Talent management – how to discover, develop and retain exceptional employees
This example is a good demonstration of what talent management is about. It creates a new perspective on the link between performance, development and employee satisfaction/happiness. The aim is to attract new talents, develop and motivate them towards growth and performance. Happy employees remain in the company for a longer period of time.
Talent management is crucial for Slovakia due to a lack of qualified workforce
Businesses have been struggling with a lack of qualified employees in various industries. However, the worst is yet to come. This is caused by the unfavourable demographic situation and students leaving Slovakia to study at universities abroad. Slovakia is the second worst country in the OECD ranking. Almost 1 out of 5 students leave the country (17%).* In most cases, the best and most ambitious students are the ones who leave. In addition, the number of university graduates dropped from 44,000 in 2010 to 29,000 in 2019.** This is a decrease of ca. 44%. For now, migrants cannot replace the necessary skilled workers.
Talent as a commodity
Even though employees are not numbers, they have a business value which can be calculated. From the economic perspective, the main aim of talent management is to develop key staff which help the company make profit. In terms of economy, we can see them as a commodity. Businesses need to identify the value of their talent pool. To determine the value, they can ask themselves the following question: how much would it cost us if a top manager left the company? The company loses profit generated by the manager (e.g., €50,000 annually), plus costs to ensure that a new manager will perform work of the same quality. This usually takes 1 to 3 years. Lost revenue + costs incurred = the calculated employee value.
Numbers are crucial
Statistics which determine value can be created not just for individual employees but also for teams and departments. It is not so important how high their value is, it is more important what happens with the value in the future. In one year’s time, a business might employ 101 employees instead of 100, but if 5 excellent leaders left in the meantime, the value of the talent pool decreased by €200,000. When you add an investment of €10,000 spent on their development, the total loss amounts to €210,000. With well-targeted talent management, the talent pool’s value should grow.
It doesn’t stop with attracting talents and concluding contracts
Employers constantly fight for employees with competitors. When employees don’t grow, they leave. All they need is a more attractive company and they are "one foot out of the door". Talent management includes a well-thought-out recruitment strategy. Ideally, a company should hire people before it necessarily needs them. In that way, senior employees have time to train newcomers before leaving and newbies have time to grow into the required position. The aim is to stop natural employee turnover from jeopardizing the provision of services, production or sales.
How to identify talent in an organisation
Personal interview is the alpha and omega. A gold standard is to listen and monitor what employees like to do, what they are interested in and what they are good at. Ideally, team leaders, managers and other senior employees should do this naturally as part of their job.
Talent reflects on high motivation and performance. Performance should go hand in hand with development and satisfaction. When results are dissatisfactory, it does not necessarily show the person’s disinterest, it could mean that they are on the wrong position. It’s trial and error. On another position, the same employee can thrive. If desired results are delivered, the company has found a new talent.
Data reveal hidden stars
Apart from interviews, talent can be identified by data. People are often guided by affections, impressions and eloquence. Extroverts may benefit from this more than introverts. However, businesses have access to large amounts of data which help discover top employees even among the so-called little grey mice. It is important to gather information so that the company’s decisions are data-driven. By using systems, it can determine what sales were brought in by the employee, how many deals he has closed, whether he works on profit or loss-making projects and it can even estimate how many people left because of him. Based on various data, the management identifies common denominators – what the top performers have in common and what the worst performers have in common. Consequently, it can determine what to develop and what to prevent.
As hunting in the talent pool gets more and more challenging, discovering, retaining and motivating talents will be a decisive factor for a company’s success. Just like in top football clubs.