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THE ROLE OF SENIOR LEADERSHIP IN HUMAN CAPITAL AND TALENT MANAGEMENT Part 2

Human resource management have evolved over the past decade. There needs to some evaluative standards for HR and talent management.

Anton S. Wahjosoedibjo of PEN Consulting shares his thoughts about The Role of Senior Leadership in Talent and Human Capital Management in a presentation.

We will look at the strategic plan and opportunities that is presented the second part in this article.

To view full article, click on the link. http://www.penconsulting.com/documents/Paper_Senior_Leadership_Role_in_HCM.pdf

Value Delivery Process in Human Capital Management
Exhibit – I shows a concept of Value Delivery Process in Human Capital Management, from Existing to Desired Human Capital Values, which include the following conditions:

• Efficient, High Value and High Performance Human Capital
• Human Capital Monetary Values are booked in the Balance Sheet and become marketable asset
• Human Capital and Talent Management become integral part of senior leadership roles. In order to achieve such conditions, we propose the strategy, describing how we are going to achieve the desired conditions; the value added steps to obtain additional values beyond strategic goals; and what should be developed and produced to make the desired goals realized, as highlighted below:

Strategy
• Apply Competency Based Human Resource Management.
• Apply best practice of Talent Management
• Integrate Strategic Human Capital Development Plan with the Corporate Strategic Business Plan
• Advocate commitment of Senior Leadership to exert proactive role in Human Capital and Talent Management as an integral part of their leadership functions

• Enhance the role and capacity of Human Resource Professionals.

Add Value
• Align competency based HR development with individual talent

• Recruit candidates with the right talents to meet organization needs

• Assign monetary value of existing and potential human capital
• Recognize talent to have potential value to human capital that has to be explored and developed to become tangible human capital value.

Develop
• Develop Competency Matrix for each position
• Compile inventory of and map-out existing and required talents
• Analyze HR competency gaps, prepare and deploy talent based competency development plan that may include HR relocation and reassignment
• Establish Personnel (HR) Inter-company / division / department Development Committees (PDC)
• Develop human capital valuation methodology and HC value monitoring, bookkeeping, reporting, and auditing procedures.
Produce
• Inventory and map of existing and required talents
• Competency matrix required for each position and personnel competency level

Strategic Plan for HC Development in line with Corporate Business Strategy covering among others: acquisition of new talents (potential HC), exploration and development existing talent into productive human capital

• Methods & Procedures to valuate and book HC financial values, including investment spent for HC value exploratory, development and production
• New Leadership Development. Program that incorporate Talent & Human Capital Management.
Those are just a few ideas from practitioner’s point of view that could be expanded and enhanced through further studies and researches by human resource professionals and academic communities. The system will work in any business organization provided there are commitment and proactive role-models from the top and senior leadership of the corporation.

THE ROLE OF SENIOR LEADERSHIP
Leaders, directors, and managers, who constitute the senior leadership in an organization, and members of the organization or workers, are required to maintain an organization’s existence. Their competencies acquired through formal education and experience that improve the organization’s productivity and revenues, are in essence the basis of human capital values. In order to maximize the human capital values, senior leadership in the organization should recognize the importance of the following aspects in human capital management:
o Talent – recruiting for the right talent through effective recruitment and identifying talents already embedded in the organization, and further develop these talents or potential capacity into needed competencies.
o Competency – applying competency based human resources management whereby all job positions have the required competency profile well documented and individual competency level of incumbents periodically appraised.
o Training, education, on the job experience – investing on improvement of individual competency in line with their respective talent into the required level of competency of the job position
o Placement, Rotation and Succession Planning and Performance Management – these are essential processes in managing talents and competencies: to develop the right talent for the right competency to carry out current or future job assignments. Good talent based
manpower planning reduces development cost and cycle time, improve productivity, and creates employee satisfaction. Effective performance management leads to improvement of human capital values.
o Health and Safety – attention to personnel health and safety are paramount to ensure that the organization’s human capital performs well and grows to higher value.

Motivation, Innovation – these represent the people aspect of human capital which do not exist in other physical capital. Highly motivated, innovative and creative people with the right talent based competency well developed will ensure high value of corporate human capital and growing corporate wealth.
Research conducted by John Bersin of Bersin & Associates 11) showed that the involvement of top executives in driving or actively participating in the talent management strategy is critical to its success. In the context of Asian culture, proactive role or role modeling and demonstrated commitment of top executive and senior leadership in the organization are utmost importance to ensure snowballing effect for a successful implementation of the talent and competency based human capital management through out the organization.

In order for the senior leadership to take proactive role in talent and competency based Human Capital Management, they should be made aware of the economic and intangible benefits of this integrated, strategically aligned human capital asset management systems, which require ongoing process. Exhibit –II shows an example of asset management process used by many oil companies to explore and develop their potential resources into real economic values. Similar ongoing process can be developed for use in the human capital / asset management and to integrate it into overall organization business strategy.

Economic benefits of the integrated talent and competency based human capital management include, among other things: increase revenues, customer satisfaction, improve quality, increase productivity, reduce cost, reduce cycle time, and increase return to shareholders and market capitalization 10). The intangible benefits include employees’ satisfaction, motivated work force,
climate conducive to innovativeness and creativity, and high individual and team performance. For organizations that have not fully exercised talent management, competency management and human capital management – the role of senior leadership in those organizations as change agents or “sponsors” to introduce and put Talent Management, Competency Based Human Resource
Management, and Human Capital Management processes to work will even be greater and more crucial. These processes require paradigm shift of the way senior leadership should look at human resources as the source of people power and human capital asset. Senior leadership is expected to disperse through out the organization the shared vision and strategic intents of the organization to give clear direction for those intertwined processes of talent, competency, and human capital management in order to achieve common goals.

Senior leadership in an organization has many ways to demonstrate and exercise commitment, interest and participation in the fabric of talent, competency, and human capital management processes.