The Future of Talent Management: Attracting & Retaining Talent Through Employee Learning, Career...

Running Head: THE FUTURE OF TALENT MANAGEMENT 1

The Future of Talent Management: Attracting & Retaining Talent Through

Employee Learning, Career Development, and Internal Mobility Opportunities

Kayla Cruz

Florida International University

PAD 6946

THE FUTURE OF TALENT MANAGEMENT 2

The Future of Work

The workplace is changing exponentially. To deny the fact, would simply be

naïve. The very nature of both the public and private sectors is different today than it was

twenty years ago, and as a society, we’ve progressed from an Industrial Age, to one much

more concerned with human capital. As a result, the focus of organizations has shifted, in

an attempt to remain competitive in the global market. Rather than solely focusing on

production, top organizations have begun to embrace the significance and importance of

their human resources. Effective human resources management will prove to be a crucial

element in the success of organizations in the future, as the success of organizations will

largely depend on the ability to attract and retain top talent. Organizations that thrive in

the new market will be those with extensive talent management strategies, providing

individuals with access to employee learning, career development, and internal mobility

opportunities.

Why Does Talent Matter?

The goal of most modern-day organizations is to be recognized as the best in their

industry. This “desire to be the best” has come into being, primarily due to our culture’s

tendency to celebrate superstars. As Godin (2007) states, “We reward the product or the

song or the organization or the employee that is number one” (p. 6), and as a result, being

average is no longer acceptable. For this reason, employers have invested significant time

and energy into differentiating themselves from competitors in the market. Over time,


however, the general consensus has become the following: “the ability to effectively

hire, retain, deploy, and engage talent- at all levels- is really the only true competitive

advantage an organization possesses” (Wellins et. al, p. 1).

It makes sense, really. As Wellins et. al argue, “your organization can create a

new product and it is easily copied. Lower your prices and competitors will follow. Go

after a lucrative market and someone is there right after you, careful to avoid making

your initial mistakes. But replicating a high-quality, highly engaged workforce is nearly

impossible” (p. 1). Given the fundamental importance of a highly engaged workforce,

organizations have placed a large focus on the implementation of talent management

strategies, hoping to improve their global rankings amongst other competitors.

The focus on talent management has proven to be financially rewarding for

employers, as a 2007 study from the Hacket Group found that companies excelling at

managing talent reported earnings 15 percent higher than their peers (Wellins et. al, p.2).

In addition, similar studies have concluded that the focus on talent management has

resulted in higher stock market returns and superior safety records, both desirable

business goals for modern-day employers. Particularly interesting is the changing value

of tangible and intangible company assets. The Brookings Institution found that “in 1982,

62 percent of an average company’s value was attributed to its physical assets and only

38 percent to intangible assets. By 2003, these percentages nearly flip-flopped, with 80

percent of value attributed to intangible assets and 20 percent to tangible assets” (Wellins

et. al, p.3).


Talent, therefore, is inevitably replacing capital as the ultimate competitive

differentiator, and “as “talentism” becomes the new “capitalism”, human potential will be

the catalyst for change and the major agent of economic growth” (Manpower Group,

2011, p. 1). The importance of human potential will not be embraced by organizations

without the occurrence of change. In order for employers to remain competitive,

executives will need to completely reconsider previous assumptions in regards to work

models and talent management. In today’s ever-changing market, the following remains

true-- organizations that are considered “best in the industry” will continue to attract and

retain top talent. As stated by Manpower Group (2011), companies will need to “brand

themselves as talent destinations if they want to become more attractive to potential

employees in their respective regions and around the world (p.3). Thus, the employers

with the best employees will always be at the top.

The Shortage of Talent

Top talent, however, is not easy to find. Even more difficult than finding top

talent, retaining talent has proven to be more of a challenge over the past few years.

Employees today have a much different mindset than that of employees from the past.

