Talent Planning and Acquisition

Recruitment Sources and Strategies – What is Recruitment?

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A major component of organizational success is the ability to attract and recruit a highly-skilled, high performing workforce. Despite the high correlation between recruitment and organizational success, recruitment processes and practices continue to be overlooked by managers. As a result, HR professionals must be able to communicate the value of developing effective recruitment strategies.

What is Recruitment?

While there are many different variations of the definitions of recruitment, they all share the element of bringing the human resource into an organization to help the organization achieve its goals. Dennis Costello defined recruitment as “the set of activities and processes used to legally obtain a sufficient number of qualified people at the right place and time so that the people and the organization can select each other in their own best short and long-term interests” (Costello, 2006).

Simply defined, recruitment is sourcing, attracting, and securing individuals with the necessary skills, values, and competencies to assist the organization in achieving its short-term and long-term goals. For a recruitment process to be effective, there must be processes and policies in place within the organization that will support the recruitment strategies. Each organization has slightly different recruitment strategies; however, most go through common steps which are outlined below:

  • Development of recruitment and retention policies that support recruitment strategies.
  • Determine the recruitment needs as well as the resources available to it to attract and retain candidates.
  • Determine the most effective recruitment source.
  • Design the job available by determining the role and compensation for the available role(s).
  • Select the candidate for the position.
    • Assess the availability of resources within the organization.
    • Assess the talent pool to determine the best candidates for the position(s).
    • Hire the most highly qualified candidates to fill the position(s).

Talent Management Best Practices

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Building Success Profiles

For management to find the best applicants to hire and know how to build their skills, they must first know and understand what to look for in employees. A success profile is a list of necessary qualities an employee should possess to meet the talent criteria. This profile includes a list of the knowledge, experience, skills, and personal attributes an organization is looking for in its potential employees. Once managers identify employees with the right talent, they can take steps to train and mold them into highly productive individuals, ready to tackle the tasks at hand.

Selecting and Assessing Talent

It is essential for talent to match the organization for their work to be sufficient. When managing talent, managers must make sure they assign the right people to the right jobs. Matching talents and skills with the workload ensure optimal performance. Ensuring that recruiting, development, and the succession of talent aligns with the goals of the organization also ensures that employees perform to the best of their ability and for the good of the organization.

Employee First Policy

Organizations could lose out on the skillset of their workforce by replacing employees with software, thereby putting the ‘what’ of meeting organizational goals ahead of the ‘why.’ For firms to develop and retain employees, they should use the employee first policy. Do you want to advance production in a firm by using a centralized virtual accounting system? Let your employees know what the system is and how it will help them. Guide them through the implementation process. Listen to their concerns and address them. Adjusting your policies according to their attitudes will put you closer to attaining the firm’s objectives.

Managing talent is not an easy task. However, the benefits of talent management compensate for its challenges. After all, managers are not the only employees who value a talented workforce in an organization. Shareholders and other stockholders also have an active interest in ensuring that the firm secures, develops, and retains talent. Managers should, therefore, use as many of the techniques and practices at their disposal to manage talent effectively in their organizations.

Talent Management Techniques

 

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Talent management techniques are the processes and tools that managers can use to attract, hire, and engage highly productive employees within an organization. Typically, talent management is a five-step process that involves identifying the goals of the organization, its drivers and challenges, defining its goals, identifying gaps within the current management process through evaluation, and taking measures to bridge those gaps. At the end of a validated talent management process, an organization should have achieved several objectives including increasing its visibility to talent, developing the existing talent pool, maximizing the satisfaction of its employees, and planning for the succession of talent within the organization. An organization with a proven and efficient talent management process should also be able to act on the results of any performance evaluation it conducts.

Organizations can use different techniques or tools to manage their talent effectively. Below is a review of the most common talent management methods employed by managers today.

Pay

What is the most compelling reason for people to work? If you ask employees that question, the chances are that you will get different answers. Some people value community, others appreciate the sense of accomplishment that comes from holding down a job, but one of the most common responses you will receive is money. This response makes payment packages one of the most effective ways for managers to attract, retain, and motivate a talented workforce.

Career and Personal Development Opportunities

There have been studies that have revealed employees are attracted to organizations that offer them opportunities to pursue their personal and professional interests. An organization that delivers to employees training and the freedom to exercise their newly gained skills, for example, is more attractive to the employee than an organization that only includes employee training. Talented individuals are driven and ambitious, and they value organizations that place stock in their desire to pursue their individual goals.

