Mangement Trends

Vol: 4, No. 2
April -2007 September - 2007

RECENT TRENDS IN TALENT ACQUISITION AND RETENTION

DK Ribfia Jain

ABSTRACT The new age economy, with its attendant

paradigm shifts in relation to the human capital, in
Talented employees in India never had the
terms of its acquisition, utilization, development and!
premium that they enjoy today. This has resulted in
retention, has placed a heavy demand on today's HR
organizations looking at newer ways to attract
profession. Today HR is expected to comprehend,
employees and once a recruit walks its portals, focus
conceptualize, innovate, implement and sustain
on building loyalty. This whole portfolio of how to attract
relevant strategies and contribute effectively towards
and retain employees is now called by a body of
giving the company its winning edge. These efforts
knowledge "talent management".
on the part of the company have resulted in
Employee attrition is costly dilemma for all
recognizing talent as priority of the company to
organizations. In today's taxing business climate,
maintain competitive edge and talent becoming a
managing company's competent and skilled human
strategic priority.
capital is vital for success.
Faced with a tough proposition in attracting talent,
HR heads of companies have started applying the Mckinsey and company consultants Michaels,]
Segmenting- Targeting-Positioning (STP) approach of handfield Jones and Axelrod define "talent" as the)
marketing, better known as 'employer branding' "the sum of a person's abilities- his or her intrinsic
strategies. gifts, skills, knowledge, experience, intelligence
In the turbulent scenario where talent is judgement, attitude, character and drive. It also
continuously depleting , HR managers are facing includes his or her ability to learn and grow.
problem in retaining their knowledgeable resource . "Talent Management implies recognizing
Here are discussed some of the latest retaining person's inherent skills, traits, personality anal
strategies adopted by companies these days. offering him a matching job."
♦ Another objective of performance appraisal as put While there are no magic formulae to manage
by the company is to identify employees with high talent, the trick is to locate it and encourage ill Talent
potential, but there is no section in the form where the management is beneficial to both the organization
level of potential of the employee may be identified as and the employees.
high, low or moderate.
♦ Planning and organizing are two different abilities Essentials of Talent Management I
but are rated in the form as one factor. ♦ Talent management is the activity of
identifying, realizing, and guiding untapped
Introduction
potential in people.
Modern organizations are operating in an ♦ It means nurturing and developing those
unprecedented, highly competitive and turbulent people identified of having ability ana
business environment which is characterized by the potential and it should form part of any
globalization of business. Further, today's global organizations recruitment and retention
workforce is more mobile than ever before. With a strategy.
dynamically changing and volatile demand-supply ♦ It involves individual and organizction
equation, especially against erratic attrition trend and development in response to a changing and
cutthroat competition no longer restricted to local or complex operating environment. includes
regional boundaries, a need for strategizing & putting the creation and maintenance of supportive
in place a robust mechanism for attracting and people oriented organizational culture.
retaining top talent becomes vital for the company's ♦ Talent management is a cor deliberate
very survival and growth. approach undertaken to

Asst. Professor, Om Kothari Institute of Management 8. Research, Kota 324005 ((Raj.)

 attract, develop and retain people with the aptitude and abilities to meet current and future organizational needs.

Talent management brings together a number of important human resources and management initiatives.
Organizations that, formally decide to manage their talent undertake a strategic analysis of their current HR process.
Talent management approach is adopted and focused on coordinating and integrating the following. ♦ Recruitment:
ensuring right people ore attracted to the organization.
♦ Retention: developing and implementing practices that reward and support employees.
♦ Employee development: ensuring continuous formal and informal learning and development.

Recent trends in talent management with respect to Attracting talent

Attracting qualified talent is the critical first step in the talent management cycle. Jobs are plenty, finding the right
candidate is the challenge. The need is to "sell a job". Having sold the job well, retaining good employees is the next
challenge that arises. And the company's brand image makes these tasks easier. Hence the marriage of compulsion
arises between HR and marketing principles-employer branding.
As we know that we get good customers
with a good brand. In the same way companies
must develop their image in the society by implementing the best practices in each and every aspect.
Employer branding therefore helps a company attract, recruit, and retain employees | that if wants and is
becoming increasingly
important in attracting and retaining star
performers in a talent-tight market.
Employer branding is not different from
(branding a product or service and the payoff are
identical. Some of them are-

product /service branding customer acquisition is easier

Increased retention possible Loyal customers Less "price sensitive" customers Employer branding Recruiting people is
easier Reduced employee churn Committed employees Less "CTC sensitive" employees

