Large companies have come to realize that a high turnover rate is twice as costly as hiring a replacement. The cost to recruit and train new employees are growing high ever year. High turnover usually results to lowered morale of its employees, thus significantly affecting the knowledge base of the company with the need to constantly train and re-train employees.
Although larger and multi-national companies tend to be able to provide the best benefits to ensure employee retention, smaller start-ups tend to bypass retaining positive and motivated employees to secure the organization’s success and be at par with larger companies when it comes to quality employees. This is where talent management comes in as a critical role in ensuring that businesses strive and keep their organizational chart teeming with talent.
There are two distinct ways that most companies do with talent management, one is plainly disregard their employees’ capabilities and do nothing to address on how to improve their employees thus rendering the term utterly meaningless. This is common among startups and smaller companies wherein sending employees to schools, training programs and hiring top talent from the get-go is a difficult task for their recruiter, either due to lack of surplus talent in the market or unable to provide competitive compensation in the market. Larger companies on the other hand rely on various methodologies ranging from forecasting to succession planning in order to meet their objectives.
Large companies or multinationals often have their own training or talent and development department to be the breeding ground for talent by providing various techniques such as letting employees attend training programs that targets a specific skill, enrolling in MBA programs and cross-training in various departments within the organization. These techniques have become quite effective as it provides organizations the flexibility of having plenty of employees with various skill sets that, more often than not, perform other tasks beyond on what is written in their job descriptions.
Although these techniques are good for employees and provide organizations a wide array of skill setthat they can use, some employees use it as an opportunity to gain experience in search of greener pasture either for higher compensation or promotion. This dilemma now gives organizations the challenge on how to retain top talent especially those that they have created an investment in. Organizations should then be able to realize that talent management is not just about creating succession plans or developing a career path by letting them gain different skills to complement their tasks. Rather, it must exist in every organization with the focus on how to support the company’s overall objectives.
Talent management therefore has to preserve the investment made by the organization by balancing employee-employer interests. The major reason employees leave is to look for better opportunities, although this arguable, it is one of the most common reasons employees give during an exit interview.
Competency gaps, TNAs and other models will still exist but companies have to make into consideration that sometimes hiring outside than developing talent is practical, cost-effective and overall much better in certain tasks that have short lead times or require vast expertise that a newly developed skill will not be able to provide. This, however, risks existing employees who is currently next on the career ladder feel frustrated and will look for opportunities elsewhere.
Talent management has to make certain arrangements wherein tasks are balanced between the organization and employee. Allocating resources or manpower that employees are most comfortable with or choose tasks that bests develop the skills of employees. Also, both parties have to understand that needing and developing talent and retaining it is intertwined that compromises must be made in order to achieve the best interests of both parties.