Talent Management Initiatives Successes and Challenges

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					Talent Management Initiatives: Successes and Challenges Facing Organizations
By Jason Averbook, Chief Executive Officer, Knowledge Infusion

Companies are hemorrhaging with wide-ranging human capital management (HCM) issues as they plan
for growth and expansion according to a recent survey conducted by Knowledge Infusion, in association
with International Association for Human Resources Information Management (IHRIM). The lack of skills
knowledge, growing gaps in leadership, and other factors such as retirement and increased turnover is
forcing companies to reassess their human capital strategy.

Internal talent management is fast becoming the top priority for many companies as they look to expand
their organization and develop leaders for future growth. Leadership development, performance
management and succession planning have emerged as the highest human capital management
priorities in 2007 (Exhibit 1). The lack of qualified candidates from the external talent supply of talent
combined with company’s inability to understand what they have in terms of human capital assets, skills
and competencies is creating a developing crisis according to our recent study.

Key findings from the study include:

    1   Leadership development, competency management and performance management have
        emerged as the leading areas of HCM investment
    2   42% of respondents stated organizational expansion as the drivers behind HCM and talent
        management investment
    3   Less than 50% surveyed feel their CEOs thinks their organization has the skills necessary to
        perform at industry leading levels
    4   Succession planning (34%) tops the list of solutions currently in implementation followed by
        competency management (32%) and performance management (32%)
    5   Customer satisfaction with packaged solutions remains challenged

In this report, Knowledge Infusion will define why companies continue to struggle with human capital
performance, outline what is driving HCM investment, and provide recommendations to address the
continue talent crisis among organizations.

Exhibit 1
Changing Human Capital Management Priorities
Executives Concerned with Talent Gaps

CEOs are becoming increasingly concerned about the skills of their workforce according to our survey.
Less than 50% of respondents reported that their CEO believes the organization has skills needed to
perform at industry-leading levels. Whether they are in an industry feeling the acute pain of talent
deficiencies effecting business results or finally recognizing the importance that a finely-tuned workforce
has on business outcomes.

Exhibit 2
Executives Confidence in Talent Pipeline Waning
Source: Knowledge Infusion, 2007

           Do you think you CEO believes that your workforce has the skills it needs to perform
                                       at industry-leading levels?

                                  I don't know



What is most worrisome in this year’s study is about 1 in 4 respondents “don’t know” their CEO’s beliefs
about the organizations existing skill set. With many respondents in the survey from HR, this would
suggest a complete lack of communication between HR and the executive suite.
In addition to the survey, recent Knowledge Infusion customer interviews with executive and HR leaders
confirm the misalignment between the business and HR in developing a cohesive talent management

Thought-leading executives that recognized the importance of talent are increasingly demanding HR
leaders to address many questions including:

    1   Who can lead us into new markets?
    2   Who are our leaders of tomorrow?
    3   How can I align talent with my operating plan?
    4   How can I mobilize talent globally and cross-functionally to maximize business results?
    5   What does my bench strength look like?
    6   How can I build a talent pipeline for the future?
    7   How do I develop today’s performers for tomorrow’s organization?
Customer Satisfaction Waning with Existing HCM technology Investments
Addressing people and process challenges are important issues in HCM transformation. As noted in our
study, executive sponsorship and internal talent management are key people and process components
and part of the transformation efforts.

Technology is equally important to people and process, as a core component to HCM success.
Unfortunately, customer satisfaction in HCM technology continues to be challenged. Approximately 40
percent of survey respondents indicated they are not satisfied with their existing human capital
management solutions, up from 30 percent in 2006.

