insight November 2007

Leading Talent Planning Practices (What your organization needs to know!)

Domain Expert: Mark Albrecht, Vice-President, Talent Management Solutions, malbrecht@salary.com

Bottom Line To successfully attract and retain talent, organizations need to develop, deploy and monitor an effective
Talent Planning program that is driven by organizational strategies and goals.

Subjects The scope of talent planning

Executive Summary 65% of employers

In todays competitive marketplace, while attracting the right caliber of employees remains an believe that their
imperative, it has become equally important to establish effective programs for developing
companys performance
employees from within, ensuring retention of key employees and planning for succession or
review process leads to
vacancies before they occur. All too often succession planning is initiated only after a key
employee has departed with no viable replacement and the business impact has already occurred.
improved performance.
Less than 40% of
Talent Planning may be viewed as broader than succession planning in that it is an ongoing
employees agree.
process that seeks to continuously groom and develop employees within the context of
organizations goals and strategies and 55% of managers claim
does not focus exclusively on replacement Exhibit 1 that they meet formally
for key positions. The core purpose of
Talent Planning Life-Cycle with their employees
Talent Planning is to retain key employees.
A retention strategy is accomplished 2 or more times a year
within a five-phased talent planning life to review performance.
cycle (see Exhibit 1). Less than 30% of
Plan
employees agree.
PLAN: Anticipate talent needs and
competencies. 33% of HR professionals
SELECT: Identify high performers with surveyed indicated
Replace Select
potential. that employees leave
DEVELOP: Augment the competencies Retain because of their
of high-potential employees. managers.
PROMOTE: Create a pool of ready
Less than 10% of
managerial talent.
Promote Develop employees agree.
REPLACE: Manage effective
succession in leadership positions.

Source: salary.com Surveys

Talent needs vary by organization; however, there are fundamental denominators that should be embraced in order to have an
effective Talent Planning strategy. This publication discusses the leading practices that successful organizations incorporate
when planning or optimizing their Talent Planning program.

The Scope of Talent Planning

Organizations differ in strategies, level of dependence on highly skilled workers, percentage of employees whose retention
is critical to maintain a vital workforce and the funds available for Talent Planning programs. These differences dictate the
composition of programs, as well as the percentage of employees that are covered. Given these natural distinctions in
organizations perspectives, it is worthwhile to discuss the dimensions that help calibrate these programs.

Additionally, understanding these best practices within the context of budgets and an organizations unique talent needs
enables the identification of specific program areas to accent in order to achieve effective practices for each organization.

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 insight November 2007

The Talent Planning process can be disaggregated into four dimensions as shown in the Talent Planning Program Pyramid
(see Exhibit 2). As organizations develop talent plans, they need to ascertain the depth (hierarchy of positions) and the breadth
(number of employees) that these four dimensions will encompass.
Exhibit 2
Succession Planning: The periodic process of identifying, assessing and Talent Planning Program Pyramid
developing senior-level leadership candidates to potentially succeed current
company leaders in key senior management and business unit positions in
order to ensure the continuity of the business.
Leadership Development: The process of identifying, assessing and
developing high-potential employees as candidates for managerial or Succession
leadership responsibilities in the future. Planning
Talent Development: The process of identifying, assessing and developing Leadership
talent pools for jobs or skills that have been identified as critical to the current Development
or future business. Talent Development
Career Planning: The ongoing process of identifying, assessing and
developing employees in a formal program for managing their growth and Career Planning
advancement within the organization

The cornerstone of an effective Talent Planning program is to target those competencies and skills that are critical to future
business and to select high-potential employees judiciously for development. Successful programs always find an optimal
balance between investable budgets and critical talent needs.

Seven Pillars of Talent Planning

A critical underpinning of leading Talent Planning practices is that the entire process from inception to execution is more formal
than not, but managed prudently so that objectives that are critical to the organization are captured without unnecessary effort
or bureaucracy. The 7 practices described below are the hallmarks of cutting-edge Talent Planning processes that should be
applied to varying degrees and across different employee segments depending on each organizations priorities (see Exhibit 3).

Formal Process Perspective: Organizations with leading practices Exhibit 3

define Talent Planning as the process of perpetuating the workforce 7 Pillars of Talent Planning
skills needed to support the business strategy. These organizations
establish formal processes for planning, managing and measuring talent
Talent Planning
programs with the same approach and rigor as that which is applied to

Employer & Employee Value Balance

managing tangible assets. They define talent more broadly as those
Success Measurement Mechanism

Targets a Broader Employee Base

Critical Part of Strategic Planning

Formal Assessment & Selection

Formal Process Perspective

key skills, job families and leadership positions that will ensure the
Program Communication

organizations continued growth and competitive advantage.

