What Is Talent Management?

Published Date: 23 Mar 2015 Last Modified: 09 Jan 2018

Chapter 1

Introduction

Background of the study

There has been a paradigm shift in the business environment across the world which has led to a growing demand of more efficient and phenomenal results from the scheduled operations and routine activities. This applies primarily to the field of human resource management which stands accountable for the acquisition, development, utilization and retention of the human capital. The present, as is evident, is immensely competitive, be it in terms of sourcing activities, investor relations, technological advancement or simply the workforce. The human resource managers are now faced with the double-edged sword of identifying, selecting and nurturing potential talent and also to formulate and implement pertinent strategies that can effectively contribute towards the achievement of organizational objectives. Hence, the biggest challenge that comes across the human resource panels is to get a hold of limited and thinning pool of skilled accessible candidates to replace important employees when they leave, hugely emphasizing the difficulty to attract, develop, motivate and retain the best employees in an organization.

Authors, academicians and business experts alike maintain different views and opinions regarding the meaning of “talent”. Talent can be anything that predisposes an individual to success in a position or organization (Jason Lauritsen, 2010). The author further supports this view by stressing that talent is situational. A person can be advantageous because of his natural ability in one scenario but not necessarily in others. This means that in order to be successful that person has to be placed in a right role within an organization so that his abilities and capacities can manifest as talent to drive the success of the business.

Another view maintains that talent can allegedly be a potential trait, a symptom of inherent ability, a foreshadowing of future greatness, or a way of describing an individual's early achievements or performance merits (Downey Greg, 2009). Whilst at the same time paradoxically, talent can be understood as the reason why some experts are more capable than others; unlike a concept like jeito, (a Brazilian term for knack), talent is more often than not generally very much task specific or specialized, even while a talented person is believed to be often quite versatile. Talent is specifically opposed to hard work or determination, implying that skill is primarily a mix of natural talent and hard work, in various proportions and quantum. Likely, talent is very much an idea or a skill that some people learn faster, more effortlessly, and with greater effect. In certain ways, talent can be thought of as a multiplier, enabling a person to achieve more out of formative experiences and activities.

Keeping such ideas in mind, in the business purview, “talent management” is the process of matching capabilities with commitments (Donald H Taylor, 2007). This describes the aim of the entire talent management process. It underscores that talent management rather than being aimed at an individual focuses on the entire organization so as to ensure that the firm is able to achieve its set targets for both, the present and the future. The encompassed assumption here is that capability is based on an organization's sole source of value and competitive advantage in a developed economy: its human capital.

“Talent management” comprises identifying a person's innate skills, traits, individuality and fitting him into the right work profile; every individual possesses unique talent that matches an exacting job profile and any other position will lead to discomfort (Salma Aliakabar, 2004). It therefore falls under the Management, specifically the HR Division, to situate candidates with discretion and prudence simply because a wrong fit can result in additional hiring, re-training and all such wasteful activities.

“Talent management” is a complex assortment of associated HR processes that delivers an easy elementary benefit for any business (SHRM, 2009). Talent Management can be easily considered to be advantageous and important to both the organization and the workforce. The organization gains from:

• improved productivity and potential;
• an enhanced association between a person's efforts and business goals;
• commitment of esteemed workforce;
• reduced employee turnover rate;
• Better bench strength and an improved fit between individual's work and skills.

Employees gain from:

• Enhanced motivation and dedication;
• career growth;
• increased awareness about and involvement in company's goals;
• Continued inspiration and job satisfaction.

Analyst research has established that companies employing talent management strategies and solutions display superior performance than their direct competitors and the market in broad (SHRM Survey, 2009). About 83% of the large enterprises view integrated talent management as mission critical and upto 73% of HR professionals believe that talent management impacts the financial performance positively (Softscape Global HR Survey, 2009). As per the Talent Pulse Survey, (2005) about 1,400 HR professionals worldwide believed the attraction and retention of high-caliber employees as the most critical issue. These issues were further underscored by the fact that 54% of the respondents agree that talent issues have an influence on overall productivity and that there is a clear linkage between talent management and industry performance. HRVote, Human Resources magazine's online voting forum reported that 44% of the respondents implied talent management and succession planning was a considerable challenge. According to an IDC study U.S. HR BPO 2005 Vendor Analysis: The Evolving Landscape, 37% of U.S. HR outsourcing expenses in 2004 was on HR and talent management services.

Several taxing workforce problems confront HR, counting:

• Increased competition for skilled personnel.
• Imminent retirement of the “baby boomer” generation workers.
• Reduced levels of employee commitment.
• Realization of the high cost of the employee turnover.
• Onerous demands of managing global human capital.
• Necessity of succession planning.
• Outsourcing and off shoring practices.

This necessitates novel thinking and a new charge to achieve success in an industry. These elements, coupled with the requirement to align workers directly with business goals, compel HR to progress from policy formation, cost diminution, process competence and risk management to lashing a fresh talent frame of mind in the organization. Therefore, talent management is an ongoing process that provides the optimal personnel for a particular business. Under this role, HR performs as the strategic enabler and a catalyst of talent management processes that empower the managers and workforce whilst developing business value.

Taleo's graphical representation stresses upon the mandate of talent management to be responsive to the organizational goals and accordingly be the driving force behind the business performance. Herein, talent management is denoted as a circular and not a linear, module of activities.