Selecting Talent

An effective retention strategy begins at the earlier stages of the recruitment & selection process. This is true
because most of the employee turnover happens due to poor chemistry or bed fit.The research indicates that most of
the people leave organizations due to he mistakes made during the hiring phase. For this reason some smart
companies are adopting the strategy of " hire for attitude & train for skill." They have realized that it is easier to develop
the skills & capabilities that an employee needs than to attempt to change the employee's personality or mindset.
For instance, although infosys receives about twice the number of application as its competitors it is very selective in
recruiting employees.
In the financial for 2004-2005, it received close to one million resumes which went through rigorous selection
process and offers were made to about 1.5% of the applicants. Infosys looks at candidates who display a high degree of
"learnability".
The company looks for candidates with good analytical ability, team work and leadership potential besides
innovation skills and structured approach for problem solving.
Some companies go to even extraordinary lengths before hiring somebody. According to a study, Hewitt, a leading
Indian company, was selecting a senior marketing manager after the candidate had gone through several rounds of
interviews. The company had identified the person they thought was the right one for the job and was on the verge of
making an offer. The HR head took him out for dinner and, during the meal, the
Prospective marketing manager was particularly rude to a waiter in front of his potential employer and peer. The
company reversed its decision to recruit him. If he could be rude to the waiter in such a setting, how would his
behavior reflect the company image and culture if he were in-charge of marketing?
Besides getting the right people in the door, recruiting has an important symbolic aspect. When a prospective
employee undergoes rigorous selection process, the person feels that he or she is joining an elite organization.
This creates high expectations and gives an impression that people matter the most to the organization.
 Retaining Talent

The time is tough. There is no denial to the fact that in today's fast pace and knowledge boom, one of the most
important factors for today's organization is talent. Its viewed that the availability of suitable and competent talent
inside any organization determines the excellence of the same.
Most companies today would acknowledge that their human resources are most important asset. But since
companies can't own employees the way they own factories or product your success or failure hinges on the quality
and duration of the relationship you form with your people. In present scenario people choose companies which have
congenial atmosphere and prefer change if they don't get desirable, as it may hinder the growth and success of the
company. Hence retention is vital than recruitment.
The attrition rate of employees in organization is alarming. Take any industry, any sector, any organization and
you can find more than enough examples of employees joining and leaving their workplace. All this adds to the
worry of HR managers who are only left with the option of scratching their heads and singing no mercy's all-time
hit-"where do you go?"

Thus it is an organization's ability not only to recruit, but also to cultivate and retain, talent that will ultimately
determine its longevity.
Two major trends point to the growing importance of employee retention as an important HR issue. One is the
constant rise in turnover in virtually every economic sector and left
Unaddressed it can have an adverse impact on
organizational effectiveness. The other is the ever
raising cost of turnover, especially when it involves
high performers.
Cost of Employee Turnover
Turnover is important because it costs the organization money in direct expenses to recruit and train new
hires and indirect expenses to pay overtime for remaining workers, when necessary, and in opportunity cost of lost
production. Estimates vary widely (as does the true expense), but several authors have placed total cost (which
include various aspects of recruitment, hiring, training and lost productivity) at somewhere in the vicinity of the one
to two times the yearly pay of the one who leaves. That means a thousand-person company) with a 10 percent
turnover rate per year and on average individual pay level of $40,000 might be expected to spend between $ 4
million and $ 8 million per year on turnover-related costs.
Strategies for Retaining Talent
The problem of attrition continue to escalate. Today talented professionals are increasingly mobile, have highly
transferable skills, are internet literate, well informed and above all, sought after. Organizations are constantly
struggling to keep

Sustained competitive advantage in the

Knowledge economy.
Employees.

Retention inevitable
our basic components that a retention. Strategy must address in order to infuse confidence among

1 Effective performance managemen

2 Career development opportunities

Work-life balance

Retention of talent is fundamentally

Compensation talent continuity.
and recognition )
. .. - ■""

We must manage our human assets with the same

rigor we devote to our financial assets.
 37

therefore it is crucial for every organization to retain two years. In reality these are at best, average
talented people by developing appropriate talent increases in a scenario where 30 % hikes are not
retention strategy. Following are some of the key talent uncommon. These still don't stem attrition. Its not just
retention strategy. the best performing employees who are switching jobs;
even mediocre employees who benefit from salary
hikes of 30% leave their organizations.' Surely, as an
organization you have to pay at least hygiene-level
salaries. It is the cost of doing and staying in business.
20:80 rule Applying the 20:80 rule, organization must
identify the top 20% star performers who contribute to 5. Work-life balance
80% growth of the organization. Retaining star Work-life balance has important consequences for
employees is a continuous struggle, because top employee attitudes towards their organizations as well
performers will always be in demand. Quitting by high as for the lives of employees. With the economy on a
performers constitutes "dysfunctional turnover " that roll and globle work practices becoming the norm in
can pose a large threat to business success. That's India as well, the educated Indian workforce is
why it is rightly said If you don't embrace your stars, suddenly discovering that hefty pay cheques come at
someone else will. a price- long working hours, stress stiff targets and
intense competition. And 'Zero personal life'.
2.Let them know that you want to keep Employers should realize their role in helping their
employees strike a balance in their lives, before they
them burn out.
In an attempt to help its employees tide over this
Many organizations have deliberately not told talented
problem, IBM India has appointed a person to
people that they were special in many ways for fear of
specifically look into work-life management issues. It
alienating the average performers. But this practice
has introduced work-life balance initiatives like
makes it difficult to retain top performers. To retain top
parenting workshops, an in-home care project, a day-
talent in the future , executive will need to clearly
care center and access to a work-life essentials web
identify, develop involve and recognize key people.
site that offers work-life balance tips.

