What Singapore HR heads must do to keep their talent

The premise of talent management (TM)

With the current economic malaise affecting many advanced economies, many companies are constrained fiscally, while having to balance finances with spending to achieve longer-term goals.

This conundrum is also acutely felt by Human Resource managers, not barring those in Singapore who have to hire, develop and retain the best people that would be able to contribute to organizational capabilities and performance, amid the current talent crunch exacerbated by the current restrictions on hiring foreigners.

As talent increasingly becomes of importance to strategy and core competencies, the demand for talent is high; their short supply is also exacerbated by changing demographics, with falling birthrates making the pool even smaller.

The Chartered Institute of Personnel Development (CIPD), a professional association for HR professionals in the UK, aptly defines talent as “individuals who can make a difference to organizational performance either through their immediate contribution or, in the longer-term, by demonstrating the highest levels of potential”.

Making important decisions about managing talent for organizational needs while keeping within budgetary constraints have become a top priority.

Developing and managing talent from within, in the context of firms operating in Singapore, also makes much sense both from the financial and social-organizational equity point of view; developing and promoting from within not only circumvents the current financial and legal drawbacks of a talent search beyond the country, but also sends a strong subliminal promise of career developmental opportunities to the current employees in the organization that would not doubt increase employee engagement and loyalty.

Identifying talent in your organization

The issue of potential also figures prominently in the context of talent management. How does one determine talent? This is a question that HR practitioners must answer.

Assuming they do not treat TM as just another fancy term for Human Resource Development, they must choose between the “inclusive” perspective, where everyone is treated as talent and should be developed according to their strengths and abilities, or the “exclusive” perspective where only a select group of people are defined as talent, or high potentials, and are given additional resources and developed.

The latter (also more popular) view runs the risk of alienating the rest who are still essential to the organization but are not identified as “talent”, and may have implications for their motivation and morale. However, the flipside can be said that those who are termed talent and groomed tend to report increased engagement.

To mitigate the effects of ill feelings of those who are passed over, HR practitioners who are partial to the exclusive view must be specific in the definition and requirements for talent identification and be seen to adhere to principles of transparency and meritocracy.

Both views also have implications for HRD practitioners with a focus on L&D. The inclusive or the “talent pipeline” view means enacting a comprehensive training and development strategy for all employees that focuses on employee-job fit and developing competencies to fill different parts of the organization.

The exclusive or “talent pool” view means a more targeted developmental approach for those individuals that have the potential for higher positions or greater responsibilities that mainly involves leadership and management development initiatives.

The view adopted by the HR practitioner must carefully consider the vision, strategic needs, culture and financial constraints of the organization.

Developing talent

The development of a viable strategy for talent development hinges on how the next two implications are answered. This article will adopt the “exclusive” view to talent identification as a reference for discussion.

Firstly, HR practitioners must decide what kind of development trajectory should be identified before commencing developmental initiatives. Would it be a targeted approach to potential where the individual is groomed for a certain leadership position, or is she groomed for general leadership positions?

If the former, then it is difficult to predict that she would indeed grow into the specific position as they might be a myriad of confounding factors that might come into play in her learning and experiential trajectory.

Embarking on a targeted approach might also mean thinking about whether the development should be short termed i.e. developing for performance in her current or the next position; or mid to long termed i.e. development for her next or eventual position.

In all, a targeted and long termed approach to development of talent or high potentials would result in a more complete, specialized individual who would, upon arriving at her final destination after many years of focused training, development and grooming, be ready and able to take on her role effectively.

The more general, medium to long-term approach to development would mean a better-rounded individual due to her varied learning and job experiences.

Additional advantages to this approach could also be the flexibility for the organization as this talent can be deployed in any suitable position at any time of her career trajectory, which also means that the return on investment on the individual could be realized sooner; and that this approach lowers the risk of wasted resources should the talent leave the organization.

The HR practitioner must consider the needs and resources of the organization before deciding on the preferred approach.

Secondly, would the rest of the organization be supportive in the development of these “exalted” employees? As mentioned in the discussion above, employees that are passed over during the talent identification process might have ill feelings towards the identified talents.

This might become problematic when these people are required to work with the talents in teams, share knowledge, collaborate or God forbid, coach and mentor them. Those passed over might not want to share their knowledge with the talents, due to jealousy that the talent might get even further ahead in his career trajectory, or due to fear of losing his unique value to the talent.

The solution to this problem thus is to make knowledge sharing in “mutual self-interest”. The talent, after receiving knowledge, must be held accountable for not just his performance, but also that of his team members; the more experienced employees that are sharing knowledge or developing these talents must also be rewarded for their efforts.

However, implementation of this depends on the trust that management would recognize and account for efforts of both parties.

Retaining talent

I believe the key to retaining talent in the form of both high potentials and those employees with business critical skills would be employee engagement. Academia provides a wide variety of definitions, but most identify an affective-cognitive component - “a positive, fulfilling, work-related state of mind that is characterized by vigor, dedication, and absorption”.

It is increasingly apparent that people, especially those from Generation Y, are no longer satisfied with work but are looking for opportunities for greater self-expression and fulfillment. Studies have also showed that employees value intrinsic factors such as purpose, fulfillment, autonomy, satisfaction, close working relationships and learning as more important than money.

Being fulfilled and engaged holds the promise of self-actualization, and is key to attracting, developing and retaining true talent, or even most employees.

From the organizational point of view, engagement is important in that it entails an employee being attentive and absorbed in the performance of their roles, which has a direct impact on commitment, positive work behaviors and ultimately organizational performance.

Engagement as reciprocity

Learning and Development HR practitioners must understand the underpinnings of employee engagement. Academics explain that employees and their organizations have bilateral obligations to each other that must be fulfilled in order for the relationship to be committed and beneficial to both parties.

Employees are believed to be more engaged when they perceive that the organization has fulfilled their end of the obligations in areas that are perceived to be important in their relationship. This theory is bolstered by a similar concept organizational psychologists term “the psychological contract”.

This is an implicit contract outside of the formal employment contract, with its own terms and obligations, that exists in the minds of employees that binds both employee and employer together.

While the fulfillment of the formal written employment contract stipulates a legal employment arrangement where work is exchanged for monetary compensation, the fulfillment of a psychological contract by the employer (organization) usually entails corresponding employee commitment to her organization and very possibly, engagement at work.

A curious survey by a well known consulting firm which found that 43% of high performing employees (who would very much be identified as talents) are disengaged at work compared to their lower performing counterparts shows that engagement is difficult to enact, and probably more so for high potentials.

The obligations or terms of exchange in the psychological contract expected by employees (and more so for talents or high potentials) are no longer just simple hygiene factors in the areas of compensation and benefits, but are increasingly higher order needs such as growth and career progression opportunities.

Talented employees are usually ambitious and may have different career strategies; they may desire and pursue career management activities that focus on either furthering their career within or even outside the current organization.

Career advancement aside, these individuals may desire training and development opportunities that would also meet their personal needs, and not just the organization’s alone. HR practitioners must make careful considerations and balance the needs of these talents with the needs of the organization when designing learning and developmental initiatives.

A caveat – the importance of integrating the TM framework

Definitely, all TM activities must be aligned with strategic objectives and culture (especially in the area of human resource management policies) in order for results to show. Correspondingly, the definitions of talent will change according to changes in strategic objectives.

With organizational strategies becoming more emergent in nature, and assuming strategic human resource development is in place, management and HR practitioners must constantly define talent in tandem with changes in business and strategic needs, and vice versa.

This form of succession or talent planning ensures that companies will have adequate time to train and develop the requisite people that can serve or drive business needs.