Most of the organizations do not feel much about managing their talent. Here is why they should -

• Typically, labor accounts for about 65 % of every business in any industry. The percentage is more for labor intensive businesses for example those in manufacturing.
• The performance difference between talented and lesser talented employees is huge.
• Employees and how they are managed is the most important source of most organizational competencies and strengths.

Talent management is not only important for hiring people as per the need, it is also important for determining when to hire. In the traditional model of hiring supply meant developing people internally for future. There was an upfront investment in candidates recovered through an enhanced performance over time. This was a good perspective; there were equal chances of making and losing money by investing in your people.

Hiring from outside or temporary employment on the other hand was seen as something that cannot fetch you substantial returns and or act as potential source of knowledge and competitive advantage.

These trends lost sheen over a period of time with the rise of the great corporate career. Consider this - In 1950’s — 1960’s an average fortune 500 executive had been with his/her company for average 24 years. Not anymore, the traditional and lifetime model was breaking up and giving way to a new model. Outside hiring increased along with the increased employee turnover.

The change was brought over by organizations failing to plan. Increased pressures from market for speed of delivery and variety of goods, the third wave of corporate restructuring and failure to keep up with new management practices brought chaos to planning.

In a survey conducted in 2003 by SHRM it was found out that 60% of the firms have no succession planning of any kind. Surprisingly more than 70 % had it in that late 1970’s! IPMA-HR survey of the workforce as a whole in the year 2004 found out 63 % have no workforce planning of any kind; the same was an integral component of virtually all companies in 1950’s. A new trend had taken shape, shortage - go outside and hire!

On the employee side, the trend of lifetime employment has diminished now. Talking in terms of the percentage of lifetime employees - in 1980’s 53 % of employees worked as life time employees, the same decreased to 34 % in 2009. The questions that arises is how do we manage the next generation employees and what exactly do people expect from jobs.

The new generation employees it seems do not believe in the old philosophy of ‘we will stick around till you need us’. They are more enterprising and will to take risks in their career; they accept failures easily and are prepared for them. People now prefer flat hierarchies, build careers around jobs and want a clear performance management system.

There are work-life balance concerns, issues of job flexibility all of which calls for renewing the social contract with the employees. The employees, their psyche, their beliefs and most important their attitudes are changing - talent management can’t afford to sit back. It needs evolution.

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