In the present scenario, workforce expenditure is the prevalent category of pay out for most organizations. Automation and analysis of the recruitment and hiring processes of a firm delivers the abrupt labor force visibility and insights that are needed to notably perk up the bottom line. Performance management contributes towards the ongoing processes and activities to sustain a vast workforce. The future prospect of talent management is encompassed in the solutions planned from the scratch to provide for the business-centric operations on an integrated talent management platform. Decisions about talent management figure the competencies that companies have and their eventual achievement and from the perception of people, such decisions establish the path and pace of careers.

In India currently, it may be difficult to visualize the crisis of possessing too much talent, but the first slump in the financial system, or even in a fragment of the economy will make things stand apart. Such mismatches are most definitely included in the primary problems that organizations and many large employers face. Over the precedent generation, companies specifically, seem to have jumped from surpluses of talent to shortfalls to surpluses and back to such a cycle. The challenge evident in front of the employers is to follow much more strongly the requirements for talent to evade both the shortfalls and oversupplies.

Talent management is not an end in itself. It is not about fostering the growth of employees or charting succession plans. Neither is it about gaining definite benchmarks like a four percent employee turnover rate, having the most qualified and skilled personnel, or any such strategic outcome. The objective of talent management is the quite more general but valuable task of serving the business achieve its general objectives. And in the business world, that objective is to be profitable; be it in the short run or the long. What we need to attend to going onward is to ensure how to craft investments in growth affordable and fraction of that challenge embodies employee retention, making it probable to at least retain workers long enough to recover the training investments made in them.

Problem Statement

“Intense competition in the emerging Indian IT market has made talent retention and its management a challenge and therefore, questions the role of strategic talent management in being able to address such issues and being effective in an organization's overall effectiveness.”

Talent Management has gained its fair share of fame in being effective in attracting, retaining and managing talented individuals. The Indian IT industry is marked with the following:

The increased globalization has fuelled the growth as well as competition of the IT industry in India which is characterized by issues of talent retention.

In spite of rising demand for talent, talent management has not yet completely arrived in India, making it all the more crucial in the current chaotic times and its effectiveness in the Indian scenario.

Development of talent pools remains to be a sore issue with the HR professionals employed in the Indian IT sector.

To summarize the above headings, the issue is the talent retention of skilled individuals in the Indian IT industry that leads to increased costs to an organization. The HR professionals have to engage in brainstorming activities in order to unearth ways to attract, retain and manage talents which are considered to be the biggest asset of a company today. Also, the talent management practices and their implementation in the Indian IT industry context have been far from satisfactory and add to the woes of a highly competitive market. Moreover, maintenance of talent pools so as to support succession planning and measures to integrate talent retention, employee commitment and employee involvement all stress the need to address the issue of talent management with a strategic bend.

Aims and Objectives of the Study

The aim of the study is to understand the importance of talent management in the current corporate scenario by collecting relevant information and enabling a better understanding of the strategic HR processes that a company can employ in order to manage and retain its key people.

Aim

“To understand the impaxt of a good talent management program on an organization's overall effectiveness, particularly in the case of Indian IT industry, in order to enable it to manage and retain its key resources; and gaining an understanding of the talent retention and employee involvement functions.”

Objectives

The objectives of the study are:

1. To gain an understanding about talent management and its relevance to the current corporate scenario
2. To explore the importance of talent management in the organization's overall success
3. To study the role of strategic planning, employee retention and employee commitment in talent management
4. To understand and evaluate the challenges faced in managing talent in the organizations today
5. To study the role of talent management in prolonged employee satisfaction
6. To explore the importance of talent management in the Indian IT industry and the significance of maintaining a talent pipeline for companies in the Indian IT sector
7. To study the key drivers that lead to employee commitment crucial for a talent management system to be effective

Significance of the study (to be edited upon the completion of the study)

The implications of this research aim at exploring the relevance of talent management programs to the Indian IT indutry. It will assist the corporate in understanding the effectivess of framing such programs so as to be able to effeciently manage and retain its key players. Through implementation of talent management practices, the organizations efficiency is likely to increase, developing a proficient pool of skilled and talented employees which can be leveraged as a competitive strategy; making the corporate more competent to challenges in the industry.

The research tests an employee commitment level to his/her organization and also aims at identifying the key drivers/attributes that propel employee commitement level in an Indian IT setting. The significance of the results mark that talent management programs are not only crucial and effective, but also cost-efficient, by maintaining a consistent pool of skilled employees tehreby reducing on the hiring, training and firing costs.

In the present financial crisis effective workforce is the only difference that can make an organization carry its operations smoothly. Successful implementation of such talent management programs is of remarkable significance for the business. The research solution furthers the adoption of healthy talent management processes and its various functions to create significance for the business in achieving its ultimate goal of operational efficiency, cost control and profitability.

Limitations of the study

The study is subject to several limitations, some of which are highlighted as under:

1. The study is confined to the specific organizations of the India IT sector. The finding of the study, therefore, cannot be generalized for the entire Indian scenario as a whole.
2. Sample size, being small, is not completely representative of all the employees, employers and the HR people engaged in the Indian IT sector. All this might have affected the reliability of the results to some extent.
3. Time as well as financial constraints are also one of the limitations of the study.

Organization of the paper

Chapter 2

Review of Literature

2.1 Meaning and Definition of Talent Management

According to several authors, an all-encompassing definition of talent management is difficult to pin down. Lewis and Heckman (2006) pointed out that identifying an exact meaning of talent management is complicated owing to both the confusion regarding the definition of terms used and the various deviations in assumptions made by the writers who consider the issue. Lewis and Heckman further support their view by noting that the terms succession management, talent strategy and human resource planning are more often than not used interchangeably, all of which form an integral part of talent management functions. They believe that there is no clear view existing on talent management and none at all that can be considered as sufficiently strategic.

