Talent Management: Updating Old and Tired Practices

by Knowledge@SMU, 06 July 2010

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topics:
Human Capital Management

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HR recruitment retention talent management training programmes

What has the supply chain sector to do with talent management? It offers lessons for businesses to adopt practices that are in keeping with the times and apply them in talent management, according to Professor Peter Cappelli, who is George W. Taylor Professor of Management, and Director, Center for Human Resources at the Wharton School, University of Pennsylvania.

A guest speaker at a recent seminar organised by Singapore Management University’s Office of Research and the Wharton-SMU Research Center, Cappelli warned of outmoded talent management practices and shared his insights on “Managing talents in the modern workforce”.

He has written a book and contributed articles on the topic to the Harvard Business Review, where he called for a fundamental new approach to talent management that takes into account the great uncertainty businesses face today.

“Every talent management process in use today was developed half a century ago,” he said. It is now time for a new model to be developed, to better address the current environment. The supply chain management sector is a field from which lessons in talent management can be drawn.

Moving with the times

“Unlike talent development, models of supply chain management have improved radically since the 1950s,” Capelli said. “When markets were predictable, companies used to build up stockpiles of components in manufacturing. But that is no longer the case. Since the eighties, companies have initiated just-in-time (JIT) manufacturing processes and other supply chain innovations that allow them to anticipate shifts in demand and adapt products ever more accurately and quickly.”

Applying the same concept used in supply chain management, talent management is a matter of anticipating the need for human capital and setting out a plan to meet it. The considerations are to manage the uncertainty that complicates workforce planning, finding the right balance in internal development of talent and other tasks that lie within talent management.

In short, talent management is defined by Cappelli as: “Can we get the right person at the right job at the right time?” He asserts that talent management is not a human resource problem but is, fundamentally, a money issue. As such, it requires an understanding of the resulting costs as well as the benefits arising from talent management choices.

To put this point into context, he brought up an example of an employee during the course of a career. “At the beginning, the employee is still at the familiarisation phase and is not worth much. But, contributions do pick up quickly. What it means is that the company is investing in new employees, providing, among others, training programmes, on-the-job experiences and coaching by peers and supervisors. Thereafter, a career path is mapped to allow for job progression.”

Traditional approach outmoded

Cappelli’s research shows that such a traditional approach -- common in big corporations -- in developing talents, has been rendered ineffective by two developments. One is the end of “lifetime employment” practice with the onset of job mobility, where employers are prepared to pay to win over experienced employees who have gone through the mill at other companies.

The other development, he said, is that talent development planning over the longer term no longer makes sense. It is not practical for companies to oversee lifelong career prospects for talents when strategic planning is being done on much shorter time frame because of uncertainties.

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