Tag: Talent Management

Talent management is the process of identifying and developing key individuals in a business that possess important knowledge, skills and abilities. The focus is to retain essential capabilities in the workforce to maintain business competitiveness.

The talent management process provides key individuals with an opportunity to develop their skills and experience by engaging in challenging duties, professional development and career growth, which in turn helps to build loyalty to the business

The process involved in talent management are:

Understanding the requirements: Every position, no matter how similar, has its own specific description, title, and needs. Understanding the requirements of each position is important in helping you identify talent traits from employees that match those job requirements. For example, if you understand that a job position requires deep foresight, it would help you identify candidates who look ahead before making decisions and not those satisfied with short-term effects.

• Attracting talents: Getting the people you want to work with you is a whole process on its own. You have to proactively but subtly attract them and build a natural pull. It is crucial to develop a career-oriented relationship with them in order to successfully develop their talent.
• Sourcing talents: This involves searching for the best talents matching a job requirement form the pool of employees in the company. Sometimes, the talent (person) you want might not be an employee yet and you have to extend your search through specific and tailored pre-hire assessment tests.
• Selecting the talent: Of course, not everyone invited will be selected. This presents a problem. What are the selection criteria? How best to go about the selection process to ensure that the most suitable candidate is not eliminated by a trivial or unrelated test exercise?
• Retention and integration: Candidates have to be integrated into the culture of the company. They also have to be induced to stay, grow, and become a part of the staff. This is generally followed by periodic performance appraisals and career sustenance.
• Training and development: This is the stage where much time and effort will be spent. The selected candidates are nurtured and developed over time to hone their skills and sharpen their talents.

Succession planning is a systematic process of identifying and developing talent for leadership positions in the future. According to SHRM survey of 2003 it was found out that 60% of the firms that they interviewed had no succession planning in place and contrastingly about 70% of the major corporations globally had a proper succession planning in place in the late 1970’s. Similarly, IPMA HR survey of 2004 found out that 63% of companies have no manpower planning at all which was commonplace in every organization till the late 1950’s.

Succession planning specifically deals with the process of replacing staff who step down with others who are taking over. It covers the time, manner, and smoothness of replacement, as well as determining who is in the best position to take over a particular role. Succession planning also covers aspects of employee exit from the job role or the company.

Marshall Goldsmith one of the world’s leading executive coaches recently wrote that many executives complained about succession planning being such a waste of time. Still many CEOs complained about lack of bench strength in their organizations lack of talent principally. Finally, the role of demographics cannot be ignored. United States, for example has an aging population. India on the other hand has a population that is young by demographic standards. The combination of all these factors we may say has made a mess of succession planning in the past few decades.

In contrast to the individual focus of talent management, succession planning ensures that the broader requirements of a business are met.

After undertaking a gap analysis to identify key jobs and competencies that are critical to the success of the business, a succession plan may be established.

The succession planning process identifies and prepares talented employees to step into key positions and leadership roles and ensures that they have the skills, experience and knowledge to meet changing work requirements.

An effective succession planning process increases the availability of experienced and capable employees that are prepared to assume key roles as they become available.

Where there is a gap in the internal skills base of the business, succession planning can be used to guide external recruitment to fill critical roles in the future.

Importance of talent management and succession planning

Talent management and succession planning provide businesses with a deliberate strategy for the retention and continuation of critical competencies and demonstrate a genuine commitment to developing the existing workforce.

Without a planned and deliberate approach, a business may be unable to provide its services and products to the level or at the quality expected.

Businesses without talent management and succession planning processes are exposed to risks associated with untapped potential and diminished productivity, the loss of key employees, the loss of essential knowledge and skills, and the difficulties of quickly recruiting new employees with the same skill sets.

The combined processes are important to business because they:

• Protect critical operational requirements.
• Ensure maximum contribution of high potential employees.
• Support the development and growth of employees and ensure greater worker engagement.
• Offer a range of learning, development and skilling opportunities.
• Are formalised through training and career pathways and plans.
• Are a key component in formal human resource.

Talent Management encompasses the strategies, processes, and practices that organizations use to attract, identify, develop, engage, and retain talented individuals who can contribute to the achievement of organizational goals. These talents are the lifeblood of any organization, driving innovation, productivity, and competitive advantage.

Internal Talent Pipeline:

• Internal promotions and transfers:

Promoting and transferring existing employees into new roles based on their performance, skills, and potential.

• Succession planning:

Identifying and grooming high-potential employees to fill key leadership positions within the organization.

• Talent development programs:

Offering training, mentoring, coaching, and stretch assignments to nurture the growth and progression of internal talent.

External Talent Acquisition:

• Recruitment:

Attracting external candidates through various channels such as job boards, social media, recruitment agencies, and career fairs.

• Campus Hiring:

Partnering with educational institutions to recruit fresh graduates and entry-level talent with relevant skills and qualifications.

• Talent Networks:

Building relationships with industry professionals, alumni networks, and passive candidates to tap into a broader talent pool.

Technology and Automation:

• Applicant Tracking Systems (ATS):

Using software to streamline the recruitment process, manage candidate pipelines, and automate tasks such as resume screening and interview scheduling.

• Artificial intelligence (AI) and Machine Learning:

Leveraging AI-driven tools for candidate sourcing, skill assessments, predictive analytics, and personalized recommendations.

• Talent Management Platforms:

Adopting integrated platforms for performance management, learning and development, succession planning, and employee engagement.

Diversity and Inclusion Initiatives:

• Diversity Recruiting:

Actively seeking candidates from underrepresented groups (e.g., women, minorities, LGBTQ+ individuals) to foster a more inclusive workforce.