As is evident, there are several approaches to talent management. One such approach identifies talent management with the traditional HR practices for instance recruitment, selection, training and performance management, among various other things (Cheese et al., 2008). This approach cannot be considered new as the traditional HR practices are becoming more decisive to a business' success and hence, it is gradually getting imperative to associate such practices with the talents needed by the firms.

Another varying approach towards talent management is firmly linked with the notion of HR planning, succession planning and strategic HR management (Rothwell & Kazanas, 2004). These authors underscore and emphasize the strategic significance of talent management, whereas others stress upon the talent pools required for the succession planning. But this literature fall short in advancing the theory or practice of HR (Lewis & Heckman, 2006).

A third approach towards talent management caps on a rather general view by identifying talent management with concerns like leadership (Barner, 2006), talent pools (Michaels et al., 2001), an individual's potential (Smilansky, 2006), the development of talent (Fulmer & Bleak, 2008) and the attraction and retention of personnel (Rueff & Stringer, 2006).

Understandably, none of the above-mentioned approaches to talent management is able to clearly define the concept of talent management or to highlight the ways of managing talent through comprehensive understanding of HR planning and practices. The third approach fails in being persuasive owing to its lack of focus and the plethora of topics covered under one head. Moreover, all these approaches overlook the strategic significance of talent management and hence, fall short of linking it with the overall business strategy thereby limiting the potential and scope of talent management and perceiving it as another HR domain.

Another view deals with the task of talent management, “Talent Management is the recruitment, development and retention of individuals who consistently deliver superior performance.” (Tony Davis, 2007). The author further defines a talent management strategy as “a structured and corporate approach to the recruitment, retention and development of talented individuals within the organization.” The intent of a talent management strategy remains to ensure the employment of such personnel that will consistently deliver superior performance. The writer maintains that a talent management strategy is not an overtly intellectual concept as it is evident that highly skilled employees are expected to disproportionately contribute to an organization's successful achievement of goals and hence, become an invaluable asset in the process. The author inevitably agrees that it is a challenge to manage and retain a talented workforce and hence, terms it as a strategic issue which involves its own fair share of planning and execution.

As per Andrés Hatum (2010), “Talent Management is a strategic activity aligned with the firm's business strategy that aims to attract, develop and retain talented employees at each level of the organization.” Therefore, the talent management process is linked to an organization's business and strategic-planning processes. This approach emphasizes upon the most important aspect of talent management: the employees. The author further aligns talent management with the resource-based theory of the business which maintains that sustainable competitive advantage is in possession of the companies that nurtures resources that are valuable, rare and difficult to imitate. Talent Management is but a tool to generate and maintain such resources through its human capital. With such a view, the author has conveniently delineated the focus of talent management on the talent at the organizational level and not at the individual employee level. This definition therefore clearly defines how talent management can be used to develop an organization's talent structure by attracting, developing and training people. Such a talent structure can most definitely be the source of a sustainable competitive advantage in the current scenario.

Talent Management is “a holistic approach to optimizing human capital, which enables an organization to drive short- and long-term results by building culture, engagement, capability, and capacity through integrated talent acquisition, development, and deployment processes that are aligned to business goals.”, (ASTD Research, 2009). The view focuses upon the consequences of employing talent management practices in the immediate as well as the distant future. Also, it supports talent management as being able to result in building and organizational culture that encompasses the essence of the work environment of a company. The definition also stresses upon the ability of employing talent management to enhance both the capacity and capability of individuals by appropriately matching them with the right job profile suiting their personalities. Furthermore, all such modules pertaining to talent management are to be designed keeping in view the ultimate goals of an organization thereby aligning it with the entire business strategy.

Derek Stockley, (2011) defines talent management as, “A conscious, deliberate approach undertaken to attract, develop and retain people with the aptitude and abilities to meet current and future organizational needs.” He further states that “Talent management involves individual and organizational development in response to a changing and complex operating environment. It includes the creation and maintenance of a supportive, people oriented organization culture.” Derek aptly emphasizes upon the dynamic role of talent management in an ever-changing business atmosphere. The view aims at the function of talent management that leads to the development of healthy organizational culture within a business that considers the involvement of employees at a more active level. This view besides being consistent with others also, adds a new dimension to the scope of talent management thereby widening the applicability and functionality of the same.

Another view maintains that “Talent Management is an oxymoron” (Davies & Kourdi, 2010). The authors hold that linking talent to ‘management', a term that best describes planning, organizing, leading, directing, facilitating, and controlling a business; is absurd as talent is believed its own special ability and personal capacity for achievement. According to the writers, talent management was used first in early 1990s by an IT software firm that wanted to market a new employee database, hence, the view that talent management can be best believed to work with data and not with human capital and their potential.

There are clearly several opinionated ideas of different authors on talent management. Whilst some associate it with the routine HR activity and processes and consider it as an extension to the faculty of human resource planning, others define such role as meager to the scope of talent management. They believe that limiting talent management to a specific domain is very much being unassuming and therefore, a proper sense is manifested in the term only when it is viewed as being appreciably strategically skewed. Under this dimension, the role of talent management can be considered as being fruitful in the present and the immediate future and both in the short-run and the long-run as well.

