Talent inventory: What is it and why is it key for business?

Note published on June 16 in El Economista, Capital Humano [Human Capital] Section by Blanya Correal Sarmiento.
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Talent planning is a strategic and essential  process in the sustainability of any business. Thus, it is key to conduct an inventory of organizational capabilities, based on the abilities, experience and attitudes that the people in the organization have.

You assess your business, and you realize that 25% of your experts, people who have developed a deep understanding of your operation which, in order to be acquired, takes at least seven years of learning  in order to reach a satisfactory level of mastery, will retire within the next three years. On the other hand, you review the turnover of your key positions, and you see, first of all, that talent leaves the company while holding middle management positions due to the lack of a clear career plan and, additionally, that 30% of the people hired leave the organization within their first six months … This whole scenario sounds like a talent crisis, but it is surprising to learn that it is the situation that many companies are currently going through.

According to Mercer’s Global Talent Trends 2022 study, 32% of the surveyed companies are making aggressive investments in reskilling their talent, the big question is what happens with the remaining 68%.

This same study reveals interesting information on the way in which many organizations are facing the shortage of talent by reducing the demand for skills, doing this through the deconstruction of job positions, separating specific tasks that can be automatized and, thus, redesigning the positions to be staffed by talent with a lower level of competence- This, however, in not possible in the case of numerous work positions and, therefore, talent planning becomes a strategic and essential process for business sustainability.

The base for this whole exercise is the identification of the inventory of organizational capabilities, based on the abilities, experience and attitudes that the people in the organization have. The question is how to measure this inventory and how to use it to support the actions that the business needs to take in terms of development and growth.

There are currently two approaches to building this talent inventory. The first one is based on talent segmentation through the use of methodologies such as 9box, where groups of individuals are identified by their level of performance and potential, identifying four types of profiles that correspond to:

  1. The group of people with a high capability to take on new challenges in new environments, be it territories, markets with different categories, portfolio restructurings, among others.
  2. The group of experts that, given their deep mastery and knowledge can ensure the operation of the business or its organic growth.
  3. The group in the process of consolidation, that requires strengthening both its capabilities and its results with the objective of being prepared for future challenges faced by the company. AND
  4. The group of talent that for various reasons needs an immediate improvement boost to create value within their positions once again.

Establishing these four groups and measuring the dimension that each one of them has in relation to the future objectives of the organization provides full clarity on the gaps and specific needs for injecting capabilities or accelerating the development of capabilities or knowledge. Nevertheless, this is a live inventory, it changes continuously and, therefore, it must be ensured that the team leader exercises the responsibility of administering and managing the value that this talent has.

When a manager takes a position as head of a function, we normally ensure that somebody informs him about the status of his objectives, his resources, budgets, goals and commitments. Today, a practice that is taking increasingly more importance in high-level organizations also has to do with the provision of a talent balance, that is, the manager receives a detailed inventory of the capabilities of the people on his team and, in turn, also receives the responsibility of managing and increasing them as part of his business results. It could not be different, Human Resources is not the one responsible for taking care of these skills and when team leaders understand their role in this sense, organizations create a significant competitive advantage.

The second way of conducting a talent inventory is based on the identification of organizational capabilities through the measurement of individual capabilities.

In this sense, some companies are advancing in the acknowledgment of individuals’ experience and knowledge in the different functional routes of the business. To this end, the first step is the definition of the key competences that generate the company’s differentiating factor, and then evaluate the knowledge, capabilities and attitudes that the people have in order to generate a successful performance of their duties. This technique has the advantage of identifying the actual practice of these capabilities and defining, at the same time, the type of positions that can help accelerate their development.

Both methodologies for conducting a talent inventory have advantages and, therefore, the best way of deciding which one is the most suitable for the business is based on the type of challenges faced by the company and the processes that support the growth of people within the organization.

Ever increasingly, companies are understanding the role of responsibility in the empowerment of the people who comprise the work teams and, therefore, having strategic areas for talent planning and management that are truly functional and that are ahead of the client’s future needs is a key element for competitiveness.

What is also very interesting is that the capabilities of talent inventorying are no longer frameworked only in the technical mastery of the processes or in the generation of results, every day an increasing number of high-performance companies have discovered that human skills, improperly labelled as soft skills, are the ones that make the difference in the capability for successful adaptation and in the exponential development of business plans.