Dispelling the Myth: Talent Management in the Mid-Market. consulting software solutions
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1 Dispelling the Myth: Talent Management in the Mid-Market consulting software solutions
2 Talent management is often seen as an issue that only the largest enterprises with the largest workforces need to address but why should that be the case? Executive summary Talent matters. That s as true for medium-sized businesses (MSBs) as it is for large enterprises if not more so. In an uncertain economic environment, organisations that fail to attract, retain and develop talented employees run the risk of missing out on opportunities for revenue growth and market expansion, regardless of their size. In this white paper, we will see how, by applying talent management processes and technologies to a few key tasks recruitment, training/development and performance appraisals MSBs can start to reap the benefits of increased workforce motivation and productivity. Introduction: why talent matters Talent management is often seen as an issue that only the largest enterprises with the largest workforces need to address but why should that be the case? Why should employees with natural aptitude or skill, the dictionary definition of talent, be any less valuable to midmarket companies than they are to larger organisations? Medium-sized businesses, or MSBs, make a significant contribution to the UK s overall economic well-being, creating jobs and prosperity in all regions of the UK, according to a late 2011 report from the Confederation of British Industry (CBI), the UK s top business lobbying organisation. In order to do that, they need talent. In the CBI s report, Future Champions: Unlocking Growth in the UK s Medium-Sized Businesses, it defines MSBs as companies with revenues between 10 million and 500 million. Even at the lower end of this range, it estimates, firms with between 10 million and 100 million in revenues may represent less than 1% of UK firms, but they account for 22% of UK revenue and 16% of total employment. They may not have the size, scale and budgets of their larger rivals, but MSBs have other advantages. Their comparatively smaller size makes them more agile and responsive than blue-chip multinationals when presented with market changes and new opportunities. They often enjoy closer, more personal relationships with their customers and suppliers. Consensus is typically reached quicker in an MSB; innovations can be introduced faster. An MSB s larger competitors may be able to outspend it but, hampered by bureaucracy and layers of organisational hierarchy, they won t be able to move as quickly. At the same time, an MSB often expects more from its most talented employees and relies on them to deliver. In a smaller workforce, individual members must be able to use their initiative, show entrepreneurial flair, take proactive decisions and contribute to the free flow of ideas in the business. In fact, the MSB s distinctive culture is often shaped as much by its team as by its founder or owner. In defining talent, the Chartered Institute of Personnel and Development (CIPD) makes no mention of workforce size. Talent, it says, consists of those individuals who can make a difference to organisational performance either through their immediate contribution or, in the longer term, by demonstrating the highest levels of potential. That s as true in an MSB as it is in a large enterprise or a tiny start-up. Talent management, meanwhile, is defined by the CIPD as the systematic attraction, identification, development, engagement, retention and deployment of those individuals who are of particular value to an organisation. Again, there s no reference to workforce size. In this white paper, we will argue that talent management is just as important to MSBs if not more so as it is to large enterprises, and that, regardless of size, companies that fail to attract, retain and develop talented employees run the risk of missing out on opportunities for revenue growth and market expansion. This is a risk that few organisations regardless of size or industry sector can afford to take in an uncertain economic environment. By putting in place robust talent management processes and tools, MSBs can help their most talented employees stand up to the challenges of this environment and better assist the organisation they work for in achieving its goals. 2
3 Modern approaches to talent management are based on the simple understanding that natural aptitude needs nurturing in order to thrive. Addressing core talent challenges Talent management may sound pretty daunting to the MSB. But modern approaches to talent management are based on the simple understanding that natural aptitude needs nurturing in order to thrive. Just as a talented athlete requires an enthusiastic, dedicated coach in order to reach the peak of their abilities, so talented employees require training and development, through exposure to new workplace opportunities and experiences, in order to reach theirs. But before that can happen, a talented athlete needs to be spotted and signed for the team or in corporate language, recruited and on-boarded. Over the course of their career, their progress against goals set for them needs to be measured (performance management). In time, if they re retained and developed effectively, they may be ready to become one of the team s star players, when previous titleholders retire or move on (succession planning). All these processes fall under the banner of talent management and are just that: processes. The technology that underpins talent management, meanwhile, helps to automate processes, where automation is appropriate, and to guide staff through the necessary workflows, where manual intervention and human decision-making are required. The ultimate goal of companies that implement talent management is the same, regardless of their size: to organise the workforce so that employees understand the company s goals and objectives and the role they are expected to play in delivering desired outcomes. By applying talent management processes and technologies to a few simple tasks that, in most cases, they already perform, MSBs can make a start in talent management and reap its benefits. These tasks might include: Recruitment MSBs offer a wealth of training and professional