Talent management can have a direct impact on business outcomes. Yet, in a competitive market, financial capital allocation and management often overshadow human capital—which is less predictive. As a result, company leaders can easily lose touch with the “people aspects” of profit.
Research shows that organizations should pay more attention to their talent management strategy. A recent McKinsey Global Survey of 1,820 respondents (representing all organizational levels and industries) largely agreed that “organizations with effective talent management programs are more likely than their counterparts to outperform competitors.”
Accordingly, it makes sense that organizations should take a closer look at their talent management efforts to boost the bottom line. Here’s what you need to know in order to effect positive change within your organization.
Potential Benefits of Effective Talent Management
There are many cumulative benefits that can come about as a result of talent management, according to the findings of the McKinsey report. One such benefit includes the ability to attract and retain the talent needed to realize business strategies. In fact, organizations with the most effective talent management efforts produced six times more talent attraction and retention rates.
Close collaboration between HR leaders and the executive team benefits organizations the most. When everyone is on the same page, talent resources and projects can be better aligned for success. Decisions become more streamlined and the organization can adapt to anything that happens in the industry.
Risks and Consequences of Ineffective Talent Management
Poor talent management produces effects that are opposite of those mentioned above. Ineffective human capital strategies—mainly those that lack any direction or are too slow to take action—result in employee performance problems, low retention rates and added costs to the organization. This can cause the talent budget to sink quickly, and shortages typically hurt other employees, creating a vicious cycle.
If your organization is looking to reinvest in its talent management strategy/program, the first step is identifying the most important practices to consider. A focus on specific talent management strategies can produce many benefits for an organization.
For instance, the McKinsey report highlighted that the three most impactful practices included rapid allocation of talent, HR’s involvement in fostering a positive employee experience and a strategically minded HR team working in tandem with leaders.
Practices That Can Predict Talent Management Success
Margaret O’Hanlon, founder of re:Think Consulting, knows how HR can make businesses more profitable and effective. “Statistics indicate that these are practices that have impact on the overall effectiveness of the talent-management program and influence on business results,” she says.
The top practices that can predict organizational success include:
- Talent must be swiftly moved among strategic projects in an agile fashion. This can change as priorities rise and fall. The ability to adapt skills and knowledge is key to organizational human capital management.
- Every employee is given the most positive experience according to his or her career path. HR facilitates this, along with the management team. Employees choose how they’d like to develop their career skills and advance themselves in the organization.
- HR leadership has a good overall understanding of the organization’s priorities and growth strategy. Having a seat at the decision-making table puts HR in the position to support these goals and help make the organization profitable.
Paying closer attention to your organization’s talent management strategy and taking the above actions can support greater talent attraction, performance and retention. If the company is faltering in one of the above areas, it’s pertinent that you realign talent management efforts to coincide with corporate goals.
Looking for other ways to better support your colleagues? Check out United Concordia Dental’s Employer Toolkit to learn of new strategies for engaging (and retaining) fellow employees.