The extent to which a company can respond to external opportunities and threats is more than ever being determined by the talent of its employees; the knowledge and skills of the workforce and the manner in which the organization is able to turn these assets into value are all determining factors. If talent is managed professionally, and the interests of the employee and the organization are tuned into one another, this will be to the advantage of both parties. The employee will be competent, and the company will offer him or her sufficient opportunity to develop.
The talent lifecycle initially focuses on determining the required abilities, then on strategic workforce planning. Workforce planning allows HR to establish a relationship between the company strategy and the abilities of (future) employees: can the strategy be achieved with the current skill sets or does a lack of certain skills pose problems in reaching the goals? All of the data to answer this question are usually available within the company. The question is if it is easy to turn this data into useful information. We observe that companies are increasingly investing in stand-alone talent management systems, without getting the basics of HR data right. Rather than creating islands of talent management functionality in a sea of disconnected, incorrect and erroneous data, companies should invest in a reliable base containing HR information, in order to be able to drive higher ROI when they invest in Talent Management. The ability to base strategic workforce decisions on reliable HR information will leverage the investment in any of the Talent Management processes.
In the service economy, knowledge is extremely important: if the company does not have access to the right competencies and skills, the company strategy cannot be executed, and this will affect the future of the enterprise. Knowledge and skills can thus be seen as a part of the ‘company assets’, comparable to a machine or tool. Shortages are typical for specialized and experienced workers, and can coexist with relatively high overall unemployment in the external environment. With the help of workforce planning, HR can predict any excesses and/or shortages of skills and act upon this before it is too late.
As knowledge exists in the mind of the employee, company capital has become a lot more volatile than in the past, and the company will have to put more effort into holding on to its employees. The way we look at employees is changing: where organizations were used to think in terms of employee groups, companies are now starting to differentiate based on rare abilities: some employees are simply crucial to the company.
HR will have to ensure that this differentiation is emphasized in appraisal and reward schemes, so that crucial employees feel recognized and valued and other employees do not feel ignored. HR also has to support the business by ensuring that adequate knowledge-sharing methods, training and development opportunities are in place, so that a sufficient capacity (in terms of skills) is available.
Differentiation is also required to ensure that career plans are carried out. A manager relies on a stable team, and will not be inclined to allow a well-performing employee to move into another part of the company: this would be at the expense of his own results. This is not in the interest of the larger whole, though. For the company, it is better that HR identifies new talent, stimulates their development, and offers these employees challenging opportunities within the company. This is especially true when dealing with members of the new generations: they are used to think in projects, and will switch to a different employer that offers them more challenging work as soon as they view their current work as uninteresting.