Benefits

Benefits are another significant tool managers can use to manage talent. Imagine a scenario where two organizations approach a talented investment banker; let us call them Company X and Company Y. Both organizations offer the banker an equivalent amount. However, Company X provides potential employees with more money and less health insurance and housing benefits. Since the difference between the proposals is only about $20,000 in wages, the banker goes for Company Y, which has many more comprehensive benefits. That is how today’s managers attract talent into their organizations: by offering benefits, the latter cannot refuse.

Company Culture

How do management and employees interact? How does management nurture relationships among its employees? Is the general impression of a firm’s work environment active and innovative, or is it conservative and bureaucratic? These are a few things talented individuals will want to know before they join an organization.

Regardless of which talent management method an organization implements, management must be ready to dedicate a considerable amount of resources to maintaining, developing, and attracting employees for its talent management process to be considered adequate.

Coming up with an appropriate talent management scheme might be intimidating for a manager. Valid talent management programs are why guidelines on how to formulate talent management strategies exist. They simplify the talent management method for managers. Below is a look at what works best for talent management.

The Benefits of Effective Talent Management

 

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The Benefits of Efficient Talent Management

According to a 2006 report conducted by the Economist Intelligence Unit (EIU) in cooperation with Development Dimensions International (DDI), the majority of the world’s CEOs spend enormous time, money, and resources in talent management. The 2008 report from the same firms indicated that 55% of top-level executives thought their firms were in danger of underperforming due to lack of proper talent management (Wellins, Smith, & Erker, n.d.). These are just a few instances that validate the necessity of effective talent management across all levels of an organization.

The importance of effective talent management is summarized as:

Production of Quality Output

High performing employees guarantee maximum efficiency in an organization. They also build relationships between the organization and the customers. The delivery of high-quality goods and services also makes the organization a go-to entity for most consumers.

Value creation

External drivers that surround any company places a lot of value in the talent pool within a firm. Therefore, having talent management practices in place that are effective enhances value to a firm in the eyes of potential investors.

Differentiation

In today’s rapidly developing workplace, the presence of talent and talent management systems is a great differentiator between firms. This presence is because a talented workforce is hard to duplicate. When one firm comes with an innovative product, a new company can go in, replicate the product, and provide a better service. Similarly, it is not a rare incidence to find organizations operating within the same niche copying each other’s production and design processes. Having a highly productive workforce provides organizations in these situations with a distinguishing factor and competitive advantage.

Talent Management Practices

 

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What is Talent Management?

Different experts have varying definitions of talent management. However, most of the definitions that talent managers provide have a few concepts in common. For instance, many organizations view talent management as retaining and developing talented employees to achieve the goals of an organization.

We will look at talent management per the definition outlined by the Development Dimensions International (DDI): “as a mission-critical process that ensures organizations have the quantity and quality of people in place to meet their current and future business priorities” (Wellins, Smith, & Erker, n.d.). According to DDI, talent management does not only encompass hiring and retaining employees. On the contrary, appropriate talent management involves everything from the selection and development of employees to their succession and performance management. Talent management is only valid when managers engage with all its various aspects. These aspects are one of the numerous factors that present a challenge to managers when it comes to talent management.

Challenges in Implementing Talent Management Practices

Below are problem’s managers may encounter either while formulating or implementing talent management practices:

  • Increasing globalization within the current workforce: This influence employee expectations and forces managers to think outside traditional management concepts to satisfy the talent in their organizations.
  • Changing demographics in race, age, and ideology: This factor influences the wants and needs of incoming and existing employees. Whereas an older employee would be pleased with a pleasant physical working environment, for example, a younger one would expect freedom in the workplace. It is difficult for management to meet the needs of workers when they are diversified.
  • Increased virtual workplaces: Management is finding it difficult to compete with the benefits of working from home or anywhere, which makes it hard for them to retain talent.

There are other reasons that make talent management practices and concepts difficult for managers. Managers should overlook these issues because of the benefits afforded to their organizations with talent management. When there is a clear strategy of how an organization plans to recruit, retain, develop, mentor, succeed, and evaluate talent, everybody benefits. Investors, shareholders, management, and employees all benefit from proper talent management practices and concepts.

