Talent Management Orientation Guide

“Talent management” is a broad term that includes all of the ways a company engages with its employees, from recruiting and onboarding to training, coaching, succession planning and performance management. It is the umbrella under which all talent strategies are deployed.

The success of these programs, and how well they are aligned with business goals, is becoming increasingly important as businesses struggle to compete in the global marketplace.

“Talent management continues to be a concern for today’s CEOs,” said Dan Staley, principal and head of the HR technology practice at PricewaterhouseCoopers. In Pricewaterhouse’s 17th annual global CEO survey, 93 percent of CEOs said they recognize the need to change their talent strategies, yet almost two-thirds of them have failed to make those changes. “It’s going to be a major challenge for companies going forward,” Staley said.

Roadblock

Seventy percent of workers are not engaged, according to a 2013 Gallup Inc. study of the U.S. workplace. “That’s dismal,” Forrester Research’s Claire Schooley said. “People accomplish so much more when they feel engaged with their work.”

It’s also an opportunity for HR leaders to demonstrate their strategic value to the company. As CEOs try to figure out how to adapt their talent strategies, they will rely on HR leaders to guide their path — but only if HR can demonstrate how their talent management programs can deliver measurable business benefits. That’s a tall order. According to the Pricewaterhouse survey, only 34 percent of CEOs feel that HR is well prepared to capitalize on transformational trends, and 9 percent say it is notprepared at all.

To change that perception, HR leaders must take a strategic, business-focused approach to talent management, said Leighanne Levensaler, vice president of human capital management products for Workday Inc. “Your talent management strategy must be inextricably linked to your current and future business strategy for the company to be successful.”

But that can be difficult, particularly as most talent management programs don’t spring up fully formed. They are built piecemeal as the company grows, and each one may have its own team, strategy and measures for success. But if you want to be viewed as a key part of the strategic business process, those disparate programs need to be reined-in and updated to focus on current and future business goals.

Roadblock

Goal-setting conversations can’t stop at the top. While more than half of senior leaders convene meetings throughout the year to discuss goals with business leaders, only 6 percent of those leaders use the same approach to communicate goals to their direct reports, according to a Bersin by Deloitte study titled “High-Impact Performance Management.” “This creates opportunities for misinterpretation, inconsistent messaging and lack of alignment across the company,” Bersin’s Stacia Sherman Garr said.

“Be clear on your objectives and be willing to adapt your plan as the business demands,” Levensaler said. “Business strategies can change on a dime, so you need to be agile enough to respond.”

This Roadmap offers HR leaders a framework for building a talent management program that delivers strategic business results.

Plan

What is your talent strategy? The first step to building an effective talent management program is defining what success looks like, said Cristin Sturchio, global head of talent for Cognolink, a global research firm. “Use that vision to identify skills and competency people need to make the company successful, then build your hiring, training, development and incentive programs around it.” Sturchio’s team found the most successful researchers in their organization are those who are competitive, self-motivated and results-driven; they built those traits into all of their recruiting and development efforts.

Create a talent plan as part of the business plan. Human resources should be part of strategic planning so it can help leadership understand how talent development will help them achieve their goals, then HR can map talent management efforts to align with them, said Stacia Sherman Garr, vice president of talent and HR research at Bersin by Deloitte.

fast track

Organizations that make it easy for employees to set clear goals are four times more likely to score in the top 25 percent of business outcomes, according to Bersin by Deloitte. “Creating a clear connection between employees’ work and an organization’s goals is a key driver of employee engagement,” Bersin’s Stacia Sherman Garr said.

Identify what you are doing right and what needs improvement. Look for success stories across your talent management process — great recruiting strategies, effective training programs — then determine why they work and how you can apply those lessons learned to other programs.

Prioritize your budget. To make the most of limited resources, identify your top talent priorities and align your budget accordingly, said Ravin Jesuthasan, managing director of the global talent management practice at Towers Watson & Co. For example, if developing great tech talent is key to the business plan, you might focus more money toward recruiting and compensating top young recruits; whereas if great leadership is your priority, leadership training, mentoring and succession planning should draw more investment.

Do

Train and engage managers. “Managers play a key role in helping employees set goals, assess performance and find development opportunities,” said Claire Schooley, an analyst at Forrester Research Inc. To be effective, however, managers need training on how to best mentor their team and ensure they are achieving their potential.

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“Lots of training” isn’t the same as “good training.” In 2014, SAP’s new chief learning officer, Jenny Dearborn, reviewed the company’s entire training curriculum with the goal of eliminating any course that didn’t directly support the company’s strategic goals and desired competencies. “We went from 50,000 learning assets to 4,000,” she said. “Now every course is fresh, aligned with business results and there are no redundancies.”

Create transparency. Talk to employees about the goals and health of the company, and the role they play in the business, Cognolink’s Sturchio said. “When employees understand how their productivity is tied to the success of the company, they feel like they are part of something bigger.”

Pilot new ideas. Pricewaterhouse’s Mike Fenlon thinks HR should view itself as a talent research-and-development center. “The key for developing the right talent strategy is to begin with an idea, and see if it works,” he said. By piloting innovative programs with a small segment of employees or recruits, you can test ideas without investing a lot of moneyand prove they work before rolling them out to everyone.

Set goals. Every employee, from leaders to front-line workers, should have goals that are regularly reviewed and updated, Garr said. “It should be a continuous conversation between managers and workers.”

