Insights Into Results-Oriented Human Resources Solutions

Talent Solutions

Best Practices in Talent Management

Strategic human resource management often focuses on the linkage between talent and an
organization’s business challenges and strategies. Effective strategy execution requires
sufficient numbers of effective people with the right skills and knowledge, in the right roles,
guided by strong leaders. This has made “talent management” one of the most pressing issues
facing senior HR executives. Current business forces, such as increasing turnover as the
economy improves, globalization of markets and labor forces, aggressive competition, and
heightened corporate oversight, have intensified needs for improved acquisition, development,
deployment, motivation, and retention of key talent. In the US alone, demographic trends
associated with the retirement of the baby boomers, who often occupy key knowledge worker
and leadership roles, further underscore the imperative to uncover and nurture talent from within.

The supply of leadership talent is critical to any organization’s prosperity and is, therefore, a
central element of talent management. The increasing trend of growing leaders from within is
based on a dawning realization that a popular alternative for acquiring talent—poaching key
people from competitors—ultimately leads to frustration. Outstanding leaders who can ‘ramp
up’ quickly are hard to find, increasingly expensive, and even when successfully recruited, tend
to move from company to company. So the best approach, usually, is to develop systems and
processes to identify available leadership talent.

So, what do we mean by talent management? In the broadest possible terms, it is the strategic
and tactical management of the flow of talent through an organization. Its purpose is to assure
that the supply of talent is available to align the right people with the right jobs at the right time
based on strategic business objectives. The term “talent management” is often used to denote e-
recruitment and automated applicant tracking systems. This emphasis on staffing and recruiting
is more appropriately called the talent acquisition phase of the talent management cycle, an
important but preliminary step in the overall process.

Talent management is composed of two essential elements:

• Succession planning, or assuring near-term leadership continuity by thoughtful

consideration of the availability, readiness, and development of internal talent to assume
critical “priority” leadership roles.

• Proactive analysis and planning to assure long-term strategic development and

deployment of critical leadership and other resources through systematic identification,
assessment, planning, and developmental action.

Useful talent management requires a foundation rooted in accurate data to ensure that decisions
are fair, objective, and fact-based. Talent data should be centralized to encourage broad thinking

Aon Consulting FORUM September 2004

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about how talent can be utilized and developed. This requires that information is available
regarding:

• Previous job challenges,

• Development challenges needed to accelerate development,

• Career interests,

• Performance history,

• Leadership potential, and

• Promotability.

Information technology and HR must manage this data and make it easily accessible while
ensuring confidentiality.

Based on research and best practice work with many leading organizations, Aon Consulting has
developed a web-based talent management support system. Performance Pathfinder provides a
full range of real-time data for fact-based talent planning and decision making.

An effective talent management system fosters an organizational culture where talent

identification, assessment, performance management, development, and placement processes are
strategic, ongoing, and ‘natural’ HR and management activities. Organizations with best
practice talent management approaches realize returns on this investment in a range of areas:
more effective strategy execution, more productive employees, better leadership, and improved
morale.

Best Practice Approaches to Talent Management

1. Develop strategies to respond to threats and opportunities, while capitalizing on

strengths and addressing weaknesses. Executives and HR determine strategic talent
requirements, given key organizational strategies and challenges faced by the business;
what are the critical positions, competencies, and values needed?

2. Identify and evaluate key people. Who are the high-potential employees, the solid
contributors in current roles, and the problem performers?

3. Determine development and placement plans. Map out job assignments/rotations, task
forces, and development and training.

4. Implement plans and monitor overall process. Document actions taken, the resulting
performance, and the emerging issues.

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Aon Consulting FORUM September 2004