2.2 Importance of Talent Management in organizational success

“Talent Management has become the lifeblood of organizations. It is often seen as a primary reason for organizational success and failure and the key source of competitive advantage.” (Silzer & Dowell, 2010). The authors mutually agree that the business environment since the 1990s has been witness to several groundbreaking changes such as falling trade barriers and globalization of businesses worldwide. Such an expansion has led to increased demand for global talent which is needed to support these initiatives (Sloan, Hazucha & Van Katwyk, 2003). This has further resulted in immense competition for the talent on a global scale (Michaels et al., 2001). Therefore, the ever-increasing demand for talent globally along with the widening scarcity of exceptional talent has made the organization realize both the importance and benefit of talent management practices.

According to Ringo et al., (2008) as companies seek to overcome challenges coupled with globalization, changing workforce demographics and the emergence of new business models, they are looking forward to their employees as the critical source of differentiation in the market. The authors firmly believe in talent management practices and consent that investment in the same leads to an organization outperforming its peers. They also found through their research that high performing firms are more likely to invest in the talent management processes. They maintain that all organizations put into practice some form of talent management, without it they would be not capable to function. But at the same time, those that invest in an integrated set of talent management capabilities closely associated with their business strategy have a leg up against the competition. “No organization in today's economic climate can afford to invest in talent management practices without a demonstrable and significant return on investment” (Ringo et al., (2008).

Organizations that are able outpace their competitors in attraction; development and retention of the best talent have a several distinct advantages: considerably lower costs, invariably higher productivity, consistently better quality, more satisfied and loyal customers, and increased financial performance (Schiemann, 2011). All such merits determine the critical path to on organization's success thereby chalking down talent management as the key driver in the entire phenomenon. Talent management, beyond any confusion, is crucial to organizational success. It can be easily considered equally important for innovation, customer satisfaction, profitability and new product development of the company (Management Study Guide, 2011).

Talent and leadership continue to be inadequate. Fewer qualified personnel and leaders intend to join the workforce to replace aging workers who are on the verge of retirement. Moreover, talent management practices of the 20th century need to be relooked and worked upon to keep pace with the actuality of a rapidly varying 21st century business environment (ADP, 2010).

Silzer & Dowell (2010) further maintain that there are several other such factors that have contributed invariably to the growing importance of talent management in an organization:

• There is a widely increasing demand for talented leaders and individuals with growth of the emerging markets in the developing countries.
• There is an acute realization of shrinking pool of skilled, talented and experienced workforce, especially in USA, Europe and Japan.
• Besides, increasing complexity of global business and the emerging requirement for talented individuals that can effectively adapt to the changing business atmosphere further advocates the role of talent management in organization success.
• The growing need that specific organizational capabilities are needed for developing a sustainable competitive advantage in a highly competitive market and a rising call for recruitment and retention of highly skilled workers with specialized competence to build upon the future capabilities.
• And most importantly, the increased difficulty in retention of crucial talent as a result of a shift to a self-managed professional careers where skilled personnel aggressively pursue their careers and advancement by switching over different companies and geographic boundaries.
• Also, talent management has led to containment of internal costs of hiring, training and firing by focusing upon centralized shared services, outsourced functions and continual investment in the state-of-art HR practices of talent management that seeks internal hiring and retention.

Talent management adds up to a number of significant human resources and management inventiveness (Derek Stockley, 2011). Organizations that properly make a decision to manage their talent (i.e. human capital) embark on a strategic analysis of their contemporary HR processes. This is to make certain that a synchronized, performance oriented approach is implemented.

According to Derek Stockley (2011), most often than not, organizations adopting a talent management approach should focus on co-coordinating and incorporating, in order for it to be beneficial:

• Recruitment - Under this the organization has to ensure that the right people are attracted to the right jobs matching their attitude and personality which will lead to “best job fit”.
• Retention - Under which the focus lays on the development and implementation of such practices that reward and support employees.
• Employee development - It is concerned with ensuring that incessant informal and formal learning and development continues within a firm.
• Leadership and "high potential employee" development - This involves particular development programs for fostering the growth of existing and future leaders.
• Performance management - This module primarily deals with specific processes that cultivate and sustain performance, including feedback and measurement mechanisms.
• Workforce planning - The organization here undergoes planning for business and general variations, including the older workforce and current or future skills shortages.
• Culture - This particularly deals with the development of a positive, progressive and high performance way of operating the processes and activities.

A vital step is to recognize the personnel or workers, the people and positions that are significant to the business. It is not necessary that they need be senior personnel. Many companies lost a substantial amount of organizational knowledge in the downsizing exercises during recession a couple of years ago. The impact of the loss was not realized immediately. However, with time it became apparent to many firms their mistake, when the organizations were at a loss of people with the knowledge and skills to either anticipate or solve problems that arose. Therefore, talent management processes ensure the avoidance of such blunders by recognizing and assorting talented individuals in such a format that their real potential is unleashed and the organizations stand to gain from this.

Derek further maintains that the current deliberations about skill shortages and the ageing population are also hugely forcing the organizations to focus on the talent management issue. At most of the times it becomes improbable to recruit and develop new individuals to look after the operational needs. Therefore, as a solution most of the leading firms often decide to develop and foster their own personnel, instead of making an attempt to hire highly skilled individuals. The author believes that every organization should implement talent management principles and approaches.

The varied views on the importance of talent management in the organizational success all converge on a single theme that it is critical for the successful achievement of business goal and more so, in the competitive times such as these. They clearly throw light on the advantages and benefits that a firm can accrue from the efficient implementation of talent management processes and can bolster the business as well as its corporate culture.

