Dr Xiaoxian Zhu looks at the talent situation for smaller businesses.
Talent management is a popular term and has become one of the main factors in driving the competition and development of small and medium-sized enterprises (SMEs).
It is a key process in Human Resource Development (HRD), and for learning and development professionals. To develop talent and maintain competitive advantage, however, SMEs face some challenges due to its scale. Therefore businesses first need to understand its importance and to identify the talent in their organisation.
Debate exists over who or what is considered as talent and how ‘talent’ differs from other terms in HRD, including skills, human capital or competence. Although many businesses use organisation-specific definitions, influenced by sector or type, in my experience quite a lot of companies still do not know how to define talent, let alone how to manage it.
The CIPD found that talent mainly focused on individual attributes, with great variations over definition. In many organisations, talent may be equated with leadership or leadership potential.
There are some specific problems in Human Resource Management (HRM) facing SMEs, such as limited HR resources and knowledge, limited resources for employee development, an imperfect recruitment mechanism, the shortage of HR investment and the difficulty of retaining talent.
The right talent, and recruitment of suitable talent, is very important for the overall development of SMEs.
These problems seriously restrict the development of enterprises themselves. So the study of HRM in SMEs, and understanding the importance of identifying and nurturing talent, can provide much needed reference for learning and development professionals in solving these problems.
This is of great significance for promoting the healthy development of SMEs and to ensure their stable growth.
Researchers believe that most talent is developed from natural abilities through learning. Recent developments also stress the importance of intensive practice in developing talent and specialised abilities, as well as the role of prior expectations. Talent may be present but unrecognised and undeveloped, as with ‘late bloomers’.
This can generate the ideal and effective talent development with motivated individuals constantly looking to learn from feedback through targeted exercises provided by experienced, supportive mentors and coaches, challenging them to go beyond their limits and ‘get better faster’.
This suggests key roles for motivation and learning ability, or trainability or absorptive capacity, in development.
Identifying these talent elements can help businesses understand the talent in their industries and maintain competitive advantage. Talent can be seen ‘inclusively’ or ‘exclusively’. ‘Exclusivity’ is the most common approach taken in practice.
However, due to the smaller scale of SMEs, especially those in the high-technology industries which are leading organisational innovation in the world (a key focus of my research) and the high rate of technical skills required in this industry, inclusive approach is mostly adopted.
The exclusive approach should be adopted in different emphases on identifying or ‘buying’ talent versus developing or ‘building’ high priority technical skills.
Talent is the core competitiveness of SMEs. Differing from HRM in large enterprises, SMEs, due to their smaller scale, fewer management hierarchies, quicker decision speed and fewer employees, should pay special attention to the selection and training of talent.
Because every single newcomer or talent counts. The right talent, and recruitment of suitable talent, is very important for the overall development of SMEs.
Therefore, when selecting talent, learning and development professionals must help and support organisations to choose talent that can meet the needs of enterprises and have a sense of belonging to the organisation. Of course, this puts forward higher requirements for HRM.
In short, SMEs should not go too far in employing people. SMEs cannot draw huge amounts of capital from large enterprises to store talent. Businesses need employees who are quick to work and become loyal. So SMEs should not pursue talent, only the ‘right’ talent will create competitive advantages for enterprises.
Most SMEs still lack effective measures for the introduction and training of talent, training and improvement of staff, construction of enterprise culture, improving the enthusiasm of employees and the sense of identity to the enterprises. Therefore, establishing a standardised staff education and training system is especially important to nurturing talent in SMEs.
It is essential to understand whether talent management is focused on people’s performance or their potential in the organisation. In SMEs, high-technology companies as an example, such ‘high potentials’ tend to focus on technical skills.
Also, in SMEs normally the person who does the most urgent and important tasks and plays the key role in the project operation chain has more priority when differentiating the talent group; while whether the ‘position’ is manager or non-management is not so important.
Most SMEs have less understanding of the urgency of talent management and find it difficult to identify their talent due to their limited scale, business environment, the fast paced development and changes. To establish a systematic talent management system and plan and nurture talent in SMEs continues to be proved to largely impact organisational development in a strategic way.
In high technology industries, at initial rising talent levels, training and education in core technical/professional skills dominates. At later stages, training and education for management with assessment of role/capability fit and interventions by mentors and supporting colleagues is emphasised.
HR and learning and development professionals in SMEs should pay early attention to talent management, and raise awareness of talent management with their employees and management.
Managers may not be all aware of the needs of talent management due to their organisational size or location or background, and matters relating to recruiting, developing and retaining such individuals, whilst some subsidiary/line managers are shown to often act in their own interests, hiding their best employees.
About the author
Dr Xiaoxian Zhu is Principal Lecturer (International) and a programme leader of the MA in Human Resource Management at Teesside University Business School. She specialises in talent management, learning development and employability in high-tech industries.