Employees today insist upon “having challenging and meaningful work”, are “more loyal

to their profession than to the organization”, and are “less accommodating of traditional

structures and authority” (Wellins et. al, p. 3). In addition, senior employees are

increasingly postponing retirement, hindering the ability of lower-level employees to

advance in their career fields, resulting in a negative impact on the development of talent.


According to a 2009 survey conducted by CareerBuilder, today, “60 percent of workers

over the age of 60 are electing to postpone their retirement due to the financial crisis”

(Wellins et. al, p. 4). This inability to grow professionally has left lower-level talent

feeling stuck in their careers, and has caused many employees to seek employment

outside of their current organizations. As talent has become an increasingly scarce

resource, it is important for organizations to implement extensive talent management

strategies, in hopes of managing talent to the fullest effect.

Organizations today are beginning to realize that they are largely responsible for

this shortage of talent Reports by The Global Leadership Forecast indicate that, “only

about half of the world’s organizations identify high potentials,” and “even fewer (39

percent) have programs to accelerate development” (Wellins et. al, p. 8). The first step in

making changes to talent management strategies, however, is to acknowledge the current

lack of talent management programs. Growing talent is not an easy feat. According to

Wellins et. al, “it takes, on average, 10 years for a high-potential leader to advance into a

senior position, and along the way, that individual needs mentoring, stretch assignments,

personalized development plans, and development activities to build key skills. In short,

it’s a lot of work. And it’s work, we’ve found, that organizations are not doing” (p. 8). If

organizations wish to succeed and overcome this shortage of talent, especially during a

time of changing attitudes and beliefs regarding the workplace, they must be willing the

put in the work. It won’t be easy, but the return on investment of top talent is infinite.


Modern-Day Trends Affecting Talent

The Pursuit of Passion

The next cycle of business has arrived. Like it or not, employees are demanding

more from their jobs than they ever have in the past. For years, employees sought ought

stability, and remained loyal to their employers throughout most of their careers. Today,

that stability is not enough. Today, employees are actively seeking passion in their daily

lives, and therefore, in their workplace. As Pink (2005) states in his book regarding the

future of work, “This is the next cycle of business. First came the quality revolution of

the 1990s. Then came the cheap revolution, which dramatically reduced the cost of goods

and allowed people around the world to have cell phones and Internet Access. So what’s

next? Meaning. Purpose. Deep life experience. Use whatever word or phrase you like, but

know that consumer desire for these qualities is on the rise.” (p. 225).

The Demand for Workplace Flexibility

With this desire for meaning and passion, employees are actively seeking ways to

align their careers with their personal life goals. As we have seen throughout the past few

years, a dramatic shift has taken place, in that employees are demanding a better work-

life balance. Employees are requesting more flexibility, and employers who recognize the

importance of work/life integration, are embracing the use of technology and providing

more flexible work options for their staff. As a result of this workplace flexibility, these


organizations set themselves apart from their competitors, and are further able to attract

and retain the best talent in the market.

The Rise of the Millennial Generation

As millennial employees enter the workforce at an increasing rate, the overall

talent and talent management practices of organizations will be severely affected. This

generation of workers, “which will form the majority of the workforce by 2020, has

particular characteristics that employers can’t afford to ignore” (PWC, 2012, p.19).

Amongst these characteristics is the fact that, “they expect to burn through a number of

employers during their career, and they’re looking for job satisfaction, fulfillment, and

fast career progression” (PWC, 2012, p.19). While these desires may seem difficult for

employers to manage, the good news is that for millennials, the “focus is on interest and

opportunity, rather than on monetary awards” (PWC, 2012, p.19). Although according to

PWC’s (2012) report, “38 percent of millennials said they’re on the lookout for new

opportunities” (p.19), by better understanding the needs of millennials, organizations can

construct talent management strategies that increase their ability to retain these talented

young workers.

