The business case for talent management


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The business case for talent management

  1. 1. The Business Case for Talent Management
  2. 2. Saving time, money and the hassle of employeeperformance and salary reviews, talent management provides abundle of benefits for businesses.E ncompassing everything from reviews to coaching, fromsuccession planning to record-keeping, talent management is anexcellent management strategy in and of itself.Anecdotally, HR managers and staff believe that the reduction ofadministrative time associated with performance reviews, which cantake months and even involveadditional hiring to handle thepaperwork, is the biggest return oninvestment point for companies. Companies that focus on talentWith that in mind, the business case management enjoy a five-yearfor talent management is expressly return on equity that rangesclear: Companies that develop – andput into action – talent management between 20 and 38 percent,strategies can boost both business according to a 2009 Ernst & Youngand their bottom line. global workforce survey. 2
  3. 3. Just What is Talent Management?In a nutshell, talent management means focusing on finding the best people (as well as theright person for the right job), then ensuring that those capable employees are engaged with yourcompany and aligned with your key business goals.When you combine all of these elements together, the talentmanagement equation will add up to better businessperformance.Further, talent management is the combination of being able to attract highly skilledemployees and develop and retain them for successful future businessefforts. Talent management is a combination of communication and technology, business transparency and feedback and coaching from managers that can lead to happy, productive, long-term employees as well as impressive, long-term business results. 3
  4. 4. Businesses looking for a competitive advantage intheir industry can use talent management to find that edge, to get aheadand to get results. Just as the face and shape of the workforce continues to evolve, so do company efforts to retain and reinvigorate their employees to ensure that they are getting the best out of the people who come to work every day. A talent management strategy and plan can prevent the drags of turnover, unhappy and unproductive employees, and wasted company time. Talent management, then, is truly this generation’s go-to business strategy to inspire and educate employees and to simplify onerous human resources tasks. 4
  5. 5. Who is the Buyer of Talent ManagementSystems?Who is generally the buyer of a talent management system?In short, the answer is: the entire company!From top to bottom, your entire company will contribute to andbenefit from a strategic talent management system.More specifically, the purchaser of a talent management system can be your company’s HR Director,CFO or CEO, depending on roles and responsibilities within your business. Likewise, you might want toassemble a small team to evaluate talent management options, focus on implementation, and trackprogress and goals after adding talent management to your company. While talent management will benefit the entire organization, it is a good idea to have at least one point person for its implementation, usage and updates within your company. 5
  6. 6. How Talent Management Systems ReduceCostsWhile companies tend to focus more on the costs of employee salary and benefits, there are some prettystriking figures regarding other employee-related costs, especially for businesses consideringimplementing talent management. Disengaged employees are naturally less productive and, shockingly,cost the U.S. economy a whopping $300 billion each year, according to Gallup.Did you know: • Replacing just one employee can cost between 150 and 250 percent of that individual’s salary, according to a study by the Institute for Research on Labor and Employment from the University of California, Berkeley? • Separation costs for that same employee will include the cost and time of exit interviews, various administration functions, any severance pay and potential increases in unemployment compensation? • Employee absence costs include having other employees cover that open position, which may not be in their area of expertise, loss of employee productivity and the potential costs of uncertainty among your current workforce? • Replacement costs for an employee include the cost of attracting new applicants with job postings, the time and costs for job interviews and/or testing, potential moving/relocation expenses and any administrative expenses associated with hiring that new person? 6
  7. 7. W ith an average annual employee turnover rate of more than 14 percent, according to the Bureau ofNational Affairs, it becomes clear pretty quickly how expensive turnover can be for companies of all sizes.Beyond that, a recent Gallup poll revealed that:Companies with a lot of dis-satisfied workers had turnover rates thatwere up to 51 percent higher than their peers with happieremployees. Some simple math shows that talent management systems can quickly reduce overall costs while improving productivity. 7
  8. 8. One of the best ways to cut HR costs is to eliminate orautomate administrative processes. Automating performancereviews may be the most-loved feature of talent managementsystems, which can also organize learning and development,succession planning and salary surveys, among other HRfunctions. ? Ask your Human Resources department and management team how much time they spend each year on performance and salary reviews and you can quickly determine how much time and money can be saved with talent management. 8