advancement opportunities, but may need to shout louder than larger companies in order to get their voice heard by job-seekers. Talent management can help, by assisting the MSB in keeping a database of potential hires; coordinating recruitment efforts across newer online recruitment channels and social networking sites; and streamlining the recruitment process, by turning paperbased information, such as application forms, interviewer feedback and previous employer references, into electronic information that can be more easily managed and shared. It can also assist in helping HR staff to view the workforce as a whole as a talent pool, in which a variety of skills, qualifications and experience is needed in order to maintain competitive advantage. Through talent pooling, the HR team can more accurately match skills gaps, appropriate applicants and job opportunities. Case study: Hendy Group The Hendy Group is a familyrun chain of over twenty vehicle dealerships spread across Southern England. It employs over 700 staff, who between them, handle over 200 million of business annually. The company receives around 200 speculative CVs a year from would-be employees, in addition to about 30 in direct response to job vacancies. Prior to implementing SelectHR from the Access Group, HR director Clare Hendy and her team responded to every applicant in writing and had to forward all paper-based applications received to the relevant manager. Today, everything is online: managers get an automatic telling them that someone has applied for a role and they can view the application online. Mail merge is set up to issue candidates with interview dates and times automatically and, if they are successful in their application, converting them to new starters on the system is a matter of pressing a hire button. Clare Hendy believes that streamlining recruitment in this way has saved her department the cost of a part-time staff member. 3
4 MSBs understand the importance of investing in their workforce skills base. Training and development MSBs understand the importance of investing in their workforce skills base: in the 2012 Voice of Small Business survey, conducted by the Federation of Small Businesses (FSB), 26% of more than 11,000 respondents said that their business planned to increase its investment in staff training over the next 12 months. However, the provision of training and development opportunities and their uptake by individual members of staff isn t always managed in a formal, consistent way in MSBs. Talent management can help here, by keeping clear records of the training and development programmes provided by the employer and completed by individual members of staff. But talent management isn t just about recordkeeping. It can also help HR staff to analyse workforce capabilities, uncover skills gaps and refine development strategies. It can help them track employee take-up of learning opportunities and monitor post-learning performance, to see how formal and informal learning opportunities impact individual employee development. Performance management/ appraisals In MSBs, performance reviews or appraisals are often conducted on an ad hoc, informal basis, typically using paper documents if they are conducted at all. As companies grow, however, they often find that this approach is not just inefficient, but also fails to give managers the insight they need into who are the company s high-performers and future stars, as well as the contribution they make to companywide goals and objectives. This is the job of regularly scheduled and efficiently run performance management processes, based on software automation and online forms, which at the same time, help individual employees to understand their role, how it is evolving and the objectives they are expected to meet all proven factors in employee satisfaction and retention. Case study: West Suffolk College West Suffolk College, in Bury St Edmunds, employs over 800 staff and provides vocational training across Suffolk and Norfolk. Since implementing SelectHR, college staff are now able to book training themselves, via a single screen that provides them with detailed information about what courses are available, who s teaching them and the classroom where the course will be held. According to Jo Wyatt, coordinator in the Faculty of Quality and Professional Development, this means she spends a lot less time fielding calls and can instead focus on maintaining the quality of courses provided. For each course, she can run an attendance list for staff to sign, she says: SelectHR enables us to send an automatic to the line manager if an employee does not attend, which has led to a big decrease in no-shows. Conclusion As we have seen, MSBs are vital to the UK economy and the effective management of their talent may be fundamental to their long-term performance and growth. In fact, developing a robust approach to people management may be a crucial ingredient in helping them to rise to the challenge of unlocking growth potential, according to Dr Jill Miller, research adviser at the CIPD. As an organisation s workforce grows and the scope of [its] operations changes, particular challenges arise, particularly when it comes to balancing the need for formal systems and processes with the desire to preserve value-creating innovative and entrepreneurial cultures, she writes in a mid-2012 report by the organisation into people management approaches among UK-based companies. With larger teams, the skills and capabilities of managers become of paramount concern, and maintaining people s strong engagement with the organisation s purpose and vision becomes more challenging as the distance between the owner/founder and employees increases. In other words, a growing team needs strong performers, developing news skills, who understand their roles and the expectations placed on them all core talent management issues, but all processes that can be implemented simply and cost-effectively in a mid-market business today. 4
5 Further reading Future Champions: Unlocking Growth in the UK s Medium-Sized Businesses Confederation of British Industry (CBI), October 2011 [ Achieving Sustainable Organisation Performance Through HR in SMEs Chartered Institute for Personnel and Development (CIPD), June 2012 [ consulting software solutions
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