• Inclusive Culture:

Creating an environment where diverse talents feel valued, respected, and empowered to contribute their unique perspectives and experiences.

• Bias Mitigation:

Implementing strategies to mitigate unconscious bias in recruitment, selection, promotion, and performance evaluation processes.

Global Talent Pool:

• International Recruitment:

Attracting talent from diverse geographical locations to leverage global expertise, cultural diversity, and language skills.

• Expatriate Assignments:

Sending employees on international assignments to develop global leadership capabilities, transfer knowledge, and support business expansion.

• Remote Work Opportunities:

Embracing remote work arrangements to access talent regardless of location, promote work-life balance, and reduce geographic constraints.

Partnerships and Collaborations:

• Strategic alliances:

Collaborating with external partners, suppliers, vendors, and academia to access specialized skills, resources, and expertise.

• Joint Ventures and Acquisitions:

Partnering with or acquiring companies to gain access to talent, intellectual property, market presence, and innovation capabilities.

• Industry Partnerships:

Engaging with industry associations, professional networks, and consortia to share best practices, benchmark performance, and address talent challenges collectively.

Employee Referrals and Networks:

• Employee Referral Programs:

Encouraging existing employees to refer candidates from their personal and professional networks, often resulting in high-quality hires.

• Alumni Networks:

Maintaining relationships with former employees who may become boomerang hires or serve as brand ambassadors to attract talent back to the organization.

• Professional associations:

Participating in industry events, conferences, and networking forums to connect with potential candidates and build relationships within the professional community.

Brand Reputation and Employer Branding:

• Employer Branding:

Cultivating a positive employer brand reputation through employer value proposition (EVP), corporate culture, employee testimonials, and employer review sites.

• Talent Attraction Marketing:

Leveraging digital marketing, content marketing, employer branding campaigns, and social media presence to attract and engage prospective talent.

• Employer Awards and Recognition:

Showcasing organizational achievements, workplace culture, and employee satisfaction through awards, rankings, and industry accolades.

Skills Development and Training:

• Continuous Learning:

Providing opportunities for employees to develop new skills, acquire industry certifications, and stay updated with emerging trends and technologies.

• Training Programs:

Offering formal training sessions, workshops, seminars, and e-learning modules to enhance technical, soft, and leadership skills.

• Cross-Functional Exposure:

Facilitating job rotations, cross-training, and interdepartmental collaboration to broaden employees’ skill sets and perspectives.

Employee Value Proposition (EVP):

• Compensation and benefits:

Offering competitive salaries, bonuses, incentives, healthcare, retirement plans, and other perks to attract and retain top talent.

• Work-life balance:

Providing flexible work arrangements, remote work options, parental leave, wellness programs, and employee assistance programs to support employees’ well-being.

• Career growth opportunities:

Emphasizing opportunities for advancement, career development, mentorship, and recognition to engage and retain high-potential employees.

Talent Analytics and Data-driven Insights:

• HR Analytics:

Leveraging data and analytics to assess talent acquisition metrics, employee engagement levels, turnover rates, and workforce demographics.

• Predictive Analytics:

Using predictive modeling and data mining techniques to forecast future talent needs, identify flight risks, and optimize talent management strategies.

• Talent Dashboards:

Creating visual dashboards and reports to track key performance indicators (KPIs), workforce trends, and talent pipeline metrics for informed decision-making.

Continuous Improvement and Feedback:

• Feedback Mechanisms:

Soliciting feedback from employees, candidates, hiring managers, and other stakeholders to identify areas for improvement and enhance the talent experience.

• Continuous Feedback Culture:

Encouraging ongoing dialogue, open communication, and constructive feedback loops to foster employee engagement, development, and retention.

• Iterative Optimization:

Iterating and refining talent management processes, policies, and practices based on feedback, insights, and lessons learned to drive continuous improvement.

Talent Management (TM) refers to the anticipation of required human capital for an organization and the planning to meet those needs. The field has been growing in significance and gaining interest among practitioners as well as in the scholarly debate over the past 10 years, particularly after McKinsey’s 1997 research and the 2001 book on The War for Talent. Talent management in this context does not refer to the management of entertainers.

Talent management is the science of using strategic human resource planning to improve business value and to make it possible for companies and organizations to reach their goals. Everything done to recruit, retain, develop, reward and make people perform forms a part of talent management as well as strategic workforce planning. A talent-management strategy should link to business strategy and to local context to function more appropriately.

Components:

Attract, develop, motivate and retain: This is not a comprehensive list. Talent management touches on all key HR areas, from hiring to employee onboarding and from performance management to retention.

• The full scope of HR processes:

Talent management is about a set of HR processes that integrate with each other. This means that talent management activities are larger than the sum of the individual parts. This also means that a talent management strategy is required to capitalize on its full potential. More about this later.

• High-performing employees:

The purpose of talent management is to increase performance. It aims to motivate, engage, and retain employees to make them perform better. This is why the importance of talent management is so significant. When it’s done right, companies can build a sustainable competitive advantage and outperform their competition through an integrated system of talent management practices that are hard to copy and/or imitate.

Focus:

• Employer reputation:

Reputation is related to employee branding. However, reputation is more affected by external media the company has less control over. An example of reputation gone wrong is the banking sector in recent years, especially after the 2008 financial crisis.

• Employer branding:

Having a strong brand attracts even the best candidates.

• Candidate experience:

The experience of the candidate influences the employer brand.

• Referrals:

Talent knows talent. Referral programs are effective as they help to pick up candidates that onboard quicker and perform better. We listed 7 employee referral programs examples you can take a look at to get inspired.

• Onboarding:

Getting people up to speed as quickly as possible helps to make them more productive and increases employee retention.

