TALENT MANAGEMENT: A COMPETITIVE TOOL

Employees with prized skills are too rare to squander on jobs others can do. That’s why some organizations are relieving their valuable talent of those responsibilities so that they can spend more time on the tasks only they can perform—by redesigning job roles within the company or by turning to external providers of specialized expertise. Consider this example:

The Narayana Hrudayalaya Cardiac Hospital in Bangalore has junior surgeons, nurses, and technicians handle routine tasks such as preparing the patient for surgery and closing the chest after surgery. Senior cardiac surgeons come to the operating room only when the patient’s chest is open and the heart is ready to be operated on. This approach helps the hospital provide care at a fraction of the cost of U.S. providers while maintaining U.S.-level mortality and infection rates.

In today’s knowledge economy, competitive advantage is increasingly coming from the particular, hard-to-duplicate know-how of a company’s most skilled people: talented (and highly paid) engineers, salespeople, scientists, and other professionals.

The problem is that across the private, public, and social sectors there aren’t enough knowledge workers to go around. And the situation promises to get worse.

In response, some firms are taking steps to expand the talent pool—for example, by investing in apprenticeships, coaching and other training programs.

But a number of companies are going further: They are redefining the jobs of their experts, transferring some of their tasks to lower-skill people inside or outside their organizations, and outsourcing work that requires scarce skills but is not strategically important.

Firms have long been carving off repeatable, transactional work—such as call center services, payroll, or IT support—and either shifting it to lower-cost locations or outsourcing it to capable companies such as Viffa Consult Limited.

What is new is that companies are now doing this with knowledge-based jobs that are core to the business.

Some organizations are already familiar with ways to break work into highly specialized pieces. Let us see how to do that for high-end knowledge work.

The process involves several steps:

• Identifying the gap between the talent your firm has and what it will need
• Creating narrower, more-focused job descriptions in areas where talent is scarce;
• Choosing from various options for filling the skills gap
• Rewiring processes for talent and knowledge management.

Identify the Skills Gap

The first step in redesigning knowledge work is to conduct an inventory of skills and create a detailed estimate of the kinds and amounts of skills your firm will need to execute its strategy over the next five years or more.

This will require a thoughtful discussion among top managers, leaders of business units, and HR team members, and should be part of the strategic-planning process.

Many companies don’t have this conversation. They simply reuse the job descriptions already embedded in their organizational chart, year after year, and become alert to the need for new skills only when they find themselves having to play catch-up to more-prescient competitors.

Companies must be explicit and precise in defining their must-have skills. Let us look at examples

• A professional services firm may require deep expertise in certain industry-specific niches to address the needs of its clients—for instance, capabilities in credit-risk modeling for financial institutions.

• A consumer goods company may discover that it needs a cadre of general managers and marketers with proven track records in emerging markets to maximize its potential in geographies projected to account for more than 50% of world economic growth over the next decade.

After identifying the critical skills your strategy will require, create a detailed inventory of how many people in your organization possess them.

Then estimate how those numbers will change over the next five years given the current pace of hiring, training, moves, and retirement.

This analysis typically demonstrates that demand is higher than expected—and that the likely supply (at least internally and potentially externally) will fall short without significant action. Such skills gaps can put key strategies at risk.

Unfortunately, many companies do not rigorously document their employees’ specialized skills in either hiring or annual performance-management processes.

Some companies now focus on competencies rather than tasks in employee evaluations.

Two people in the same role, when evaluated solely on tasks, could both be high performers but might have different underlying competencies; conversely, two people in very different roles might have the same underlying competencies. Their competencies have implications for what their career paths could be and where the organization could best use them today and five years down the road.

Analyze How Skills Are Utilized

Once your company has identified its talent gaps, it must then determine the workforce implications: Should current and future roles be restructured?

How should recruitment, hiring, and training change? What new talent sources, if any, should be considered?

Begin by assessing how effectively your company is leveraging existing talent. That will provide insights into how it might better utilize scarce experts. A number of tools can be used to do this:

    Time allocation surveys,

People document how much time they spend on tasks, can produce eye-opening results.

Companies often find that highly skilled people are spending significant amounts of time on general management or administrative activities that don’t require their scarce skills.

A retail bank, for example will discover that its salespeople are spending a mere 25% of their time selling and the rest on administrative work, such as rewriting contractual documents and processing orders, and other activities.

