Talent is key to the success of any organisation, so it’s unsurprising that many entrepreneurs employ specialist talent management solutions to help create and maintain a high-performing workforce and achieve business goals. This involves recruiting, developing and retaining the best employees in the market. However, many of the benefits of talent management are not as concrete as business owners think.
Here at The Chemistry Group, we firmly believe that traditional talent management has its shortcomings and that taking a context-driven talent strategy would be more beneficial. Talent management is based on the belief everyone can be moulded to the same level, often resulting in employees performing to an average standard. In contrast, our talent strategy identifies the key requirements of the role and maps that on WGLL to help employees thrive.
Here we look at the five most commonly cited benefits of talent management, and explain why they aren’t as straightforward as they seem.
Myth #1: Talent management develops strategic hiring processes
Every business wants the best people working for them, and talent management supposedly helps them recruit the most impressive candidates. This can be achieved by integrating tasks like the uploading of job descriptions, tracking potential candidates, and organising how correspondence is managed. Unfortunately a strategic hiring process is only effective when you’re making a concerted effort to prioritise the right skills and characteristics. Recruiting the wrong candidate can cost businesses a fortune. In fact, the Recruitment & Employment Confederation estimates that a bad hire at mid-manager level (£42,000 salary) could cost up to £132,000. Mistakes like this cannot be avoided using talent management alone.
When it comes to filling a vacant role, many businesses look for candidates similar to those who have previously worked, or currently work, for the company. Conversely, a totally different kind of employee might actually be what they need to take their business to the next level. This is why we use strategic workforce planning to identify the specific talent required to boost performance in every area of the organisation. Once a business has a full and comprehensive understanding of the traits required in their future employees, strategic hiring processes will bring better results.
What’s more, companies may not always need to look externally to fill vacant positions. Our talent strategy methodology could reveal that the talent already exists within the workforce, and it’s simply a case of ensuring employees are working in roles that support the enterprise’s short and long-term goals.
Myth #2: Talent management retains top talent
A key aim of talent management is to retain high-performing employees. However, while these individuals may perform well on paper, this doesn’t necessarily mean that they find their work engaging. And if an employee doesn’t feel fulfilled, they are more likely to leave. Research from CIPD found that overskilled workers are almost twice as likely to consider quitting than those in well-matched roles.
Talent management merely focuses on tracking performance to ensure each member of the workforce meets their standard targets, whereas talent strategy works to ensure that every candidate is matched to a role in which they’ll truly thrive. For example, somebody in your sales team may have untapped creative potential that makes a marketing position more suitable, while also challenging and motivating them. Similarly, an external hire may not have the experience you would usually associate with a given role, but possesses personality traits that predicate high performance and engagement in that context.
This is why our talent strategy examines every employee within an organisation, highlighting where they are most likely to flourish, and perhaps even unlocking talent in unexpected places. Our work with The Co-op on their award-winning retail apprenticeship programme is an example of this. Using our talent strategy methodology, we’ve helped to transform entry-level roles in retail for school leavers, improving retention and increasing internal promotion opportunities in the process.
Myth #3: Talent management improves understanding of the workforce
Talent management is said to provide a business with a better understanding of its workforce—something half of UK employees believe their employers are lacking, according to research from payroll and HR software provider ADP. Overseeing employees’ professional development means that progress can be monitored, goals set, and issues remedied. However, this approach relies on assumptions made about each individual. Talent strategy, on the other hand, uses scientific insight to uncover everything a person can bring to the team.
Our talent strategy process enables a business to grasp the details of its team’s inner workings. We conduct psychometric tests on every single person in an organisation to identify their strengths, weaknesses, and unique personality traits. Equipped with this scientific data, a company will gain the most comprehensive understanding of its workforce, and be able to assess how best to develop the talent at its disposal. This could involve providing employees with additional responsibilities or new challenges that are likely to have the biggest impact on business performance. As Jeff Phipps, Managing Director at ADP UK, commented, “[Understanding employees] allows businesses not only to learn how to utilise their talent in the best way possible, but to ensure employees feel their potential is realised and feel motivated to do their best work.”
Myth #4: Talent management stimulates employee development
Once a business has secured new talent, it must give those employees the tools they need to progress throughout the organisation. Talent management encourages companies to provide their team with the learning and development opportunities required for career growth, and offer opportunities to improve. This is very important considering that 70% of employees haven’t mastered the skills required to do their jobs. However, talent strategy is needed prior to talent management, as a business first needs to make sure they have correctly identified the core capabilities most in need of development.
We refer to the psychometric data we’ve obtained from the workforce earlier in the process, and work with our clients to highlight the traits that will have the greatest impact on business performance. Unlike some talent management solutions, which typically allow the HR team to assign training based on employee data, our approach to talent strategy is more collaborative, incorporating insights from the line manager and the employee. The employee rates themself for each core capability, and their manager does the same. These assessments are followed by a face-to-face meeting to stimulate clear and structured conversations, resulting in better performance planning outcomes.
Myth #5: Talent management helps to boost revenue
As talent management involves cultivating and developing the talent already present within the workforce, this in turn should boost financial success. In theory, employees will be performing to the best of their abilities, and with optimal efficiency, to help the company gain a larger market share. According to Gallup: “The additive effect of selecting naturally talented individual contributors is 6% higher revenue per employee, for a combined gain of up to 33% higher growth potential.” However, many businesses often miss out on revenue because their talent management plan has failed to identify the organisational factors that impact performance the most.
Chemistry’s talent strategy solution is superior in this respect because every initiative is determined by the business’s specific context. Our approach involves examining data from across the organisation in order to determine which combined variables have the greatest impact on a target outcome. For example, we could discover that those in executive roles aren’t displaying empowering behaviours, or not responding to existing incentive structures. Unfortunately, poor leadership can cause productivity to drop 5-10%, costing a business 7% of its total annual sales. However, once this combination has been revealed, we can work with the business to resolve these issues. In this case, we may decide to hire somebody new using our executive selection process in order to change the balance of the team and boost leadership performance, therefore increasing overall revenue.