• Selection:

Spotting and selecting the best is a critical part of talent management.

• Inboarding:

Yes, you read it right. When people are promoted internally, they also need support to achieve maximum productivity. This is called inboarding.

• Engagement:

Engaged employees are motivated, perform well, and are more likely to stay.

• Retention:

Retention strategies help to keep the best people on board. An example is succession planning.

• Succession planning:

You want to be able to fill crucial top positions whenever they become vacant. Having a talent pipeline that ensures succession planning is a key element in this.

• Learning and Development:

This is not only a common talent management practice, it’s also a Human Resource best practice. Educating employees helps increase performance and retention. After all, once you’ve recruited the best people, you want to make sure they remain the frontrunners in the field, right?

• Performance management:

An essential part of managing talent is tracking and improving their performance.

• HR analytics:

As we’ve said before, by leveraging data you can ensure that you’re hitting the right KPIs that have an impact on business outcomes.

History

The precursor to “Talent management” seen extensively in firms during the latter part of the 20th century was centered around internal talent development. An overemphasis was placed on the training and evaluation of managerial positions creating an excess supply of middle-management talent. Poor business forecasting of economic downturn in the 1970s combined with no-layoff policies for white-collar workers resulted in corporate bloat. Recession throughout the 1980s saw large increases in unemployment as firms restructured, placing less importance on internal development. As a result the hiring of outside talent largely replaced the internal development schemes seen in businesses earlier in the century and by the late 1990s had reached its limit. Firms found they were both attracting and losing experienced employees at the same rate and needed to explore new ways of retaining and nurturing incumbent employees.

The term was coined by McKinsey & Company following a 1997 study. The following year in 1998 “Talent management” was entered in a paper. Written by Elizabeth G. Chambers, Mark Foulon, Helen Handfiled-Jones, Steven M. Hankin, and Eduard G. Micheals III. However, the connection between human resource development and organizational effectiveness has been established since the 1970s.

The profession that supports talent management became increasingly formalized in the early 2000s. While some authors defined the field as including nearly everything associated with human resources, the NTMN defined the boundaries of the field through surveys of those in corporate talent management departments in 2009–2011. Those surveys indicated that activities within talent management included succession planning, assessment, development, and high potential management. Activities such as performance management and talent acquisition (recruiting) were less frequently included in the remit of corporate talent management practitioners. Compensation was not a function associated with talent management. Lastly, the strategy of using talent management help organizations with workforce during WWII.

Scope:

India is one of the rapidly emerging markets in South East Asia. Recently companies in India have started to focus on their talent management programs. There are two classes of labour in India; skilled and unskilled, and it pays a lot to be skilled in India. Minimum wage of an unskilled labour lies somewhere in between US$1,400 to $1,500 per annum, which is very low by international standards. But if you are equipped with tertiary skills you can easily make a good living. This difference in the wages can be comprehended with the help of a simple economics’ concept of supply in demand. High skilled workers are a scarce resource everywhere and therefore they are valued more, which explains the higher wages.

Even with the higher wages, a job-hopping attitude is clearly visible in the Indian workforce, especially the millennial. A survey found out that 54% of the Indians consider leaving their current job because of the lack of growth opportunities. This percentage rises even more when the sample is taken from age-bracket of 16–24-year-olds. The talented and ambitious youth of the country, greatly values the skill development opportunities provided by their employers.

• Talent Acquisition:

All organizations today want the sun and the moon and the stars but often land up only reaching the tree tops. Business firms are looking for employees who have excellent functional skills, social skills and strategic skills but, it is almost impossible to find one candidate who has best of all skills. Hence organizations make do with what they get. Identifying and acquiring talented workforce is one of the most important stages of talent management as they say, “Well begun is half well completed.”

• Talent Development:

Once you have hired the right set of employees into the organization, it is imperative to develop them in the areas that are important to the organization. Some competencies are stable whereas some are dynamic competencies. The stable competencies include the enduring characteristics of individuals which remain more or less the same over time and the dynamic competencies include knowledge and skills that are continuously changing.

Talent development primarily aims to develop the dynamic competencies of individuals through interventions such as formal training programmes, coaching and mentoring by senior leaders of the organization, job rotations, on the job learning, special assignments, action learning, committee work, stretch assignments, developmental assignments, job shadowing, etc.

• Talent Engagement:

Hiring and developing talent does not ensure that we have engaged employees. Having employees who go out of their way to help others, having employees who do not restrict their work tasks to their job descriptions and having employees who are more willing to work on holidays or extra time is a blessing in today’s competitive environment. These things will happen only and only if the employees are truly engaged with the organization.

Having engaged employees is truly an asset to the company and a success story towards talent management. With organizational citizenship, behaviour is often used as a parameter to gauge employee engagement, what is often overlooked as a factor has increased engagement in mentoring the employees. Mentoring is when senior and more experienced individuals in the organization take keen interest in the personal and professional development of junior and less experienced individuals in the same organization.

• Talent Retention:

Hiring the right talent, investing in further developing them and engaging them is a futile effort if it does not lead to talent retention. All the hard work and efforts of the HR team go in vain when employees want to exit early from the organization. Not all exits are bad but when employees want a separation without having contributed enough, is where the problem lies. Some companies especially in the Information

Technology sector are trying to remedy this situation by asking employees to sign a bond. A bond that is a contract between the employer and the employee that makes them agree to terms and condi­tions stating that they will not leave the organization for a minimum period of xyz years as decided by the company. In case they violate this clause of the Memorandum of Understanding, there is a huge monetary fine associated with the same.

