The Importance of Talent Management to Make Profit Maximization in the Company

 

In today’s challenging business environment of going global and competition becoming intense, organizations have mounting pressure to perform better than before. Over the years, acquisition and perpetuation of talent has become a key tool in accelerating competitiveness and enhancing organizational capabilities to respond to market changes wherein employees’ skills and personalities are appropriately deployed to optimize performance. Furthermore, identifying and developing executives who have leadership potential, like every other vital strategic function, is a demanding process.

Organizations today are confronted by societal developments such as globalization, technological improvements, demographic changes and increasing global competition. These evolutions cause not only shortage of workers but also risk losing knowledge and experience.

What is talent management?

Talent management is defined as the methodically organized, strategic process of getting the right talent onboard and helping them grow to their optimal capabilities keeping organizational objectives in mind.

 The process thus involves identifying talent gaps and vacant positions, sourcing for and onboarding the suitable candidates, growing them within the system and developing needed skills, training for expertise with a future-focus and effectively engaging, retaining and motivating them to achieve long-term business goals. The definition brings to light the overarching nature of talent management – how it permeates all aspects pertaining to the human resources at work while ensuring that the organization attains its objectives. It is thus the process of getting the right people onboard and enabling them to enable the business at large.

 

Under the umbrella of talent management, there are a string of elements and sub-processes that need to work in unison to ensure the success of the organization. For example, analyzing the right talent gaps for the present and the future, identifying the right talent pools and best-fit candidates, getting them to join and then optimizing their existing skills and strengths while helping them grow are touch-points that are all equally important. They support each other and the whole structure would crumble even if one sub-process fell out of sync.

 

How to attract the new talent:

Talent management as described by Schweyer (2004) includes sourcing (finding talent); screening (sorting of qualified and unqualified applicants); selection (assessment/testing, interviewing, reference/background checking, etc. of applicants); on boarding (offer generation/acceptance); retention (measures to keep the talent that contributes to the success of the organization); development (training, growth, assignments, etc.); deployment (optimal assignment of staff to projects, lateral opportunities, promotions, etc.) and renewal of the workforce, with analysis and planning as the adhesive. The below figure 1 described the main elements of talent management.

Figure 1: Main elements of talent management

Source: Armstrong

 

Organizations need formal processes, with many stakeholders’ involved and strong links between leadership and talent to translate into talent management initiatives into specific organizational value-based behavior (Mathew, 2015).

Major impacts on maintaining talent pool in the organizations:

1.     Impact on financial outcome of the organizations:

According to Joyce et al., (2007) stated that looking at the situation from a financial perspective, researchers assess the relationship between competence in talent management and financial organizational performance and demonstrate why talent management is a worthwhile investment. Organizations with a deliberate talent management strategy demonstrate significantly higher financial performance compared to their industry peers, for example, regarding operating profit (Axelrod et al., 2001; Guthridge & Komm, 2008; Ringo et al., 2008), sales revenue and productivity (Axelrod et al., 2001; Barber, Catchings, & Morieux, 2005; Di Romualdo et al., 2009; Gandossy & Kao, 2004; Yapp, 2009), Net Profit Margin, Return on Assets and Return on Equity (Di Romualdo et al., 2009; Joyce et al., 2007), or Return on Shareholder’s Value and Market Value (Axelrod et al., 2001; Huselid, 1995; Huselid & Becker, 1998) (Bethke-langenegger & Mahler, 2011).

2.     Impact on organizational outcome of the organizations:

On the corporate level, a sustainable and strong corporate culture (Di Romualdo et al., 2009; Steinweg, 2009), a significant increase in operational excellence (Ashton & Morton, 2005; DiRomualdo et al., 2009) and better market access (Gandossy & Kao, 2004; Kontoghiorghes & Frangou, 2009) are the reported results of strong talent management competences. Moreover, a study of Towers Perrin (2005) suggests that talent management improves an employer’s image and attractiveness, but only if that strategy is transparent and clearly communicated both within and outside the company (Sebald, Enneking, & Woltje, 2005) (Bethke-langenegger & Mahler, 2011).

3.     Impact on human resource outcomes:

Studies point out the positive impact on employee engagement (DiRomualdo et al., 2009; Gandossy & Kao, 2004). Additionally, companies with established talent management capabilities achieve improved quality and skills (Gandossy & Kao, 2004), higher innovative ability (Kontoghiorghes & Frangou, 2009; Sullivan, 2009; Tansley et al., 2007), higher job satisfaction among employees if they are given career and development opportunities (MacBeath, 2006; Steinweg, 2009) and above all, a higher retention rate overall and of talent in particular (DiRomualdo et al., 2009) (Bethke-langenegger & Mahler, 2011).(Bethke-langenegger & Mahler, 2011).

Talent Management Models:

Over the years, there have been multiple models made for talent management that have been created b organization who have felt that they have finally cracked the code on the perfect model. The thing with talent management, however, is that it needs to morph to suit the latest talent trends, digital disruptions, and employee expectations.

The primary components of the model are:

·       Acquire – Employer branding, recruitment, onboarding

·       Assess – Talent analytics, succession planning and assessments

·       Develop – Workforce planning, culture at work, engagement and retention practices

·    Deploy – Goal alignment, career-path planning, learning and development, and performance management

Conclusion:

Talent management is an importance HR related duty in the modern business world in order to identify the skilled employees and retain them by avoiding loosing the employees. As recruiting is vital and costly task to the organization and it takes more time, it is worth to have strategies or the plans to retain the skill employees.

Bibliography:

Bethke-langenegger, P., & Mahler, P. (2011). Effectiveness of talent management strategies. 5,

524–539.

Mathew, A. (2015). Talent Management Practices in Select Organizations in India. Global

Business Review, 16(1), 137–150. https://doi.org/10.1177/0972150914553527