Sunday, 16 November 2014

Talent Management and Employee Retention, why you need them both

 
It is an axiomatic fact that human capital represents the real distinctive organizational component genuinely and effectually enabling employers to attain competitive edge. Beyond the rhetoric which may at times surround this principle, it can be definitely averred that whether an organization attains determined objectives this is thanks to the contribution of its people.
 
 
 
Unquestionably, employers can imitate, on occasions even promptly, every move made by their most successful competitors in the market but their people. Whether an employer has been successful in attracting the best talents existing in a determined area, this could practically boast the achievement of two simultaneous important feats: employing the best people and averting these to be hired by its competitors.
 





Despite talent can be defined in many ways, in the business field every definition associates with it particularly significant features and characteristics essentially enabling individuals to yield remarkable results and reach outstanding, above-than-average performances.

 

Talents could be thus defined as those individuals who possess distinguishing skills and capabilities enabling them to effortlessly perform at well-above-the-standard and who can effectually support the employer in the pursuit of its strategy and in the attainment of its intended objectives. Yet, these individuals can be considered as talent-dynamic, that is, people whose current capabilities and skills are predisposed to further grow and develop over time and who can consequently help the organization to sustain its growth and ultimately gain and preserve competitive advantage.

 

With particular reference to the business world, it can be averred that talent is not as widespread and promptly available as employers desire it to be. By contrast, the number of individuals who can actually make a difference and effectually help organizations to yield the desired results is relatively small. This has triggered and exacerbated over time a borderless competition amongst organizations, which have ever since devoted a growing attention to the design and development of practices aiming at attracting this significant category of individuals. So harsh has become the competition for talented people over time as in 1998 the consulting firm McKinsey formulated the self-explanatory expression “war for talent” to label this new phenomenon.

 

With the passing of the years, employers realized that attracting particularly talented individuals is not enough, it is in fact also crucially important for organizations to retain and further develop these. The need for the adoption of a structured and clear approach specifically aiming at investigating new and effective ways of attracting and retaining talents gave later birth to a new specialism widely known as “talent management.”

 

Talent can be intended not only as a current state, but also as a prospective state. Individuals can already possess the sought-after qualities or show to have the potential to develop these in the incoming future. Some employers have hence reconsidered the meaning of talent accordingly and expanded the extent of their search of potential talents to the organization current staff.


 
Businesses can thus opt for an inclusive or exclusive approach to talent management. The talent management strategy adopted by an organization can be deemed as exclusive whether employers restrict their attention and efforts to a limited number of high-fliers; by contrast, whether the activities and initiatives aiming at identifying and developing talent are extended to the overall employee population the approach to talent management is deemed inclusive.

 
 

Irrespective of the approach considered as the most appropriate and hence adopted in practice by employers, talent management can be divided into two main stages: the first stage is concerned with the search of talented people, either in the exogenous or endogenous context, whereas during the second phase employers efforts focus on the development and retention of the pre-identified individuals.
 
 
 
The common denominator of the inclusive and exclusive approaches to talent management is invariably represented by the employer dedication of resources and efforts to a limited number of individuals. Despite the inclusive approach entails the extension of the quest for talented people to the organization overall employee population in fact once the talented people and potential talents have been identified the initiatives included in the business’ talent management programmes will be offered only to the individuals qualifying for the scheme.
 
 
 
All in all, it can be therefore concluded that talent management programmes and initiatives are invariably dedicated to an elite of employees. Despite the presence within a business of a number of particularly talented individuals definitely represents a great asset to the business, it can be hardly assumed that employers may ever attain their objectives and successfully pursue their strategies without the active and effective contribution of the entire workforce. The considerable importance for employers of developing sound and effectual employee retention practices seems hence to be self-evident.
 


 
Talent management and employee retention practices are by no means mutually exclusive; on the contrary, the simultaneous introduction and implementation of such practices can certainly contribute to improve the worth of the employer value proposition and hence its employer branding. These programmes added to the other financial and non-financial initiatives implemented by employers can undeniably help these to attract and retain quality individuals. Once again, the synergic multiplicative effect produced by bundling reveals to be significant for the attainment of the organizational objectives.

 

Employers must be aware of the circumstance that the implementation of talent management practices does not entail having in place employee retention practices. Even though talent management and employee retention could be deemed as the two sides of the same coin, these actually represent two different approaches aiming at achieving two different aims. Whether an organization should, for instance, experience serious hardships in terms of attrition, the development and introduction of talent management programmes would not enable this to overcome the problem. Similarly, organizations will never be able to address the problems associated with skills shortage and succession planning by introducing employee retention practices.

