APRIL 2016 ∙ NUMBER 2016/03

FACT SHEET

TALENT MANAGEMENT:
PAST, PRESENT AND FUTURE
FACT SHEET ∙ APRIL 2016

1. INTRODUCTION
“Being excellent at talent management will enable an organisation to capitalise expeditiously on
future opportunities and changes.” Theo Veldsman, University of Johannesburg.

Talent Management as a people management concept has grown over the last decade, covering
the full spectrum from the point of entry of employees to the organisation to their point of exit.

“Talent management” as a term does not carry a universally accepted definition. A google search
on the term throws up 2,5m results. In order to bring some focus to the discussion on talent
management, the SABPP has, in its HR Management Standards, adopted the following definition:

Talent Management is the proactive design and implementation of an integrated talent-

driven organisational strategy directed to attracting, deploying, developing, retaining and
optimising the appropriate talent requirements as identified in the workforce plan to ensure
a sustainable organisation.

This definition clearly positions Talent Management as a strategic activity, which gives a framework
to guide and integrate many of the activities across the HR value chain such as recruitment,
learning and development, performance management and reward.

Many companies have been noted for their “game changing” talent strategy. “GE’s human resource
(HR) policies and practices underwent significant development and change in the last half of the
20th century. Four successive CEO’s made the development of management talent a high priority,
and in doing so, made GE’s HR management processes among the most sophisticated in the
world.”1. GE, Microsoft, and Google have become international benchmarks for a strong and fit-
for-purpose talent management strategy. Could this be the reason behind their success? Do they
possess the right talent for their strategy? Have they attracted, developed, retained the right
people for the right purpose? And most importantly, has their talent set them apart as a leader in
their industry, giving them the competitive edge?

Because Talent Management is a strategic process, HR must scan the environment and adapt
the strategy accordingly. Currently, South African (SA) organisations are experiencing economic
instability and the drive for talent could be waning due to the cost cutting measures organisations
are adopting. But at the same time, the drive for sustainability is high, so how do organisations
balance future needs and current cost constraints - can they afford the best talent for their
organisations in the short term? What are the challenges that are experienced within the labour
market currently and how can they affect Talent Management strategies and processes? What
does the future hold for Talent Management and how do HR practitioners prepare for it?

1 McLean, C.B. (2006) GE’s Talent Machine: The Making of a CEO. Harvard Business
School, 1. HBS Case no 399-150 (Boston: Harvard Business School Publishing), 1999

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2. Talent Management:
The Past – Case study Microsoft2
“We’re in the intellectual property business. It’s the effectiveness of our developers that
determine our success. Take our 20 best people away, and I will tell you that Microsoft will
become an unimportant company.” Bill Gates, CEO Microsoft (1992)

Microsoft in the 1980’s understood that talent was their main driver to achieve their world
leader status. Their initial focus was to develop human resource philosophies, practices
and policies. By the 1990’s as they grew, there were changes in these philosophies,
practices and policies. As Fortune Magazine once observed, “Microsoft has been led by a
man widely recognised as a genius in his own right, who has had the foresight to recognise
the genius in others.” The vision of their leadership clearly included the type of talent that
was required for the company. Gates had long recognised that it took exceptional people
to write exceptional software. His preference for hiring extremely intelligent people, not
necessarily experienced, new college graduates dated from Microsoft’s start up days when
he and co-founder Paul Allen recruited the brightest people they knew from school- their
smart friends.

How did Microsoft use their Talent Management Strategy to their advantage?

• They defined their type of talent they wanted to attract and aligned their HR policies to recruit
them. Bill Gates as their CEO was open and unapologetic in recruiting the “best and brightest”.
• As the company grew they focused their recruitment strategy towards young talent in
universities. Microsoft recruiters made visits to the chosen universities in search of the “best
and brightest”.
• They created an intense recruitment process before the candidate was hired, whereby the
candidate would be interviewed by at least 3 to 10 Microsoft employees.
• The recruitment process tested their thought processes, problem solving abilities, and work
habits. Little attention was given to their actual experience.
• Technical interviews were also conducted, and the candidate had to answer in a “written
code”. To test the candidates’ deductive reasoning, composure and problem solving abilities,
an oddball question would be asked during the technical interview. For example, the candidate
would be asked “How many times does an average person use the word “the” in a day?”. If the
candidate took 30 seconds or more or did not know, then the interview was over.
• The interview feedback to other interviewers had simply either one of two responses ie “Hire”
or “No Hire”. This was emailed to the applicant with no room for any “no grey areas”.
• Gates ensured that the company’s credo was upheld - “If you have someone who is mediocre,
who just sort of gets by on the job, then we’re in big trouble.” Gates believed and upheld
that the “big trouble” was that, even though poor performers were weeded out, mediocre
performers that remained were occupying positions that could be filled by someone brilliant.

