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The 7 Pillars of HR Leadership — Part 3: Talent Management

Posted on September 1, 2020 by

Talent management in the new normal

Both employees and employers would agree that there are a lot of opportunities to improve talent management processes — in particular, those related to talent development and performance management.

But the COVID-19 crisis has made it necessary to take action sooner, with traditional goals and KPIs having little applicability in the post-pandemic world. Almost all goal-setting processes are hugely affected by the crisis, more so because organizations now need to deal with a large number of remote workers.

What can HR do?

HR should relook at enhancing their organization design for resiliency, so it is better able to quickly respond and adapt in a decisive manner in unexpected situations. Here are some considerations to keep in mind.

Next-generation models

HR will need to formalize administrative and management processes for nontraditional employment models. In the past, organization redesigns were focused on streamlining roles, supply chains, and workflows to increase efficiency. However, this makes organizations fragile and incapable of reacting quickly to changing situations.

Continuous feedback culture

This is by no means a new trend; however, as COVID-19 disrupts all forms of employee engagement, it becomes even more important to continuously engage with employees and recognize the work they are doing. Recognition in the form of monetary rewards, public acknowledgment, tokens of appreciation, development opportunities, or other low-cost perks can motivate those employees directly involved and creates objectives that employees will be motivated to attain.

It has always been recommended that HR and senior management be transparent with employees; however, in the post-pandemic era, transparency becomes vital. With all the uncertainty surrounding the potential fallout from the pandemic, HR leaders and professionals need to be proactive and consistent with the truth, so that employees are informed, reassured, and prepared. Transparency builds trust, and trust is the foundation for productivity.

Talent management and succession planning challenges for SMBs

Posted on July 1, 2020July 13, 2026 by

Succession planning is an integral part of talent management

Talent management is all about fulfilling the organization’s business objective by acquiring, developing, and deploying the employees with the highest potential. The responsibility of HR is to create an environment where these high-potential employees can learn, develop, gain on-the-job experience, and progress in their careers, with the expectation that some of them are destined to play a significant role in the future growth of the organization.

Succession planning is a process for identifying and developing new leaders who can replace old leaders when they leave or retire. It increases the availability of experienced and capable employees prepared to assume these roles as they become available. Those organizations that can nurture and manage their talent well are the ones that can identify and develop future leaders. Succession planning forces an organization to introspect carefully on its available talent, build constructive appraisal processes, and ensure they are applied fairly across the organization.

Most small and mid-size businesses (SMBs) very rarely have formal talent management and succession management processes. Even though these are prevalent among large enterprises, SMBs lag behind in this respect — and even those that have incorporated succession planning find that getting an effective business outcome and doing it right remains a challenge. In the last few years we have seen increasing interest among SMBs in recognizing the importance of talent management and succession planning; however, there appears to be a substantial gap between intention and reality. It is one thing to have these processes implemented, but the real question is: do they deliver?

Implementing a succession planning process usually involves significant cultural change, and SMBs find it harder to embrace such change, as some have grown over the years without any formal process. Sometimes they face challenges from traditional mindsets that prevent the modern performance-based appraisal processes necessary for creating a fair system — and a modern performance process is the backbone of talent management and succession planning. Finding potential successors who are ready to take up new responsibilities when their time comes requires discipline, consistent processes, and organizational commitment, mainly from senior leadership. Succession planning is a top-down approach at first, even though the actual realization happens at the grassroots level.

Approaches to succession planning and talent management

At times succession planning is misunderstood as a procedure in place only for the highest level of executives. This is a flawed concept. Succession planning must be driven from the top, but its primary purpose is to ensure that a pipeline of talented (high-potential) individuals is always ready and in place.

As resources are scarce among SMBs, proper coordination among the talent acquisition team, training team, and succession planning team will ensure that you get your internal employees ready to take up newly available opportunities. Organizations should go to external candidates only when no internal candidates are available — this is where succession planning saves the organization thousands of dollars in onboarding, training, and making a new employee productive.