Need

No process or organization is any good without the right talent managing it. The right people can create the right design, the right processes and adopt the right technology to propel any organization in the desired direction. Talent management is all about having the right person at the right place at the right time for the optimum time and at the right price. Organizations have now realized that people could be that crucial differentiating edge for them in the increasingly competitive marketplace.

There are various reasons for which a company would need talent management as summarized below:

1. To align the workforce with the business needs:

Talent management is about identifying the right talent for the right role. It implies fitment of right set of skills to the right set of job requirements. This alignment of skills to job tasks ensures synergy between the staffing process and the business demands.

2. To engage the workforce for establishing and sustaining highest level of productivity:

An engaged workforce leads to a productive workforce. Establishing and sustaining highest level of productivity implies a lot of things including creating and maintaining a talent culture. This culture creates an enabling environment for employees to learn, grow and excel at their work. We propose an EVOSKILLS model to create and sustain a talent culture in an organization that will enable highest level of productivity.

3. Effective talent management helps in increasing the employee satisfaction:

Employee satisfaction can be understood as cognitive, emotive and social comfort that is achieved by working in an organization which has fair policies that respect employee sentiment. Developing fair transparent and just employee related policies and ensuring their smooth execution is very much an integral part of talent management.

All the great places to work that have achieved the Great Place to Work title by employee votes are places that guarantee employee satisfaction through effective talent management processes.

4. To effectively develop leaders in the organization who can use their expertise to help in the growth of the company:

Talent management includes talent development. Developing talent does not only mean developing technical skills and functional skills of employees, it also includes developing behavioural skills of employees including those of the leaders. Many organizations have tie-ups with leading B-schools of the world to help the organizational leaders develop the right set of competencies through different educational programmes. In turn, these leaders are expected to serve the company for a minimum specified period of time, especially if the educational programme is sponsored by the organization, partly or fully.

5. To effectively balance diversity in workforce enabling highest possible employee engagement:

Workforce diversity is a challenging theme. Organizations are today spending on diversity training among other things on a high priority basis. If not dealt with elegance and dignity, it can backfire big time. People want to know how much you can before they care how much you know. Employees belonging to different age groups, gender, race, community, linguistic groups and religions, all expect and rightly so to be treated fairly to say the least. Beyond the fairness paradigm is the legitimacy and access paradigm that claims to use diverse backgrounds of employees for business gain.

Career Development or Career Development Planning refers to the process an individual may undergo to evolve their occupational status. It is the process of making decisions for long term learning, to align personal needs of physical or psychological fulfillment with career advancement opportunities. Career Development can also refer to the total encompassment of an individual’s work-related experiences, leading up to the occupational role they may hold within an organization. Career Development can occur on an individual basis or a corporate and organizational level.

One might engage in classroom training in-house or at universities, or opt for special job or task force assignments, or especially early in the career, job rotation. Lateral moves and promotions are more difficult to use for developmental purposes. Managers with vacancies have their own objectives to meet and may be reluctant to fill openings with candidates designated for career development, rather than with those who have the best skills to do the job.

It is essential that career development be fully integrated with internal staffing activities. Career development provides a supply of talents and abilities. Individuals must be committed to and accept responsibility for their career development.

• Growth Opportunities:

Individuals can expand their abilities by enrolling for training programmes, acquiring an additional degree, seeking new work assignments. When an opportunity arises in the organisation, employees with the required skills would be placed in that position.

• Resignations:

When an individual sees career opportunity elsewhere which are not available in the existing organisation, resignation may be the only alternative. When used sparingly, it results in promotion, salary increase and a new learning experience.

• Job Performance:

Career progression largely depends on the job performance; the better the performance, the higher the chances of going up the corporate ladder.

• Mentors:

Mentors can aid career development by sharing their knowledge and insights and wisdom to help junior managers.

Process

(1) Staffing and Orientation:

This phase is composed of providing career information to the job candidate (whether internal or external) and using selection techniques so as to match potential workers with the right job. The type of career information provided may include knowledge of jobs within the organization and possible career paths for the employee.

Selection techniques that are used to match employee and employment opportunity include assessment center exercises and job posting systems even for positions that are to be filled internally (a form of self-selection).

(2) Evaluation Phase:

This phase is characterized by two important aspects, namely performance review and succession planning. The purpose of performance review, from a career development perspective, is to provide feedback to employees on their skills and knowledge, both to increase job satisfaction and to help them prepare for their next job. Succession planning links information from and about individual employees to the human resource needs of the organization.

(3) Development Phase:

During the developing phase, more visible career development strategies are employed. Tools used during this phase include career discussions between employee and supervisor, career resource centers, self- assessment and career counseling, and career planning workshops.

Career Development Planning

On an individual basis, career planning encompasses a process in which the individual is self-aware of their personal needs and desires for fulfillment in their personal life, in conjunction with the career they hold. While every person’s experiences are unique, this contributes to the different careers that people will acquire over their lifespan.

• Long Term Careers

Careers that are long term commitments throughout an individual’s life are referred to as ‘Steady-State Careers.’ The person will work towards their retirement with specialized skillsets learned throughout their entire life. For example, somebody would be required to complete a steady process of graduating from medical school and then working in the medical profession until they have retired. Steady-state careers may also be referred to as holding the same occupational role in an organization for an extended period and becoming specialized in the area of expertise. A retail manager who has worked in the sales industry for an extended period of their life would have the knowledge, skills, and attributes regarding managing non-managerial staff and coordinating job tasks to be fulfilled by subordinates.

A career that requires new initiatives of growth and responsibility upon accepting new roles can be referred to as ‘Linear Careers,’ as every unique opportunity entails a more significant impact of responsibility and decision making power on an organizational environment. A linear career path involves a vertical movement in the hierarchy of management when one is promoted. For example, a higher-level management position in a company would entail more responsibility regarding decision-making and allocation of resources to effectively and efficiently run a company. Mid-level managers and top-level managers/CEOs would be referred to as having linear careers, as their vertical movement in the organizational hierarchy would also entail more responsibilities for planning, controlling, leading, and organizing managerial tasks.