2 Bartlett, C. (2001). Microsoft: Competing on Talent (A). Harvard Business School, 1 . HBS
Case No 9-300-001(Boston: Harvard Business School Publishing), 2001

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• Gates focused on building his Caffeine culture - the employee benefits and the non-mandated
benefits that created such a culture. “Anything with caffeine is free.”
• Talent was always developed and challenged to develop. Work assignments had to be
challenging and engaging.
• Reward was linked to employee ownership. Gates recognised talent with reward and linked it
closely to performance. Reviews were formal semi-annually, and responsibility was on both
the manager and employee.

Bill Gates is the richest man on the planet.

(Forbes, 2016). As a leader he ensured that
his talent management strategy changed and
adapted from the 1980’s to today.

“I’d have to say my best business

decisions have had to do with
picking people.”

3. Talent Management: The Present

Present talent management practices continue to incorporate aspects of the past. SA organisations
have borrowed the practices and adopted the strategy of companies like Microsoft. However, it must
be noted that not everything can be adapted and practised in the SA context. SA itself has moved
into a volatile and downward economic phase. GDP has decreased and that negatively impacts
sectors which are normally key areas of growth. Organisations are being forced to retrench, even
having to reduce key categories of staff. HR professionals need to adapt their talent strategies to
the economic climate of today.

Keller3 has identified key challenges in today’s global labour market:

CHALLENGES WITHIN THE LABOUR MARKET

a. The challenge of open labour markets, including issues of retention as well as the
general challenge of managing uncertainty.
b. New models for moving employees across jobs within the same organisation.
c. Strategic jobs for which investments in talent likely show the greatest return.

3 Keller, P. C. (2014). Talent Management: Conceptual Approaches and Practical Approaches.

Wharton School of Business, 305. Retrieved from Management Study Guide.com.

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Keller and Cappelli4 define two approaches where the first is inclusive (includes all employees)
whilst the second focuses on workforce differentiation to identify key categories. These approaches
have been used to manage the challenges within Talent Management – a leadership team needs
to decide on which approach they wish to us.

Inclusive All employees and workers have

strengths that are value adds to
the organisation

Subset of employees
or jobs that creates
disproportionate value exclusive

Challenges specific to South Africa include the influx of youth into the employment market and
the mismatch of job opportunities available to them. According to the South Africa Survey 2016
of the Centre for Risk Analysis (Institute of Race Relations), the number of unemployed people
(narrow definition) between 1994 -2015 increased from 2 million to just over 5 million. The number
of unemployed people (expanded definition) between 1994 -2016 increased from 3.6 million to 8.3
million. The graph below shows this trend very clearly.

4 Keller, P. C. (2014). Talent Management: Conceptual Approaches and Practical Approaches.

Wharton School of Business, 305. Retrieved from Management Study Guide.com

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OD
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Official definition Expanded definition

Source: 2016 South Africa Survey

What does this mean for Talent Management in South Africa?

• HR professionals must plan their talent forecasts in line with the business strategy and the
talent strategy in line with bottom line contribution.
• Job profiling should be aligned to the skills and competencies required for growth, sustainability
and profitability.
• Skills audits must be interlinked with workforce planning and succession planning.
• The talent management strategy must drive recruitment to ensure that the right talent for the
future is attracted.
• The selection process should include competency testing and assessments to ensure that new
recruits will reach expected performance rapidly.
• Rewards and recognition should be designed to be a performance motivator.
• HR must be business savvy, and link the talent management initiatives to organisation
affordability, while building the business case for investing in talent for the future.
• Due to the influx of young people to the labour market, the demand for jobs rises whilst the
supply of job opportunities decreases. This affects the economic growth of the country, and
poses a challenge to the Government and private sector. HR professionals need to drive the
talent strategy to attract the “best and brightest”, whilst ensuring compliance to the relevant
legislation like B-BBEE.
• Planning and forecasting of talent is critical. HR professionals need to understand and interpret
the climate of the country and how it impacts the business. Changes in legislation, new
technology, and socio-economic circumstances influence the strategic direction organisations
must take to survive the current challenges. The talent management strategy will provide the
competitive edge to secure the talent that drives and delivers on the strategy.

