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What is Talent Management?

Concepts & Definitions Human Capital Management

Talent Management and Succession Planning are processes that were historically only conducted for the top few percent of employees in an organisation.

With the advent of new technology and methods, it is now possible to conduct these processes for the entire workforce. It has become possible to do so quickly and with benefits for the whole organisation, each line manager, the HR department and every employee.

Definition of Talent Management Processes

In dealing with Succession planning and Talent management, our definition of Talent Management includes Succession Planning for every employee and also includes the following:

  1. The employees Career Aspirations, next role desired, direction of advancement, time frames
  2. Rating of roles as to their criticality to the organisation
  3. Rating as to the managers perception of the employees potential (A,B,C) against several behaviours
  4. Managers view as to where they see the employee, Readiness for Promotion, Next role to be promoted to, Succession Plan – employee that could replace this employee (in the event of promotion or in the event of this employee leaving) and readiness of the next employee to take over the role
  5. Flight Risk assessment (what is the probability this employee will leave the organisation in the next twelve months)

The outcome of this process is to enable:

  1. The manager to understand the Talent in his or her team
  2. For the manager to be able to visualize his or her team as to the various factors that relate to the probability and consequence of an employee exiting the organisation
  3. The employee to know that their aspirations and development have been considered
  4. The organisation to be able to understand where it’s talent is at

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Why Bother with Talent Management Process?

Employees typically constitute 60% of the organisation’s operating costs. In a business or organisation supply sense, employees are more difficult to source, have longer lead times for replacement, cost more than ever before and have a very high total replacement cost.

Intellectual capital loss is often not considered as a direct cost but it will have an increasing impact on organisations as the world’s major economies transition from the industrial age to the services age (knowledge workers).

In most organisations however there is little consideration for the cost of replacement, training, induction, time taken for the employee to get up to speed (be 100% productive in their new role). Most organisations have little or no infrastructure, systems or procedures to deal with the costs of employee turnover.

Given that this is the single largest expense in an organisation, clearly more appropriate tools and technologies are needed to manage Human Capital.

Talent Management and Succession Management are tools to assist organisations through:

  1. Reducing Employee Initiated Turnover (involuntary turnover)
  2. Improving Resilience by having employees cross skilled so that they can take over Critical Roles correctly.
  3. Growing Talent within as it becomes more difficult to source externally
  4. Helping Mangers understand that there is a major impact of not managing their teams

Interaction between management processes

Relationships between Succession Planning, Talent Management Processes and Employee Turnover

Employee Turnover is directly related to management processes (poor processes or a lack of processes). Most employee surveys (such as Attachment, Engagement, and Exit Surveys) indicate the top 6 reasons why employees leave their jobs are:

  1. I was not appreciated (had little or no feedback from my manager)
  2. I was not managed well (lack of direction from up above)
  3. I was not developed (no personal development opportunities)
  4. There was no career path
  5. I left as I got a better offer (salary or cash incentives)
  6. Lifestyle issues

The order of these reasons may change per employer however the reasons tend to be the same across the majority of organisations.

So how are these reasons connected to processes?

Consider an organisation that has:

No Performance management processes.

Employees are given sporadic direction not aligned to the corporate or agency objectives. They are given little feedback against how they are tracking to the objectives because there are no objectives to begin with. The lack of a valid performance management processes accounts for items a) and b) above. i.e. “I had no feedback or clarity around what I was expected to do.”

No Succession or Talent Management processes.

Employees do not have a conversation with their managers about their Career Aspirations. Therefore, managers have no idea about employee career aspirations. Development plans are difficult to structure as managers find it hard to align development to the companies’ objectives with the employee’s own aspirations as they are not aware of either. Managers do not have visibility as to who is a Flight Risk (employees most likely to leave an organisation), have not considered who occupies very critical roles and the consequence of these employees leaving the organisation. Because there is no consideration for Flight Risk and the consequence of leaving the organisation, managers have not trained other employees to take over critical roles if the person in the critical role walks out the door tomorrow.


Organisations without Talent Management processes will see an increase in employee turnover as the market for Talent reaches crisis point. The net working population is predicted to decrease for the next four years. Competition for Talent is increasing, therefore turnover will increase.

Your organisations success depends on your people. People are the predominant source of competitive advantage and need to have adequate processes in place to reduce turnover and maximize the performance of the organisations Human Capital.

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