• Short Term Careers

When individuals take on a short term or temporary work, these are ‘Transitory Careers’ and ‘Spiral Careers’. Transitory Careers occur when a person undergoes frequent job changes, in which each task is not similar to the preceding one. For example, a fast-food worker who leaves the food industry after a year to work as an entry-level bookkeeper or an administrative assistant in an office setting is a Transitory Career change. The worker’s skills and knowledge of their previous career will not be applicable to their new role.

A spiral career is any series of short term jobs that are non-identical to one another, but still contribute to skill-building of a specific attribute that individuals will accept over their lifetime. Many individuals can undergo slight career transitions or accept short-term contract work in the same work field, to build on different skill sets needed for them to succeed in an organizational environment. For example, an individual with a degree in Business hired to do ‘project management’ in one area of a department can be promoted or transferred to complete another task in the same department to work on ‘marketing’.

Career Development Cycle

• Know Yourself

Interest, Values, Skills, Assets, Resources, Personality

• Explore Possibilities

Research, try things out, Narrow choices, and explore new possibilities

• Make Choices

Set Goals, develop a plan, Remove Barrier

• Make it Happen

Convert plan into action, learn along the way, Achieve goals

Steps in Career Development cycle

• Step 1: Needs:

This step involves in the conducting a needs assessment as a training programme.

• Step 2: Vision:

The needs of the career system must be linked with the interventions. An ideal career development system known as the vision links the needs with the interventions.

• Step 3: Action Plan:

An action plan should be formulated in order to achieve the vision. The support of the top management should be obtained in this process.

• Step 4: Results:

Career development programme should be integrated with the organisation on-going employee training and management development programmes. The programme should be evaluated from time to time in order to revise the programme.

Career Life Cycle is a model that describes the stages of an individual’s career development. It is a useful tool for both individuals and organizations in understanding the different stages of a career and the corresponding developmental tasks that need to be accomplished at each stage. The career life cycle typically consists of four stages: exploration, establishment, maintenance, and decline.

• Exploration:

This stage usually occurs during the early years of a career. During this stage, individuals are exploring different career options and trying to identify their interests, skills, and values. The primary developmental task during this stage is to gain self-awareness and explore different career options to find a good fit.

• Establishment:

This stage occurs when individuals have found a career path that aligns with their interests, skills, and values. The primary developmental task during this stage is to establish oneself in a career and develop the necessary skills and competencies to succeed in that career.

• Maintenance:

This stage occurs when individuals have established themselves in their careers and are focused on maintaining their success. The primary developmental task during this stage is to continue to develop one’s skills and competencies, expand one’s network, and take on new challenges to continue to grow and advance in one’s career.

• Decline:

This stage occurs when individuals begin to transition out of their careers, either by choice or due to circumstances such as retirement. The primary developmental task during this stage is to plan for and manage the transition out of one’s career, including preparing for retirement or finding a new career path.

Succession Planning is a process for identifying and developing new leaders who can replace old leaders when they leave, retire or die. Here the planning is usually a close process, so that those who have been selected are not likely to know that they are on a succession list or chat. Succession planning increases the availability of experienced and capable employees that are prepared to assume these roles as they become available. Succession planning is a strategy for passing on leadership roles often the ownership of a company to an employee or group of employees.

Succession planning is a process that ensures an organization has a plan in place to identify and develop internal talent to fill key leadership roles when the current leaders leave their positions. A succession planning program is a formal program that helps organizations identify and develop their future leaders.

A well-designed succession planning program involves several key steps. The first step is to identify the key leadership positions that need to be filled in the future. This involves analyzing the organization’s strategic objectives and identifying the critical roles that are necessary to achieve these objectives.

The next step is to assess the current talent within the organization to identify potential successors for these key positions. This involves evaluating the skills, experience, and potential of current employees to determine who is ready to take on leadership roles in the future.

Once potential successors have been identified, the organization can begin developing them through training, mentoring, and other development opportunities. This involves creating a development plan that outlines the specific skills and experiences that potential successors need to acquire to prepare them for future leadership roles.

In addition to developing potential successors, the organization should also establish a process for regularly reviewing and updating the succession plan. This involves monitoring the progress of potential successors, updating development plans as needed, and identifying new potential successors as the organization’s needs change.

A well-designed succession planning program has several benefits for organizations. It helps ensure continuity of leadership and reduces the risks associated with unexpected departures of key leaders. It also promotes employee engagement and retention by providing clear career paths and development opportunities.

Also known as “replacement planning,” it ensures that businesses continue to run smoothly after a company’s most important people move on to new opportunities, retire, or pass away. Succession planning can also provide a liquidity event enabling the transfer of ownership in a going concern to rising employees. Taken narrowly, “replacement planning” for key roles is the heart of succession planning.

• In dictatorships, succession planning aims for continuity of leadership, preventing a chaotic power struggle by preventing a power vacuum.
• In monarchies, succession is usually settled by the order of succession.
• In business, succession planning entails developing internal people with the potential to fill key business leadership positions in the company.

Effective succession or talent-pool management concerns itself with building a series of feeder groups up and down the entire leadership pipeline or progression. In contrast, replacement planning is focused narrowly on identifying specific back-up candidates for given senior management positions. Thought should be given to the retention of key employees, and the consequences that the departure of key employees may have on the business.

Types of Succession Planning programs:

• High-potential Program:

This program identifies employees who have the potential to fill key leadership positions in the future and provides them with targeted development opportunities to prepare them for these roles.