Research on this new workforce indicates that job tenure amongst young workers

has decreased. In one survey of new millennials, reported by Johnson Control (2010), “34%

said they expected to stay in a job between one and two years, with 57% saying two to

three years” (p. 34). Clearly, this survey indicates that younger workers are eager to find


opportunities to utilize their knowledge and skills and will not remain at a job where they

feel that they are undervalued. Safian, (2012) presents the idea that “The new reality is

multiple gigs, some of them super short, with constant pressure to learn new things and

adapt to new work situations, and no guarantee that you’ll stay in a single industry. It can be

daunting. It can be exhausting. It can also be exhilarating” (p. 66).

Technological Advances & The Increasing Number of Start-Up Companies

In today’s economy, start-up companies are flourishing. Due to the availability of

technology, new industries have entered the market, and increasingly, start-up companies

are joining their competitors in the war for talent. High-performing individuals, workers

with talent, passion, and funding, are no longer waiting to be employed by large

organizations. Instead, they are employing themselves. The ability to start a company is

no longer as difficult as it once was, and because of that, individuals are either starting

their own organizations, or partnering with others who are. In addition, the flexible

culture associated with start-up companies is appealing to many individuals, thus drawing

many talented employees away from their current organizations, in pursuit of a better

work/life balance.

Fighting the Battle Against Turnover

Why are employees leaving? Certainly, this is a question that most employers are

attempting to answer. According to Oracle’s (2012) report on talent mobility, “the desire


to improve retention rates links directly to the positive impact good employee retention

has on productivity and the corporate bottom line, and conversely, the high cost of

turnover (p. 4). Due to the financial hardship placed on employers caused by the cost of

turnover, organizations are anxious to improve employee engagement levels, in hopes of

decreasing the number of employees choosing to leave their workplace.

Hence the focus on talent management strategies. Employee engagement levels

are low, and perhaps, in some organizations, decreasing. According to a survey

conducted by Right Management (2010), “Of the 28,000 employees surveyed, only 34

percent reported being fully engaged by their job and organizations” (Right Management,

p. 2). Another survey by The Conference Board indicated similar results, finding that

“only 45 percent of U.S. employees are satisfied with their Jobs (Right Management,

2010, p. 2). This data is alarming for employers, as low engagement levels lead to

turnover, and turnover, as previously mentioned, negatively affects an organization’s

bottom line.

So what can organizations do about this? Let us first focus on what they cannot

do. Employers cannot change the attitudes, beliefs, opinions, and desires of potential

employees. Likewise, they cannot change the market’s new direction. They cannot

change the new structure of work, given increased technology and the entrance into the

so-called “Human Age.” However, they can position themselves as leaders in their

respective industries, in regards to talent. They can implement talent management

practices that set them apart from their competitors. As reported by Right Management


(2010), “organizations judged to be best performers are almost three times more likely to

provide career development opportunities than those judged to be below-average

performers. Best performers recognize that providing such opportunities works” (Scales,

2010, p.2).

Getting Employees to Stay: Talent Management Strategies That Work

Employee Learning

Perhaps the easiest practice to execute, employee-learning opportunities allow

organizations to train employees beyond their daily job capacities. While some employers

understand the many benefits of employee-learning opportunities for both employers and

employees, others continue to view this practice, “more as an expense than an

investment” (Savardi, 2005). For employers who embrace this negative view of employee

learning, it will prove difficult to remain competitive in the market, as stated perfectly by

Savardi (2005), “in today’s economy, if your business isn’t learning, then you’re going to

fall behind.” Organizations should invest resources into providing employees

opportunities to expand their knowledge in a variety of areas, both related to and not

related to their current roles. Ultimately, “employees are the ones that produce, refine,

protect, deliver, and manage your products or services every day, year in, year out,” and

in today’s ever-changing economy, “continual learning is critical to your business’s

continued success” (Savardi, 2005).


Despite the fact that many employers still view training as an expense, statistics

indicate that organizations are increasing their investment in such training programs.