2.3 Role of strategic planning, employee retention and employee commitment in talent management

Strategic Planning

The talent management approach should be strategically driven in order to be successful and effective (Silzer, Israel, Dowell, 2009). It then becomes the focus of achieving the business and talent strategy. The planning of talent management has to be done strategically in a similar manner in which the development of products and services is planned. And such an ability to formulate and execute strategy depends upon having the quintessential talent in place. The authors put forth that an organization's highly talented individuals are placed in strategically critical positions; they become a source of sustainable competitive advantage which remains difficult to be imitated by competitors whereas products and services can be easily emulated. Leading organizations are believed to place equal emphasis on strategic talent reviews, strategic planning process and annual operating reviews. Most writers agree to the point that talent planning should be considered as a business process especially as differentiation in other aspects become hard to maintain.

Talent Management should be strategically planned by an organization in order to locate, attract and assimilate the required talents (Tapomoy Deb, 2005). Under such a case, the firm should assess that likelihood of a talent staying within an organization in the near future. This will enable the company to get a grip on the requirements of talent in the present and the future. And hence, strategic planning of talent management leads to the establishment of linkages between overall loyalty, commitment, productivity and turnover.

Talent management and planning should be closely associated with the corporation's strategic plan and business needs and it should consider the broadest assortment of potential of all employees within the firm and not only senior executives and top management. Besides, managers at all levels and hierarchies should be held accountable for the growth of talent within their workgroups, with the seniors and the leaders actively participating in the progression (AMA, 2007).

According to Ravinder Shukla (2009), strategic planning in talent management will clearly determine where an organization is going over the next coming years, the manner in which it plans to get there and the ways to determine whether it got there or not. In other words, it will portray the path, the means and the outcome of the entire talent management process. The strategic plan will on its own link the talent management practices to the entire business organization.

Thus, as is evident from the approaches above, talent management gets a meaningful direction when linked to strategic planning. As growing number of corporate begin considering talent management as a business process, there is a building realization of having a distinct strategic plan for it which will look after the talent requirements of an organization and also, acts a guide to the personnel involved in the talent management processes.

Employee Retention

The biggest challenge facing the corporate today is an extremely dynamic and unpredictable workplace atmosphere marked by sustained turbulence in the economy. Managers face a complicated confrontation of motivating and retaining employees in a situation of increased uncertainties (Mitchell, 2002).

Employee retention is believed to be an ability of an organization to maintain a stable workforce (Rothwell & Sherwani, 2008). Employee retention is critical to an organization as it costs a huge amount of money to an organization in terms of recruitment and training of new hires and also in overtime payments and opportunity costs of production when the turnover rates are soaring. Talent management takes under its domain the reduction of voluntary and critical turnover and hence, to increase employee retention. According to the authors, employee retention is a key constituent of a successful organizational talent management strategy. Organizational leaders would be prudent to investigate why people depart, why people stay, why high potential personnel leave, and why high potential recruits stay. In doing so, the organizations will be able to use the results to develop the talent management structures and also, to fabricate employment brands and institute, and maintain, an organizational ambiance that supports retention.

According to Barbara J. Kreisman (2002), specifically the manager generates performance in each and every worker by pacing up the reaction between the worker's talents and the organization's goals and also between the individual's talents and the customer's needs. When all such managers within a firm play this role well, the business becomes strong, one powerful employee at a time. Therefore, with the guidance a strategic talent management process, managers can look forth to augmenting the development of their employees and their talents which will ultimately lead to the success of the organization.

A thriving talent management system is an obvious process for identifying and emergent high potentials. Many companies cautiously appraise and manage a small fragment of their talent as high potentials. Other corporations do not clearly part out this group or present preferential expansion or management. Either way, identifying top performers and fostering their development provides advanced chances for performance and retention (Philips & Edwards, 2009).

According to Ravinder Shukla (2009), for many years organizations have continued to view their people as the greatest asset. But the reality remains a little misunderstood as most of employers are ignorant about what exactly talent is and how can it be utilized within an organization. Author maintains that it is possible only through an adequate talent management strategy to put the right people at the centre of their core business strategy. This will result in attraction of new employees, money savings on external recruitment, improvement in staff motivation and increased employee retention.

Furthermore, the intrinsic rewards as a key element of talent management system in the Indian context are quite important and hence, suggest that employers should indeed more closely examine non-pecuniary mechanisms to encourage employee retention (David G. Collings, 2011). Such a view maintains that a proper structured talent management procedure will adhere to rolling out rewards, bonuses and recognition merits to its talented and performance-driven bunch of individuals which will in turn act as a catalyst for the employee retention phenomenon.

Employee Commitment

Employee commitment is a perception usually defined in terms of the “strength of an individual's identification with and attachment with a particular organization (Mark Cully, 1999).  This view highlights the fact that an employee who feels himself aligned with the values and goals of an organization is more likely to identify his own self with the company. Moreover, this sense of identification will bring along forth the attachment towards one's job, position and the organization. This will ultimately result in an increased dedication towards the work of an individual and hence, higher productivity.

In the current HR diction, employee commitment and employee engagement are often seen as mutually interchangeable words. But according to Barrow & Moseley (2005), engagement is usually considered to be a more immediate state (wherein the authors compare it with weather rather than the climate) whereas commitment stands for a more enduring belief in the organization. They further note that it is possible for en engaged employee to lack a long term commitment or for a committed employee to feel temporarily disengaged. But nonetheless, these two terms are more often than not are considered to be quite replaceable by each other.

