While human capital is essential in fueling growth in the mid-market, many organizations lack strategies to recruit and retain top talent. Employers need to adopt effective talent planning activities that involve the entire organization, align it with business strategy, and engage the workforce.
A new report, “Mastering Talent Planning: A Framework for Success,” found that fewer than half of mid-market companies are currently implementing critical talent planning processes in their business strategies.
Among the 400 C-suite level mid-market executives surveyed, 61 percent said talent planning was one of their top priorities, while more than 40 percent gave themselves a grade of “C” or less for their efforts. Thomas Stewart, executive director of the National Center for the Middle Market said there is “clear room for improvement” in how they implement processes.
“Middle market firms that adopt more formalized approaches enjoy better talent planning overall—and it’s no coincidence that the fastest-growing firms are more likely to implement a more robust set of talent planning activities,” said Stewart.
The report recommended that mid-market companies adopt a “ABLE” Talent Planning Framework to bring more structure to their talent planning processes. This includes:
- Aligning talent planning with strategy
- Building processes to enable successful talent planning
- Leading by example
- Engaging the organization
The framework helps talent planning activities move beyond HR to the entire organization, and helps businesses adopt best practices in the areas of succession planning, staffing, development, performance management and talent review.
ADP said that how an organization manages talent can be a “game changer” and that business owners and shareholders need to comprehend the link between keeping the best talent and achieving the best results. It recommends that organizations develop their own talent management strategy with a few basic components. This includes application management, performance management, succession planning and social networking. “Then it’s time for your consistent, active engagement in each area to maximize the quality and length of the employee life cycle for your top talent,” said ADP.
In the tightening labor market, mid-market organizations specifically need a system or process for identifying high-potential employees. More than half surveyed by NCMM said they use talent review meetings for these activities, yet these companies have different approaches. Organizations not only should focus on an individual’s current output, but on their potential to rise as a leader. The Human Capital Institute said there are six critical traits that distinguish top talent from the average employee. They stake a claim to leadership, aren’t afraid to stand on principle, they are smart and innovative, ask for help, are team players and are self-motivated.
“By undertaking more activities in specific areas—namely succession planning, identification of high potential employees and identification of skills gaps— companies are likely to realize the greatest improvements in their talent planning efforts,” said Stewart.