The interview distilled some key points about having an effective talent management strategy. Firstly, an effective strategy relies on a very proactive approach. HR managers must see the importance of going out there and seeking information relevant to their industry and their role. They need to inquire about what is taking place in their own verticals as well as key trends on a macro level. They then need to relate that back to their organisation ie draw the connection between what’s happening in their industry with what’s happening at a micro level in their own organisation. Trends and industry outlook only take you so far in providing a complete picture.

What was clear from the conversation we had, is that at times, HR lacks insight. What this simply meant is that HR seems to lack the ability to know what to do with the data that they have and to connect it with workforce planning, for example, or any of the issues they are looking at. It is this lack of insight that prevents them to going that one step further.

A focus on administrative tasks, the inability to delegate these tasks and to take on a more strategic approach, alongside the changes that affect the global economy and the industry would mean that HR would be slower in understanding their organisation’s business strategy. Consequently, it would result in an inability to transform the strategy into a relevant and executable plan.


From left to right : Erik Schmit, Rolf Bezemer, Rowena Morais
and Datuk Dr Hamzah Kassim. Photograph courtesy StepStone Solutions.

Below are highlights from the conversation that took place.

HR Matters : What do you believe should be among the top three issues that any successful HR person would be concerned with, in putting together an effective talent management strategy?

Dr Hamzah : We first need to understand the business strategy, the different pressure points in the organisation that may raise the demand for new talent management. This is particularly obvious when the people element are critical to service delivery and this is where we see greater commitment to talent management. We need to understand the driver behind a talent management initiative. When we work with certain organisations, we’ve noticed that at certain life cycles, talent management is critical to moving things ahead. Questions like whether they have the talent in place may come up when there may be new investments, diversification plans or new mergers as well.

The second issue is that HR has to understand the current capability. A lot of focus in talent management is currently actually on personnel management, which is more operational in outlook. But the shift in the institutional mindset is important. Talent management requires more than a focus on operational issues. It demands a forecast of future skills as well as an ability to anticipate new compensation systems that need to be in place to acquire, retain and develop talent. If HR is focused on operational issues, that mindset shift will indeed be challenging because they won’t have the expertise and capability to migrate to a more sophisticated and newer talent model. Institutional capacity is critical.

Rolf Bezemer : One of the things that aligns to that is that there are many areas in business where there are instruments and performance indicators (supply chain and financial, for example) in other areas of the organisation to give you a feel for what happens. But when one looks at HR, there is still a lot that’s done on gut feel, traditional wisdom and not really based on argument or fact. So, it is very hard then for HR practitioners to overcome the hurdle and make informed decisions. It becomes hard to overcome the transactional mode and get over other operational issues such as payroll management etc. But the fact remains – if you want to be more aligned with the business strategy, you need to stand up and be better.

HR Matters : Do you think that the focus on gut feel, for example, is related to a lack of tools or a lack of awareness?

Rolf Bezemer : There’s a lack of insight; in knowing what to do with the data you have or connect it with workforce planning or strategy. One of the trends that we have seen with talent management is that scenario modelling and predictive forecasting for the workforce is becoming more important. However, you cannot achieve this if you don’t do certain things to put the framework in place.

Erik Schmit: I think that HR is really in a transition. In regards to your point about HR being very focused on administration, the thing is that with the changes in the global economy and changing demographics, it really then becomes key for HR to understand the business strategy so that they can transform it into a relevant executable talent management strategy. To that end, I think that insight is key.

HR Matters : What do you see as one of the primary reasons for this lack of insight?

Dr Hamzah : In Malaysia, it is the shift in the economic structure from a very production intensive industry to a knowledge-based industry. You see that the sudden shift now to a knowledge-based industry requires a different understanding of the skill, demand, compensation and incentive systems. It is new for many in HR. In the past, a small percentage of total costs were related to people costs. ‘People are your assets’ was indeed a rarity, in a sense. Now however, for some organisations, this people cost can represent up to 80 per cent of their total cost. This issue is exacerbated by greater talent mobility, the increased demand for good talent in the region and the pressure to retain the people you have spent a lot of effort in developing. So, scarcity of talent combined with greater mobility of talent does indeed create some issues that HR has to deal with.

Rolf Bezemer : If you compare this against what’s happening in the US and Europe, the challenge with retention seems to be much higher in Asia. With Malaysia, as we noted in a recent survey, although Malaysians do appreciate job security and stability, they appear to be one of the highest mobile movers in the world. This simply means that as an HR organisation, you are faced with a lot of investments in people that have a short ROI. Consequently, there is a lot of opportunity cost attached to it.

Erik Schmit: One of the reasons why insight is becoming so important for people to retain and attract talent is that it is looking more and more like a sales cycle. You do need to understand the talent that you want to hire, you need to understand the drivers and what it is that they are looking for, to be competitive.

HR Matters : So we’ve identified that lack of insight is an issue. How would we address this?

Dr Hamzah : I believe you need to understand the talent market from a macro perspective and see what is in demand. What are the issues facing talent now? You need to anticipate future competency and really understand the competitive environment in terms of compensation. Then, you need to understand how to develop your talent model. And by this I mean, in terms of the different structures, the capability, the future demands of your business, the culture you need to shift in your organisation, gathering insight into your people’s desires, their career model.... these internal issues. The fact is that technology to a great extent, is delayering the organisation. The removal of layers of hierarchy is creating a different sort of organisation. To this end, organisations can sometimes be seen not to build a career path for their talent. We work with clients where in the process of large IT implementation projects, we are called upon to restructure an organisation. These changes mean that sometimes, people question where they move to, from where they are, within an organisation. This is not always so clear. People get disappointed when they find that the organisation is not putting their career path forward. People also want to know where the next step is. Therefore, from an HR point of view, you need to take this into account and you need to show them their career path. All of this has to be configured.

Rolf Bezemer : The classical dilemma for HR is being in a sort of split where they reactively report on stuff that has happened and not necessarily be in a situation where they are talking about the future and various scenarios. This is because they may be missing a framework or a well-defined set of talent variables. It varies for the different verticals and dependent on organisational maturity as well.