Dynamic competition in the labor market, globalization, constant changes related to the development of technology – all these elements make it increasingly difficult nowadays to keep an employee in the organization for the long term. Companies operating in various industries are seeking diverse methods to take special care of people with above-average skills.
Risk factors in managing talents – table of contents:
One way to do this is to implement talent management practices. However, with the growing importance of talent management in modern business, some risk factors may undermine the effectiveness of this process. Below we look at the aspects that can have the greatest impact, and consider what can be done to minimize their effect on the organization.
What is talent management?
Talent management is a strategic process implemented by organizations across industries that involves identifying, recruiting, developing and retaining exceptional employees. The main objective of this approach, which is increasingly popular, is to ensure that the company has the right employees (along with their knowledge, skills, and experience) for each position – by which the people hired will contribute to the achievement of set business goals, ensuring long-term success. Thus, talent management is a significant part of organizational culture that promotes development, innovation, flexibility and high commitment.
Talent management – possible risk factors
While there are undoubtedly many benefits associated with effective talent management in an organization, unfortunately, it is also possible to detail certain risk factors that can affect its effectiveness. These should be divided into two groups: internal (related to the organization as a whole) and external (coming from outside the organization). The most important of these are presented below.
Internal risk factors
The lack of a talent management strategy is undoubtedly the most important internal risk factor. If an organization does not have an elaborate, thoughtful, tailored talent management strategy, appropriate action is unlikely to be taken to identify, develop and retain above-average employees. The lack of coordinated action will, in turn, translate into talent being used inefficiently, which is likely to increase the desire to leave. In addition to this element, we will also mention:
- Lack of management support – effective talent management requires management commitment and support. If leaders and managers do not understand and support the processes being implemented in this area, there may be a problem of lack of resources, inadequate investment and limited priority for this area,
- Lack of development plans – development programs are a vital aspect of talent management and an expected element of functioning in a company by above-average employees, and their absence leads to stagnation, which can consequently mean quitting,
- Lack of plans for vertical and horizontal promotions – if an organization does not have plans to deal with the departure of key employees, it may face difficulties in continuing operations and maintaining business continuity.
External risk factors
The most important external risk factor in talent management should be considered in the actions implemented by competitors. Dynamic competition in the labor market – that is, offering better employment conditions, additional benefits or development prospects – increases the likelihood that people with above-average skills will leave and forces the development of further strategies to retain them. This area should also be pointed out:
- demographic changes visible in the market – the aging of the population (resulting from a low birth-to-death rate) may lead to a talent deficit in the market. A decrease in the availability of appropriately qualified employees (characterized by above-average skills) may lead not only to difficulties in attracting them but also in succession planning or achieving set business goals.
- globalization – this element represents a deeper dimension of competition, as the opening to foreign obliged organizations to compete for talented employees internationally (making it more likely that they can lose recruits to competing companies offering better employment and development conditions).
How to minimize risk factors?
The risk factors outlined above can significantly harm the activities implemented by the organization – but some of them (internal aspects) can be minimized with a properly designed talent management strategy. When developing it, take into account several diverse aspects, such as the company’s business goals and its specifics (market situation, values, structure, etc.), the development needs of employees, currently possessed knowledge and skills, requirements for specific positions, possible tools and methods for employee development.
Remember to include in the strategy methods for measuring and monitoring the effectiveness of talent management activities (by establishing indicators that will demonstrate success).
Risk factors – summary
Effective talent management requires awareness of the aforementioned risk factors and taking measures to minimize them, especially in the form of the development of an appropriate document by the HR department and talent management specialists (with the support of management). Through the created strategy taking into account development and succession plans for selected positions (and, of course, the actions implemented on its basis), it will be possible to obtain a team that will work every day for the success of the organization.
In this regard, however, it is worth remembering that this type of document is not obsolete – you should constantly upgrade and reshape it to match changing business and market conditions.