     Social network analysis

A quantitative method for surfacing and depicting informal interactions among people in an organization can show which individuals are sought out for different types of expertise and how they are connected to others in the company who need their skills.

     Analysis of outcomes or value

Can be used to quantify the effectiveness of any given contributor or process.

Some companies use assessment surveys to determine whether experts feel their skills are well matched to their current roles and to understand how colleagues perceive experts’ performance.

Other companies evaluate the process for getting to an end product. (For a marketing department, an end product could be a brand plan.) The analysis involves mapping the current process and figuring out the time it takes and its cost; assessing the actual versus aspired-to quality of the end product; identifying the people deployed at each step of the process; and using that information to identify opportunities to simplify the process and ensure a good match between skills and tasks.

Redefine Jobs

Using the results of a skills-gap analysis, your company can redefine jobs to ensure that experts devote almost all their time to tasks that require their specialized skills.

In redefining jobs, companies should also consider technological advances that make it easier to perform work remotely. Companies and employees today have more choices for where work is done and by whom. In cases where in-person interactions and sophisticated judgment are core to value delivery—performing medical procedures, sales, and giving financial advice fall into this category—the goal is to redesign the role so that people are spending all their time at the high end of their skill set.

If tasks are appropriately segmented, a lower-cost solution shouldn’t mean inferior quality work.

Virtualization

Tasks that require scarce skills but do not depend on in-person interaction or physical proximity—screening mammograms or conducting complex pricing analytics, for example—can be shifted to people in less costly locations.

Regardless of how a company chooses to virtualize work, a performance management system is crucial to success. Performance of individuals who work remotely should be regularly reviewed. Managers may need training to do this effectively.

Outsourcing or contracting

When a company has a onetime or infrequent need for expertise (an oil company needs a certain type of engineer for a specific project or an auto parts firm needs specialized expertise to develop a pricing model) or when a firm experiences periodic surges in demand for certain skills, hiring an external provider could be the best option.

In recent years, the availability of highly capable “knowledge professionals on call” has increased.

In making the decision to outsource, organizations should consider strategy as well as cost: Does having direct ownership of the work confer any competitive advantage?

If so, keep that work in-house and make sure that those responsible for the work are freed from lower-value tasks that others could accomplish.

If a company does decide to outsource, it must take pains to connect its external providers to the broader organization. This starts with an orientation or onboarding program that gives contractors an insider’s understanding of the firm and provides them with points of contact.

The company must facilitate frequent interaction and communication between contractors and internal experts and decision makers, and establish a well-thought-out process for the handoff of work to internal owners.

Without those mechanisms in place, external providers may produce work that is technically accurate but lacks company-specific nuance or the internal buy-in necessary for it to stick.

Rewire Processes for Talent and Knowledge Management

The solutions described will be effective only if an organization also retools its processes and culture to support the new ways of working. In particular, firms must learn how to manage specialists and external providers and integrate them into the business.

1-Companies must excel at attracting, motivating, and retaining specialists.

2-Companies must develop mechanisms for cultivating specialists who have the potential to take on broader roles or become leaders in the organization.

3-Companies must capture the knowledge of internal and external specialists so that others in the organization can benefit from it. This requires robust, easy-to-use knowledge management processes and systems. Some companies categorize each project up front according to the insights it is likely to generate (for example, “distinctive,” “proprietary,” or “common”) and create a road map for how insights should be documented and shared.

The road map specifies templates for codifying knowledge, lists of people and groups within the company who might find the knowledge useful, and suggested schedules for knowledge-transfer meetings

4-Companies should ensure that specialist employees working remotely engage with both the employees who use their work and business leaders. Ways to make this happen include inviting them to join cross-functional teams, having company leaders meet with specialist groups regularly, and embedding specialists in business units.

As with any major workforce change, it’s often best to start small: Move one subset of work to specialists or external providers and expand that base over time. This allows a company to test new talent pools and management processes and build stakeholders’ confidence in them.

Aggressive companies are shaking off conventions about where, how, and by whom knowledge work is done. But as traditional roles are redefined, workers are bound to struggle with uncertainty. It’s crucial that leaders redouble their efforts to ensure that key managers are fully engaged. All employees must understand how the transformation is connected to them, know what is expected of them, and be clear on how their success will be evaluated. In this way they can unlock both increased productivity and personal satisfaction.