According to the American Society for Training and Development, “in 2004, the average

annual training expenditure per employee was $955, which is an increase of $135 per

employee from the previous year” (Brum, 2007, p.1). In addition, “the number of formal

learning hours per employee also rose from 26 hours in 2003, to 32 hours in 2004”

(Brum, 2007, p.1). Evidently, organizations are facing reality, understanding that in

today’s constantly changing work environments, “it is typically the companies with the

best trained employees that adapt and adjust most efficiently” (Brum, 2007, p. 7).

Although many organizations have shown increasing levels of investment in

employee-learning opportunities, there still exist opponents of the practice, insisting that

training negatively impacts employers. Not only do they believe that training negatively

affects employers financially, but they also believe that employee-learning opportunities

lead to increased levels of turnover. The idea behind this thought process is that once

employees have been trained and develop new skills, they are likely to leave the

organization with their enhanced competencies. As Brum (2007) states, “a company loses

all of its investment should an employee terminate the relationship upon completion of

training” (p.1).

Given that many resources are invested in the training of individuals, the goal, for

employers, is to increase the commitment levels of employees upon completion of the

training, so that they choose to remain working within the organization. As Brum (2007)


argues, “when organizations seek to foster a philosophy of commitment, then the

likelihood of an employee searching for employment elsewhere is lowered” (p. 2). Brum

continues his argument, stating that many employees see employee-learning opportunities

as “gifts”, and that these “gifts” then often cause employees to, “exert more effort,

become more productive, and have a greater sense of debt to the organization” (p.4).

Other benefits of these training programs include an increase in worker output and

productivity, and for the employee, this often translates into career advancement

opportunities and increased wages.

In essence, when organizations help employees, employees usually want to help

their organizations in return. Employees that participated in training programs, “viewed

the organization as being more supportive, looked at the company more favorably, and

had less of an intent to quit” (Brum, 2007, p. 8). The investment in training proved to

increase employee commitment, reduce turnover, and improve employee performance, as

employees who participated in training “were shown to seek more job upgrades, receive

more performance awards, and have better job attendance than those that did not attend

training” (Brum, 2007, p. 6).

Career Development

To continue the battle against turnover, employers have begun to recognize the

importance of career development programs within their organizations. These programs

fundamentally empower employees to work towards their individual career goals, while


continuing to work productively for their current employer. Based on reports of

organizations with such programs in place, employers that support career development

opportunities for their employees, “claim they retain a greater number of employees”,

which positively impacts the overall efficiency of the organization (Merchant, 1996, p 1).

However, in order for career development programs to be successful, employers must

assist employees in matching employee needs with the needs of the organization. As the

management of careers was once the sole responsibility of employees, organizations have

now assumed a more active role in developing their talent, forming cooperative and

collaborative relationships between employers and their staff.

This collaboration between employers and employees suggests that the notion of

career development is no longer solely associated with the idea of climbing a vertical

ladder of success. Instead, career development entails the creation of a specific

organizational culture, one “that fosters growth, challenges, and job enrichment”

(Merchant, 1996, p.12). While employees are ultimately responsible for taking ownership

of their individual development, employers are able to provide several necessary

resources that help facilitate the career development process. Although this process

requires further investment of organizational resources, it is beneficial to employers, as

the goal of career development “is not about getting ahead, but rather about getting to be

the best an individual can be and finding a place in an organization where they can

express excellence and contribute to the goals of the organization” (Merchant, 1996, p.1).


Now that the goal has been established, how do employees find those roles that

allow them to express excellence? To help address this issue, many organizations have

employed the use of Career Counselors. Career Counselors not only assist in identifying

high-potential talent, but also work with employees on a one-to-one basis, to assist in

identifying realistic career opportunities. As Merchant (1996) states, “the objective of

career counseling is to assist employees in exploiting their strengths and potential and

avoiding mismatches between individual aspirations, capabilities, and organizational

opportunities” (p.9). Many would argue that if successful, the use of Career Counselors to

assist with Career Development, results in higher levels of job satisfaction and employee

engagement within organizations.