The Talent Pool

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The statistics for talent are not as promising as those for the job market and readiness of employers to employ. They show a blunt contrast that demonstrates a steady drop in the number of talented candidates available for employment. As world economies grow, the need for young talented employees to regenerate the talent in the job market grows as well. Most industries and organizations are managed by people who are closer to their retirement ages, and it foretells a point shortly in the near future where their retirement results in a lack of the required workforce needed to run the company. With the population of the world taking a slant towards the older generations, a significant economic gap is left for talent since most of the older generation of workers are in charge, mainly owed to their long-tenured work experience.

Younger generations who are starting businesses as soon as they can is a trend that may have something to do with decreasing talent pools all over the world. Despite the validity of starting up a business, many employers find themselves lacking skills the younger generations could have offered their businesses. Challenges in staff retention also occur due to this move towards entrepreneurship as experienced employees move to start their own businesses. About 543,000 new businesses get started each month, according to Yahoo.

Many modern organizations based on these statistics have made talent pools one of their top priorities when projecting their company’s future growth. These talent pools are databases that contain prospective job candidates that are needed both currently and in the future. This can include referred sourced, applied, and candidates that were a close second for a previous position but did not receive an offer. With the number of unemployed candidates steadily decreasing, the number of people who are part of the available talent pool for any organization is also declining. This decrease in talent pools indicates that organizations have fewer options when looking for fresh talent to revitalize their organization.

Thinning talent pools also means that some skillsets will continue to become difficult for employers to find either due to their high demand or due to people’s lack of qualifications in the required fields. Experienced employees and those employees with an educational background specific to the employer will also be increasingly difficult for employers to recruit and increases the risk of an employer eventually making a diluted workforce that is more invested in the number of workers rather than the quality of employee.

Increases in higher education of the workforce give the optimism of slowly but surely refilling the talent pool and making it a more diverse organization for employers. An equilibrium must be maintained, which makes sure that a source for new employees is always available while minimizing unemployment.

Many countries have taken to outsourcing their workforce because there are larger talent pools available outside the United States, and many organizations have realized the benefits of using employees in other countries. When appropriately tapped, it can affect the budget differently, and workers in other countries are characteristically a lot less expensive for similar services. Also, overseas employees potentially offer a wide variety of skill sets that may not be as readily obtainable in the United States. This added accessibility of qualified workers combined with cost benefits has brought the outsourcing conversation to the forefront of many organizations.

Understanding the Current Job Market and Talent Pool Availability

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As literacy levels rise with increased availability for expanded education, the number of professionals available to the world at large continues to grow. There is a proportional rise of entrepreneurial businesses that try to employ as much of these professionals as possible, without wasting any of the talents that are released into the world every day from training institutes everywhere. This effect has often resulted in numerous studies that are conducted to provide information to professionals on the way the market treats the employer and the employee, as well as the reception of individual professionals in regards to salary expectations and employment opportunities.

The Job Market

In April 2019, the U.S. Bureau of Labor Statistics estimated that the total number of non-farm payroll employees increased by 263,000, and the unemployment rate declined to 3.6 percent. Also, unemployment is at its lowest since 1969 (2019), and the existing pool of unemployed skilled workers has steadily decreased. Due to this decrease in available job seekers, employers are currently seeking employees.  As a result, it has made finding a job easier for those seeking new employment, giving them greater leverage during the employment hiring process. Any skilled person can use this situation not just to get a better wage during the recruitment and hiring process, but to get working conditions that result in an ideal work/life balance as well as other benefits.

With the job market favoring employees, those with confident communication skills and experience on their side are shown to receive more substantial wage increases when they venture outside their current employment and seek jobs in a rejuvenated market that is not just looking for skill but for experience in required fields. A survey by HR Mythbusters in 2017 found that the median tenure at a job for workers between ages 55 and 65 was 2.53 years, the median tenure for those between ages 35 and 55 was just under two years, and for those between ages 25 and 35, the median tenure was 1.42 years (Wilkie, 2017). It has become socially acceptable and almost expected for people to switch jobs more often now than in the past. It has also indicated that the people who receive the most significant pay increases are those employees who are taking the risk of moving from stagnant jobs and other positions. Americans who leave their employers to move to a new organization are enjoying pay raises that are one-third larger than raises for workers who stay put at their original company – a gap that has reached the widest point since the Great Recession (Rugaber, 2018).

