The Strategic Interdependence of Attracting, Developing, and Retaining Talent

The Strategic Interdependence of Attracting, Developing, and Retaining Talent

Why is it important for managers to recognize the interdependence in the attraction, development, and retention of talented professionals?

The first important step for a company is to hire talented professionals. However, it is also essential that these talented individuals are developed further in order to maximize their contributions to the success of the company (Dess, et al). The next step is to develop strategies to retain the developed talents by not only recognizing and compensating them but also by ensuring that the work environment is a quality one. Poor hiring tends to impede the effectiveness of the process of developing and retaining talented professionals. It also creates additional burdens during training.

 What are some of the potential downsides for firms that engage in a “war for talent”?

Organizations tend to offer competitive salaries in order to attract and retain talented professionals. This is not only expensive but also limiting because other than the salary, there are other more important factors that candidates look into before they accept a position from a firm. Thus, the use of appeals rather than pay is the best strategy to attract and retain human capital. In addition, an extremely competitive recruitment process might cause disreputable hiring processes, and this will definitely damage the reputation of the company, not to mention the fact that it signifies an unstable working environment.

Discuss the need for managers to use social capital to leverage their human capital both within and across their firm.

It is important for the managerial team of a company to understand the way work should be done as well as the interaction of people both within and outside the company (Dess, et al). This is because such interactions could affect the company’s long-term health. According to social capitalism, mutual respect and friendships are factors motivating professionalism, loyalty, and human capital development. Some of the characteristics of social capital include interfirm relationships, and this helps firms to work with buyers, suppliers, and partners via mutual projects and exchange of information. Social networks are recognized as an important basis for collaboration.

Works Cited

Dess, Gregory. Strategic management: Text and cases. McGraw-Hill Education, 2013.

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Summary: Firms throughout the industrial world are recognizing that the knowledge worker is the key to success in the marketplace. However, they also recognize that human capital, although vital, is still only a necessary, but not a sufficient, condition for creating value. We began the first section of the chapter by addressing the importance of human capital and how it can be attracted, developed, and retained. Then we discussed the role of social capital and technology in leveraging human capital for competitive success. We pointed out that intellectual capital—the difference between a firm’s market value and its book value—has increased significantly over the past few decades. This is particularly true for firms in knowledge-intensive industries, especially where there are relatively few tangible assets, such as software development.

The Strategic Interdependence of Attracting, Developing, and Retaining Talent

The second section of the chapter addressed the attraction, development, and retention of human capital. We viewed these three activities as a “three-legged stool”—that is, it is difficult for firms to be successful if they ignore or are unsuccessful in any one of these activities. Among the issues we discussed in attracting human capital were “hiring for attitude, training for skill” and the value of using social networks to attract human capital. In particular, it is important to attract employees who can collaborate with others, given the importance of collective efforts such as teams and task forces. With regard to developing human capital, we discussed the need to encourage widespread involvement throughout the organization, monitor progress track the development of human capital, and evaluate human capital. Among the issues that are widely practised in evaluating human capital is the 360-degree evaluation system. Employees are evaluated by their superiors, peers, direct reports, and even internal and external customers. We also addressed the value of maintaining a diverse workforce. Finally, some mechanisms for retaining human capital are employees’ identification with the organization’s mission and values, providing challenging work and a stimulating environment, the importance of financial and non-financial rewards and incentives, and providing flexibility and amenities. A key issue here is that a firm should not overemphasize financial rewards. After all, if individuals join an organization for money, they also are likely to leave for money. With money as the primary motivator, there is little chance that employees will develop firm-specific ties to keep them with the organization.

The third section of the chapter discussed the importance of social capital in leveraging human capital. Social capital refers to the network of relationships that individuals have throughout the organization as well as with customers and suppliers. Such ties can be critical in obtaining both information and resources. With regard to recruiting, for example, we saw how some firms are able to hire en masse groups of individuals who are part of social networks. Social relationships can also be very important in the effective functioning of groups. Finally, we discussed some of the potential downsides of social capital. These include the expenses that firms may bear when promoting social and working relationships among individuals as well as the potential for “groupthink,” wherein individuals are reluctant to express divergent (or opposing) views on an issue because of social pressures to conform. We also introduced the concept of social networks. The relative advantages of being central in a network versus bridging multiple networks were discussed. We addressed the key role that social networks can play in both improving knowledge management and promoting career success.

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The fourth section addressed the role of technology in leveraging human capital. We discussed relatively simple means of using technology, such as email and networks where individuals can collaborate by way of personal computers. We provided suggestions and guidelines on how electronic teams can be effectively managed. We also addressed more sophisticated uses of technology, such as sophisticated management systems. Here, knowledge can be codified and reused at a very low cost, as we saw in the examples of firms in the consulting, health care, and high-technology industries.

In the last section, we discussed the increasing importance of protecting a firm’s intellectual property. Although traditional approaches such as patents, copyrights, and trademarks are important, the development of dynamic capabilities may be the best protection in the long run.

SUMMARY REVIEW QUESTIONS

1. Explain the role of knowledge in today’s competitive environment.

2. Why is it important for managers to recognize the interdependence in the attraction, development, and retention of talented professionals?

3. What are some of the potential downsides for firms that engage in a “war for talent”?

4. Discuss the need for managers to use social capital in leveraging their human capital both within and across their firm.

5. Discuss the key role of technology in leveraging knowledge and human capital.