Talent Management In Current Economic Conditions Management Essay

Talent Management In Current Economic Conditions Management Essay INTRODUCTION: The present global economy has not only created a complex but dynamic environment as well and the firms need to learn how to compete effectively and efficiently in order to achieve viable growth. (Briscoe et al, 2009 and Friedman, 2005).But one of the greatest obstacles for the success of an organization is due to shortage of workforces with needed enthusiasm and competencies. Even in the period of recession talent management practices have been put aside in order to cut cost. However it is at this time that the strategies of the company should be reassessed and practices of talent management should be encouraged. The organization needs to ensure, in order to have success, that they are having right people with the needed qualities at the right time and in right location. (U.S. Department of the Interior Office of Personnel Policy, 2001) In this essay I would be explaining the meaning of talent management, along with a history (in the appendix) and then I would be critically analyzing the importance of talent management in current economic conditions followed by a conclusion and the learning outcome. TALENT MANAGEMENT: There is no proper definition of talent management as each organization thinks differently. To some organization it is about managing the highly talented individuals having specialized skills which helps the organization to withstand the market and for the others it is about managing the talent i.e. all people have talent and it should be identified and then to train them as per the requirement of the organization. Most of the talent management decisions are done based on core competency of an organization and the skills required for the particular position. Thus talent management is basically a recruitment of people both internally as well as externally, developing them in line with the organizations current business goals, and then promoting and retaining those people for the future business goals. These all functional aspects are done by human resource department who work in line with the companys business goals. (Sundararajan, 2009) ROLE OF TALENT MANAGEMENT IN CURRENT ECONOMIC CONDITIONS: In the current economic downturn most of the organizations around the world have taken tough decisions in terms of managing their talent. Most of the companies has slashed jobs, reduced training and development budget on their staff and have put talent management programmers on hold or have cancelled. The HR professionals are put under pressure by the companies to cut cost. (Bersin, 2008) Even the demographics are considered to be an important for success of an organization and are also the main driver for talent management challenge. Nearly 70 million baby boomers are expected to stop working in U.S. in the next 15 years and only 40 million workforce are expected to retire in the similar period, thus creating a shortage of workers. (Adecco, 2008). All the above shows that how significant is talent management practices and the job which HR plays is a launch pad of talent mindset. But the companies, thinking of bright future prospects have taken a positive approach towards their business and also managing their talents in the  present economic downturn. The companies which have implemented well controlled talent management programs have not only helped the company to overcome short term business challenges but it has relocated the company to achieve long term success and growth. It also has helped the organizations to increase their profits by employing the right people at the right time. (Deloitte,2009). A recent survey conducted by Bersin Associates(2009) have shown that the organizations which have implemented talent management programs have achieved a 60% higher return as compared to the organization that have not implemented it. Thus the organizations have felt the importance of effective talent management processes and have focused more on retaining their highly skilled people and reviewing their systems to ensure that they have maximum return on inve stment. There is an important requirement of knowledge workers, in an organization, having precise skills which are developed through extensive learning and guidance. These workers have created an essential impact on the success of the company. (Jackson,Hitt and DeNisi, 2003). Most of the organizations require constant innovative products to satisfy the needs of the customer. These can be done only through the workforces of the company. This shows that how the talent management practice is crucial to success. Even most of the multinational organizations have felt the need of these workforces and for these they are moving to other countries to recruit and hire talent people. They always look out to enter into new markets as quickly as possible before their competitor does as this helps them to hire the best talent at best prices which helps the organization to remain competitive in this global environment.(Schuler Jackson, 2009) The talent management programs are vital for an organization as it brings a greater long term benefits as compared to short term benefits. Thus the organization needs to have a long term mindset which is crucial in period of economic instability as it brings benefits to the organization than cutting cost in the short term. SHORTCOMINGS OF TALENT MANAGEMENT: As per Cappelli, the large corporations especially in U.S. talent management practices have become dysfunctional leading to the failure of its practices. The main two reasons for its failures are firstly the surpluses of employees during downturn leading to layoffs and reshuffle and secondly the lack of adequate talent resulting in talent crisis. (Cappelli, 2008) The talent management practices in U.S. were done in two ways that were equally ineffective and fruitless. The most regular practice done by the U.S. companies is that they never did anything nor made any plans to combat the crisis of talent. Thus whenever they require a new talent or any employee leaves the job, they relied on outside hiring to fulfill the gap of talent which proved to be costly.