hat is Talent Management?

Talent management is a complex collection of connected HR processes that delivers a simple

fundamental benefit for any organization:

Talent drives performance.

We all know that teams with the best people perform at a higher level. Leading organizations
know that exceptional business performance is driven by superior talent. People are the
difference. Talent management is the strategy.

Analyst research has proven that organizations using talent management strategies and
solutions exhibit higher performance than their direct competitors and the market in general.
From Fortune 100 global enterprise recruiting and performance management to small and
medium business eRecruiting, leading companies invest in talent management to select the
best person for each job because they know success is powered by the total talent quality of
their workforce.

The Talent Age

In 1997, a McKinsey study coined the term: war for talent. Now in the new millennium, we
find ourselves in the talent age. During the agricultural age, the economy was based on land,
a truly physical and very tangible asset. The industrial age followed with a manufacturing-
driven economy. Higher business performance was derived through the most effective use of
factories and distribution networks.

The knowledge age moved the basis of economic value to information assets through
integrated communications and computer technology. Now the competitive battlefront is for
the best people because they are the true creators of value.

The New HR Mission and Talent Management Processes

Many challenging workforce issues confront HR, including:

Many challenging workforce issues confront HR, including:

• Heightened competition for skilled workers.

• Impending retirement of the baby boomers.
• Low levels of employee engagement.
• Acknowledgement of the high cost of turnover.
• Arduous demands of managing global workforces.
• Importance of succession planning.
• Offshoring and outsourcing trends.

This requires new thinking and a new mission to achieve business success. These factors—
coupled with the need to align people directly with corporate goals—are forcing HR to
evolve from policy creation, cost reduction, process efficiency, and risk management to
driving a new talent mindset in the organization.
One important distinction is the evolution of the difference between tactical HR and strategic
talent management. Transactional HR activities are administrative overhead. Talent
management is a continuous process that delivers the optimal workforce for your business.

In this new model—instead of being the owners of processes, forms, and compliance—HR
becomes the strategic enabler of talent management processes that empower managers and
employees while creating business value.

With this view, talent management may be defined as the implementation of integrated
strategies or systems designed to improve processes for recruiting, developing and retaining
people with the required skills and aptitude to meet current and future organizational needs.

Anecdotally, talent management is often defined as performance management, incentive

compensation, or talent acquisition. Talent management is also often confused with
leadership development. Although leadership development is a crucial function of your
organization, focusing on it exclusively is a legacy of last century. Our modern service and
knowledge economies in the talent age require a broad and holistic view. A high performance
business depends on a wide range of talent.

Taleo’s graphical representation emphasizes the mandate of talent management to respond to

business goals and consequently be the driver of business performance. Talent management
is depicted as a circular—not a linear—set of activities.

Why Talent Management?

Workforce cost is the largest category of spend for most organizations. Automation and
analysis of your recruiting and hiring processes provides the immediate workforce visibility
and insights you need to significantly improve your bottom line. Performance management
provides the ongoing processes and practices to maintain a stellar workforce.

Today, many organizations are struggling with silos of HR processes and technologies. The
future of talent management is embodied in solutions designed from the ground up to provide
business-centric functionality on a unified talent management platform.
Since nearly all competitive business factors have become commoditized, talent is what
ultimately drives business success and creates value. Leading organizations rely on Taleo
solutions and services to assess, acquire, develop, and align talent with business objectives
while significantly reducing process costs, improving quality of hire, reducing risk, and
achieving higher levels of performance.

Though it may seem intuitive, it is worthwhile to articulate the fundamental significance of

successful talent management practices:

• The key enabler of any organization is talent.

• The quality of your people is your last true competitive differentiator.
• Talent drives performance.

Talent management requires strong executive support, along with systems and processes all
directed towards having the right talent doing the right work at the right time. That’s when
talent truly drives higher business performance.
Society of Human Resource Management (SHRM) survey

Managing Global Talent: Recruitment, Selection, and

Retention

An international oil service company like Schlumberger has few fixed assets and no legacy
positions; it lives off its know-how, embedded in the talent of its workforce. In that sense,
Schlumberger is a typical multinational in today's knowledge economy. What is notable
about Schlumberger is that it made some bold strategic decisions concerning global talent
attraction and development. It moved early on from exporting home based talent to
transnational talent management.

Talent management is the process through which organizations anticipate and meet their
needs for human capital. Basically, it involves getting the right people into the right places at
the right time. The focus has historically been on managerial and leadership positions, but
increasingly it also targets top-level technical specialists who are strategically important to
the success of the firm—like the engineers for emerging markets that Schlumberger needs.

After defining talent management, we discuss other reasons why it is so important for the
international firm—some might argue that together with the closely related domain of
performance management, it is the most important item on the HRM agenda. The reasons
have to do with the progressive move into the knowledge economy, with demographic
changes and globalization (notably competition for talent from local start-ups and
multinationals in emerging markets), and with increasing individual mobility.

In international firms talent management has historically been a local responsibility;

corporate headquarters restricted its focus to expatriation and the development of senior
leaders. Today transnational organizations are under pressure to have more consistent talent
practices across the world. This tension between global consistency and local adaptation is
one of the balancing acts that we discuss in this chapter; the other is the balance between
building or buying talent—developing talent internally or recruiting it from the market.

We then move on to discuss three areas of particular interest to firms operating across
borders. The first is managing recruitment, where we consider how an organization can
forecast the supply and demand for talent, how it can reach out to recruit people globally, and
how it can build an appropriate employer brand as well as a differentiated employee value
proposition.

The second area of talent management is selection and assessment, where we review the role
of culture and business context in selection, and what this means for the management of
diversity (with a focus on gender as well as national culture and ethnic background). Many
international firms use competence frameworks to steer assessment and link it to capability
development. We discuss alternative ways of developing such a framework and applying it in
a transnational firm. We also discuss the important challenges of internal talent selection,
how "potential" can be assessed among people in operations located around the globe.

The third area is retention management. Investing in the development of talent is not a viable
business proposition unless the company can retain the individuals and profit from that
investment. Before moving on to the next chapter, where we focus on talent development, we
explore another balancing act in talent management—balancing short-term pressures with a
long-term time horizon.