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• The SABPP HR Competency model emphasizes the capability of Talent Management and its
application and will assist HR practitioners to identify the skills they need to practise Talent
Management proficiently.
• The SABPP Talent Management Standard element should be prioritised as a key strategic
imperative in driving effective talent management strategies.
• Creating and building strong talent cultures in organisations is one of the most critical success
factors for sound talent management.
• In developing an inclusive approach to Talent Management, key talent segments in the SA
context should be identified, e.g. youth talent, black talent, women talent.
• A dedicated approach to talent development is needed to retain and optimise talent in
organisations.

Source: SA Board of People Practices (SABPP)

The Bersin by Deloitte report “Predictions for 2016 A Bold New World of Talent, Learning, Leadership
and HR Technology Ahead”5, focused on a set of key predictions for 2016. These predictions are a
good indicator of the type of changes that impact talent management strategies globally and how
the change impacts a particular country. South Africa currently is continuously adapting to the
economic climate changes and the resulting impact on business. These predictions are useful
for the preparation of new or improved strategies to assist business survival. The predictions6 are
summarized below:

1. The new digital focus for HR will change the way HR organisations design and deliver employee
solutions.

5 Home.bersin.com
6 Home.bersin.com

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2. Currently employees don’t find HR systems user friendly. These systems also are not delivering
analytics needed for talent management, therefore organizations will continue to replace core
HR systems with integrated cloud technology, “but it will be expensive, time consuming, and
may not deliver on all of the talent management tools we need.”
3. “People Analytics Accelerates Its Growth – Evolving to a Mainstream Program in the HR
Function.”
4. “A new generation of performance management, recruitment, learning wellness, and employee
feedback systems” as components of talent management will create a new generation of
talent management platforms
5. “Engagement, Retention, and Culture Persist as Top Priorities- With New Feedback and
Analytics Systems Coming to Market. Real -time feedback, culture assessment tools, and
other ways to capture and measure employee feedback will become a major new discipline
within HR and business.”
6. “Companies will continue to struggle with leadership development, leaders will advance young
leaders faster, push new leadership models, and spend more money on end-to-end leadership
programs. Mentoring and multigenerational support programs will grow and proliferate.
Research shows that coaching and mentoring are the most valuable talent practices which
you can develop in your company.”
7. “The Revolution in Corporate Learning Continues as a New Model Evolves. Learning teams will
focus more on “experience” and less on “program design,” and end-to-end design thinking
will spread throughout Learning and Development (L&D); curation and knowledge-sharing
will grow. The “Four E’s model of Learning Model” is likely (when applied) to pivot your Talent
Management Strategy and L&D plans ahead of the curve in learning for 2016. The “Four E’s
model of Learning Model:

• Education (formal training)

• Experiences (developmental assignments and projects)
• Environment (a culture and work environment that facilitate learning)
• Exposure (connections and relationships with great people)”.

8. “Diversity and Inclusion Merge with Key HR and Business Strategies – To move Well Beyond
Compliance and Become a Strategic Part of Business.”
9. “The HR Profession Leaps Forward as a New Breed of HR Leaders Enter the Stage”.

4. Talent Management: The “possible” future

The World Economic Forum, in the article “The Future of Jobs and Skills,” makes mention of
developing terms related to talent management. The integral change factor is the disruptive
changes occurring in business that will impact the employment landscape in the future. “Many
of the major drivers of transformation currently affecting global industries are expected to have
a significant impact on jobs, ranging from significant job creation to job displacement, and from
heightened labour productivity to widening skills gaps.”7. The article is the basis of results from
the Forum’s Future Jobs report which seeks to unpack and understand the difference between
the current and future impact of disruptions on recruitment patterns across different countries
and industries, the disruptions on employment and skill sets.

