The Business Case for Talent Management

Saving time, money and the hassle of employee performance and salary reviews, talent management provides a bundle of benefits for businesses.

Encompassing everything from reviews to coaching, from

succession planning to record-keeping, talent management is an excellent management strategy in and of itself. Anecdotally, HR managers and staff believe that the reduction of administrative time associated with performance reviews, which can take months and even involve addit ional hir ing to handle the paperwork, is the biggest return on investment point for companies.

With that in mind, the business case for talent management is expressly clear: Companies that develop – and put into action – talent management strategies can boost both business and their bottom line.

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Companies that focus on talent management enjoy a five-year return on equity that ranges between 20 and 38 percent, according to a 2009 Ernst & Young global workforce survey.

Just What is Talent Management?In a nutshell, talent management means focusing on finding the best people (as well as the right person for the right job), then ensuring that those capable employees are engaged with your company and aligned with your key business goals.

When you combine all of these elements together, the talent management equation will add up to better business performance.Further, talent management is the combination of being able to attract highly skilled employees and develop and retain them for successful future business efforts.

Talent management is a combination of communication and technology, business transparency and feedback and coaching from managers that can lead to happy, productive, long-term employees as well as impressive, long-term business results.

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Businesses looking for a competitive advantage in their industry can use talent management to find that edge, to get ahead and to get results.

Just as the face and shape of the workforce continues to evolve, so do company efforts to retain and reinvigorate their employees to ensure that they are getting the best out of the people who come to work every day.

A talent management strategy and plan can prevent the drags of turnover, unhappy and unproductive employees, and wasted company time.

Talent management, then, is truly this generation’s go-to business strategy to inspire and educate employees and to simplify onerous human resources tasks.

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Who is the Buyer of Talent Management Systems?Who is generally the buyer of a talent management system?In short, the answer is: the entire company!From top to bottom, your entire company will contribute to and benefit from a strategic talent management system.More specifically, the purchaser of a talent management system can be your company’s HR Director, CFO or CEO, depending on roles and responsibilities within your business. Likewise, you might want to assemble a small team to evaluate talent management options, focus on implementation, and track progress and goals after adding talent management to your company.

While talent management will benefit the entire organization, it is a good idea to have at least one point person for its implementation, usage and updates within your company.

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How Talent Management Systems Reduce CostsWhile companies tend to focus more on the costs of employee salary and benefits, there are some pretty striking figures regarding other employee-related costs, especially for businesses considering implementing talent management. Disengaged employees are naturally less productive and, shockingly, cost the U.S. economy a whopping $300 billion each year, according to Gallup.

Did you know:• Replacing just one employee can cost between 150 and 250 percent of that individual’s salary,

according to a study by the Institute for Research on Labor and Employment from the University of California, Berkeley?

• Separation costs for that same employee will include the cost and time of exit interviews, various administration functions, any severance pay and potential increases in unemployment compensation?

• Employee absence costs include having other employees cover that open position, which may not be in their area of expertise, loss of employee productivity and the potential costs of uncertainty among your current workforce?

• Replacement costs for an employee include the cost of attracting new applicants with job postings, the time and costs for job interviews and/or testing, potential moving/relocation expenses and any administrative expenses associated with hiring that new person?

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With an average annual employee turnover rate of more than 14 percent, according to the Bureau of

National Affairs, it becomes clear pretty quickly how expensive turnover can be for companies of all sizes. Beyond that, a recent Gallup poll revealed that:

Companies with a lot of dis-satisfied workers had turnover rates that were up to 51 percent higher than their peers with happier employees.

Some simple math shows that talent management systems can quickly reduce overall costs while improving productivity.

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One of the best ways to cut HR costs is to eliminate or automate administrative processes. Automating performance reviews may be the most-loved feature of talent management systems, which can also organize learning and development, succession planning and salary surveys, among other HR functions.

Ask your Human Resources department and management team how much time they spend each year on performance and salary reviews and you can quickly determine how much time and money can be saved with talent management.