Encourage the behavior you want. Incentivesshould be clear, simple and tied to strategic skills, said Bryan Lewis, chief operating officer of Cognolink. “If you train people for those competencies, then tie incentives to that performance, it is easy to measure your success.”

Hold vendors accountable. Vendors should be just as culpable for meeting goals as your in-house team, said SAP’s Chief Learning Officer Jenny Dearborn. Before choosing a vendor, tell them what your business goals are, and ask them how they plan to meet and measure the effectiveness of their efforts to achieve those outcomes.

Review

Roadblock

Don’t leave talent out of the strategic conversation. If senior leaders set strategic goals without considering the talent implications, it will create obstacles to business success, said Bersin by Deloitte’s Stacia Sherman Garr. “It’s critical for leaders to have a dialog with HR about how talent management supports their plan.”

Measure everything. Every talent management program should include measures of success that directly align with business goals. Whether you are launching a new recruiting app or rolling out a training program, ask yourself: ‘Can I document how this investment will make something better?’ Dearborn said. “Everything you do should drive measurable business results.”

Use the same metrics as the rest of the company. The executive team doesn’t care how many people finished a training program, or how long it took you to hire someone. They care how those programs affected business goals, productivity and bottom-line results, said Workday’s Levensaler. “Your metrics have to be in the context of how the business measures itself.”

Choose technology with built-in benchmarks and metrics. Many of today’s HR technology tools provide real-time data about how programs are being used, who’s using them and other basic measures that can demonstrate success, Schooley said. “Some measures are more sophisticated than others, but it’s a good place to start.”

Harness that data. A good talent management program holds reams of valuable data. Using it to do workforce analytics can help companies identify development gaps and better prepare their workforce for the future. The prospect of doing analytics can be daunting, but HR technology tools are making it easier by offering analytics tools and dashboards, templated questions to ask and making suggestions based on results, Levensaler said. “Technology is accelerating every day,” she said. Though she cautions users not to be too reliant on the tools alone. “Humans still absolutely need to be involved in the process.”

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Organizations that make it easy for employees to set clear goals are four times more likely to score in the top 25 percent of business outcomes, according to Bersin by Deloitte. “Creating a clear connection between employees’ work and an organization’s goals is a key driver of employee engagement,” Bersin’s Stacia Sherman Garr said.

If it doesn’t work, get rid of it. When you continue to invest in a program just because it has always been there, you are wasting valuable resources that could be used more strategically, Dearborn said. “If you can’t draw a line between the program and the business goals you shouldn’t be doing it.”

Case study

Real-Time Feedback at PricewaterhouseCoopers

Being adaptive and future-focused is critical for a successful talent management program, said Mike Fenlon, global talent leader for PricewaterhouseCoopers. “You have to let go off the illusion that there is one right way to do things.”

Pricewaterhouse’s talent management team has been going through a multiyear talent transformation effort to better align all of its programs. Fenlon sees it as an opportunity for HR to transform itself. “Not every innovation will work,” he said. “But we always learn something.” At the core of the transformation is the idea of “radical simplification” to allow for more rapid learning and development.

One of the more successful programs to emerge is a redesign of the company’s performance management program. In an 18-month pilot program, Fenlon’s team replaced the traditional end-of-project performance review with a real-time feedback and assessment model. Fenlon’s team also rolled out mobile apps so managers could do reviews and provide feedback on the fly.

Early in the program, buy-in among managers was slow. An investigation showed leaders who received training were more effective and engaged in the process, so they adapted the leadership training and rolled it out to all of the participating managers. At the end of 18 months, performance measures showed pilot participants were more motivated and delivered improved business outcomes on their projects compared with teams that did not participate.

Plan, Do, Review

Plan

• Define your talent strategy. The first step to building an effective talent management program is knowing what success looks like.

• Make the talent plan part of the business plan. Help leadership understand the role talent development plays in achieving their business plans, and map talent management efforts to align with strategic goals.

• Identify what you are doing right and what needs improvement. Look for success stories across your talent management programs and use those lessons to improve less successful efforts.

• Prioritize your budget. You can’t do everything, so identify your top talent priorities and align your budget accordingly.

Do

• Get managers on board. Remind them of the role they play in talent development, and provide training on how to mentor and develop their teams.

• Create transparency. Employees need to know why their productivity matters to the business.

• Pilot new ideas. Test new programs out on a subgroup of employees to prove that they work before rolling them out to everyone.

• Set goals. Every employee, from leaders to front-line workers, should have goals that are regularly reviewed
and updated.

• Offer incentives for the behavior you want. Incentives should be clear, simple and tied to strategic skills.

• Hold vendors accountable. Tell them what your business goals are, and require them to demonstrate how their products are helping you meet those goals.

Review

• Measure everything. Every talent management effort should have measurable, business-focused metrics.

• Use the same measures as the rest of the company. Use the executive team’s measures for success to shape your own metrics.

• Choose technology with built-in benchmarks. Many of today’s HR tools provide real-time data and metrics you can use to demonstrate your own success.

• Harness that data. Workforce analytics can help you identify development gaps and better prepare your workforce for the future.

• If it doesn’t work, get rid of it. When you continue to invest in a program just because it has always been there, you are wasting valuable resources that could be used more strategically.