(Cappelli,2008) The second approach which is commonly used among older companies is that they relied on multifaceted and authoritative models of 1950 for forecasting and succession planning. This legacy system proved to be a great success when the business was predictable. But in the present economic conditions, where the environment is unstable and unpredictable, it was very tough to have a long term succession planning.(Cappelli, 2008) The companies could not forecast of how many employees would be staying with them once the development program was completed. Thus whenever an important vacancy occurs, the candidate identified as a successor may not be able to meet the needs of the job because of the unstable environment. The company then searches for the talent from outside to fill the gap. This outcome resulted to have a negative impact. Firstly the candidate feels betrayed as the succession plan creates an implicit promise and secondly the investment made in developing these candidates is wasted.  (Cappelli,2008) As per Cappelli, the survey conducted shows that nearly two third of the American companies are not doing any sort of manpower planning nor predicting how many employees are required and the advice they got was to return to the traditional practices of 1950s and create a long term succession plans. For implementing these plans they need to ensure that some sort of planning are done or else the company may have to depend on outside hiring to fill those gaps. The problems related to outside hiring is that it led to the problem of retention of current workers as they feel demoralized and also the cost of hiring a new employee is also very high. (Cappelli, 2008) IMPACT OF ECONOMIC CRISIS ON TALENT MANAGEMENT: Whenever an economic crisis occurs, the first and foremost which the organization does is to make deep reductions in cost by eliminating jobs and also eliminating any cost related to recruitment and professional development. Even the learning and development budget gets reduced. This results in two different scenarios: firstly the people get promoted without having necessary talent, knowledge or exposure to execute the roles effectively and secondly the studies have shown that the employees greatly value the growth of their own talent and thus plummeting the training and budget cost. This results in reduced self-esteem and act as a de-motivator for the employee and it also leads the employee to leave their job.(Insight Research, 2009) Most of the organizations have downscale their business by removing the workforces mainly due to global economic and financial conditions. The research conducted in the area of talent management have reflected that the impact of loss was not felt initially but later on it did make the organization to realize their mistake, when they had no employee with the required knowledge and skills to either foresee or solve problems that occurred. (Collins Mellahi,2009) Finally whenever a crisis occurs the managers shouldnt forget about talent management practices. They should take time to vigilantly re-evaluate their talent management strategy and make sure that they are using their largest talent their staff- as effectively as possible.(Street,2008) CONCLUSION: The most novel way to manage the talent is to use the four values drawn from the operations of supply chain management .The two of them address the improbability in the demand side and the other two addresses the supply side. Make and Buy to Manage Risk: having too much of employees are expensive. So the best way to combat such problems is to develop less candidates than the future requirement and if there is shortfall of talent then it can be hired from outside. The organization must carefully review where to put their assets as some positions can be easily crammed by outside talent.(Cappelli,2008) Adapt to the uncertainty in Talent demand: the actual requirement of talent in future is uncertain and hence the company should employ the demand in shorter groups. Then these groups are selected in regular interval thus putting fewer burdens on the management and also the employees are given general common training to all, and then they are send them back to their jobs to specialize.(Cappelli,2008) Improve the return on investment in developing employees: In order to improve the ROI, the employees should be made to bear the cost of development which helps the employees to gain knowledge. It can also be that the employees may be asked to do work on certain projects on freely basis. And the most important part is to maintain the relationship with the former employees, so that when they return back to job they bring back your ROI in the form of skills.(Cappelli,2008) Preserve the Investment by balancing the Employee-employer relationship: the employees can leave the job if they find better prospects. The best way to retain these employees is to maintain a relationship by having him share the advancement decisions.(Cappelli,2008) BIBLIOGRAPHY: Brscoe, D., Schuler, R. and Claus,E.(2009), International Human Resource Management 3rd Edition, Routledge London.[ONLINE] Available at: http://www.sciencedirect.com/science/article/B6W5M-4XK321Y-1/2/814a88aaea2c415c71975e14a443484e?zone=raall. (Accessed on: Friedman, T.L., The World is Flat, Farrar, Straus and Giroux, New York. [Online]. Available at: http://www.sciencedirect.com/science/article/B6W5M-4XK321Y-1/2/814a88aaea2c415c71975e14a443484e?zone=raall. 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