 

Design, develop and implement effectual talent management and employee retention practices is everything but straightforward; however, since talent management initiatives are introduced to the benefit of a limited number of people, whose wants and aspiration can be thus more easily investigated and met, these programmes should reveal to be relatively easier to execute. Employee retention practices, by contrast, being basically directed at the entire workforce, can prove to be much more challenging and problematic for the HR specialists involved in their development and demanding for line managers and HR during the implementation phase. Whereas offering to talented individuals genuine opportunities for professional growth and autonomy, which could be in detail identified also on the basis of the current and prospective business wants and necessities, may reveal to be relatively, but not in absolute terms, straightforward, regularly coming up with brand new initiatives aiming at retaining the overall employee population is very likely to reveal a sorely difficult feat to perform. Some remarkable differences are indeed likely to emerge also in terms of budgetary issues and constraints.

 
 
Inasmuch as employers need talented and smart people to help them to identify the most appropriate strategies and the most effective ways to pursue these, organizations could never ever be able to yield results without the contribution of capable and proficient individuals properly and effectively performing the activities indispensable for the regular unfolding of the business day-to-day core operations. The tasks, activities and chores performed by the people within a business are indeed all equally necessary to produce the final outcome. It can be hardly imagined that employers would recruit and reward individuals whether the activities these perform would not add any value to, or would not anyway be significant for, the overall production process. 


 

It is widely recognized that individuals derive most of their motivation from the job and the activities they perform, provided that these are perceived as fulfilling and generate as such a sense of accomplishment, pride and ultimately of belonging. Whereas the activities performed by talented people imply a high degree of autonomy and responsibility, which can definitely provide these individuals a considerable return in terms of intangible and intrinsic reward, it can hardly be assumed that people executing more repetitive and not captivating tasks may derive the same sense of fulfilment as the former from the act of performing their job. Yet, it is widely recognized that employees derive most of their motivation from the awareness that the activities they execute are significant and valuable for the attainment of the organizational objectives and hence for the employer. Whereas talented people may hardly lose sight of the strong link existing between the activities they preform and the way these fit with the organizational strategy, this line of sight habitually results to be much more blurred for the shop floor.
 
 
 
 
The development of both talent management and employee retention practices definitely represents a sorely difficult task for HR managers and specialists but, as we have seen, the development of sound and effective employee retention practices typically presents even more difficulties. Furthermore, whereas talented people once the employer has decided to invest in them are likely to start and walk a path entailing a constant development, growing levels of responsibility and possibly a change of role over time, the largest part of employees are likely to continue to perform the same tasks and activities for a very long period of time at best and till retirement at worst.  In these cases it is glaringly obvious that people with a certain level of Growth Need Strength (GNS) will feel uncomfortable continuing to perform the same activities for a very long period of time. Under such circumstances, especially whether individuals should perceive their current job as a dead-end one, there are good chances that these people will try and seek for new opportunities either internally or externally.
 
 
 
Managers’ mission is therefore very important and at the same time definitely challenging. In every organization there are people performing repetitive tasks which are in any case vital for the attainment of the organizational objectives and that, for repetitive and mundane these might be, require to be executed by experienced, accurate and professional workers. Yet, more often than not these people perform such type of tasks from a long period of time and at a more-than-satisfactory level. In terms of quality and quantity there is a world of difference between the final outcome yielded in the same length of time by an experienced and loyal employee and that produced by a newcomer; especially whether this does not fully fit the business culture. Whether some of these experienced and productive individuals should leave the business, the employer would be prompted to activate a costly chain process formed by: recruitment and selection, induction and training. At the end of the process it is very unlikely that the new hires may attain the same level of professionalism and performance as that achieved by the employees who have resigned. The incumbents will be able to attain the same level of contribution after a number of years at best, which does not clearly represent an ideal situation for an employer.
 
 
 
All in all, it emerges that retaining good workers and best performers is of paramount importance for employers, irrespective of the complexity of their roles. Employers should hence definitely continue to pursue their interest in talent management, preferably in its inclusive rather than exclusive form, but not to the detriment and overlooking the importance of the rest of the company employee population. Every good employee is important, the definition of human capital is not casual and it is not indeed limited to part of an organization workforce. Retaining good employees is invariably important and can enable employers to practically attain competitive advantage and avert the costs associated with employee turnover. On the other hand it cannot be denied that a too stagnant workforce is not positive for employers too. Newcomers, especially whether these have had previous work experiences in different businesses, can clearly contribute to an organization a breath of fresh air which is habitually beneficial to employers and employees as well. This objective can, however, be met when replacing retired people, when expanding the size of the workforce or as a consequence of a deliberately activated sorting effect plan.
 
 
 
People at all levels are important for organizations so that in order to avoid undesirable additional costs and possible disruptions employers should devote to all of them the right attention and resources and strive to make each individual feel valued and respected in the workplace.
 

 
 
Longo, R., (2014), Talent Management and Employee Retention, why you need them both; Milan: HR Professionals, Milan [online].