By Jumpstart:HR VIP Intern: Noémi Cselényi
Effective talent management is one of the most important strategic business leverages organizations can have in today’s very competitive and uncertain market (Cappelli, 2008, Lockwood, 2006). Organizations can optimize performance and reduce costs by having a talent management strategy. In the ideal case, companies have a plan based on the forecasts regarding economic and demographic changes (such as the retirement of the baby boomers, the global workforce, skill shortages etc.) so that they will be prepared to answer these challenges (Lockwood, 2006). Successful organizations have a detailed talent management plan aligned to their business strategy (Lockwood, 2006). They have to consider the most important needs in their specific case, such as identifying the most important and rare skills needed for the organization. Hiring a highly skilled employee or a leader from outside can be extremely costly, therefore organizations should better prepare for internal hiring by having formal employee development and succession planning programs.
Since small businesses have only a few employees, more depends on their individual performance: there might be only one employee in a small business in one position. This employee’s performance will therefore determine the organization’s whole performance in that function. Also, if an employee of central importance, for example the only one who has some specific knowledge leaves, that will highly impact the organization’s ability to continue to work successfully. One another concern for small businesses is that the change of even one person on the managerial level can highly affect organizational culture.
Because of the above reasons, small businesses have to make sure that they select the best candidates and retain them. However, it is important to note that best might not mean the best performer. Cultural fit is as much, if not more important considering the large effect it has on retention. A small business is even more vulnerable to costs generated by turnover. The best option would be to find candidates who are both high performers and high fit, but if it is not possible, small businesses should carefully consider the opportunity to choose a lower performer but high fit candidate, since he might be developed to become a high performer.
After a small business has the talent pool they need, they have to make sure that these employees are engaged, feel valued and perform well. This can be done by creating a desirable culture, understanding the needs and motivations of the employees, and answering these needs. The organization should offer development opportunities to their talent so that they feel valued. However, as all businesses, they have to consider the costs of development and the fact that in the current market, there is high employee mobility, so they might leave before the investment would return.
Great emphasis should be put on employee loyalty to avoid turnover. Employee loyalty can be increased by having a desirable culture, high fit employees, performance contingent rewards, recognitions and development opportunities. In the most ideal case, organizations should assess their own employees’ needs. Additionally, small organizations should consider involving their talent in the planning of their career development and future opportunities to increase their loyalty and retention (Making employees your biggest asset, 2012). As in the case of all companies, talent management should be of central importance, communicating that the organization as a whole highly values its talent and the individual contribution they make (Lockwood, 2006).
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References
Cappelli, P. (2008, March). Talent Management for the Twenty-First Century. Harvard Business Review, 86(3), 74-81.
Lockwood, N. R. (2006). Talent Management: Driver for Organizational Success. 2006 SHRM Research Quarterly. Retrieved from:
http://www.shrm.org/research/articles/articles/documents/0606rquartpdf.pdf
Making Employees Your Biggest Asset: Winning talent management strategies for small businesses. (2012). Addeco. Retrieved from:
http://www.adeccousa.com/Documents/flipbook/2012-talent-management-strategies/index.html
About Noémi:
Industrial and Organizational Psychology graduate student at NYU. Passionate about talent, global human capital challenges and high-tech. Born and raised in Budapest, Hungary, currently lives in New York City. Loves the multicultural city, travelling and dogs. Connect with her on LinkedIn.