How to manage talent on a budget: A guide for SMBs
When it comes to recruitment, small businesses have to be more discerning than big companies about who will suit their organisation. So, what are the benefits of having a talent acquisition, performance development and succession strategy in place?
Having grown a medium sized organisational development consultancy, I know too well the challenges of competing for top talent as a small or medium enterprise. By nature, small and medium enterprises (SMEs) have to be more discerning about who will suit their organisation, and their approach to talent development must be flexible agile, and affordable.
What are the benefits of having a talent acquisition, performance development and succession strategy in place?
“Talent” and “succession planning” are not just HR buzz words. A clear strategy supported by an efficient system will further develop and drive engagement, build high performance, and result in real financial returns. Some of the key benefits include:
1. Increased competitive advantage:
An effective leadership team, who can execute the organisation‟s strategy whilst improving the performance of those around them, can give your business an edge over the competition.
2. Improved operational efficiency:
Regardless of your destination, without a roadmap, the journey will be tedious and long. Clever systems and processes equal time and cost savings and will help to make your initiatives “business-as-normal” while still maintaining alignment to your overarching strategy.
3. Improved people performance:
If you are lacking an approach to talent and succession planning, chances are that you are not making the most of the right people in the right roles at the right time. A structured approach to performance and talent management can result in increased productivity and efficiency, greater engagement, improved time-to-competence and higher retention.
4. Decreased risk:
Improved line-of-sight over people and performance will enable you to monitor engagement and performance levels, helping you to address issues of poor performance and reduce turnover.
What is a best-practice approach for SMEs?
Many of the large enterprise approaches to talent acquisition, performance development and succession planning do not quite fit the average SME. In turn, there are some key components of these approaches that do work:
1. Have a real time talent acquisition strategy and plan:
To keep ahead of the market you should always be thinking about what your operating model is, how your structure aligns to it, and where the critical roles are in your business (including any “hot spots” where talent is hard to attract). This picture should align to a plan of what type of talent you are trying to attract at different levels within the business. It sounds simple but in fact takes a concerted effort and regular review to get it right. For my own business, I constantly think about the mix of capability we need at different levels, across functional areas of the organisation, and with the right proportion of industry expertise to match our client base.
2. Make the most of what you have with clever and targeted performance management:
There are so many options available to organisations around how to measure performance; from paper based approaches, online systems and completely integrated talent management approaches. SMEs need to be able to link strategy to the performance plan and therefore should be targeting a small number of key KPIs in the business and aligning top to bottom performance focus on these metrics. There should also be a focus on innovation and attention must be given to the behavioural side of performance in addition to the financial or tangible side. Failure to include these could negatively impact your culture in the long term.
3. Identify critical roles and critical talent and develop talent pathways and succession plans:
There is so much jargon surrounding engagement, succession, and talent planning but many SMEs have to be selective about where they invest their dollars. Our medium sized clients are continually asking what to focus on or prioritise when ones organisation cannot afford to invest in a bells-and-whistles HR program and a million-dollar employee benefits program. My suggestion is to automate what can be automated and focus your development investments on your critical roles and people. This will ensure you get the most out of limited budgets and HR capacity.
Where do I start?
Small companies have the advantage of being agile and hence able to manage their people on a more intimate and informal level. Employees of small companies are usually very aware of budget limitations– therefore, any benefit is perceived as a good benefit! While you are executing a broader talent strategy, there are also a number of quick-win initiatives you can implement for immediate improvements in engagement and performance levels:
- Devise a talent acquisition and development strategy: ensure all of your people initiatives are aligned to this.
- Be transparent with your talent: Make sure every person in your business knows “what is important” when it comes to performance. Build visibility and transparency around your key performance metrics and expectations.
- Invest in cost efficient performance and development technologies: In identifying a gap in the market for cost-efficient development solutions, we have designed our own interactive learning portals featuring over 600 professional development strategies, activities, techniques and tools. You can also take your own approach by introducing e-learning or an intranet with a professional development modules.
- Implement affordable recognition programs: Introduce initiatives to celebrate both individual achievement and team performance, keep a strong focus on reinforcing the right behaviours.
- Design-your-own employee benefits package: This can be as simple as offering group personal training sessions, extended Friday lunch-breaks, purchasing industry magazine subscriptions, or, giving each individual a small budget per year to spend on personal development.
- Refresh your Employee Value Proposition: Who says SMEs can‟t compete on a brand level? Ask your employees what really matters to them and revisit your internal messages to ensure you are creating a culture that people really want to be part of.