According to research conducted by Right Management, a correlation was found,

“between employees’ perception of being able to progress towards career goals, and

overall engagement” (Right Management, 2009, p.3). Employees were asked to respond

to the following question: I know how to progress in my organization. Figure 2 below

depicts the percentage of employees with favorable, neutral, and unfavorable responses.


Of those who reported favorable and unfavorable responses, the difference amongst

the two groups in regards to employee engagement was significant. Figure 3 below

demonstrates the level of engagement of the two groups, indicating clearly that those

employees who know how to progress in their organizations, present far greater levels of

engagement (Right Management, 2009).

The results of Right Management’s research serve to encourage career

development, arguing “when employees have a viable career development plan, they are

more likely to find and select new roles most appropriate to their skills and talents and to

readjust quickly after significant organizational change” (Right Management, 2009, p. 3).

During times of extreme change and uncertainty, that is exactly what organizations need

their employees to do. Over time, career development programs will help reduce the loss

of intellectual capital, as well as the cost of hiring and training new employees. As Right


Management (2009) reports, “when employees experienced a favorable climate for career

growth, it had a significant impact on retention” (p. 5).

The employees, however, cannot pursue career development without the help of

their superiors. As Right Management (2009) states, “senior leaders have to make career

development a priority” (p. 8). Without the support of administration and senior leaders,

organizations will fail to provide career development opportunities for their staff.

Extensive coaching, mentoring, training, stretch projects, and shadowing are required if

employees desire to reach their career goals, and employees are not alone in the need for

training. Right Management (2009) emphasizes the importance of providing line

managers with career development training, arguing that they need to possess “the tools

and skills for supporting career development” (p. 8).

Although a complex and robust concept, career development will continue to play

a vital role in organizations. To compete in the market, employers will need their

employees to perform at their optimal capacity, and “by taking steps to align employee

and organizational goals, companies can ensure they’ll be in top competitive form, able

to meet- and exceed- the demands of today’s difficult marketplace” (Right Management,

2009, p. 10). By making a conscious effort to create an environment where employees

feel safe to discuss their career aspirations with their employers, organizations will

succeed in building a talent pool that is “able to meet current and future needs” (Right

Management, 2009, p. 1).


Internal Mobility

In order to support fundamental components of career development, organizations

must understand the importance of internal mobility opportunities for employees. As

stated by Manpower Group (2011), “in the Human Age, talent mobility- moving people

to where the work is- must be one component of a coordinated public-private response to

the talent mismatch” (p. 2). This movement of employees, however, does not necessarily

require employees to relocate to other organizations. By presenting employees with

opportunities to move within the organization, employers can position themselves

favorably against the negative costs of turnover.

But does internal mobility really work? According to reports by Oracle (2012),

“studies have revealed a significant relationship between internal mobility and corporate

performance” (p.1). In addition, “research conducted over the course of a decade found

that the top 10 percent of companies with high-performance work systems had four times

the amount of sales per employee,” and “remarkably, these companies filled more than

60 percent of jobs from within” (p.1). Given these findings, the implementation of

internal mobility opportunities for employees are certainly worth exploring. Through the

existence of comprehensive internal mobility programs, “companies can leverage their

employee base to achieve corporate goals, shifting resources where they’re most suited”

(p. 2).


Perhaps one of the most often reported frustrations of high-performing employees

is stagnant career growth. High-performing employees are actively seeking opportunities

to learn new skills and are looking to use their talents to better their organizations. As

Oracle (2012) warns, without internal mobility opportunities, “top talent will be more

likely to disengage or depart. After all, if they can’t see a career path within the

organization, or they realize that other employees are being promoted or recruited

without the skills and competencies to do the job, your top talent will likely go

elsewhere” (p.2). As mentioned previously, employers cannot afford to lose top talent.

Not only does the lack of internal mobility affect employees, but it affects

potential business growth as well. As reported by Oracle (2012), “if leadership pipelines

are clogged with employees lacking the appropriate mix of skills and experience to step

into pivotal roles, business growth will suffer” (p. 2). For this reason, employers need to

actively monitor their talent pool and develop succession plans as well as a better

understanding of high-performing employees.