• Talent Review Program:

This program involves assessing the current talent within the organization to identify potential successors for key leadership positions. The program focuses on evaluating the skills, experience, and potential of current employees to determine who is ready to take on leadership roles in the future.

• Career Development Program:

This program helps employees identify and develop the skills and experiences they need to advance their careers within the organization. It provides employees with a clear career path and development opportunities that prepare them for future leadership roles.

• Executive Coaching program:

This program provides one-on-one coaching and mentoring to potential successors to help them develop the skills and experience they need to take on leadership roles in the future.

• Succession Planning Task force:

This program involves creating a task force that is responsible for overseeing the organization’s succession planning efforts. The task force is typically composed of senior leaders and HR professionals who work together to identify potential successors and develop them through training and development opportunities.

Process and Practices

Companies devise elaborate models to characterize their succession and development practices. Most reflect a cyclical series of activities that include these fundamentals:

• Identify key roles for succession or replacement planning
• Define the competencies and motivational profile required to undertake those roles
• Assess people against these criteria – with a future orientation
• Identify pools of talent that could potentially fill and perform highly in key roles
• Develop employees to be ready for advancement into key roles; primarily through the right set of experiences.

Research indicates that clear objectives are critical to establishing effective succession planning. These objectives tend to be core to many or most companies that have well-established practices:

• Identify those with the potential to assume greater responsibility in the organization
• Provide critical development experiences to those that can move into key roles
• Engage the leadership in supporting the development of high-potential leaders
• Build a database that can be used to make better staffing decisions for key jobs

In other companies these additional objectives may be embedded in the succession process:

• Improve employee commitment and retention
• Meet the career development expectations of existing employees
• Counter the increasing difficulty and costs of recruiting employees externally

Process of Succession Planning

• Identifying Key Business Areas and Positions:

First and foremost, the key business areas are identified, i.e. the areas which are significant with respect to the operational activities and strategic objectives. After that, those positions are identified which if vacant can cause difficulty in achieving business objectives.

• Ascertaining Competencies for Key areas and positions:

Next, you need to determine the required competencies for key business areas and position, in order to create the selection criteria, establish performance standards and fill the difference between what the viable successors know and what they need to know, through the training and development process.It determines the knowledge, skills, ability and experience required to achieve business goals.

• Find out the interested and potential candidates and assess them as per the competencies:

After competency is analysed, the next step is to identify among various employees working in the organization, who are interested as well as they have the capability to fill key business areas and positions. The Human Resource Manager discusses future career plans and interests with the candidates and identifies the potential successors who are ready to replace the old ones and can be trained and developed for future contingencies.

• Develop and Implement Succession Strategies:

Strategies for learning, training, development, knowledge transfer, experience sharing is developed and implemented for potential successors.

• Evaluate Effectiveness:

The last step to the succession planning process is to evaluate the succession planning and management, to ensure that all the key business areas and positions are covered under the succession planning. Further, it also ensures that in case of any sudden vacancies in future, key positions can be filled as soon as possible and the successors perform effectively when they hold the position.

A larger business might groom mid-level employees to one day take over higher-level positions.

• Recruitment

Succession planning starts with proper hiring practices with the goal of choosing candidates that are capable of rising through the ranks as time goes on. For example, an experienced person from another company might be courted and groomed for an executive-level position.

• Training

Training includes the development of skills, company knowledge, and certifications. The training might include having employees cross-train and shadow various positions or jobs in all the major departments. This process can help the person become well rounded and understand the business on a granular level. Also, the cross-training process can help identify the employees that are not up to the task of developing multiple skill sets needed to run the company.

Benefits of Succession Planning

There are several advantages for both employers and employees to having a formalized succession plan in place:

• Shareholders of publicly traded companies benefit from proper succession planning, such as the case when the next candidate for CEO is involved in business operations and is well respected years before the current CEO retires. Also, if investors observe a well-communicated succession plan, they won’t sell the company’s stock when the CEO retires.
• With Baby Boomer business owners and leadership retiring in huge numbers, a new generation of leaders will be needed.
• Employees know that there is a chance for advancement and possibly ownership, which can lead to more empowerment and higher job satisfaction.
• Management keeps better track of the value of employees so that positions can be filled internally when opportunities arise.
• Knowing that the company is planning for future opportunities reinforces career development among employees.
• Management’s commitment to succession planning means that supervisors will mentor employees to transfer knowledge and expertise.
• With succession planning, leadership and employees are better able to share company values and vision.

Need for Succession Planning

Succession Planning is a part and parcel of the Human Resource Planning, which acknowledges that the employees may or may not work with the organization in the future. And so to be at the safer side, a succession plan is developed to analyse the vacancies which might take place when an employee leaves the organization, the business areas which might be affected, job requirements and the skills of the existing incumbent.

Steps in Designing of HRIS

(1) Study the Present System:

In defining requirements or assessing the existing information system, three questions need to be answered; what is the present flow of information? How is the information used? How valuable is the information to decision making?

(2) Develop a Priority of Information that Managers Need:

Once the current system is understood well it is used to develop priorities. A manager must have certain information in order to make proper decisions. Other information is nice to have but is not essential to the manager’s decision-making. The HRIS must ensure provision of high priority information. Lower priority data should be generated only if the benefits exceed the costs of producing it.

One approach would be to have individual managers develop their own priority lists and then integrate them into a list for the entire organization. Certain departments will find that the information they identify as top priority would be far down the list for the organization as a whole. Here the needs of the entire organization might be the controlling factor.

(3) Develop the New Information System:

The organization wide priority list should govern the design of the HRIS. Information not worth the cost is excluded. A system of required reports should be developed and diagrammed. The entire organization is treated as a unit to eliminate duplicity of information.