Employees who request pay increases within their organizations are finding it easier to get their requests met. Most businesses do not want to risk the loss of their more experienced and trusted employees in the new job market to other firms or competitors. They are even more willing to pay these improved wages as long as the employee is dedicated to the company and has shown continued growth in terms of output, but it is causing some financial hardships on some organizations.

Another positive for employees is the continued trend of growing wages. The steady growth of a 3% pay increase per year has been seen, and the trend only seems to keep on rising as the markets are more willing to accept professionals (Stahl, 2017). Due to this trend compounded with the willingness of the employers to accept higher pay requests from job seekers, employees are not likely to have problems reflective of the current market’s pay condition.

Some professions are seeing more market growth than others creating a perfect situation for both employers and employees to make more significant profits and get more significant dividends. Those with the most considerable growth projections are personal care aides, home health aides, food service employees, nurses, and retails workers. There is also a severe shortage of computer programmers, correctional officers, therapists, other mental health practitioners, and human resource managers. These jobs are offering more opportunities primarily due to the lack of employees who have the essential training to keep these positions filled.

The steady rise of contracting and freelancing services also yield another potential employment avenue that was not available previously. An NPR/Marist poll finds that 20% of jobs in America are held by workers under contract (Noguchi, 2018). This statistic shows that in the future contracting and freelancing types of jobs could potentially outnumber full-time employment. Many freelancers or contract employees have chosen to go in that direction to escape the typical 9-5 workweek, although some drawbacks include a lack of benefits and stability. Organizations outsource because it can be cheaper and do so when particular expertise is needed. Onshore, offshore, and nearshore outsourcing is further options for organizations depending on needs. Also, contracted employees do not receive the benefits that full-time employees would otherwise receive, and work on an hourly basis so they can be used as needed. The U.S. Bureau of Labor Statistics recently issued a report on individuals in alternative work arrangements, which indicated that 16.5 million people now are inclusive of what is known as the “gig economy.”  The gig economy refers to people that are paid by the gig or task/project (Stahl, 2017).

Many countries are still contending with the balance between the labor market’s job security, job stability, and flexibility. In developing countries with the crisis of unemployment, the professed benefits of the recovering worldwide market seem nonexistent since no immediate changes in their countries are present, especially among the younger citizens. However, there has been a lot of progress made regarding unemployment. Weak quality employment is now the most significant issue as it related to global markets. World Employment and Social Outlook: Trends 2019 (WESO) confirms that a majority of the 3.3 billion people employed globally in 2018 had insufficient equality of opportunity, material well-being, and economic security (2019). Even though people might have jobs in the global market, they still reside in poverty.

Even as the majority of the world’s job markets are getting better, proper absorption of different skill sets remains very distinct and separate. Specific degree holders have also been shown to be statistically more viable within the market, making it into the top paid list quickly. The most in-demand degrees include human resources, marketing, business-type degrees, and information technology. Potential employees with healthcare degrees are one of the most sought-after groups with so many nurses retiring each year and as technology advances in the medical field.  The potential opportunities make healthcare an attractive field for many people. There is also an ongoing debate regarding experience versus education. Many employers have differing opinions in regards to whether they favor hiring college graduates and interns or at the other spectrum, employing mid-level and higher employees with more years of experience and market-specific training. Regarding these differences, job growth in one sector can fuel overall growth in other industries.

Human Resources Planning: The Four Critical Steps

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Human resource planning is a four-step process designed to help an organization attain its goals by making full use of its workforce. The complexity of a human resource plan depends on various factors, including the work environment expected in the future, the duration of the plan, and the objectives of the organization. The four critical steps of human resource planning are:

1. Environmental Analysis

Environmental Analysis is defined as a “process to identify all the external and internal elements, which can affect the organization’s performance” (Pestle Analysis, 2015). From an HR perspective, environmental analysis requires looking at a variety of different external and internal factors. External elements that an HR professional should take into consideration include changes in employment laws or legislation, unemployment rate and trends, educational trends, technology, and trends within the industry. From an internal perspective, HR professionals should assess the skills of the current workforce, gaps in the skills necessary to achieve organizational goals, and the strategic plans of the organization. Environmental analysis is often achieved by conducting a SWOT (strengths, weakness, opportunities, threats) analysis. Some questions to ask throughout this process include:

1. What is going on with the world and the economies of areas where you operate? How will these trends affect your organization? How will they impact HR decisions? For example:

  • What is the unemployment rate?
  • What laws are changing that will affect your business? Are there other political concerns that will affect your business?
  • In your local areas of operation, what trends are you seeing that will impact the organization?

