Do you know your talent as well as you think you do?
When it comes to companies’ talent processes, are they focusing on the right things? To answer this question, we spoke to a wide range of talented individuals at different stages in their careers and senior HR people. This gave us the chance to really explore what talented individuals want from their employer, to test if there are any differences by group, eg sector, stage of life, gender etc, and to understand what organisations are offering their talented individuals.
Our findings reveal a serious mismatch between what talented individuals want, what organisations think they want, and what organisations offer them. In fact, there was only a 45% alignment between the wants and needs of talented individuals and the organisation’s offer. So it’s clear organisations don’t know their talent as well as they think they do.
How to give talented individuals what they want
We think great talent management is all about differentiating the offer for various groups of talented employees. The best results come from a personalised approach, with tailored employee value propositions (EVPs) for individuals who are your organisation’s main source of competitive advantage. In other words, giving talented individuals what they really want. And this approach delivers results.
By adopting talent segmentation – a more strategic and personalised approach to talent management – your organisation can improve bottom-line performance. Research shows organisations who segment their talent pool, eg by type of talent, and differentiate development for these individuals show greater levels of total shareholder return than organisations that don’t.
The journey to talent segmentation
Talent segmentation is a practical and simple way for you to introduce a greater degree of differentiation into your talent processes. Specifically, it can help you:
- choose who to focus on (key value-generating talent) and to create definitions for these different populations of talent
- really understand what the talented individuals within each population want from their relationship with your organisation.
We break the talent segmentation process into six key steps.
Step 1: Focus
Your talent management processes should be informed by your strategic direction. So your organisation needs to be clear on its source of competitive advantage and what the current market conditions are. Being clear about how you compete as an organisation, eg on service, product or operational excellence, and understanding whether or not your current market conditions are steady, volatile or even game changing, will help you identify the type(s) of talent that will make the most difference to your organisation.
Step 2: Define
Moving away from the assumption that talent is just about leadership, the next step is to look at the type(s) of talent that will enable your organisation to deliver value in the future. This means prioritising the various capabilities the organisation will require. While leadership talent will be needed in all contexts, other types will be specific to your source of competitive advantage and market conditions.
Step 3: Refresh
Having worked out the type of talent that really drives success, develop the processes and tools to identify these individuals among the employee population. Approaches such as theoften focus primarily on ‘future leadership talent’ and sideline the important conversations about what’s going to be done to engage and develop the most valued individuals. Taking a differentiated approach to talent management means you consider not just performance and potential, but also who the value generators are and the actions to take with each type of talent.
Step 4: Group
Once you have established your definitions of talent and identified the people who meet the criteria, you should get to know them and find out what they want from their relationship with the organisation.led to us identifying six ‘talent interest groups’, each with shared needs and wants. Identifying the six talent interest groups in your organisation will allow you to get to the root of what talent wants and create a more tailored value proposition.
Step 5: Align
Once individuals are assigned to talent interest groups, the next step is to align the EVP with their interests. For instance, tailoring the compensation, benefits, development and working environment these individuals receive, based on the talent interest groups they’re in. In addition, you’ll need to know the current challenges your talented individuals face and consider the future when you think about the type of experience you want to create for them.
Step 6: Accelerate
organisations that have programmes to accelerate the development of talented individuals see a clear return on investment for their efforts – a total shareholder return up to 25% higher than organisations that don’t have such programmes in place.