Once identified, those high-performing employees should be counseled, and the

ability to move within the organization should be highlighted. These high-performers are

the employees that organizations should seek to cultivate, and sometimes, in order for

employees to challenge themselves and expand their competencies, they need the

opportunity to transition into different roles throughout their careers. This ability to move

with the organization should be supported by senior management, and should be instilled

in the company’s culture, as “companies that support successful internal mobility


programs demonstrate a commitment to their employees- showing workers that they’re

viewed as a valuable talent pool worth cultivating over the long-term.” (Oracle, 2012,

p.13).

Organizations can use annual performance reviews to discuss internal mobility

opportunities with employees. Through this method, top performers can be identified by

their leaders, and talent profiles, which, “ describe employee skills, abilities, experience,

and performance” (Oracle, 2012, p.7), can be created. These talent profiles may

ultimately prove to be vital to an organization’s success in the future. As Oracle (2012)

reports, “talent profiles maintained in an employee database may also be used for skills

gap analysis and targeted learning and development” (p. 7). As technology has allowed

organizations the ability to gather and retrieve personnel data, essentially creating a skills

inventory, “an organization can mine a transparent internal labor pool and profit from a

clear understanding of the human capital it controls” (Oracle, 2012, p. 7).

The desire to move within an organization is one that employees will

increasingly experience in the future. No longer are careers perceived to be linear,

instead, they are considered, “a process of development of the employee along a path of

experience and jobs in one or more organizations” (Baruch, 2003, p.59). Rather than

solely being perceived as means of generating income, modern careers are being defined

as a “source of identity, creativity, life challenge, as well as status and access to social

networking” (Baruch, 2003, p.9). Throughout the next few years, the trend of flatter

organizations will prevail, and organizations will need to embrace this new view of


careers. As a society, we’re moving away from the ideas of hierarchy and career ladders,

and instead, moving towards a new system, known as the career “lattice” (Deloitte,

2012).

In the past, career success was determined by an employee’s rate of upward

mobility. Today, however, the very nature of careers has changed. Careers have become

much more flexible, offering “a variety of options” and “many possible directions of

development” (Brauch, 2003, p. 61). For this reason, internal mobility will become

increasingly important, as employees seek new roles within their respective

organizations. As stated by Baruch (2003), this multi-directional career model “takes into

account the full scale of landscapes. You can choose. You can climb the mountain, you

can opt for another mountain, take some hills instead, wander along the plains- a variety

of options is accepted” (p. 61).

What’s Next?

As employees continue to demand more from their every-day work experiences,

organizations that embrace this new work structure will prosper, as they will possess the

ability to attract and retain top talent. As reported by Deloitte (2010), “talented workers

join companies and stay there because they believe they’ll learn faster and better than

they would at other employers” (p. 16). For this reason, comprehensive talent

management strategies will set high-performing organizations apart from their


competitors, as employees will increasingly seek out employee learning, career

development, and internal mobility opportunities.

It is evident that organizations will need to invest significant resources in order to

adapt to this new structure of work. Baruch (2003) suggests that employers should focus

on developing “a variety of multidirectional career paths based on flexibility, offering

alternative work arrangements, and work/family policies” (p.67). As employees look to

gain “employability” rather than “secure employment” (Baruch, 2003, p. 62),

organizations will need to allocate resources to provide better educational opportunities

for current and future talent pools. Baruch (2003) argues, “employers can no longer

provide secure jobs- instead, they can help employees improve their competence and

ability to acquire employment” (p. 62). Through the provision of employee learning,

career development, and internal mobility opportunities, this goal can be achieved. As

stated by Deloitte (2010), “the ladder is splintering” and “the corporate lattice is

emerging” (p.2). Organizations, both private and public, will now be tasked with the

construction of new talent management strategies, and these strategies ultimately decide

their fate in the new market.


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Date post:	18-Oct-2014
Category:	Recruiting & HR
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