Knowledge Infusion attributes low satisfaction levels of existing HCM technology due, in part, to:

    1    Lack of a cohesive strategy and plan prior to implementation of a talent management solution
    2    Siloed processes and systems were implemented in a vacuum and not focused on addressing
         business needs
    3    Little to no governance structure when evaluating or implementing human capital management
    4    Focus and priority on “low value” functionality
    5    No consideration for evaluating people, process and technology together – no holistic approach
         to talent management initiatives
    6    Misaligned expectations between solutions and functionality that was sold versus what was
         actually implemented

Today, organizations are most satisfied with recruitment, performance and compensation management
solutions. Conversely, for the past two years, organizations have been least satisfied with competency
Management, workforce analytics and succession planning. Knowledge Infusion attributes the lack of
satisfaction due in part to the lack of maturity for those solutions.

Exhibit 3
Talent Management Technology Initiatives Have Much Room for Improvement

Knowledge Infusion anticipates continued high replacement rates and customer satisfaction issues in the
future due several factors including the low risk and cost associated with “switching” of siloed applications
and continued focus on short term process automation versus long term HCM value creation. Increased
integration and functionality, though, is encouraging companies to begin down the path towards a talent
management suite approach.

Recommendations & Call to Action
Knowledge Infusion recommends organization take the following action in an effort to continue their focus
on talent management.

Define your “talent plan”. Develop a 3-year talent management roadmap and stay true to your strategy.
Adapting and flexing that strategy is important, but massive wholesale change year-over-year will prevent
any progress and buy-in from the business. Evaluate near term solutions and process improvement in
context of the 3-year plan. Avoid making talent management decision in a siloed approach. Work
towards business level ownership and accountability of talent management placing the dependency and
onus on managers and employees instead of HR.

Leverage growth and expansion to fuel talent management initiatives. Build your talent management
business case around initiatives senior management cares about in the language they use –- expanding
markets, new products, extending geographies, improving customer service, growing revenue, sales, and
profitability, defining service and industry measures and benchmarks, etc. HR must focus towards
business-level ownership of talent management including define pivotal roles, focus on internal talent for
development and succession, building core skills and competency model, establishing HR as competency
steward, redefining and integrating processes and systems.

Identify your “Talent DNA”.
Defining a Talent DNA means identifying the critical components and processes in your talent
management strategy (Exhibit 4). This approach requires a holistic approach to talent management and
viewing key processes such as talent acquisition, career planning, learning management, performance
management, succession planning, and compensation together and looking for areas of integration in
process and technology. With a more holistic approach to talent, you can look at such areas as the
source of hire and assess trends for high performers or low performers and evaluate the impact on
employee performance and business results such as same store sales in retail or manufacturing
Exhibit 4.
Effective Talent DNA Requires a Holistic Approach
Source: Knowledge Infusion, 2007

              Talent               Performance

  Succession              Talent
                           DNA               Learning
 Management                DNA

             Career            Compensation

Focus on internal and external talent development simultaneously. Focusing on talent retention
versus talent acquisition should not be an “either or option”. As the talent supply chain is continuing to
constrict, organizations must continue to evolve their approach and attractiveness to external candidates.
Concurrently, organizations are experiencing the largest gap ever between job requirements and what
exists within an organization and must look internally to development and grow their existing talent. The
key to success is direct involvement with line of business (LOB) management and defining a
standardized, company-wide skills and competency model. Take the time to understand your
organizations’ expansion strategy and how that strategy impacts the internal and external workforce.
Lastly, organizations must shift from disciplinary-oriented to developmental planning, goal management
and 360-degree reviews that embrace and engage the workforce.

Look to re-prioritize succession planning efforts. Succession planning is an increasingly critical area
for organizations and defining with the entire organization. Succession planning, or better defined as
succession management, must be re-evaluated an eye on integration with other processes such as
performance and competency management, automation, and objectivity. Success planning, at the core,
includes the process of assessing, managing and planning the pipeline of talent to fill critical positions
across the organization.

Form a talent management governance council. Define a governance structure that supports the
talent management strategy and includes participation for the line of business. Get to know your HR
counterparts, and more importantly, how their role, viewpoint and domain expertise can be leveraged.
Include leaders of ALL talent management functions in solutions evaluations and view technology as
talent management catalyst.