  9. 9. The Real Benefit of Talent Management isImproved Business PerformanceS udy after study shows that engaged, high caliber employees will lead your tcompany better business performance. For instance: • Engaged employees produce more, display higher morale and have far fewer sick days than disengaged employees (2.69 vs. 6.19 sick days per year); • When you can quickly and easily see what everyone is working on, your executive team can make resourcing decisions based on alignment with corporate goals. Likewise, executives report reduced inefficiency and positive responses to management data that allows them to determine what employees are working on and ensure that everyone is in alignment with corporate goals; • The executive team can also focus on your company’s top priorities and ensure the entire company is working on the most important business tasks; • Open lines of communication, a real benefit of talent management systems, will lead to greater business innovation; • When you put responsibility (with a combination of self-service and transparency) in the hands of your employees, they will respond positively and offer great service. • You will benefit from identifying your top performers, something many businesses can’t readily identify. Talent management provides the ability to see that data and coach and manage employees accordingly. 9
  10. 10. ?When you think about your ideal workforce,doesn’t it include engaged employees who willactively contribute to your company’s success?How about open, clear internal communication?And decisions made with your business’ topgoals in mind?If you answered, “yes,” “yes” and “yes,” talent management canpoint you in the right direction on all of these and more.A culture that rewards talent will attract more talent … don’t youwant the best possible team? 10
  11. 11. What Should We Expect to Pay for TalentManagement?Depending on the size and scope of your business, your talent managementneeds and costs will vary.When it comes to costs, the main elements are the cost of talent management software,implementation and internal administrative costs. Most business owners will be pleased to learn $ that talent management generally costs far less than they would estimate. For instance, Kapta Systems proven talent management system is built with small businesses in mind and gives access to lots of features with a small price tag. The SaaS-based, low-cost talent management system is recognized for “no hassles, no surprises” and provides an easy-to-use and easy-to-implement interface. 11
  12. 12. Other ways to save money on your talent management tools?Consider SaaS-based systems, lower internal IT support costs, eliminating the costs of investing inhardware, simple implementation and month-to-month contracts as opposed to long-term contracts thatlock customers in. Talent management isn’t just about paying more in bonuses and raises to your top performers – it’s about giving them a platform to manage their career development and allowing them to actively contribute to the success of your organization. In fact, you likely won’t need to use your entire employee compensation budget to attract great people; you simply need to provide them with an opportunity to do their best work and receive recognition for it. 12
  13. 13. What Will Happen if We Don’t Invest inTalent Management?Talent management is truly an investment that will pay off year afteryear and employee after employee.If your company chooses not to invest in talent management, turnover will increase as employees growfrustrated by lack of quality feedback and eventually leave – taking with them all the time, money andenergy you had previously put into that individual. Further, if your company does not provide a platform fortalent and career management, employees will simply find it somewhere else – whether it’s with anothercompany or an online platform such as LinkedIn or Finally, you should assume that yourcompetitors are investing in talent management strategies and tools to recruit and retain their top talent.In today’s cut-throat economy and competitive employment market, the question might be: Can you affordNOT to invest in your talent?It won’t take much time, research or thought for you to answer “no” and consider your best options fortalent management within your company. 13
  14. 14. The Growing Case for Adopting TalentManagementTalent management keeps companies on-trend and able to focus more time and energyon business growth and development – where they want to spend their time and energy.Whether your company needs help defining goals, managing HR processes, providing evaluations,communicating with employees or re-engaging those employees in your business efforts, you have alreadymade the case for talent management in your company.Talent management will help you find the right Saving time, money, hassle, stressemployees for the right positions, inspire thoseemployees to give their best to your company, offer and more, talent management givesaccurate, timely and useful reviews and raises, companies the ability to organize alland communicate regularly. It will not only manage of their employee performanceyour talent, it will engage the lifeblood of your evaluations, salary reviews, employeecompany. It is both simple and effective. goals, manager feedback andLet talent management help your business, your coaching, internal communication, exitemployees and your overall success. Getting strategies and more – all online and instarted today can help you make a fast and one convenient place.powerful difference tomorrow with your employeesand within your business. 14