Editor's Note: Take a look at our featured best practice, McKinsey Talent-to-Value Framework (230-slide PowerPoint presentation). Curated by McKinsey-trained Executives Unlocking Business Excellence: The McKinsey Talent-to-Value Framework Toolkit In the dynamic world of modern business, staying ahead of the competition means maximizing the potential of your most critical asset – your people. The **McKinsey [read more]
Finding It Hard to Manage a Stable Talent Pipeline? Get Help from These 6 Pillars of Talent Management
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Enterprises worldwide face problems selecting, staffing, developing, compensating, motivating, and sustaining their key talent. Building a sustainable Talent pipeline is quite strenuous even for large multinationals.
Replicating best practices from somewhere and applying them alone isn’t sufficient for organizations to build a Talent pipeline and achieve Competitive Advantage. This warrants overcoming arduous challenges associated with this digital age, including:
- Adjusting to varying dynamics in global markets
- Handling the expectations of varied customer segments in different geographies
- Managing the preferences of key Talent
- Acquiring new technologies
- Building novel capabilities
- Achieving Operational Excellence by streamlining operations and improving processes
- Exploring new markets
- Devising strategies to attract, select, develop, assess, and reward top Talent.
Developing Talent Management practices helps the organizations build and retain talented people available in the job market. The term was first used by McKinsey & Company in 1997, and it pertains to planning and managing strategic Human Capital through activities, i.e. attracting, selecting, developing, evaluating, rewarding, and retaining key people.
Executives use diverse Talent Management strategies and career pathways based on various departments, levels, and roles in their Talent pool. Multi-year research on Talent Management practices conducted by an international team of researchers from INSEAD, Cornell, Cambridge, and Tillburg universities studied 33 multi-national corporations, headquartered in 11 countries. The study revealed that successful Human Capital practitioners and workforce planners adopted 6 core principles. These principles act as the 6 pillars to effective Talent Management implementation:
- Alignment with Corporate Strategy
- Consistency of Talent Management Practices
- Integration with Corporate Culture
- Involvement of Leadership
- Global Strategy with Localization
- Branding and Differentiation
Let’s discuss the first 3 pillars in detail, for now.
Alignment with Corporate Strategy
Integrating Talent Management with Corporate Strategy is imperative as the need for future Talent depends on the company’s long-term strategy. Corporate Strategy should guide the identification of Talent required to accomplish organizational goals, since it’s the right Talent that drives the key strategic initiatives rather than strategic planning.
For example, GE’s Talent Management practices have been a great assistance in implementing their strategic initiatives. The organization regards its Talent Management system as their most potent execution tool and has integrated TM processes into their strategic planning process. To sustain its image as an innovation leader, GE targets technical skills as a priority in its annual Strategic Planning sessions. Individual business units lay out their business as well as the Human Capital objectives in GE’s annual strategic planning sessions. Significant time is spent on reviewing its Innovation pipeline, its engineering function’s structure, and Talent requirements. To achieve its vision, GE promotes more engineers in its senior management than its rivals.
Consistency of Talent Management Practices
Talent Management practices must be consistent and synchronous with each other. It is critical not only to invest in advancing the careers of key Talent but also to invest in processes to empower, compensate, and retain them. Human Capital practitioners utilize various tools to ensure consistency of Talent Management practices, including Human Resources satisfaction surveys and qualitative and quantitative data on TM practices implementation.
For example, the success of Siemens is based on consistent monitoring of its systems, processes, and key performance metrics across its subsidiaries. Every element of Human Capital Management is connected, continuously assessed, and linked to rewards. This goes from recruitment of graduates each year, to their orientation, to mentoring and development, to performance evaluation and management, and compensation and benefits.
Integration with Corporate Culture
Corporate culture is regarded as important as vision and mission by renowned global organizations. These companies hold their core values and behavioral standards very high and promote them among their employees through coaching and mentoring. They strive to embed this into their hiring, leadership development, performance management, remuneration, and reward processes / programs. So much so that they consider cultural adaptability a crucial element of their recruitment process—as personality traits and mindsets are hard to develop than technical skills—and evaluate applicants’ behaviors and values rigorously.
For example, among other leading companies, IBM has a special emphasis on values while selecting and promoting people. To ensure consistent values across the board, it organizes regular values jam sessions and employee health index surveys. These sessions encourage open communication and debate on values and organizational culture and their importance among employees.
Interested in learning more about the other pillars of Talent Management, the various approaches to TM? You can download an editable PowerPoint on 6 Pillars of Talent Management here on the Flevy documents marketplace.
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Want to Achieve Excellence in Human Resource Management (HRM)?
Gain the knowledge and develop the expertise to become an expert in Human Resource Management (HRM). Our frameworks are based on the thought leadership of leading consulting firms, academics, and recognized subject matter experts. Click here for full details.
The purpose of Human Resources (HR) is to ensure our organization achieves success through our people. Without the right people in place—at all levels of the organization—we will never be able to execute our Strategy effectively.
This begs the question: Does your organization view HR as a support function or a strategic one? Research shows leading organizations leverage HR as a strategic function, one that both supports and drives the organization's Strategy. In fact, having strong HRM capabilities is a source of Competitive Advantage.
This has never been more true than right now in the Digital Age, as organizations must compete for specialized talent to drive forward their Digital Transformation Strategies. Beyond just hiring and selection, HR also plays the critical role in retaining talent—by keeping people engaged, motivated, and happy.
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About Mark BridgesMark Bridges is a Senior Director of Strategy at Flevy. Flevy is your go-to resource for best practices in business management, covering management topics from Strategic Planning to Operational Excellence to Digital Transformation (view full list here). Learn how the Fortune 100 and global consulting firms do it. Improve the growth and efficiency of your organization by leveraging Flevy's library of best practice methodologies and templates. Prior to Flevy, Mark worked as an Associate at McKinsey & Co. and holds an MBA from the Booth School of Business at the University of Chicago. You can connect with Mark on LinkedIn here.
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