Practitioner Ponderings: Talent Management

Richard M. Vosburgh

The first two columns that I wrote “set up” the science/practitioner issues; and the next five addressed the significant ways in which I-O contributes to the employee lifecycle:

• June 2015: Performance Management
• September 2015: Staffing
• January 2016: Strategy & Measurement
• March 2016: Learning and Development
• July 2016: Talent Management

To find how I-O contributes to all five employee lifecycle areas, from the SIOP website, click on “Professionals” and you will see “I-O and the Employee Lifecycle.” 

Generally speaking, talent management involves assessing and anticipating the human capital skill requirements of the organization and putting in place processes and procedures to meet those needs.  Another way to describe it is the use of strategic human resource planning to ensure that the talent in the organization will meet business needs and increase shareholder value.  A talent management strategy needs to link to and support the organization’s business strategy and it must be “owned” by the business and designed and supported by the Human Resources function.  This column will identify many ways in which the science of I/O Psychology should inform the design of the processes.

It is appropriate that the Talent Management topic is covered last, because in a way it is the “umbrella” over all the other processes.  What gets included in Talent Management can vary widely; but a broad definition includes all the core HR processes:

• Workforce analysis (current and future needs)
• Talent Sourcing
• Recruitment
• Selection
• Onboarding
• Training and Development
• Performance Management
• Succession Planning
• Career Planning
• Engagement and Retention
• Termination
• Exit Interview

Competency Models are often used as a way to define workforce needs, assess individual skills, and make a “match” or identify where skills are missing and needed.  Twenty years ago these processes were not designed to fit together and were done with “paper and pencil”.  Today most organizations have some form of software support where the processes are inter-connected.  Peruse any current HRIS solution and you will find these processes related to Talent Management at the heart of its functionality.  However, a current challenge is that most of those software solutions simply took the paper form and automated it; so the burden on managers remained high. 

More current “software as a service” solutions provide a greater role for “social” input from many others beyond the manager (peers; subordinates; customers; co-workers; vendors)—making the data more robust and the process less reliant on the elusive omniscience of the manager. 

Many more changes are coming to the traditional practices of Talent Management.  As Deloitte’s Global Human Capital Trends 2016 trends report reveals, it appears that organizations are gradually but steadily moving away from “Talent Management” to “Employee Experience” as the new model for HR.  That is leading many companies to redesign their people practices to align with new business models. HR executives will then be expected to guide the redesign of their internal cultures into agile, employee-focused and transparent ecosystems based on their new purpose.

Several trends are creating this shift.  First, markets have changed.  The average life of an S&P company has shrunk from 67 years in the 1920s to just 15 years today.  Second, the implicit employment contract between “the organization” and “the worker” continues to change dramatically.  The “Gig Economy” is creating a large workforce of what used to be called the “contingent workforce”; made up of professionals building sustainable critical skills that create a personalized professional brand.  A career becomes a series of projects across a number of companies.  The role of HR then must change to consider alternative ways to source and engage the right talent when it is needed.  The “Employee Experience” needs to encompass not just the full time workforce, but the shadow workforce as well (including suppliers and vendors).

According to Deloitte, the implications for HR include moving beyond a static supply chain view of talent (and I would add that I/O Psychology can contribute on these issues):

• HR will operate on evidence-based principles and be conversant in the analysis of workforce data and employment trends.
• HR will master the fundamentals of organizational and process design.
• HR will simplify HR processes from the vantage point of the user experience.
• HR will help shape new cultures of engagement, collaboration, and innovation.
• HR will lead the charge for continuous skills upgrade and employee learning.
• HR will operate within the broader employment ecosystem sourcing work both on the inside and outside of the organization.

I will often ask an external expert to contribute to this column.  For this topic, I turned to Dr. Anna Tavis to summarize where she sees Talent Management evolving.  She is the Founder of Global Plus Lab, and Adjunct Professor of Management at New York University, and the Academic Program Director of Columbia University’s Master’s program in Human Capital.  She writes:

2016 looks more and more like the beginning of the end of Talent Management as we have known it. Talent Management historically evolved in the end of the last century as an answer to the set of questions organizations posed to create efficiencies in identifying, recruiting, retaining, developing and promoting their top performers. The code word for Talent Management was “differentiation.”  It has remained to be the one preferred way organizations solved for their people’s needs for at least the last three decades. In 2016, it became more and more clear that the business requirements have significantly shifted but the Talent Management processes we have built and perfected over the years have remained static.

Most of us are familiar with Moore’s Law, which states that computing power doubles roughly every two years. Why is it then that our organizational solutions including but not exclusive of Talent Management have a linear change pattern and follow the Newtonian Laws of Gravity?  They have remained unchanged (though constantly tweaked and perfected) for the last few decades.

Breakthroughs have created a supercharged platform for the transformation of traditional employment towards the next generation work arrangements and alternative organizational structures. By the year 2020, “Talent management” will most likely look very differently from what we know of it today. It will no longer be about the elitist concept of “talent” that focuses on “chasing the stars.” It may no longer even be about “top down management” at all and further it might not much longer be about the traditional “employment” as we know it now. It will be most likely called something else; and will be heavily impacted by three trends.