3. Employee engagement

The best way to retain is to provide work motivation. 6 . P r o v i d i n g r e c o g n i t i o n , r e w a r d &

rejoice
Challenge, job satisfaction, treating the employee with
significance, being
It is crucial to understand what drives key talents.
predictable with systems and practices that are lot The major reasons talented people leave organization
bent or changed to accommodate any individual at are lack of involvement, and poor management.
any time may help retention. Task force could be Providing recognition helps to retain key talent and also
constituted to examine the sources of attrition. When yields great feedback and generate ideas for talent
employees are adequately engaged and adequate retention. Every individual is delighted with recognition
social and financial security is provided retention and reward amongst masses. These days few
goes up on its own. companies are working on fun filled trips and for off-
sites their employees to maintain their interest and
rejuvenating them. Companies are creating the
4.adequate and competitive pay
positions of CFO i.e. Chief Fun Officer for arranging
packages these fun filled activities.

salaries are going up. It is widely reported that

7. Career Counselors in the office
salary hikes in India are amongst the highest in the
world 4% to 15% increases are reported in the last
In the knowledge economy CC are a new
retention tool. It has become customary for the IT,
BPO and other service industries to have career
counsellors for guiding junior staff in particular. This
helps to motivate them. Some firms have trained
 counselors, but many other prefer senior officials to act that new retention tools could be adopted. Today
as career counselors for their juniors. The role of career when companies recruit people they often focus
counselors is to work independently to find people for attracting precisely those people who will be the most
the right role for the organization and this finally turns difficult to retain. Though attrition can not be
out to be a good retention tool. completely eradicated but it can be reduced to drastic
Companies reckon that mentors can guide and level by being innovative. Companies the" days are
motivate staff and somewhere counselors are now-a- emphasizing not only on physical emotional benefits
days working aS MENTORS A career counselors also. They have to develop new ideas to touch the
helps employees on the professional and personal emotions of their employees make them loyal
front, and find a work-life balance. towards their organizations. Companies involved in
designing strategies such napping, internal job
8. Take a NAP posting, flexi-time are being more successful.
Motivated by the saying " After lunch sleep a while,
after dinner walk a mile". Some companies have devised
a new concept to relax their employees on the job by
providing napping facility in office post lunch. Calm and B e r g e r, D o r o t h y R .2004. T a l e n t
soothing atmosphere is provided during this time to relax Management Handbook,
their mental cobwebs. 2) Tata McGrow-Hill Publication, New Delhi.
3) GuruSwamy K., Ramani VV, "Talent
9. Internal job posting Management-Concepts & Cases", Vol I, ICFAI
University Press.
4) Dasari Ravi, 2006, "Ret ai ni ng High
This is one of the latest retention tool adopted by performers-Issues & Imperatives", The ICFAI
various companies to retain talent. This implies that if University Press.
someone wants to leave for changing the role, he can 5) Mathews B, Sarita B, "Talent Management -
switch within the company for similar role. For instance Change New face of HR", HRD Newsletter,
a salesperson wants to come in HR or Operations can Jan 2007, Issue 10, Vol: 22.
switch within the company at similar ranks. 6) Sharma, E.J. "Make them stay forever",
Human Capital Vol: 8, pp 30-34.
7) Rao Sabitha, "Touch points on attraction &
Day-to-day home Retention", NHRD Journal, May 2007, Vol:l,
Issue 3, Pg no. 30.
8) Bose Praveen, 2007 "Career Counselors in
the Office", The Economic Times, 13 June
Companies have initiated a new concept of hiring
2007, pp 15
an individual at company pay rolls to cater to the need
of their employees home related work. This is a very 9) Parishwad Rajesh, "Balancing act" "The week
good initiative to avoid wastage of precious Man-hours - Struggle for work-life balance" March
and relaxing employees to focus on their area of 11,2007
expertise. Companies keep a person on their rolls to 10) Goldsmith Marshall, Paper on "Retain your top
performer" smith communication partners,
generate faith of employees. This person bank their
www.google.com
checks, deposit fees of their children in school, book
cinema tickets and restaurant for them. 11) Trevor Charlie "Reach for the stars-managing
& retaining top performer", www.google.com
CONCLUSION

The environment is very volatile and attrition is

increasing day-by-day. It poses a challenge before
HR managers, they need to be very innovative so