Why Talent Management Is Important for Successful Businesses
Scarce is the HR department today that has not heard of the discipline of talent management. From its relatively early days where it was liable to be dismissed as mere, newfangled business jargon, it is increasingly being recognized as intrinsic to HR and its importance as a component of business strategy is being appreciated.
What is talent management?
Simply put, talent management is a process that seeks to drive employee performance through integrated people management practices. It looks at not any one component of HR but the entire scope of its work, and it seeks to attract, develop, motivate, and retain the most high-performing employees available in the job market.
When an organization has a well-defined talent management strategy in place, it could benefit in the following ways:
- Attract top talent in the competitive job market
- Build a sustainable competitive advantage and outperform competition
How is talent management different from HR?
Talent management is broader than HR. An easy way to appreciate the difference is by considering the case of a candidate being evaluated for a job position at a company.
- HR, traditionally, would look at the candidate and evaluate his/her fit with the role requirements
- Talent management would look at the candidate and evaluate his/her fit with:
- Requirements of the current role
- Requirements of possible future roles
- The culture and values of the company
What is the purpose of talent management?
The role of talent management is very important in an organization. A well-defined talent management framework serves the following purposes:
- Provides company leadership with a structured approach to retaining talented employees and developing their potential
- Develops the staff in line with both their individual goals and those of the company
- Improves organizational effectiveness as a key component of the process of planning the workforce
Does an organization stand to gain from a well-defined talent management process?
It certainly does! Talent management brings the following advantages to an organization:
- Attracting the best talent: Globally speaking, the level of unemployment is at the lowest level in the past half-century! The availability of skilled workers is low, even though the workforce is multi-generational. Organizations find it difficult to hire the most talented individuals, and having a dedicated talent management strategy in place is a signal to a prospective hire that he/she will have sufficient opportunities for professional growth and development, which has been seen to be a major draw for potential hires.
- Retaining skilled employees: This becomes especially critical given that
- Companies make tangible financial investments in employees
Companies incur intangible costs such as
- Time taken to get up to speed
- Workplace knowledge gained
It helps to build engagement, which in turn builds loyalty, and loyal employees rarely quit! A good employee is as valuable as—if not more than—money, and in that sense, employee development is not an expense but is in fact an investment with the likelihood of strong returns.
Who drives talent management at an organization?
The most important role in creating a purposeful talent management framework at an organization is played by its leadership. Good leaders serve as positive role models, and foster strong development cultures that let their organizations thrive. Leaders must constantly strive to better their own performance, and thereby motivate their employees to do the same. An organization staffed with engaged employees and inspirational leaders knows the importance of managing products, policies and operations. It has a culture where employees get the due recognition and value for the work they do, and are also challenged to do better and learn more in the process of discharging their duties.