(4) Choose a Computer:

Today, it is reasonable to assume that HRIS of most organizations will be computerized. Because of the increasing reliance on computers, the HR managers should be computer literate. The presence of computers is far too pervasive and their usefulness far too great for human resource managers to ignore their capabilities. Human resource software for personal computers is almost always the responsibility of the HR department.

The modern day complexities involved in managing a global labour force makes developing an effective global HRIS a necessity. Information concerning many factors affecting human resource must be shared. This information must be relevant and timely to assure that the best HR decisions are made.

HRIS Subsystems

Presently, HRIS is an integration of ‘HRM’ and the ‘Information System’. With the development of various concepts and sub-systems of the HR function, the top management’s perspective of HR has undergone a tremendous change prompting extensive use of computers that have the capability of pro­cessing, storing, and retrieving massive information of complex and diverse nature.

It helps managers to perform the HR function in a more effective, efficient, and systematic manner. It can be a potent weapon for lowering administrative costs, increasing productivity, speeding up response times, and improv­ing decision-making and customer service.

HRIS is now taken as an integration of activities of the HRM function and the information system in relation to basic HR activities, and covers people, poli­cies, procedures, and data required to manage the HR function. The most potent output of HRIS is the generation of various predesigned reports and graphical formats that help in the analysis of HR activi­ties for sound decision-making.

Top managements are increasingly making use of HRIS in various HR activities like HR planning and analysis, compensation and benefits, staffing, development of employees, performance evaluation, health, safety, and security, collective bargaining etc. Top managements are noted to have become more efficient by way of reduction in time spent on administrative work by 20 to 25 per cent and redeployment of time saved to higher tasks such as decision-making and employee development, eliminating paper and process inefficiencies.

Top managements’ horizon seems to have widened in realizing the transition of HR from an administrative department to a strategic department. Unlike in the past, the modern-day managements think of sharing data among all the functional areas to achieve organizational goals.

With that end in view, depending upon the financial constraints, choice of separate software for HR functions, and similar other considerations, an organization may choose either an integrated information technology solution like the ‘ERP System’ or a software like People Soft, SAP-HR, Abra Suite, Vantage, or Oracle-HRMS which are specifically developed for HR activities of an organization.

Mechanisms of HRIS

1. Organizational Management Module:

It is mainly used to perform numerous business and HR processes. This module is installed before any of the aforesaid modules is introduced. The information entered in this module is regarding the jobs, tasks, positions and their relationship in the organization, job description, employees working in dif­ferent positions along with their qualifications, profiles, and tasks performed by them, and the different departments in the organization.

(1) The module creates an organizational plan which depicts the functional structure of an enterprise. By relating jobs, tasks, and positions with relationship a network that mirrors the organizational reporting structure can be created and depicted via easy-to-use graphical tools. In addition to this, relationship to objects from other components like cost centres, employee, or user can be created.

(2) When an organization changes the core business process which in turn necessitates staffing adjustments, HR people can dynamically adjust the organizational model to reflect the new situa­tion. Regular evaluation of personnel situation can help avoid qualification deficit in the future.

(3) This component can be used to match employees’ qualification profiles with job requirement pro­files on a regular basis in order to pinpoint training needs and take the measures necessary to offset it.

(4) It also gives instant access to information on number of vacant positions, their associated job descriptions, activity and requirement profiles of the position, and when the vacancies must be filled. With organizational development and the organizational structure model in place an enterprise can swiftly and efficiently determine current and future staffing requirements.

(5) This module gives reliable information on the staffing position in the organization along with the reports on staff assignments, existing jobs, positions, and tasks in the organization.

2. Recruitment Module:

It is a powerful tool which optimizes the recruitment procedure and reduces administrative overheads, time, and money spent on handling job applications. By automating routine tasks and delegating them to the system, it relieves the strain of the HR department. Information regarding the advertisement of job vacancies, basic data of the applicants, minimum requirements of the job, and standard text for letter of receipt, letter of rejection, and contract of employment are entered in this module.

(1) Using the SAP-HR recruitment model the organization can advertise a job vacancy on the internet.

(2) When applicant data are entered, it also checks to see if any of the applicants are former employ­ees or are currently employed in the company. This module automatically provides the existing master records of these applicants. It also passes the electronic documents submitted by these applicants to the HR administrator.

(3) The status of the application can be found by the applicant by using the applicant number and password.

(4) The applicants are given a confirmation that the application has been received. When an applicant’s data are entered, this module automatically generates a confirmation of receipt of the applicant. The applicants can receive a letter of rejection generated automatically by the system.

(5) The application documents are scanned into the system and archived. This means that the applica­tion documents can be called upon directly from the system.

(6) This module reports the applicants transferred to the applicant pool who do not fulfill require­ments of the position advertised but have a qualification profile. It also reports the list of unsolic­ited applicants and the applicants put on hold.

(7) When a candidate is selected, a contract of employment is offered to the selected candidate. The HR manager completes the selection procedure by entering the data of hiring and information by transferring them to the personnel administration module and the HR master data.

(8) The system can create statistical reports or lists on applications received, vacancies, and adver­tisement. It finds the cost of recruitment and replacement. It studies the sources from which employees were drawn and correlates this with success on the job to see if some sources should be dropped or added. The skill database is maintained, allowing retrieval of a potential candidate for a specified job.

(9) This module is integrated with personnel development and training and enables the management to determine whether the applicant requires further training in certain areas.

3. Personnel Administration Module:

It creates and processes employee data precisely and efficiently. This module deals with employee-related personnel activities which are called ‘personnel actions’. The basic personnel activities such as hiring, organizational assignment or leaving are handled in the Master Data Administration in this system.

