Thursday, 10 April 2008

Six varieties of talent management

One of the things I covered in my Singapore training was the different forms that talent management takes in different organisations. Based upon my discussions with some of the delegates, I’ve refined my thoughts around this somewhat, as follows:

Firstly, just to note that talent management is currently defined as many different things. This finding isn’t new.

For example, in ‘Talent management: a critical review', PDI consultants, Lewis and Heckman note that “A review of the literature focused on talent management reveals a disturbing lack of clarity regarding the definition, scope and overall goals of talent management… It is difficult to identify the precise meaning of ‘talent management’ because of the confusion regarding definitions and terms and the many assumptions made by authors who write about TM. The terms ‘talent management’, ‘talent strategy’, ‘succession management’ and ‘human resource planning’ are often used interchangeably.”

Supporting this, when Bersin asked organisations how they define talent management, they came up with a very wide selection of responses: 80% said as leadership development, 78% as recruiting, 76% as training and development, 74% as performance management, 72% as succession planning, 67% as management training, 58% as workforce planning and 42% as compensation.

I’d suggest that talent management is most commonly one of six possible approaches, each of which exists along a spectrum ranging from a simple rebranding of a different concept through to a truly different approach, each of which are based upon the way that talent has been defined. Let me explain:

The first approach is progressive HR (you could also call it human capital management) and is based upon the belief that talent or human capital is a critical enabler to business success. At the rebranded end of the spectrum, this form of ‘talent management’ is really just good old traditional HR, but has been renamed talent management to make it (and the HR function) sound a bit more valuable and strategic. At the other, differentiated, end of the spectrum, this form of ‘talent management’ puts more investment into all people management activities, ensuring the development of employees’ engagement and capability, in order to build human capital and deliver business results.

The second approach is HR using e-HR systems. At the basic end of the spectrum, a basic, transactional, functional HR IT system which calls itself a talent management system is used to support one or more processes, most commonly recruitment, which is then renamed talent management. At the advanced end of the spectrum, integrated talent or human capital management systems are used to provide better understanding of talent / people management data. The assumption here is that all people provide talent, some of which is more valuable than others, and that an integrated IT system is required to identify the opportunities this talent provides.

The third approach is matching supply and demand of talent. The basic form of this approach includes short-term resource planning in which particular needs are identified and the relevant types of numbers of required talent is provided, through the recruitment of new staff or contingent workers, or the development or deployment of existing employees. More advanced approaches focus on longer-term workforce planning and succession strategy, identifying potential future-state scenarios and planning internal and external actions (eg development of high potentials / relationships with potential employees eg head farming) to close possible talent gaps.

Fourthly, talent management can refer to recruitment / resourcing of talent. At a basic level, this can be a simple rebranding of recruitment activities. I suspect this is the most popular form of talent management in organisations, and most ‘talent managers’ I have met are in fact recruiters. However, a more advanced take on this applies supply chain management principles to resourcing to ensure an appropriate ‘flow’ of people / talent into and through the organisation. Talent in this perspective is usually defined in reference to key roles, eg Kaplan and Norton’s strategic job families or Boudreau and Ramstad’s pivotal roles (those in which a certain investment can provide the greatest return).

Fifthly, talent management can also be defined in the context of development. Again, at a basic level, this can refer to a simple rebranding of learning, and particularly leadership development activities. At a more advanced level, it can refer to a major focus on leveraging peoples’ strengths or on unleashing their potential. Talent here usually refers to key people rather than to key roles, and often to the leadership team or potential future leaders.

And finally, talent management can refer to employee engagement and retention. A basic approach can refer to a set of communication activities designed to engage employees. A more advanced form of this type of talent management focuses on management of the individual deal agreed with each person identified as talent to ensure that their own individual engagement drivers / employee value proposition is implemented to the individual’s satisfaction. Talent management here is often about getting key people into key roles, or crucible roles.

The basic forms of these six approaches probably don’t deserve the title talent management, but the six more advanced forms certainly do, and each can be effective in different organisations depending upon their contexts and business strategies.

The key for ensuring that talent management is effective is to identify which one or more of these approaches will be the most appropriate for you.