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The Real Benefit of Talent Management is Improved Business Performance

Study after study shows that engaged, high caliber employees will lead your company better business performance. For instance:

• Engaged employees produce more, display higher morale and have far fewer sick days than disengaged employees (2.69 vs. 6.19 sick days per year);

• When you can quickly and easily see what everyone is working on, your executive team can make resourcing decisions based on alignment with corporate goals. Likewise, executives report reduced inefficiency and positive responses to management data that allows them to determine what employees are working on and ensure that everyone is in alignment with corporate goals;

• The executive team can also focus on your company’s top priorities and ensure the entire company is working on the most important business tasks;

• Open lines of communication, a real benefit of talent management systems, will lead to greater business innovation;

• When you put responsibility (with a combination of self-service and transparency) in the hands of your employees, they will respond positively and offer great service.

• You will benefit from identifying your top performers, something many businesses can’t readily identify. Talent management provides the ability to see that data and coach and manage employees accordingly.

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When you think about your ideal workforce, doesn’t it include engaged employees who will actively contribute to your company’s success?

How about open, clear internal communication?

And decisions made with your business’ top goals in mind?

If you answered, “yes,” “yes” and “yes,” talent management can point you in the right direction on all of these and more.A culture that rewards talent will attract more talent … don’t you want the best possible team?

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What Should We Expect to Pay for Talent Management?

Depending on the size and scope of your business, your talent management needs and costs will vary.When it comes to costs, the main elements are the cost of talent management software, implementation and internal administrative costs.

Most business owners will be pleased to learn that talent management generally costs far less than they would estimate. For instance, Kapta Systems proven talent management system is built with small businesses in mind and gives access to lots of features with a small price tag. The SaaS-based, low-cost talent management system is recognized for “no hassles, no surprises” and provides an easy-to-use and easy-to-implement interface.

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Other ways to save money on your talent management tools? Consider SaaS-based systems, lower internal IT support costs, eliminating the costs of investing in hardware, simple implementation and month-to-month contracts as opposed to long-term contracts that lock customers in.

Talent management isn’t just about paying more in bonuses and raises to your top performers –

it’s about giving them a platform to manage their career development and allowing them to actively contribute to the success of your organization.

In fact, you likely won’t need to use your entire employee compensation budget to attract great people; you simply need to provide them with an opportunity to do their best work and receive recognition for it.

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What Will Happen if We Don’t Invest in Talent Management?

Talent management is truly an investment that will pay off year after year and employee after employee.If your company chooses not to invest in talent management, turnover will increase as employees grow frustrated by lack of quality feedback and eventually leave – taking with them all the time, money and energy you had previously put into that individual. Further, if your company does not provide a platform for talent and career management, employees will simply find it somewhere else – whether it’s with another company or an online platform such as LinkedIn or Monster.com. Finally, you should assume that your competitors are investing in talent management strategies and tools to recruit and retain their top talent.

In today’s cut-throat economy and competitive employment market, the question might be: Can you afford NOT to invest in your talent?

It won’t take much time, research or thought for you to answer “no” and consider your best options for talent management within your company.

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The Growing Case for Adopting Talent ManagementTalent management keeps companies on-trend and able to focus more time and energy on business growth and development – where they want to spend their time and energy. Whether your company needs help defining goals, managing HR processes, providing evaluations, communicating with employees or re-engaging those employees in your business efforts, you have already made the case for talent management in your company.

Talent management will help you find the right employees for the right positions, inspire those employees to give their best to your company, offer accurate, timely and useful reviews and raises, and communicate regularly. It will not only manage your talent, it will engage the lifeblood of your company. It is both simple and effective.

Let talent management help your business, your employees and your overall success. Getting started today can help you make a fast and powerful difference tomorrow with your employees and within your business.

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Saving time, money, hassle, stress and more, talent management gives companies the ability to organize all of their employee performance evaluations, salary reviews, employee goals, manager feedback and coaching, internal communication, exit strategies and more – all online and in one convenient place.