According to Alfred Percy Sinnett (2007), employee engagement comes with a handful of benefits; better employee retention, better performance, higher profitability, customer satisfaction, alignment with strategic goals, improved trust, higher loyalty, improved organizational climate and employees as brand ambassadors; all of which are in integral part of successful implementation of talent management strategies.

As per the SHRM Talent Management Survey Report (2006), the primary segments that are in need of progression regarding talent management practices and stratagems are 1) structuring a deeper reservoir of successors at every level; 2) generating a culture that makes workers want to stay with the company; 3) recognizing gaps in existing employee and candidate competency levels; and 4) creating policies that promote career growth and development opportunities.

Talent management has a substantial impact on employee engagement or commitment (Janice Caplan, 2011). According to the author, talent management is not simply what a company wants to do but how it does it, how it has conversations among the employees and the employers, how does it implement systems. This map directly to aspects that lead to elevated employee engagement, wherein employees realize that their opinions count and are listened to, realizing how they contribute to organizational goals and success. This clearly demonstrates the factors that are addressed in talent management are also that contribute to high levels of employee engagement.

The prominent drivers of employee commitment are the career opportunities, increased levels of recognition, strategic drivers of work processes and performance evaluation. In order to attract, retain and motivate workers, employers have to strive to generate encouraging employee engagement. And ultimately in order to become an employee's choice or fuel his commitment, organizations have to exhibit an efficient and committed leadership and assimilate talent management as a part of their strategic focus (Tsui & Lai, 2009).

“Successful talent management policies and practices that demonstrate commitment to human capital culminate in more engaged employees and lower turnover rates” (Nancy Lockwood, 2006). Accordingly, employee engagement has a considerable influence on worker productivity and talent retention. Employee engagement is therefore believed to have the power to make or break the bottom line. Workers who are most committed execute 20% better performance and are 87% less liable to resign. In accumulation, the establishment of an engaged staff is recognized by the quality, strength and genuineness of communication by HR and top management to workers, as well as the quality of administration. The function of the manager as the most significant enabler of employee commitment to the profession, business and teams cannot be overstated. Besides, when performed well, practices that sustain talent management also support employee engagement (e.g., work-life balance programs--flex time, telecommuting, compressed workweeks, reward programs, performance management systems), as believed by Lockwood (2006).

In the war for talent, organizational success therefore most importantly depends on efficient recruitment and retention. To achieve this goal, HR can offer value by centering on five key areas: ascertaining organizational stability, underlining the importance of employer brand and goodwill, fostering the growth of integrated talent strategies, sustaining multilevel accountability, active involvement in talent management programs and presenting prospects for career and personal development.

2.4 Theories and Models of Talent Management

Many authors have attempted to pen down their own framework for talent management and there is a vast majority of literature available, if not directly pertaining to talent management but to its various functions and faculties. Also, most of the literature that has been reviewed throws light on the inconsistency of opinions of the different authors. Their models each take a different perspective of how an efficient talent management system runs or gels with the business model of an organization.

The first and the most simplistic approach relate talent management to the “optimization of human capital which further enables an organization to drive short and long term results by building culture, engagement, capability and capacity through integrated talent acquisition, development and deployment processes that are aligned to business goals” (Andrew Paradise, 2009). The author has vitally covered all the important aspects and consequences of talent management in the rhombic grid, dividing it into four segments altogether. This implies that talent management practices result in development of several functions which can be efficiently categorized into the cultural, engagement, capacity and capability segments. On a whole the model conveniently puts across the benefits of employing talent management into an organizational system.

The second and the most comprehensible approach relate the human talent management with the competencies of an organization. This stand was given by Fernando Vargas Zðñiga (2002). According to the author, the relevance of competencies in Human Talent Management has become a high-quality formula for taking better advantage of people's capabilities. He further maintains that the Incorporation of competencies clearly entails inquiring not just only into the outcomes which are expected but also into the manner in which the diverse functions that work with the individuals in the business can help to attain these results.

In fact, such a competency based talent management model has not only considered the firm's most apparent competencies, the ones that have more to do with the skills and knowledge, but has also concentrated up on the inclusion of softer competencies that are linked with behavior and conduct of individuals. Thriving experiences in human talent management by competencies are generally due to the skill with which the business establishes a structure of competencies which reveals its philosophy, values and strategic objectives. This structure becomes the reference point for an assortment of activities in the HTM work cycle.

Under this model, competencies are taken as the opportunity to institute a common language for describing the success of the organization. Such a common language certifies that any individual, irrespective of his domain or level, has a clear and collective perception and understanding of what is anticipated from him. But to work in reality by competencies, the company requires a frame of reference which is precise and is sustained at all levels of the organization.

As per the author, the steps which are generally taken in establishing the model are:

• Consideration of the strategic objectives of the company
• Analysis of the capacity of the organization and of its resources
• Comprehensive Study of the financial economic viability of the model
• Understanding and adoption of Human Talent Management principles and structure
• Preparation of the competency model
• Application of the competency profiles in the different stages of Human Talent Management

Typical model of human talent management

The expectation of people's needs is now usually referred to as competencies. The essential aspect under this is that, in this step, businesses seek to recognize the needs which, in agreement with the estimated development of the corporation, will be echoed in demands for new competencies. This activity permits the cautious planning of training so that it can fulfill two objectives. Firstly, creation of the nexus between the competencies needed and the competencies accessible at the present time. Secondly, anticipation of the training activity which would coat the competencies needed in the future, and also the recruitment and/or release of workforce which would permit corporations to organize these competencies.

