Wednesday, 28 May 2014

Using Talent Management as a Competitive Strategy

Why a Talent Strategy

Finding, winning, retaining and developing talent is at the heart of what makes a world-class organisation. Those businesses who strategically focus on having outstanding people outcompete those who are merely recruiting above average, but too few organisations recognise that focusing on talent is a distinctive business strategy. 

"Ultimately, the businesses that are going to win in the war for talent, are those that accept the challenges and opportunities presented, and adapt to a new way of recruiting..." Real Business

Talent management is not about paying higher, it is about a complete company wide strategic approach to people, focusing on them as the key strategic asset of a company. Its a different way of thinking about the total value of human capital within an organisation.

Businesses have always recognised the importance of outstanding people, but only relatively recently have businesses focused on the strategic competitive advantage that can be leveraged through talent management strategies. The benefits not only include lower costs per employee, lower staff turnover, higher effectiveness but ultimately the ability to strategically outcompete your competition with dynamic, highly motivated people.     

World-Class companies spend 27% less on HR and operate with 24% fewer staff, while still achieving higher effectiveness. (The Hackett Group)

Battle for Talent

In advanced economies the battle for talent is what drives the exceptional from the simply outstanding. Using talent to drive your organisation is becoming an increasingly viable option for brand leaders across an ever wider range of industry sectors to create a sustainable competitive advantage within businesses. The strategy of targeting the best talent, acquiring it and then developing it to enable their organisation to effectively outcompete their competition on more than product and service. 

Defining your strategic advantage through quality people is about setting out a standard of excellence to find, win and retain the best people provides a competitive advantage for many businesses. Professional services, such as legal, financial and medical have always focused on creating a vertically aligned talent development market from specialist schools, dedicated well resourced universities and then into the ivy league businesses. These originally informal models have now become established global standards competing around the world, now competing against each other in a global intellectual super race. World-class competition exists in many such high worth sectors with national and international industries established by trading blocks.

This is also a strategic model which international businesses are frequently adopting to enable them to ensure they have the human capital resources they need to succeed across a wide-range of markets, particularly those competing on a global scale from heavy engineering through to customer service.      

Integrated Strategic Approach

It requires firstly operational excellence within the Human Resources department to be successful, ensuring they are aligned with the organisations strategic goals coupled with an integrated approach to talent management. This integrated approach requires Human Resources to proactively work across the organisation rather than respond to it. Developing talent at the top end drives up not only the top performers but also raises the bar for all employees. A talent management strategy is about raising standards of excellence throughout an organisation not just for the high flyers.   

That approach also requires organisations to ensure that their vision and values are central to their talent recruitment and development strategy. Anyone can buy talent, but that is not a sustainable guarantee of success, because if you just buy talent then so can anyone else buy them off you. Sustainable talent development strategy requires more than just buying talent, it requires nurturing and developing people who believe what you believe, or as Simon Sinek says:-  

"If you hire people just because they can do a job, they'll work for your money. But if you hire people who believe what you believe, they'll work for you with blood sweat and tears" Simon Sinek  

A talent strategy is not just about accelerating the high fliers, the tomorrows leaders, the most successful companies develop a complete systematic, integrated approach across 'all the talent' management throughout the whole organisation.  While talent programmes tend by their nature to focus on the top talent, actually rolling the strategy throughout all the talents within the organisation creates, realises and sustains the competitive advantage of a talent strategy.

Focusing on Talent Reduces Costs 

By developing a talent strategy organisations can effectively reduce costs inside their Human Resources departments through strategic alignment, and more significantly reduce often hidden  ancillary costs and in the use of outside agencies, as well as the huge benefits of lower staff churn and backfilling, but fundamentally through strategic alignment throughout the employee life cycle.     

Having a clear strategic vision for Human Resources is central to the success of talent strategies. Without the strategic alignment, Human resources are focused on reactive tactics rather than proactive ones.  The costs of being reactionary in human capital terms are firstly being non competitive, but also HR departments cost more to run. 

Talent is a Culture 

Organisations which are reactionary to recruitment are increasingly suffering from the inability to win the top talent as peer review and social media drive the agenda of knowledge way from the company to its employees and directly to core target employee groups. This social media shift results in the control moving from how organisations wish to been seen as, to how they are really perceived by potential talent. No matter how big your brand or your marketing budget your reputation is what matters to knowledge rich target audiences. 

Talent strategies focused around creating world-class performance require increased focus on the development and performance of employees. That dedicated investment in strategic workforce planning creates effective resource planning aligned to strategic goals, rather than tactical ones which often leads to significant savings in staff and skill investment. Investment in skills which directly contribute to tangible strategic goals rather than abstract ones. In highly competitive markets, your business culture is often the key factor in achieving talent acquisition.    

The organisations undertaking and winning talent strategies are most noticeably those playing in highly competitive, high value global markets rather than at national scale, where being world-class is not an aspiration but a reality. They are also quicker at identifying skills that are needed by their company today and in the future, and often take a multi-year perspective that enables them to develop needed skills internally. 

Strategic Talent is the Future

World-class HR organisations have nearly twice the number of internal placements that typical companies have, saving significantly on time and costs and are also able to recruit staff externally much more quickly when necessary. The final big advantage that talent strategy organisations have is the direct link between employee engagement and performance, they are far more rigorous in measuring it as well as providing people managers with the training and support they need to be effective.

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