"Now is a good time to invest in a talent management system to ensure that when the market swings again, companies can still retain high quality performers on its payroll," says Gary Stocks, director of strategy at Business Systems Group (BSG).
Effective talent management is the ability of managers to identify and attract new talent as well as develop and retain employees with learning and growth opportunities in line with the business's strategy and scorecard. Companies need to have a good talent management system to support their strategies, particularly when the market is experiencing a downturn, and when retention of good talent is pivotal.
"An organisation will always need to deliver quality output to its clients, as its delivery dictates its current and future income, and anything that positively affects income is in high demand in difficult times," says Stocks. He adds that it is important to understand there is a difference between HR systems and talent management systems. The distinguishing factor is that while HR systems focus on administration-related functions, talent management systems incorporate both administrative functions as well functions for performance assessment, compensation, succession planning, leadership development and employee satisfaction.
This type of system helps managers make decisions about talent more objectively as it allows for continuous collection and tracking of information and tighter control over the workforce.
"Companies that are getting it wrong don't spend enough time on career development," Stocks says. Experts say 63% of high growth companies review performance more than annually. In order to be objective and get a true reflection of the employee's performance, reviews need to be a collaborative process. Collaboration takes a lot of time and becomes cumbersome, with manual systems especially in organisations with large staff complements, fuelling the need for automated systems.
One of the greatest challenges that have caused this 180^0 shift in mindset from a customer to an employee focus is finding talent. Results from the latest Manpower Talent Shortage Survey revealed that 38% of employers in South Africa are battling to find qualified candidates to fill their posts, and globally, this figure is 31%.
Factors such as a greater availability of employment opportunities for high quality talent and the transferability of skills due to globalisation are playing a substantial role in shrinking talent pools. This shortage is aggravated by longer-standing employees failing to mentor and transfer knowledge to newer members of the workforce.
"Another challenge is developing talent both in terms of technical capacity and leadership ability," says Stocks. It is clearer to understand how one should develop technical skills than to understand how to develop talent into leaders.
A third challenge is retaining talent. Finding ways to keep employees engaged and providing growth opportunities is becoming increasingly difficult as more external opportunities become available.
These factors have led to talent management discussions securing the top spot on CEO's agendas and have made talent management technologies essential to organisations serious about gaining a competitive advantage through their workforce. Analysts forecast that by next year in the US alone, the talent management technology market will exceed US$4 billion, indicating a compound annual growth rate in excess of 26% since 2005.
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