7 Forum, W. E. (2016). The future of jobs and skills. World Economic Forum. www.weforum.org

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What does the future hold for Talent Management according to the
World Economic Forum?

• Drivers of change leading to the beginning of the Fourth Industrial Revolution

• The growth in artificial intelligence, robotics, machine learning, nanotechnology, genetics and
biotechnology are emerging with speed.
• Smart systems will tackle all sorts of problems and challenges and impact socioeconomic,
geopolitical and demographic developments.
• Employment trends could lead to “a net employment impact of more than 5.1 million jobs lost
to disruptive labour market changes over the period 2015-2020.” (Forum, 2016)
• Total loss of 7.1 million jobs concentrated on white collar office functions e.g. Office and
Administrative roles.
• 2 million jobs gained in the Computer, Mathematical, Architecture and Engineering fields.
• “Manufacturing and Production roles are expected to see a further bottoming out but also
anticipated to have relatively good potential for upskilling, redeployment and productivity
enhancement through technology rather than pure substitution.” (Forum, 2016)
• New and emerging roles are prevalent by 2020. These focus on 2 job types which are Data
Analysts and Sales Representatives. These roles are projected to become critical roles in the
future as one will assist the companies to make sense of the data generated by the disruptive
technology, whilst the other need to evolve to commercialising and explaining their product
offerings.
• Changes in ease of recruitment, looks at current trends that leads to the competition for talent
in-demand professions like Computer and Mathematics; Architecture and Engineering.
• Disruptions in skill stability as the business model changes.
• The future workforce strategy should be a priority and business leaders must exercise more
agility in their reaction to the disruptions occurring.

Source: Forum (2016)

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World Economic Forum Recommendations for Action

• Reinvent the HR Function: “As • Rethinking education systems:”

Business leaders begin to consider Business should work closely with
proactive adaption to the new talent governments, education providers
landscape, they need to manage and others to imagine what a true
skills disruption as an urgent 21st century curriculum might look
concern.” like.”
• Making use of Data Analytics: • Incentivising lifelong learning:
“Businesses and governments “Governments and businesses have
will need to build a new approach many opportunities to collaborate
to workforce planning and talent more to ensure that individuals have
management, where better the time, motivation and means to
forecasting data and planning seek retraining opportunities.”
metrics will need to be central.” • Cross-industry and public-private
• Talent diversity - no more excuses: collaboration:”Given the complexity
“...it is time for fundamental change of the change management needed,
in how talent diversity issues businesses will need to realise
perceived and well known barriers that collaboration on talent issues,
tackled.” rather than competition , is no
• Leveraging flexible working longer a nice-to-have but rather a
arrangements and online talent neccessary strategy.”
platforms

Source: (Forum, 2016)

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5. Conclusion
According to the Talent Management Survey Report of 2012/2013 by Knowledge Resources,
performance in three areas can assist companies to have an advantage over their rivals8:

• “Build stronger people leaders.

• Do more to attract, develop and retain talented people.
• Treat and track performance with transparency.”

“The challenges facing many companies will require a paradigm shift in leadership capacity for
those organisations to succeed…We developed the Goldfields Limited leadership programme
aimed at achieving the transition of middle to senior managers currently operating at an operational
level of work into a more strategic level of work as our future general managers.” Italia Boninelli.9

Following through on the Knowledge Resources report, and according to BCG/WFPMA Creating
People Advantage Survey (2012)10 there are six essential steps to building your talent base, which
is the foundation in achieving and sustaining a talent advantage over rivals:

1. “Develop a Talent Strategy.

2. Develop a Leadership Model
3. Tailor your Sourcing activities to attract Diversity
4. Engage in Talent development activities that accelerates internal capabilities
5. Create a culture of Talent engagement and affiliation.
6. Create a Talent Magnet Culture”.

In comparison, Bersin identifies “key practices that create an inclusive talent system- they are
hallmarks of global companies that outperform their peers today.”

• Integration of diversity topics and inclusion programs in learning and development.

• Coaching and specific practices that create inclusion and reduce bias in performance
management.
• A focus on inclusion and diversity in succession management.
• A diversity and inclusion strategy that is well-communicated throughout the company.
• A senior diversity and inclusion leader who is empowered to set standards and
communicate results.
• A focus on tools and training to include diversity in career management and development.
• The development of tools, training, and metrics for diversity and inclusion in talent
acquisition.”