The most progressive SMBs focus on continuity and sustainability, so most of their succession planning programs reach right down through the organization — identifying promising talent from managers, middle managers, and senior managers to recent graduates, and seeking opportunities to develop that talent. A typical approach uses organization and development reviews to identify the areas in which the organization needs to excel, what the implications are for leadership, and where those leaders could be found.

Once the requirements are clear, the next step is to capture a range of information about the successors — such as year-on-year performance rating, internal and external career moves to date, perceived strengths and weaknesses, language ability, and mobility. Some organizations “force-rank” successors based on a range of criteria. The next step is to categorize people by timeframes and readiness for positions in 0–2 years, 2–4 years, and 4–7 years, which helps create relevant career planning steps so the successor is ready within the stipulated timeframe. Ultimately the business strategy will determine what kind of skill set the company needs in the future and where people with those skills can be found. Leadership is not a fixed concept — and especially with all the changes around us, new management skills will be needed — so flexibility is essential to ensure your talent management practices keep evolving as the business changes.

The role of competencies and competency models

Competencies and competency models have become very sophisticated over the last decade or so. Some are specific to internal processes like leadership or talent acquisition, and some are specific to a particular industry segment. Large organizations usually spend much time and effort building these for themselves, but most SMBs cannot build something on their own and may end up with homegrown competencies across various talent management processes.

To be successful, SMBs should pay attention to competency models that are uniform across all talent management areas and explicitly link performance and succession together. They should look at building or acquiring competency models aligned with their overall business strategy. Competency models designed to evaluate performance appraisals tend to be reasonably mature and consistently applied, but not so much in other areas. Depending on maturity, organizations may use traditional annual appraisals, 360-degree reviews, or continuous performance management (CPM) practices — most often with the same competency model. Increasingly, organizations link appraisals to bonuses, connecting compensation models more closely with competency and performance issues; that said, succession planning is not always related to the competency model, and organizations should pay attention to connecting the two.

Building a global talent pool

These days it is not uncommon for smaller SMBs to diversify outside their country boundaries, and depending on the industry, they may have teams based in offshore or nearshore locations. The post-COVID-19 environment will force SMBs to recognize the importance of developing an all-inclusive global talent pool capable of meeting the post-pandemic situation as well as future challenges of organizational expansion and diversification. A structured succession planning process keeps track of who may be suitable to take up international opportunities, helping organizations plan better by understanding the availability of talent across the globe.

Is your succession planning in line with your diversity policy?

On paper, all companies have a diversity policy. Still, implementing it consistently across hiring, promotion, job rotation, and succession planning is certainly not done systematically. In most US-based organizations, race and religious diversity are generally less advanced than gender diversity. The lack of women’s representation in senior roles has already created much bad press in the last few years, and movements highlighting racial justice will push organizations to be more proactive — not only maintaining a healthy diversity policy but applying it to all areas of HR, specifically the future succession planning process.

Most SMBs do not pay much attention to job rotation

Once the organization finds the right candidates, it should put programs in place to make them ready in the stipulated time. It is an excellent opportunity for SMBs to consider job rotation or secondments as a positive, desirable thing — some companies even make this a prerequisite for taking on senior roles. This is also an excellent way to give experience to high-potential candidates.

Conclusion

SMBs can look to the many strong talent management and succession planning programs in place across large enterprises and adopt some of the best practices. Many modern-day HR and talent solutions like SAP SuccessFactors are based on industry best practices, which can certainly help kick-start the succession planning initiative for your organization.

How SMB businesses can build a game-changing talent management strategy

Posted on June 21, 2020 by

Talent management challenges for SMBs

Building a talent management strategy is challenging for small and medium-sized businesses because of many factors like limited resources, branding issues, and lack of technology usage. This article highlights a few such challenges that SMB businesses face in talent management strategy, and the strategies that can be implemented to tackle them.

