and what company doesn’t want full engagement and high-
performance?

Ways to improve employee retention

Every area of the employer-employee relationship in your organization deserves your attention. Embrace
these key strategies to improve your organization's employee retention and boost employee  satisfaction:

 Onboarding and orientation — Every new hire should be set up for success from the very start, from the
first day of work to the first week and beyond. The job  orientation is just one component of onboarding,
which can last for weeks or months, depending on your organization. Aim to develop an onboarding
process where new staff members not only learn about the job but also the company culture and how they
can contribute and thrive, with ongoing discussions, goals and opportunities to address questions and
issues as they arrive.
 Mentorship programs — Pairing a new employee with a mentor is a great idea for onboarding. New team
members can learn the ropes from a veteran with a wealth of resources, and the new hire offers a fresh
viewpoint  to experienced staff. Mentors shouldn't be work supervisors, but they can offer guidance and
be a sounding board for newcomers, welcoming them into the company culture. 
 Employee compensation — It's absolutely essential in this competitive labor market for companies to offer
attractive compensation packages. That includes salaries, of course, but also bonuses, paid time off, health
benefits, retirement plans and all the other perks that can distinguish one workplace from another. Every
employee should have a full understanding of all the benefits they receive from your organization. 
 Recognition and rewards systems — Every person wants to feel appreciated for what they do. Make it a
habit to thank your direct reports when they go the extra mile, whether it's with a sincere email, a gift card
or an extra day off. Show your employees you appreciate them, and share how their hard work helps the
 organization. Some companies set up rewards systems that incentivize great ideas and innovation, but you
can institute recognition programs even on a small team with a small budget.
 Work-life balance — What message is your company culture sending? If staff are expected to regularly
work long hours and be at your beck and call, you'll likely run into issues with employee retention. Burnout
is real. A healthy work-life balance is essential, and people need to know that management understands its
importance. Encourage staff to take vacation time, and if late nights are necessary to wrap up a project,
see if you can offer late arrivals or an extra day off to compensate and increase job satisfaction. Many
companies offer telecommuting or flexible schedules to improve work-life balance for their employees.
 Training and development — In any position and industry, professionals want the possibility for
advancement. Smart managers invest in their workers' professional development and seek opportunities
for them to grow. Ask each of your direct reports about their short- and long-term goals to determine how
you can help achieve them. Some companies pay for employees to attend conferences or industry events
each year, or provide tuition reimbursement or continuing education training. 
 Communication and feedback — Keeping open lines of communication is essential for employee
retention. Your direct reports should feel that they can come to you with ideas, questions and concerns,
and likewise, they expect you to be honest and open with them about improvements they need to make in
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their own performance. Make sure you connect with each staff member on a regular basis — don't let
issues build up for the annual review. 
 Dealing with change — Every workplace has to deal with unpleasant changes occasionally, and the staff
looks to leadership for reassurance. If your organization is going through a merger, layoffs or other big
changes, keep your staff informed as much as you can to avoid feeding the rumor mill. Make big
announcements face to face, and make sure you allow time for their questions.
 Fostering teamwork — When people work together, they can achieve more than they would have
individually. Foster a culture of collaboration that accommodates individuals' working styles and lets their
talents shine. Do this by clarifying team objectives, business goals and roles, and encouraging  everyone to
contribute ideas and solutions.
 Team celebration — Celebrate major milestones for individuals and for the team. Whether the team just
 finished that huge quarterly project under budget or an employee brought home a new baby, seize the
chance to celebrate together with a shared meal or group excursion. 

A final tip: Remember to assess your employee retention strategies at least once a year. You’ll want to stay
current on market salary rates and benefits, and best practices in developing workplace culture and
manager-employee relations. Doing so will help you keep staff morale high and turnover low while
guaranteeing your organization’s success.

Employee Retention - Role of Motivation

An employee, who has performed exceptionally good, must be appreciated immediately. The top
performers must be highlighted, awarded and rewarded and must be in limelight, which make the
employee for feel indispensable for the organization. Simple words like Good, Well Done and Keep It Up,
are actually the motivating factors for the employees. It is very essential for making the employees loyal
towards the organization for delivering their best.

Employee retention benefits both the employer and also the employee. Employee retention involves a
simple process that encourages and uplifts individuals or teams within an organization to remain engaged
with the Company in the long term.

Retention of employees depends on four major motivating factors −

 Remuneration and Rewards

 Work Atmosphere
 Growth Opportunities
 Bonding and Timely Support
Let us now discuss these four motivating factors in detail.

1) Remuneration and Rewards

Remuneration plays the biggest role in the process of motivating staff, which in turn, leads to retention. It
takes a clever hand to compose a compensation package. The best packages include −

 Bonuses
 Allowances
 Basic Salary
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 Retirement Benefits
 Incentives
 Employee Assistance Programs
2) Work Atmosphere
An organization should serve as a second home, as most of the employees spend a maximum of their time
at work here. It is not always about retaining an employee but about managing one’s surroundings at
work. It is about offering appropriate facilities and services to staff.

The following points play a major role in making the employee feel connected to a corporation −

 Engaging employees in decision-making

 Friendly and lively culture
 Ethical values
 Personal and Professional Balance
 Health, safety and well-being
 Reliability and dependence
 Learning environment
 Credit and recognition
3) Growth Opportunities
Growth is an integral element of an individual’s career graph. If there is no scope of growth within a
Company, an employee seeks external opportunities. The essential aspects that an individual looks to
grow in are −

 Training for personal development

 Personal zeal to develop
 Profile of Job
4) Bonding and Timely Support
Providing a personal or professional supportive work culture is sometimes overlooked by Management.
This results in demotivation due to the decrease in interest in work in a particular team or a Company as a
whole. To craft a good, reliable, long-lasting bond between the management and an employee, it is
important to −

 Recruit an individual only if necessary

 Provide support at the time of need
 Respect the individual
 Acknowledge individual targets and create growth opportunities
 Recruit leaders who can promote team work and enhance relationships
Empowering employees, making them realize their importance and value to the organization,
appreciating their efforts and appraising them for their performances will induce self-motivation and help
reduce employee attrition. Therefore, it is very important to motivate employees at the workplace in
order to retain them.
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