The intermediate stage in the model focuses on the management procedure itself that is oriented towards guaranteeing the internal flow of resources aligned with needs, and to setting up action for the training and development of competencies. In the third step, the model envisages the development actions themselves, those which shelter the advancement of individuals and of teams through the firm's structure of posts and the conformation of the best work panels to make certain that collective competency is taken advantage of. All this remains rounded off, in the lower part of the diagram, completed with a suggestions mechanism which permits for the involvement of all those who think they have something to say, something to advise or something to improve.

A third approach describes the entire talent management process and its various aspects (Bersin, 2009). It maintains that organizations are made up of individuals who create value through established business processes, innovation, customer service, sales, and many such imperative activities. As an association endeavors to meet its business goals, it needs to make certain that it has a continuous and integrated course for recruiting, training, managing, supporting, and compensating these individuals. The chart below depicts the complete process:

1. Workforce Planning: It remains integrated with the business plan and therefore ascertains workforce plans, hiring plans, compensation budgets and hiring targets for the year.
2. Recruiting: Under which through an integrated process of recruiting, assessment, evaluation, and hiring the business brings individuals into the business.
3. On boarding: This aspect implies that companies must train and facilitate employees to become productive and integrated into the firm more quickly.
4. Performance Management: By making use of the business plan, the organization creates methods to measure and manage employees.
5. Training and Performance Support: Beyond any doubt, this is a critically important function. Here the focus is on the provision of learning and development programs to all levels of the business. This function itself is developing into a continuous support function.
6. Succession Planning: as the organization evolves and changes, there is a continuous need to move people into new positions. Succession planning, a very important function, enables managers and individuals to identify the right candidates for a position. This function also must be aligned with the business plan to understand and meet requirements for key positions 3-5 years out. While this is often a process reserved for managers and executives, it is more commonly applied across the organization.
7. Compensation and Benefits: Unmistakably this is a fundamental part of human capital management. Herein, companies try to link the compensation plan directly to performance management in such a way that compensation, incentives, and benefits line up with business goals and business execution.
8. Critical Skills Gap Analysis: This is a method which remains important, but often overlooked function in many businesses and companies. It is mostly done on a project basis but it also can be business critical. As an example, many industries in the present like the Government, Utilities, Telecommunications, and Energy are facing huge populations which are retiring. In order to overcome such a problem the companies need to identify the roles, individuals, and competencies of those individuals who are leaving and also, the actions that should be taken in order to fill in these gaps. This is known as critical talent management and many corporations are going through this now.

Therefore, all the models described above give a panoramic view of talent management and the manner in which it is expected to function within an organization. A company while making use of such models has to keep in mind its own organizational structure and its human capital in order to strike best fit with the various elaborated models.

3.5 Challenges faced in managing talent in the organizations today

Businesses today face difficult talent challenges. The ability to uphold a balanced supply of vital talent is a challenge facing all organizations worldwide. Most common among the matters impacting the next generation labor force are imminent skill shortages, an ever increasing cross-generational and varied labor force, the necessity for knowledge transfer from leaving baby boomers and considerable leadership gaps. Severe cost pressure from both traditional and rising competitors, novel markets and more challenging customers are supplementary essentials that provide a new sense of urgency to the perception of talent management (HCI, 2008). Accordingly, the firm categorized the talent management challenges as follows:

• Attracting and retaining skilled professional workers: As the competition in the market intensifies for all major resources, it does not leave human capital demand uninfluenced. Consequently, it turns out to be the biggest challenge for the corporations to attract, manage and retain highly talented individuals, which is the prime focus of successful talent management.
• Developing manager capability: The managers are supposed to play a more active role at their jobs. Their work requirements have moved up from merely being an enabler of activities to being a facilitator of development of subordinates as well. Such an outlook has to be engrained in the mind of the present as well as future managers.
• Retaining high performers: Most of the next generation workforce is highly obsessed with the concept of self development and therefore believe in quickly switching companies as a means of their career progression. Under such a scenario, it becomes difficult to encourage high performers to stay with a particular company.
• Developing succession pool depth: Succession planning is an integral part of talent management. An organization does better to plan ahead of time in terms of development of its successors and their training. Also, it should practice prudence by not being dependent on a single individual but should rather focus on developing a pool worth of future successors.
• Addressing shortages of management or leadership talent: An organization can address the forthcoming talent shortages by sustaining and developing the current human capital and practicing the hiring policies on the other hand.
• Alignment of Human Capital with Business Strategy: While senior leaders plainly identify the significance of human capital, a number of businesses struggle to attach their HR practices with their business essentials. Such a challenge has to be taken in a serious vein as the issue of strategic alignment is of major concern in talent management.
• Lack of Accountability and Capability for Talent Development: While the majority of organizations hold their senior managers and executives accountable for accomplishing business results, they are not being held responsible for talent development. In addition, most managers are short of the critical capability to develop talent efficiently. The managers have to be provided with ample training and resources to play an active role in talent development.
• Inconsistent Execution and Integration of Talent Programs: The bulk of companies maintain having elementary processes for talent management in place, for instance fundamental workforce planning, development courses for high potential workers and succession planning. However, few without fail implement these programs across the entire organization.
• Limited Use of Meaningful Talent Analytics: Data and analysis have since long played a part in driving business decisions but when it comes to talent analytics, many organizations still have a long way to cover. Involved in tracking traditional labor force measures, like headcount, turnover and the cost-based metrics, very few have graduated to tracking the metrics that matter to the organization as a whole. There is a need to successfully monitor and measure the effectiveness of talent management programs, track the quality of talent, or use specific quantitative frameworks to align human capital investments with their business strategy.

