Under normal circumstances, the best approach is to both make and buy talent. But now, things are different
Given the unprecedented impact Covid-19 has had on New Zealand businesses, managers have had to (and will continue to) think and rethink everything. Should we still care about talent management? Or should we park talent management for a time when we are past this crisis? These are amongst the many questions on their minds.
Probably different from what a manger’s immediate answer is likely to be, our short answer to the first question is yes; to the second - NO!
If there is ever a time for talent and talent management to be high on the agenda, it is in a time of crisis. ‘How is that possible?’, many may think. In a time of dismissals, salary reductions, and other monster measures, it may seem as though talent management should be pushed down the queue of managers’ ever-increasing ‘to-do lists’.
Or perhaps even added onto the ‘not-to-do list’. How can I afford to keep talent when the crisis is so severe? The question we pose response is: How can you afford not to?
Who will bring the company out of the crisis if not your talented employees? Also, talent is and will be in short supply worldwide; the competition for it will continue, and it will intensify.
Now is the time to redesign, reignite, and implement a future-proof talent management agenda because yesterday’s one will most probably need to be thrown out the window.
But first of all, what is talent? There are two main categories of talent. First, these are employees who, more than others, are contributing towards the sustained competitive advantage of the company.
Their knowledge, skills, and performance are of high value. Second, these are employees who have the potential to fill critical roles in the future.
But just having talent in the company is not enough – it needs to be carefully and wisely managed. This involves attracting, identifying, developing, and retaining talent and ensuring their continued performance and commitment to the company.
Good sound talent management is well integrated into the company’s DNA; it is there to support the overall company objectives – right now, these may be survival or recovery, but soon they will be competitiveness and profitability.
Inclusive or exclusive approach to talent and its management?
It is imperative to determine who is talent and what talent means to the organisation. Unless this is clear, it is impossible to engage meaningfully in talent management.
This requires asking who the company can and cannot function without, and who this will be in the future. It also involves considering what talent the company will need in order to grow and evolve in the sector where it operates. Once these questions are answered, it will become evident whether to use an inclusive approach (everyone is considered talent) or an exclusive approach (only the high-flyers are talent).
Opting for an exclusive talent management approach does not mean that no one else, but the top performers, matter. It does, however, mean that (typically limited) resources will be put to the most beneficial use for all employees and the company. For most companies, providing a clear definition of talent and allowing employees to both opt-in and opt-out of the talent management programme will provide the best inclusive-exclusive balance.
Make or buy talent?
Under normal circumstances, the best approach is to both make and buy talent. But right now, New Zealand businesses should focus on making talent. This does not imply that managers should forget about buying; instead, they need to identify the gaps between the skills their companies possess at present and the skills they will need in the future.
A good, sensible approach is to look internally to develop employees to fill the existing gaps first, and then to identify those that will need to be filled with external talent in the future. Being able to manage the talent pipeline will be essential for the survival of many New Zealand businesses and will aid in a speedier recovery.
What to do first?
Ensure that a clearer distinction is made between talent management and human resource management. They are different: human resource management generally aims to value all employees and is more static (long-term focused); talent management focuses on a smaller group of employees where value is added by this human capital and is dynamic (people and skills are constantly moving).
The former is much focused on the legal aspects of employment; the latter emphasises knowledge and skills. A crisis is a good time for taking talent management off the desk of human resource managers and moving it into the boardroom.
The more strategic talent management becomes, the more distinctive it will be from human resource management. And that is the aim. First, identify current talent and those with the greatest potential. Given the last months, these may not be the same individuals many managers thought they were - use updated talent profiles to ensure those who were potentials still are and that those who may not have been still are not.
Second, ensure talent are in positions where they can make an impact. Third, identify the ways that high potentials need to be developed so that they can make a difference.
Professor Snejina Michailova, The University of Auckland Business School, and Dr Dana L. Ott, Otago Business School – University of Otago, are Talent Management researchers. Some of the ideas articulated in this opinion piece are based on their book Talent Management in Small Advanced Economies (Emerald) that was published in 2019.