The personal data of each of the employees is entered—his name, date of birth, marital status, family mem­bers, blood group, email address, emergency contact phone numbers, permanent and temporary address, etc. Besides this, date of hiring, official assignments, dates of promotion, change of pay, date of leaving, etc. are also entered in this module.

(1) It tracks the chronology of data of all times and forms the basis for sound HR decisions at all levels.

(2) Through this system every type of employee information can be saved using HR info types. Info types are data entry screens. They contain separate items of information entered into fields.

(3) The system automatically adjusts all relevant employee data to actual entry data of the employee. If the employee moves to another cost centre of the company the organizational assignment of employee also changes.

(4) This software ensures consistent data at all times. This module allows automatic monitoring of data for HR processes that require follow-up activities. For example, when hiring an employee, the HR manager can specifically be reminded when the probation period ends so that necessary follow-up activities can be done.

(5) Optical archiving allows scanning original documents such as work contracts, performance appraisal, or employee photo and archive them in the system.

(6) The top management can evaluate lists like employees’ directory, family members, bank details, anniversaries of years of service, and statistical information like staffing levels, nationality, age, wage, and seniority. SAP Business Graphics enables to the editing of evaluation results in a graph­ical form.

(7) It gives the ‘personnel action’ list of employees regarding his hiring, organizational assignment, reassignment to another cost centre, change of pay, termination, and re-entry.

1. Payroll and Time Management Module:

It is an automatic planning table that is in-built in the system, and provides an overview of HRs available at a given moment. It helps in planning shifts, absenteeism management, recording working times, and compliance of labour laws. The country-wise versions are available to handle the payroll function. This can take care of multiple factors such as valuation of time data, partial payment calculation, reduction of company loans, etc.

Payroll is integrated with personnel administration, time management, and account­ing. Standardized data retention enables to use most of the data and payroll data from the personnel administration module. Time data entered via time management are automatically included in the pay­roll and valued during the payroll run.

The master file is composed of discrete pieces of information called data elements. Data are keyed into the system, updating the data elements. The elements on the master file are combined in different ways to make up reports of interest to the management and govern­ment agencies and pay cheques sent to employees.

(1) It calculates pay and includes tax tables in accordance with compensation regulations.

(2) The information on expenses and payables from the payroll is posted for accounting directly in financial accounting and it becomes easier to assign the costs to the appropriate cost centres.

(3) The system calculates gross and net pay which comprises individual payments and deductions that are calculated during the payroll period and received by an employee.

(4) The payroll system keeps track of money paid to the employee.

(5) The system generates pay cheques or direct deposits which are electronic transfers of compensa­tion funds from the company’s bank account to those of the employees.

(6) It determines the optimal health and retirement plans for each employee based on factors such as marital status, age, and other data.

2. Personnel Development Module:

It ensures that employees develop in line with the company’s goals, and at the same time enables to take individual preference of the employees into account. Personnel development has two important objec­tives. One is to ensure that there are enough qualified employees and managers in the organization; the other is to show all employees the career opportunities that are open to them, and to promote their work-related and social skills.

The career and succession planning components of the personnel develop­ment module provide powerful planning tools that help to achieve these aims. The data regarding career planning, succession planning, and performance appraisal are entered into this module. This module uses career planning to show employees what career opportunities are available if they perform well and prove suitable.

Pre-defined careers provide employees and applicants with the information on how they can progress within the organization. It can portray vertical and horizontal movements within the organizational structure and thus create all kinds of career paths for the employees.

Succession planning identifies candidates who are qualified in all respects to occupy a post at the present moment or in the future. In succession planning, the system enters information about qualifica­tions, career preferences of employees, estimated potential of employees, dislikes, and a pre-defined career.

(1) The system helps in obtaining the suitability of the potential successor and also gives concrete proposals for the training measures that need to be taken for individual candidates.

(2) The module reports the employees’ current suitability and personal preferences and forecasts what they are likely to be in the future. This system provides a powerful reporting and evaluation system.

(3) By performing various targets/actual comparisons the module helps in obtaining a realistic over­view of the company’s staffing structure.

(4) It helps in comparing employees’ profiles and displays the results in various formats so that analy­sis becomes easier.

(5) It can search through the entire company for persons with a particular qualification. This module is flexible and can be tailored to meet the company’s specific needs and personnel development strategy.

(6) It helps in identifying succession planning gaps in an organizational unit.

The organization can use this module for performance appraisal of employees. The appraisals are con­ducted using standardized criteria, thus ensuring maximum objectivity when results are calculated. It standardizes the process of employee evaluation by providing step-by-step guidelines to writing per­formance reviews, a check list of performance areas to be included in the evaluation and compute sub­totals of each category and weighted grade which can then be electronically stored as part of employees’ records.

(1) The system reports whether an employee was appraised in a given time period or not.

(2) It helps in determining which of the employees in an organizational unit have been appraised and by whom. It gives a list of the appraisals which have not been completed.

(3) It identifies persons who are over-qualified or under-qualified.

(4) It also identifies suitable applicants for a vacancy. As a personnel development instrument, an employee’s appraisal provides clear and reliable information to plan and monitor personnel development measures.

The additional modules in SAP-HR are travel management, training and event management, intranet employee self-service, and business workflow. SAP-HR is an integrated tool which is highly useful in multi-unit organizations whose operations are spread geographically.

Many of the HR decisions are data-based and fool proof maintenance of the same is imperative. Thus, integration of data helps an orga­nization to save on duplication efforts, man hours, and consequential financial cost. Circulation of data, transparency, and on-line employee communication are in-built benefits with this system.