According to Tammy Erickson (2008), the development and implementation of talent management practices are bordered by a variety of challenges in the organizations today. The author lists some of these challenges as:

1. Attracting and retaining adequate workers at all levels to meet the requirements of organic and inorganic growth: Most of the companies are facing a talent crunch, which makes it all the more difficult to retain the employees. Adequate actions have to be taken by the organizations in this regard.
2. Crafting a value proposition that appeals to multiple generations: With about four generations in the current workplace, many companies are struggling to generate an employee experience that appeals to persons with diverse needs, preferences and assumptions. The stores have a high number of Generation Y staff, while corporate positions and leadership ranks are chiefly made up of Generation X and Boomers. Hence, it becomes a problem to create a compelling worker value proposition for the organization.
3. Developing a healthy leadership pipeline: One of the major potential threats to most of the corporations is a lack of a robust talent pool from which it can choose future leaders. This is in fraction a numbers issue; the Generation X legion is small and therefore, remains precious. But it's also an interest issue; many associates of Generation X are merely not particularly excited about being considered for these positions.
4. Rounding out the abilities of hires that lack the breadth of essential global leadership: It's comparatively uncomplicated to recognize and evaluate experts in specific functional or technical fields, but much trickier to decide whether those persons have the people skills, leadership potential, business breadth and global diversity sensibilities compulsory for the nature of leadership today. Gradually more, the challenge of growing these broader skill sets falls to the corporations.
5. Transferring key knowledge and relationships: The ominous retirement of a considerable portion of the labor force challenges all companies, but chiefly those who are dependent on the potency of tacit knowledge, such as that entrenched in customer relationships, a key to most of the business success.
6. Stemming the mass departure of Generation X from corporate life: A big risk in most companies today is the exodus of mid career talent, individual in whom the business has invested heavily and in whom it has pinned its hopes for upcoming leadership. For instance, developing talent management practices and plans attuned to leverage technology and produce greater work and life balance has been a priority for organizations over recent years.
7. Redesigning talent management practices to draw and retain Generation Y's: The test of calibrating talent management practices and agenda to attract and employ the young entrants is decisively significant to all firms and chiefly so for companies that depend on a sturdy flow of top talent, such professional service firms like Mercer. All the major companies agree that making the business infrastructure more attractive to Gen Y is a high priority.
8. Making a workplace that is open to Boomers in their second careers: Age prejudice very much exists still, but smart firms are looking for ways to integrate the talents of Boomers and even older employees in the workforce. In most cases, this needs rethinking roles and employment relationships.
9. Rising above a norm of diminutive tenure and frequent movement: Several industries, for instance specialty retail, are known for having an extremely disposable vision of talent. Organizations are intent on altering that rule, such as The Gap, and it must deal with both external influences in the market and an internal state of mind. The Gap trusts that retaining workers in positions for 3+ years will be a solution to their future earnings growth.
10. Enlisting managers who don't appreciate the challenge: Most of the talent executives protest that business leaders still believe that individuals are lined up outside the entry because of the supremacy of the company's brand. The confrontation of enlisting the support of all managers for the evolution from a talent culture that has traditionally operated with a buy stratagem to one that places more importance on build is extensively shared.

In the current tentative economic environment, it's significant that corporations address talent concerns promptly, but it's in the same way vital that they get them right and that too in the first time. There is little space for trial and error, as all enterprises are expected to fabricate solid financial results. Regrettably, many organizations are still struggling to institutionalize successful talent management practices and plans.

3.6 Role of talent management in prolonged employee satisfaction

It is generally well accepted that implementation of well designed talent management processes leads to effective organizational competitiveness by causing a reduction in turnover and increased employee satisfaction and commitment (McCauley & Wakefield, 2006).

There are numerous rising costs in an industry today and it is becoming all the more difficult to contain such costs. A few organizations, however, are changing the game. Rising best practices are reducing the cost of benefits by about 10 to 20 percent per year, keeping employee satisfaction stable and connecting these expenditures more strongly to corporate objectives, particularly with the investments in talent to achieve competitive advantage. Such investments are increasingly imperative to the lucrative growth of the world's most successful companies (James Kalamas, Paul D. Mango and Drew Ungerman, 2008).

Investing in talent management processes and tools can sustain employee satisfaction as well as recruitment and retention efforts (David Bird, 2010):

Management demonstrates they care:

One way to show care for workers is to put into practice HR policies and tools that set up a foundation of fairness. Adopting and implementing talent management best practices, including things like inclusive on boarding programs, regular performance reviews, multirater feedback, pay for performance programs, performance based learning, and succession planning, help reveal management's caring and dedication to their employees' development and achievement, throughout their employment lifecycle. An excellent employer consistently supports and listens to his employees.

Management listens to workers:

One of the most efficient ways to progress communication between managers and workers is to create performance management an ongoing process rather than a once a year action. A typical performance management process should comprise self-appraisals, encourage workers to regularly report advancement on goals and development plans and encourage the use of performance journals to regularly obtain details on performance, including successes and challenges. It can very well include peer reviews or multirater feedback to importune the perspective and opinions of workers. All of these tools give workers a chance to share their visions with their managers and strengthens a management commitment to listen.

Workers Receive Help with Job Stress:

An organization's talent management program can help address worker stress in several ways: