Coined by McKinsey and Company, the term war on talent reflects the existing competition among organizations to attract and retain the ablest employees. The term addressed the shortage of talented human resources in the business world. The phenomenon had been an experience of many people and businesses but had not been captured before. Following the development of the term and phenomenon, many people and businesses worldwide have since become conscious of the developments in human resource trends and accompanying challenges. Agencies responsible for tracking demographic trends have warned that the workforce will shrink in the first and second decades of the 21 st century as a significant population of baby boomers retire (Thorne & Pellant 2006, p. 16). The scenario represents a case where there will be more jobs than workers. The extreme competition for key jobs creates a need for various ways to retain talent within organizations. Therefore, organizations can use strategies such as succession planning, developmental partnerships, developing a talent pool, creating an organizational culture, and having a differentiated Human resource architecture to retain talent.
Organizations are using the strategy of succession planning to manage and retain talent. At its core, succession planning is adopting a long-term strategic view instead of a short-term replacement of employees. According to a recent study, results indicate that companies that engage in long-term planning and early identification of potential incumbents to fill vacant positions in the future are likely to retain talent easily (Hartman, Feisel & Schober 2010, p. 170. Further, the study looks at the cases of four companies that include Electrico, Technologico, Logistico, and Carco, which use web-based applications approach to organize for employees' succession planning. These companies store the CV of employees formerly identified as talent. The respective companies' web-bases are accessible to human resource development managers and executives throughout the organization. Through well-strategized succession planning, companies have been able to retain and will be capable of retaining talent in the future.
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Creating a differentiated Human Resource Architecture is also crucial for retaining and managing talent within organizations. Human resource management and organizational culture have been linked for the past decades. The rationale has been that human resource practices' configuration results in increased company profitability. However, recent contributions to the HR strategy recognize the importance of having a differentiated human resource architecture (Collings & Mellahi 2009, p. 305). The importance of differentiation stems from the rationale that when worker groups are specified and specialized, organizational performance is boosted. The differentiation of the human resource can be based on factors such as knowledge, job, contract work, and alliance partnership. This is because, depending on each factor, employees have different contributions to an organization's strategic objectives. For example, knowledge-based employees are likely to contribute to the internal development and long-term employee commitment, while contractors will be crucial for outsourcing. Different employment nodes vary in uniqueness and human capital, making the differentiation a crucial strategy for talent retaining within organizations.
Some companies are also looking for new approaches through which they get additional talent sources. One approach is through redesigning employment systems from traditional to modern. Traditional employment systems favored employees from particular nationalities such a China, the U.S., and other developed nations with the notion that they have better talent to offer. Companies have currently adopted new hiring practices (Beechler & Woodward, 2009, p. 275). For example, some are explicit on retaining a significant number of baby boomers who will still work in their sixties and seventies. Others are using older and retired workers on projects and sharing their expertise with younger people. For companies using this strategy to get additional talent, a need for combining rewards to get higher levels of commitment and contribution from baby boomers has been created (Transley, Kirk, & Tietze 2013, p. 338). For example, putting up wellness programs could captivate retaining talent and reduced turnover rates from baby boomers. An example of a company that has successfully used the strategy is Lincoln National, which created programs that allowed the boomers to transfer to warmer places during the winter seasons. Another company, Deloitte, is also using career customization to help employees envision their talents and skills through interactive exercise and online resources that help them explore career options (Berke, Kossler, & Wakefield 2009, p. 7). With such diverse approaches tailored to suit organizations' needs, companies will retain and tap into more talent.
The development of a talent pool is another strategic approach used to maintain high performing employees. At its core, a talent pool is the pool of high performing incumbents that are reliable to fill organizational positions. The development of a talent pool resonates with shifting recruitment practices from available vacancies towards being aware of future organizational needs. This implies that an organization has some high performing employees compared to others. Therefore, in the future, if a company has vacant positions, they are already aware which employee from the talent pool will fill the vacant. Research indicates that companies such as Zurich identify the business's future needs, such as capabilities, skills, and knowledge, and find the best talent to fill these positions (Collings and Mellahi 2009, p. 310). However, the downside of having a talent pool is based on the fact that it is made of high achievers who may become disillusioned if they get roles that have a limited scope for their skills and talent application. In such a scenario, the employee is likely to be dissatisfied and reduce their firm's perception. In the development of a talent pool, therefore, organizations should be keen to have vacancies suitable enough for their high achievers' skill development.
Retaining talent requires the identification and development of talented employees and an organizational culture that aligns with the objective. Organizational culture can either be nurtured and protected from the organization's inception or can be perceived as a collective sum of beliefs, behaviors, and experiences of the team. Regardless of the manner, having a culture that supports talent retention is crucial. Research reveals that monthly, approximately three million Americans quit their job; simultaneously, fifty percent of organizations are struggling to retain their top talent (Silzer 2010, p. 240). Most leaders solve the problem by offering cool perks and competing on pay. However, these strategies do not work in the long-term, and in a short while, employees jump from one company to the next. The organizational culture needs to be driven by the top leadership and executives and reinforced through the way employees behave, communicate, and interact (Beechler & Wood 2009, p. 280). Furthermore, without top management's commitment, talent management and retaining efforts may be futile. The rationale is to make the drivers of organizational culture an asset for the organization. The value proposition is the intangible benefits and experiences employees gain through the services they offer to the organization. It is beyond monetary compensation and is based on knowledge and skills that will follow them throughout their careers. Top management can also build an organizational culture by providing them with responsibilities and aligning businesses with practices that will help push for engagement.
A final strategy that organizations can apply in talent retention and management is developing partnerships among firms. The active use of partnerships helps influence and build the next generation workforce. Most companies have a talent market or places where they source talent. They have developed initiatives crucial for the motivation and development of the next generation of leaders (Bryan, Joyce, & Weiss 2006, p. 100). Recent research reveals that global companies such as PricewaterhouseCoopers have several programs to educate their talent pool (Hughes & Rog 2008, p. 750). For example, there is an educational community initiative that has benefited academically gifted African-Americans by helping college students navigate college planning and application. Elsewhere, the Macquarie Group has partnered with INSEAD to provide the best Master’s degree from reputable business schools in Australia (Beechler & Wood 2009 p. 275). Partnering with one another helps companies retain talent and tap into potential incumbents from talent markets and alike firms.
Conclusion
Organizations are using strategies such as succession planning, developmental partnerships, developing a talent pool, creating an organizational culture, and having a differentiated Human resource architecture to retain talent. As discussed, retaining talent is crucial because getting highly performing employees is a human resource challenge in the 21 st Century. By applying the above strategies, companies can leverage employee retention and decrease employee turnover. Besides, companies compete for the best talent across the world. Also, a significant percentage of people keep resigning due to better remuneration and compensation. However, if companies employ systemic strategies, they will retain their highly skilled employees.
References
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