Critical challenges for SMBs

1) Attracting the right candidates. Small businesses find it difficult to attract the right candidates and always have a limited pool to choose from compared to large companies. These challenges are due to insufficient recruitment budget, lack of efficient recruitment processes, less use of technology in the recruitment function, and ignorance of brand building.

2) Lack of operational efficiency in HR administration. An SMB’s HR administration team is very small and must handle multiple responsibilities — recruitment, onboarding, employee performance management, employee benefits, training, and engagement. Due to a lack of technology adoption for the HR function, these responsibilities might not be accomplished with maximum efficiency.

3) Retaining talent. Even if the HR function can hire new talent, retaining it for longer periods is a tough task. SMBs often don’t have a dedicated team to manage and develop talent. If employees are not getting enough opportunities to grow their capabilities, they might feel lost, resulting in higher turnover that affects the morale of the HR function and other employees.

4) Developing employees and future leaders for succession. The HR function of SMBs may not have enough resources for employee development, performance management, and succession planning. Measuring employee performance and aligning it to business goals is essential, and without appropriate processes or tools, the HR team may not be able to manage performance.

Strategies to solve these challenges

1) Identify organization goals and align them with the talent management strategy. Before designing any strategy, understand the business goals. Talk to organization leaders to understand the company’s vision; these goals are the foundational element for deciding the type of talent needed. Create strategies aligned with the business goals — the HR function becomes a key strategic contributor when it is more engaged with business leaders to support their objectives.

2) Talent planning and recruitment. As small businesses often deal with a limited pool of candidates, they might face “the warm body syndrome” — when desperate for talent who can join immediately, you may end up hiring someone less qualified. Avoid this and never settle for less than the best talent. Your strategy must include both recruiting new hires and managing existing employees.

For recruiting new talent on a limited budget and timeline, focus on creating a brand story, talent pool development, and effective sourcing channels like social media, a career page, and referral programs. Around 92% of recruiters use social media to cast a wider net, so leverage LinkedIn, Facebook, and Twitter to access a large talent pool at no cost. A career page should include every perk and benefit and some employee reviews to gain trust. Referral hiring has the highest applicant-to-hire rate and is cheaper, faster, and effective — design simple rules and attractive rewards to turn your workforce into your best recruiters. Also develop a talent pool (past employees, rejected applicants, near-misses) and keep it engaged with newsletters and updates.

For managing and developing existing talent, recognize that the skill matrix is changing fast and finding people with the right digital skills remains a challenge. Recruiting new talent isn’t always feasible due to budgets, so consider upskilling/reskilling. Perform a skills-gap analysis of your existing workforce, design training programs based on employees’ interests and potential, motivate employees to take the training, assess effectiveness, and make changes to achieve the training goals.

3) Embrace digital technology. Automating recruiting processes with digital tools improves time-to-hire, reduces costs, and removes biases that happen in manual processes. SMBs can save hundreds of hours by using advanced HR tools at each step — sourcing, pre-employment skills testing, video interviewing, and onboarding. If you buy HR software, look for options that integrate several products in one platform to reduce the cost of purchasing special software.

4) Create a high-performance culture. The work environment drives how people behave and perform, and performance management helps engage and retain employees and improve overall performance. Performance management should be more than appraisals — it should be a culture. To drive it: set clear goals so employees can deliver; focus on each employee’s strengths and allocate work accordingly; identify and develop potential skills; develop a self-learning culture and incentivize new skill learning; and measure the progress of each training initiative and act to improve effectiveness.

5) Focus on employee engagement. Disengaged workers cause massive losses in productivity. To enhance engagement and work satisfaction and decrease turnover: provide the right applications and tools so employees can improve productivity; make employees feel they are climbing the ladder of success through training programs; reward their efforts with monetary and non-monetary benefits; and form committees based on employees’ interests and values, empowering them to build relationships.

Conclusion

Implementing an effective talent management strategy in this digital era can put you ahead of the competition. If growing organizations can connect employees to the purpose of the business, it will drive strong business growth and create a competitive advantage.