A feeding frenzy for the best staff is being triggered by a war for talent that is testing even the most skilled talent management professionals. Annie Hayes discovers how to spot and keep talent.

Managing talent is the most crucial challenge facing HR, according to a survey across 17 EU countries by the Boston Consulting Group and the European Association for Personnel Management.

It's a finding that is backed up time and time again. Andrew Hill, head of talent management at HR consultancy Chiumento, points to a survey by DDI in which 4,500 global leaders put leveraging talent second only to improving customer service relationships.

Managing talent is not only a key issue for competitive operations but one that is increasingly sapping time – the Economist Intelligence Unit reports that chief executives spend as much as half of their time on it.

What is talent?

So what do we mean by talent? In their talent management report, Rebecca Clake and Victoria Winkler, research and policy for the Chartered Institute of Personnel and Development (CIPD), offer the following definition: "Talent consists of those individuals who can make a difference to organisational performance, either through their immediate contribution or in the longer term by demonstrating the highest levels of potential."

Yet they both agree that a universal and prescribed definition such as this doesn’'t hold much importance because talent needs to be tailored for the organisation and they believe that companies find greater value by formulating their own meaning.

At Gordon Ramsay Holdings, talent is essentially viewed as the creative flair of chefs; at Google, a person regarded as talented is referred to as a 'Googler', which is described as being a confident, 'ideas' person, and a 'challenger' who thinks outside the box. So it really does mean different things to different businesses and sectors.

The art of talent management, however, is easier to define across sectors. The CIPD offers a helpful definition: "The systematic attraction, identification, development, engagement/retention and deployment of those individuals with high potential who are of particular value to an organisation."

Amanda Marques, managing director of PPS, an arm of the Badenoch and Clark recruitment consultancy, comments that, definitions aside, it is very important to understand why you put time and effort into talent management and believes it's not something that 'just' happens: "It's about putting deliberate strategies in place."

The business of talent management

Andy Baillie of Kenexa, a global recruitment and retention specialist, says that in his opinion there are three distinct stages of talent management – attraction, assessment and managing the talent or performance management: "The introduction of technology makes attracting the best people better, faster and cheaper. Most organisations will try and out compete each other. It speeds up the recruitment cycle, and talent management is then about how quickly and how well you do it."

Baillie says a laissez-faire approach doesn't really work and suggests that actively pursuing the people you want to come into your organisation is a better approach – something akin to the 'deliberate strategies' Marques talks about.

It's about "continuing a dialogue" with good candidates, says Baillie – and those who make a shortlist but don't get the job shouldn't just be discarded, he advises: "Companies need to keep them 'warm', it saves on recruitment fees too."

Everyone has their own answer. Hill says that Chiumento looks to assess the market and environment first and look at talent management from that perspective.

United Nations, one of its clients, has been helped to identify its different markets addressing its talent needs accordingly: "There are centralised teams, so the strategy needs to be more consistent, conformity should be rewarded; talent management at the U.N. is about tradition and control," remarks Hill.

There are those who are doing it well and those, predictably, that aren't. Baillie comments that investment banks are "good at it", but adds, interestingly, that in his view they're not so good at retaining talent: "Pharmaceuticals are also good at talent management – they take a long-term view of nurturing talent. BP has undergone a significant organisation re-structure and they’ve put talent management at the centre of that," says Baillie.

Marques says that companies like Argos are making leaps and bounds when it comes to improving its talent management strategies: "They found different routes into talent – school leavers for example – it’s about understanding future potential."

The war for talent?

The 'war for talent' is a term that was first coined by McKinsey and, according to the experts, it is still as relevant today. Marques highlights the problem facing organisations of raw talent: "There's a lack of graduates taking science and engineering degrees and the problem is that other sectors are also interested in these types of skills too."

Hill agrees and adds a further dilemma is the number of graduates: "Around 15% of 18-year-olds used to go to university – now that's 45%. This raises a broader question about talent."

The problems continue the further up the talent tree you go. According to Hill, the single biggest factor constraining the growth of businesses such as HP and Cisco is keeping talented people.

The key, says Hill, is about competing on different levels such as the implementation of flexible ways of working and attracting certain demographics: "Look at the Fortune 500 – women leave at twice the rate of men in the US. Businesses are letting women down. Organisations have to focus on getting the culture right."

Marques says that some sectors are suffering more than others: "A Badenoch and Clark survey showed that a quarter of employers are finding it difficult to recruit accountants."

The difficulties are exaggerated by the constantly changing environment that is putting a squeeze on talent. The CIPD talks about the alterations to the demographic trends in the UK. By the year 2020, it is projected that the UK workforce aged 20-40 will decrease by 16 million and those aged between 45 and 65 will increase by 17 million.

There is also less loyalty to one employer from individuals who self-manage their careers and development which, in turn, results in a workforce that are as transient as the customers when it comes to loyalty.

Although talent can be attracted and retained with carefully executed strategies, what is apparent is that taking a back-seat to talent management holds organisations back from realising their true potential.