Businesses thrive on talent. Talent is instilled in the individuals which make up a team. Talent management is the strategy which guides those individuals to achieve their full potential within a company, and maximise an organisations functionality or competitiveness.
Think about the factors which give businesses a competitive advantage. HR strategies? PR strategies? Marketing strategies? Research and development? Brand image? All of these factors are crucial, and a focus on each of these areas seems logical. The problem is that today's markets and economies change at such a fast rate that what might in theory seem successful may in practice turn out to be a failure. Similarly, successful strategies can easily be copied or used by competitors. In these instances, a highly talented workforce can make all the difference in making decisions or innovations to overcome these issues. So the development and success of these key factors often rests on the talent which underpins them.
Why talent management?
In the modern world, a career is never set in stone. New career paths are branching off the beaten track and there is no stigma associated with switching a job or career. In fact, the changing nature of economies and industries mean that following a set career path is less and less likely. A high-performing employee who feels even a little undervalued has many incentives to switch employers such as headhunters or the wealth of online recruitment. Competition between businesses for talented individuals is high and other incentives can be added by a current employer to stay if its known that an individual is in demand. Labour mobility has risen dramatically and switching employers has never been easier or more tempting.
This labour mobility is partially down to technology and partly down to economic and international legislation. Legislation has generally made it very easy to work abroad, often providing incentives to attract overseas workers for economic reasons. Technology has enabled this through time-space convergence or in other words being able to travel further over less time. For example the price and availability of international flights has made travelling faster, cheaper and easier, as well as the Internet allowing people to communicate in real time, meaning that people across the world can work from home, and two separated offices can work online effectively as one.
Industries have grown and evolved into more complex organisations. With many more factors to keep track of, a specific focus on talent is often neglected. Businesses have become more niche or specific as well as complex because of an increasingly crowded marketplace which has meant that the skill sets required have also become more specific. These specific skills are often learned in job or through experience as many of them are too new or specific to have an officially recognised qualification. The American Society for Training and Development in a report stated that:
“In 1991, fewer than 50 percent of U.S. jobs required skilled workers. By 2015, 76 percent of U.S. jobs will require highly-skilled workers, e.g. those with special skills in science, technology, engineering, or math. And 60 percent of new jobs will require skills held by 20 percent of the population.” (Bridging the Skills Gap,(2009) by the American Society for Training & Development (ASTD))
So these already hard-to-find skills are in even more demand. The mention of ‘special’ skills refers to industry specifics within certain academic fields, which are mostly learned in job or through experience. This instantly removes the vast majority of new graduates from being suitable for the vast majority of roles.These specific skills tie in with ‘working knowledge’ of an industry, which again new graduates are unlikely to have.
Those who do have working knowledge of an industry also have to be very literate in IT to work in many modern companies. This is one thing that new graduates are likely to have, as those born after the Internet took off are used to using computers and being online.
When considering the demographics, the scale of the skills shortage becomes apparent.
Some argue that the demographics of workers in the western world has recently started to shift as those born after World War II in the 'baby boom' begin to retire. Many of these workers have been in their industries for years and have a great 'working knowledge' of their respective industry or company. They may also have the training and knowledge needed in IT. The slow and steady loss of this generation of workers fuels this skills shortage.
The holy grail then for a business are individuals, likely to be in their 30s, with qualifications, experience and working knowledge. These people are hard to come by, and many companies then spend large amounts of money in selecting the brightest and most talented prospective employees and giving them the training and working knowledge of the industry or company so they can contribute effectively.
These individuals then have to be developed further to fulfill their potential, as well as retained successfully to avoid the high costs sunken into training leaving the company, and benefiting a rival instead. Google has excelled in this area, with a median employee age of 27#, but the fact that Google is so new has meant they are able to develop a hiring strategy from scratch and don’t have to worry about the exodus of baby boomers from the labour market.