Source: Bersin, 2016

8 Knowledge Resources Talent Management Survey Report of 2012/2013

9 Human Capital Trends, 2011 Boninelli & Meyer, Knowledge Resources
10 BCG and WFPMA Research. 2012

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FACT SHEET ∙ APRIL 2016

The HR function is the custodian and driver of the Talent Management Strategy and can utilise the
information of this Fact Sheet to improve their strategies. The key themes reflect that change in
the business environment is the catalyst for Talent Management strategies to adapt accordingly.

The SABPP audited 14 companies by November 2015, found that the Talent Management Standard
rated a 4.7 out of 10. This scoring shows that Talent Management within South Africa is an area
that warrants improvement and that HR practitioners are recognising the importance Talent
Management plays in the overall business strategy. These results indicate that Talent Management
requires much more focus and attention, and needs to be developed more strongly. The past,
present and future trends provide an important thread to show how much impact a strong, fit for
purpose Talent strategy can have on the success of the business.

Former MTN group president and CEO

Sifiso Dabengwa says “the company
invests significantly towards building a
sustainable supply of quality leaders.”11

It is therefore the responsibility of the HR leadership to ensure that their talent plans are meeting
the expectations of the business vision and the changing environment.

This Fact Sheet was written by Lathasha Subban of the SABPP with acknowledgements to
Mr Marius Meyer and Dr Penny Abbott.

11 http://www.itweb.co.za/index.php?option=com_content&view=article&id=65978

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 APRIL 2016 .∙ NUMBER 2016/01
2016/03

FACT SHEET
FEBRUARY

DATE NUMBER SUBJECT

2013
February 1 GAINING HR QUALIFICATIONS

March 2 ETHICS, FRAUD AND CORRUPTION

April 3 NATIONAL DEVELOPMENT PLAN

May 4 BARGAINING COUNCILS

June 5 EMPLOYMENT EQUITY

July 6 HR COMPETENCIES

August 7 HR MANAGEMENT STANDARDS

September 8 PAY EQUITY

October 9 COACHING AND MENTORING

November 10 HIV/AIDS IN THE WORKPLACE

2014
February 1 EMPLOYING FIRST-TIME JOB MARKET ENTRANTS

March 2 PROTECTION OF PERSONAL INFORMATION ACT

April 3 QUALITY COUNCIL FOR TRADES AND OCCUPATIONS

May 4 WORK-INTEGRATED LEARNING

June 5 RECRUITMENT – SCREENING OF CANDIDATES

July 6 HR RISK MANAGEMENT

August 7 BASIC HR REPORTING (1)

September 8 BASIC HR REPORTING (2)

October 9 EMPLOYEE ENGAGEMENT

November 10 SEXUAL HARASSMENT

For more information about SABPP, visit our website www.sabpp.co.za or blog
www.hrtoday.me or follow us on twitter @SABPP1 for daily HR information.

TALENT MANAGEMENT: PAST,

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 APRIL 2016 .∙ NUMBER 2016/01
2016/03

FACT SHEET
FEBRUARY

DATE NUMBER SUBJECT

2015
February 1 AMENDMENTS TO LABOUR LEGISLATION 2014

March 2 THE REVISED BROAD-BASED BLACK ECONOMIC EMPOWERMENT CODES OF GOOD PRACTICE

April 3 LESSONS LEARNED FOR EMPLOYERS FROM CCMA CASES

May 4 EMPLOYEE WELLNESS SCREENING

June 5 CHANGING THE EMPLOYMENT EQUITY LANDSCAPE

July 6 EMPLOYEE VOLUNTEERING

August 7 DEPRESSION IN THE WORKPLACE

September 8 EMPLOYEE WELLNESS

October 9 EQUAL PAY AUDITS

November 10 BASICS OF EMPLOYEE COMMUNICATION

2016
February 1 PRODUCTIVITY BASICS

March 2 SERVICE LEVEL AGREEMENTS

April 3 TALENT MANAGEMENT: PAST, PRESENT AND FUTURE

For more information about SABPP, visit our website www.sabpp.co.za or blog
www.hrtoday.me or follow us on twitter @SABPP1 for daily HR information.

TALENT MANAGEMENT: PAST,

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