The first trend is the emerging area of neuro-science, which is accelerating the redesign of key Talent Management Practices such as performance management systems, deepening our understanding of diversity and inclusion, leadership development, learning and rewards; and ultimately influencing how we design work spaces.  Recruitment, rewards and high potential identification and development are next, ready for revision with the neuroscientific insights as key inputs.

The second trend is the increasing prevalence of artificial intelligence driving change.  At the end of the 20th century, it was still about the flat world of globalization, outsourcing and off shoring manual jobs and first generation robots in agriculture and manufacturing.  Machines usurped the unskilled jobs that could be accomplished with pre-programmed machines.  Twenty years later, the robots are learning how to learn on their own, reprogram themselves and are beginning to replace hard earned white color jobs such as radiologists, lawyers, doctors, software engineers, journalists, and the military.

The third trend is that we are re-discovering the importance of Purpose in work.  Purpose is the next generation core value that represents a breakaway alternative to the traditional notion of “Engagement.” It does not come from the outside, from the employer. Purpose is an innate characteristic and it cannot be dialed up or dialed down as the engagement levels could.  Purpose challenges the elitism of current Talent Management, in that it could replace the concept of High Potential with the idea that transcends the situational quality of hi-potential identification.  Purpose is attainable, sustainable, and must be broadly cultivated as a source of organizational vitality.  Most importantly, Purpose expands beyond enterprise and includes all workers, internal, external, contractors, free lancers and volunteers. Purpose is generation neutral and translates across industries and it is not exclusive to the elite cohort of senior executives as was the outgoing concept of “high potential”.

As we are now on the countdown to the year 2020, it is no longer a question of whether Talent Management (or HR on the grander scale) needs to change but how fast and how radical the change will be happening in most organizations. Based on the changes in the nature of work, the question is of HR’s relevance, and the challenge is to our professional ability to adapt and transform so that we lead the transformation.  If we don’t, someone else will.

Transitioning back to the “here and now” we still must address the reality of the current status of Talent Management.  The SIOP website correctly points out that in Talent Management, developing effective Succession Planning is one important key to success.  Organizations need a process to create and manage the organization’s talent pipeline. Succession planning often includes:

• Identifying the key positions in an organization and the competencies and experience criteria they require.
• Cultivating a pipeline of high-potential talent from which to select new leadership.
• Understanding the competencies and skills currently available within the organization.

The SIOP website defines many ways in which I/O psychologists can help with talent management processes within organizations:

1. Facilitation. Facilitate meetings with senior leaders to understand key talent needs and anticipate future organizational challenges.
2. Design & Training. Design succession planning systems that support organizational goals and educate stakeholders on the process.
3. Consensus Building. Calibrate the management team on the most critical future leadership needs and identify candidates best positioned to meet those needs.
4. Assessment. Assess employees’ competencies to identify those with the aptitude or potential as well as the specific knowledge, skills, and abilities to fill key positions within the organization.
5. Development. Create a development process to prepare individuals for future leadership roles.
6. Selection. Assist the management team with the final determination of the best candidates for a leadership position.
7. Onboarding and Transitioning. Support selected candidates during their transition to the next role through action planning and coaching.

The SIOP website provides an example of an organization facing succession planning challenges.  It is a large transportation corporation faced with an aging workforce and a retiring chief executive officer.  The organization expected the retirement of roughly 5% of the workforce, or 600–800 people per year for the next five years.  Executives were unsure how to identify high-potential employees and develop them for leadership roles.  The way I/O psychologists helped this organization included:

• Facilitating a review of the organization’s business objectives and identifying mission-critical knowledge, skills, and abilities.
• Building competency models to outline individual building blocks for success and aid in selection.
• Assessing internal and external CEO candidates to replace the retiring CEO and offering insight on which candidate could best fill the role.
• Assessing 48 high-potential leaders to fill the anticipated vacancies of the retiring leadership group.
• Creating a process to develop leaders by moving them within the organization for increased opportunities and cross-functional expertise.
• Establishing an assessment process to identify employees who would make excellent first-level leaders.

If talent management is done well, organizations can experience these kinds of results:

• Retention efforts aimed at redirecting skilled workers from their intended retirement yielded a 30% improvement.
• Potential successors for all key leadership positions were identified, and development plans to prepare these individuals were created.
• Profitability increased through greater efficiency (e.g., shortened ramp-up time) and higher-performing leaders.

Unquestionably, I/O Psychologists working with Human Resources and leadership teams can make a big difference in providing organizationally relevant Talent Management programs that contribute to the goals of the organization and help deliver expected results for the stakeholders—both now and in the ever-changing future.

I invite feedback at rmvsolutionsllc@gmail.com.

References

Deloitte, Inc.  Human Capital Trends 2016.  http://www2.deloitte.com/global/en/pages/human-capital/articles/introduction-human-capital-trends.html#

Tavis, Anna.  The End of Talent Management as We Know It.

https://www.linkedin.com/pulse/end-talent-management-we-know-anna-a-tavis-ph-d?trk=pulse_spock-articles