Critical Part of Strategic Planning: Leading practice organizations
consider Talent Planning as an integral part of strategic business
planning. They mold their talent programs to support strategic objectives
and plan for their talent needs as they do for other strategic assets.
Talent Planning is the responsibility of line management and managers
are held as accountable for Talent Planning as they are to other business
objectives. Typically, there exists a formal talent plan document as part
of the overall annual business plan and budget. EMPLOYEE BASE

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 insight November 2007

The process of developing the actual talent plan is an amalgamation of discrete sub-goals and steps, each of which involves
through development. Examples include:

Identifying the organizations strategy and goals related to talent planning

Defining the purpose and scope of the talent planning process
Determining program components and procedures
Formulating a talent resource plan
Presenting the business case to obtain funding
Measuring success

Formal Assessment and Selection: Successful Talent Planning practices embody a formal assessment and selection
framework for each program. Ultimately, the final selection is based on factors that are: 1) explicit and measurable and
2) predictive of success. In addition to a formal selection process, leading Talent Planning processes also employ formal
assessment testing to augment the selection process. This helps ensure the selection is based on a range of data that
presents an objective profile of the candidates capability on relevant job competencies or other dimensions of attitudes
and abilities.
Success Measurement Mechanism: Appropriate success measurement mechanisms need to be instituted in order to
objectively assess the effectiveness of Talent Planning programs. Effective programs measure success beyond the typical
employee retention and satisfaction metrics by documenting how talent programs contribute to the financial performance
of the organization as a whole. It is therefore vital to select those metrics for Talent Planning that are the most probable
drivers of business success. Leading organizations have established comprehensive measurement programs to track the
indicators of workforce and business performance with an aim to uncover the most significant drivers of business results for
their organization.
Communication about Talent Programs: Communicating about talent programs being a part of an organizations DNA is
as important as actually having such programs. While many organizations still choose not to communicate information about
their talent development programs to employees, leading practice organizations capitalize on their talent programs to motivate
employees and attract new talent. More explicit communication of talent programs helps existing employees understand how
to develop their careers within the organization. Employees also realize the organizations desire and commitment to invest in
top producers, which, in turn, becomes a strong motivator of enhanced performance.
Broad Audience/Targeted Programs: Traditionally, organizations have focused their Talent Planning efforts on the most
senior executive positions in the company. Organizations that embrace leading practices have expanded the scope of their
Talent Planning programs to a broader cross-section of employees, especially as organizations try to leverage more value
from their human capital. Designing talent programs to plan the development of a broader audience of employees can
improve the leadership pipeline at multiple levels of the organization and increase organizational performance. For example,
a government contractor might target talent development and succession programs for senior management and critical jobs
such as engineers and program managers in order to retain its competitive advantage. It is important to note that the goal
of talent planning is not to extend talent planning to all employees, rather to find the optimal balance between investment in
employees and return to the organization.
Balance Employer and Employee Value: Value in a business context is never a one-way street. Employers must be
prepared to offer a commensurate value proposition to employees if they expect higher value from them. Organizations that
want to attract and retain highly talented employees must design their Talent Planning programs to deliver sufficient value
from the employees perspective.

Recommendations
In addition to the practices enumerated above, organizations would do well to consider the following:
1. Reaffirm the Talent Planning Program: The process of communicating the program to your employees should be
based on the purpose and goals of your program. For a communications plan to motivate employees, it must be an
ongoing communication, a mere announcement is not sufficient. You must communicate continuously through the year
about the programs activities, employee achievements and results for the business. This enables the employees to see

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 insight November 2007

your commitment, comprehend the link to organizational results and understand what they need to do to earn the right
to participate.
2. Build a Business Case for Budgets: You may find it difficult to justify the cost of Talent Planning programs to senior
management. This is often because the benefits may not be as easy to determine as the costs. Reference other studies that
indicate and quantify the benefits from Talent Planning and, equally importantly, the risks and costs of inaction.
3. Assign Responsibility: It is imperative that you clearly ascribe the responsibility of the Talent Planning function. The
responsibility may be assigned to senior leadership, line management or a combination thereof. If you assign certain
responsibilities to the employees (e.g., career planning), then it is imperative that your organization provide the processes and
tools to support the employee-driven activity, including making managers accountable for acting on employee plans. Without
accountability for compliance and action, advocating that employees take responsibility is essentially lip service; in fact,
making the entire effort more de-motivating to employees.
4. Equal Opportunity: You need to be aware that Talent Planning programs are subject to EEOC regulations that pertain to
adverse selection or discrimination. Design your programs such that procedures for selection, promotion, training, etc.,
provide equal access to all and do not discriminate against any protected class of employees.

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