A New Talent Management Framework
The concept of “Integrated Talent Management” became popular around five years ago – and since then organizations have used this phrase to describe an integrated approach to recruiting, development, performance management, compensation, development planning, and learning. The goal here is not only to make the Human Resources function operate more efficiently, but more importantly to create an “integrated system” for managing people which lets the organization rapidly and effectively respond to business needs.
Fig 1: Integrated Talent Management
For example, suppose you are a manufacturer and are growing your business in China. With such an integrated model you would have processes and systems in place to identify key leaders ready for this assignment, move technical professionals into the new business unit, establish the culture and competencies of the sales and service people needed in China, and then set in place a local recruiting process which would be consistent with your global employment brand.
Rather than just create a local HR organization which does its own thing, the integrated talent management program gives you and the organization itself a set of tools (platforms, models, cultural standards, forms, etc.) and experience (e.g. what are the best ways for us to attract the right people to our culture?) which can be rapidly leveraged for this new business opportunity. I like to think of talent management as “supply-chain management” for people – just as the purchasing function created an integrated process for acquisition and management of capital, so does talent management create an end-to-end set of processes and systems for all the management issues with people. (More on this in an upcoming blog.)
The World Changes
In 2006 we introduced our Talent Management Framework, as part of our High-Impact Talent Management® research program. Since then thousands of people and hundreds of companies have used this model to understand how the various elements of talent management come together.
But nothing stands still. As organizations have implemented this whole approach, the world has evolved – and today the concepts and best-practices of talent management have progressed. So this week we are introducing our New Talent Management Framework, shown in overview form below.
Fig 2: The New Talent Management Framework
As this colorful model shows, many of the original concepts remain the same – but we have carefully added some new elements and reworded several functions to show how this whole area has evolved. (For the detailed report, “The Talent Management Framework, A Modern Approach to Developing and Mobilizing Talent“, research members can click here.)
I’d like to point out a few of the important new concepts.
First the concept of “sourcing and recruiting” has been expanded to use the term “Talent Acquisition.” This enormous area has become very complex and highly interconnected today: organizations must assess critical talent needs, determine performance profiles, source and screen candidates, and then hire and onboard people. This whole area (which we are dedicating a new research library to) now touches the entire people-management process: headcount and job requisitions must be included in the dynamic workforce plan; organizations must recruit internally as well as externally; job profiles and candidate information must be imported and stored in the talent systems; new people must go through a well-developed onboarding process; candidate quality should be checked against performance measures to help improve sources and recruiting process; compensation plans should be checked against existing plans, and the list goes on.
Note that we added “Career Management” to the core. Organizations now realize that the problems of performance management, development planning, succession management, talent mobility, and leadership development must include a formal and transparent process to help people build their own careers. One of our research members just told me this week that their turnover rates are starting to rise and their engagement levels are low – partly due to the stress of the recession. They quickly realized that the company had very little career development focus – and one of her priorities for the next year is to build a career management program, and associated management tools and training, for each major functional area. (This is a big job, it typically takes years – but always pays off.)
The area of “Compensation” has been expanded to discuss “Total Rewards.” All our discussions with clients show that ultimately the topic of “compensation” evolves into a “total rewards” strategy. Most larger organizations understand this, and the VP or Director of Total Rewards often has a very complex job – sometimes also watching over the performance management process. For most companies, however, this area is a moving target – and with new books like “Drive” now available (Daniel Pink’s new book which gores the sacred ox about the value of incentive pay) we have to rethink the way we use compensation to drive behavior.
Note that we renamed “Competency Management” to “Capability and Competency Management.” The word “capability” is one you should include in your vocabulary. In our recent IMPACT research conference, Don Vanthournout, the Chief Learning Officer of Accenture, talked about “Building Capability Champions” throughout the company. His message was one we all have to recognize: our job is not to build skills or competencies – it is to build total capabilities. And the word “capability” refers to an individual’s ability to perform, grow, make sound decisions, lead, and ultimately add value to your entire team. Capabilities are built over many years: competency management is only one small part of the problem. In this new area we discuss the need to understand the broad portfolio of skills, knowledge, experience, and internal sources of information needed to drive success. (Informal Learning is all about capability management as well.)
Workforce Planning is described in detail in our research. We consistently see that companies with 3 or 4 years of experience in integrated talent management then migrate their energy toward business-driven workforce planning. HP, for example, has developed a workforce planning process which asks each line manager to develop an ROI model for each hire. This model is built on the company’s existing knowledge about the financial return and performance of different individuals in different roles. This is an example of a “level 4” workforce planning process (there are four levels to our workforce planning maturity model). The goal of workforce planning is to move beyond the concept of an integrated set of headcount and open requisitions and integrate the process right into the annual business plan. This is easier said than done – and it once again emphasizes why I keep saying that “talent management is a business process, not an HR process.”
Finally let me note one more new area: Talent Strategy and Business Alignment. If there is one important message to consider, it’s this: talent management is not only a process to integrate dozens of different HR and training practices — it is really a tool which helps your business leaders make better decisions and operate more effectively. Each and every business goal has a related people problem behind it – so think about your talent management process as a set of integrated tools which help business leaders rapidly address their own people and management needs. In our strategy and planning methodology, which we are happy to share with you, we focus very heavily on business strategy and business alignment before we advise organizations on their talent management approach. So get your business leaders deeply involved in this whole area so they can keep you focused on your company’s near-term and long-term business goals.
Fig 3: The New Talent Management Framework in Detail
Well enough for now. I encourage you to read this research, it includes 108 pages of detail, examples, and actual HR measures you can use to measure your success in this exciting area. Also, please join us at our upcoming webcast highlighting this new research.