Talent management is defined as the strategies and practices needed to identify, develop, attract and retain skilled workers of value to an organisation. (Rands 2009). It can be described as a holistic approach to the strategic management of the organisation’s employees. Organisations need to view their people as investments which add value to the company and not as costs which take from the bottom line. Having a talent management system in the organisation is crucial to growing the value of that human capital. If we analyse the critical factors for organisational survival and growth today, we will see that they have evolved from land, capital and equipment to creativity, innovation and problem solving. The focus has switched from fixed assets to people and their skills. “In our knowledge based economy, value is the product of knowledge and information. Companies have to bet on people, not technologies, or factories and certainly not capital (Martin, Moldoveanu, 2003). Despite this and the fact that the CEOs of many major corporations are stressing that talent is their most important resource, organisations are finding talent management to be a very intricate and complex issue, and many are struggling in their attempts to properly implement talent management programmes. As the world lies deep in recession and HR faces greater challenges than ever before, opportunities still exist for organisations to excel through proper employee development strategies. In this essay we will look at why talent management is so important, what issues arise as organisations try to implement a talent management system and finally we will look at the different development processes used when developing talented employees.
Importance of Talent Management:
In a global survey of more than 9,000 executives, the concern about the short supply of talented workers was ranked as the most significant managerial challenge ahead and the resulting cost of these people as the most likely constraint to company growth (Mckinsey, 2005). The number of people aged between 35 and 44, which is the age group most likely to fill vacated senior leadership positions, is now estimated to be falling by as much as 15% or more in the majority of developed countries (Hewitt, 2006). In 2006, baby boomers will be officially entering their sixties and as such preparing to retire. We are bombarded with statistics predicting the consequences of this demographic phenomenon, including: “The US Bureau of Labor Statistics estimates that their exit from the workforce will contribute to a labor shortage of 10 million qualified workers by 2010” (Schooley et al, 2005). The U.S. Department of Education states that “60% of all new jobs in the 21st century will require skills that are possessed by only 20% of the current workforce” (Wall, Aijala, 2004). Historically, companies have relied far more heavily on recruiting rather than cultivating talent. At the height of the “Internet Boom,” Deloitte found that larger organisations were spending an average of up to 12 times as much on recruitment as they were on training their own existing employees. Talent management if properly implemented is a source of competitive advantage, it helps to create a positive work environment which ultimately leads to greater workforce productivity.
Organisations now accept they have got to be more proactive in how they nurture and retain the right talent, if they wish to remain competitive into the next decade and beyond. They realise that they cannot continue to rely on expensive recruiting solutions to backfill every internal vacancy. They are moving to more holistic talent management strategies that will hopefully save them time and money, provide long-term benefits and reduce their exposure to risk. Essentially...