Understand the Definitions
Before we can try to achieve higher business value through talent management, obviously we need to have a clear and correct understanding of the terms “business value” and “talent management”. Below we describe the definitions.
Business Value
Business Value is a measurable characteristic that expresses the qualitative objectives and goals which a business organization strives to achieve in all its activities. It is the measure of business success that determines the present and future position of the organization in the marketplace.
Business value is defined by the ability of a company to effectively and efficiently carry out its operations and activities. A company with higher business value knows how to achieve its strategic goals and make right decisions regarding tactics. Such a company uses all the complex of business management tools to succeed in the marketplace.
Talent Management
Talent Management is the process of recruiting, retaining and training employees in an organization to provide this organization with the most gifted and highest quality personnel. It is an attempt to increase the organization’s value through improving its workforce and working environment.
A company with effective talent management is likely to take leading positions in the marketplace because it knows how to hire and retain the best staff members at affordable cost. Effective talent management paves the way for staff development and excellence. This process is continuous and carries out several basic steps. Please read the checklist “Effective Talent Management in Four Steps” to learn more.
Of course, talent management is not the only activity that ensures the achievement of business value and success. Along with IT management, budgeting & accounting, PR & marketing, sales, organizational project management, business risk management, and other critical activities, it creates a foundation for effective business value management. In this series we focus on talent management only; hopefully in our future publications we’ll uncover the rest facets of business value management and success.
Take The Steps
There are 3 steps for achieving business value through talent management. The steps are:
- Alignment: Align talent management goals with business goals
- Support: Support talent management goals with a good IT strategy
- Control: Control status of talent management goals through an analytics strategy
Step #1. Alignment
The first step is aligning the goals of talent management with the business objectives. It means a company needs to ensure that both talent management and strategic business planning move towards the same direction and contribute to the achievement of strategic objectives.
There should be a team that takes care of managing employee talents and hence becomes a strategic partner with the lines of business. In other words, the team must have and follow an action plan that supports the strategic objectives of the company. The activities of this team can then be measured in terms of business benefits.
For example: talent management involves recruitment of new talents. The recruiting process aims to find and employ candidates with the right set of skills that will drive the company’s business plans over the next 5 years. Recruiters as a team must support new talents to ensure that every new worker contributes to overall business success of the employer. The worker should be provided with all necessary training and development as well. With this alignment, the company will then benefit from talented personnel targeted at achieving business value in the long run.
Step #2. Support
The second step is to support talent management with technological solutions. This can be achieved by creating and implementing an effective IT strategy.
Why an IT strategy is required? Well because today there is no company that does its business operations and tasks within use of information technologies. No employee can perform his/her tasks without computer with installed operating system, packages and applications, including powerful talent management software. And this is all about the real world of IT and computerization.
Hence, talent management aligned with strategic business objectives needs to have a technological basis. For example, talent management involves the monitoring and control of employee performance. Managers and supervisors can use task management software to monitor how their subordinates perform their tasks. Information technologies allow the seniors to gain insight into effectiveness and efficiency of personnel. Meanwhile, employees are enabled to use the same software for planning and doing their daily tasks and projects. They can report on their performance to the seniors.
A good IT strategy paves the way for better control, development and retention of talents within an organization. The best way to figure out whether technological solutions make desired effect on talent management in particular and business value in whole is to use ROI analysis.
The analysis of Return on Investment (ROI) helps determine and calculate the earning power and profitability of funds invested in IT, computers and software solutions. ROI analysis is calculated as a percentage of the net income and the average capital employed. The analysis is a great way to figure out whether a proposed IT investment project is worthwhile of terms of business value received and improvements in talent management.
Step #3. Control
The third step places focus on the integration of talent management goals, IT solutions, and strategic business data into a single analytics system. Such a system will provide controls for managing and monitoring the status of talent management goals and their alignment with the business objectives.
Controlling the talent management process within the business environment means having data about the process and using this data to analyze the status of business objectives and the impact of IT solutions on the process. In practice, it means integrating the talent data pool into a human resource management system that provides long-term view and analytics of personnel, regardless of their positions, roles and duties within the organization. Ideally, an analytics system should share a common data model of all the business processes to ensure consistency in management and reporting.
For instance: for managing employee activities and reporting on their tasks and achievements, managers can use computer systems and IT solutions. But they do not have a single analytics system that could provide entire control of the chain “talent management – business goals – IT solutions”, because there is no common data model deployed in the working environment. Having such a model deployed allows keeping all the data about talented workers, their achievements and overall contribution to business value in a single place. All this will make it possible for example to create payrolls, impose employee fines and pay rewards, report on performance, plan for training exercises, review results of meetings and workshops, and do other stuff.