2. What is going on in your industry, specifically? Is it growing? Where is your organization placed in the industry?

  • Where does your organization fit when competing for talent? How scarce is talent right now?
  • Are there technological trends that will impact your HR needs?
  • What skills does your organization need to be competitive? Do your employees currently have these skills or what training (or hiring) will be needed?
  • What trends are happening in the industry? Does your organization make trends or follow them? What changes will you have to make to remain competitive when it comes to attracting and retaining talent?

3. Who are your direct competitors? How are they changing? Who is new to the picture?

  • How does your compensation and benefits structure compare to those organizations with whom you are competing for talent? What changes might be needed to continue to attract and retain talent?

4. From an organizational perspective, what is going on in the organization?

  • What are the company’s strengths and weaknesses? How do these elements affect HR directly? What can HR managers do to address the weaknesses or capitalize on the strengths of the organization?
  • What trends are you seeing that will impact HR in the next year, the next 5 years, and the next 10 years? What can you do to prepare (Miller, 2018)?

2. Scenario Planning

Scenario planning is described as the process where management evaluates and reviews possible scenarios the company may have to address in the future, mainly by making assumptions. To use scenario planning, there are four critical steps: identify driving forces (economics, politics, technology), identify critical uncertainties, develop a range of plausible scenarios, and discuss the implications (Mariton, n.d.).

3. Forecasting

When most people think about forecasting, they think about the future conditions of a particular environment – what will be needed as there are changes within the organization. In human resource planning, forecasting refers to the assessment of the current supply and demand for people and skills, and the use of that knowledge to determine the need for and availability of personnel in the future(AnderePrepsU, n.d.). In human resource planning, managers evaluate and assess the experience, skills, and attributes, relating to people, that will be required in the future. There are two different types of forecasting: demand forecasting and supply forecasting.

Demand forecasting

The most critical part of human resource planning, demand forecasting, is the process of estimating the number of future employees required, as well as the skills and competencies that will be needed. When demand forecasting, managers consider the long-term objectives of the organization as well as the available workforce, its productivity, and the available budget. With those factors in mind, they must decide whether the organization will need more or less of a particular skill or more or less employees. Summarily, demand forecasting enables managers to match the current workforce with the future demand of the organization. Managers can utilize different methods for determining the demand for employees in the future, including their judgment and experience as well as productivity statistics (AnderePrepsU, n.d.).

Supply forecasting

Supply forecasting is defined as the process of matching the current supply of employees, along with their skills and competencies, to the future demand of the organization. After the future demand is determined, managers, along with human resources, must develop a plan to match the demand by increasing or decreasing the supply of employees. One popular method that managers use in supply forecasting is succession planning. Succession planning is “the process of preparing employees for future jobs and deciding how management vacancies will be filled. The goal is to have highly trained replacements ready to fill vacant positions in all key jobs (AnderePrepsU, n.d.).”

4. Action Planning

After creating demand and supply forecasts, organizations should focus on the development of a sourcing strategy– how the company can utilize a variety of resources or methods to reach its desired human resource targets. Some methods may include increasing or decreasing the size of the workforce, investment in employee training and career development, or the utilization of software and technology. In the action planning process, it is important that decisions align and fit within the organizational strategic plan. An effective human resource plan will align with the goals of the organization, minimize costs for the company, and ensure maximum productivity among its employees. Once identified, the plan should be integrated into the organization’s day-to-day activities and monitored regularly. As with any plan, consistent follow-ups and evaluations are necessary to ensure optimal performance.

Failure to implement an effective human resource planning process can impact the organization in several ways, including high employee turnover, lack of competitiveness within the industry, a reduction in financial performance, lack of available resources, and a decrease in quality of services. A productive workforce equals better performance overall. Furthermore, organizations need to balance their demand for efficient workers with the availability of such talent in the market. An imbalance between the demand and supply of labor could, in turn, lead to the loss of an organization’s competitive edge. A talented workforce makes an organization valuable and high-performing. Inadequately planning how to acquire and retain such a workforce in different market conditions lowers the value of a company (AnderePrepsU, n.d.).