Struggles of Attracting and Managing Talent in a Modern Organisation

Today, the market environment is composed of millennial who demand a working atmosphere that best fits their requirements. In this regard, executives in modern organisations have struggled to attract and manage talents in their businesses. The provision of better working environment and formation of reward system may act as a solution for the challenges of attracting and managing talent. However, in order to achieve this, human capital is required and has remained to be a top global concern for most managers. The operational success of any organisation is solely determined by its ability to properly engage and motivate the workforce, which in return will drive innovation. Today’s millennial generation and its differences have introduced workforce dynamics that should be learnt by the management team in order to attract, retain and satisfy talented individuals (Festing and Schäfer 2014, p.68). In a bid of successfully navigate the current talent acquisition struggles, HR organisations should strategically and operationally position themselves, which in return will ensure that they have asserted their presence in the current competitive market. Thus, in order to win the competitive “war for talent”, better incentive system and planning should be set up (Khandelwal and Rajotia 2017, p.354).

In the current hiring climate, candidates have become so selective of the organisations that they choose to work. Various researches have indicated that over 78% of individuals would look into a firm’s reputation before applying for a particular job position. In this regard, organisations should invest a lot of resources and time in creating and developing a system that would make them unique from the competitors (Khandelwal and Rajotia 2017, p.355). According to various reports on the impacts of providing incentives to staffs, the creation of a reward system in an organisation may attract over 57% of the candidates since benefits and perks are among their top considerations before they decide to accept the job (Zhang et al. 2008, p.251). When compared with a pay rise, over 80% of candidates would settle on perks and incentives. Although the creation of a reward system has been considered as one of the ways through which modern organisations can attract and manage talent, this view may not be entirely true (Resnick et al. 2017, p.60). Contrary to what most firms believe on the impacts of large incentives on attracting and managing talents, for a business corporation to create and develop a working environment that will bring in new talented individuals, it is required to change the way it looks at the effects of rewards and incentives on employees (Mohamed-Padayachee 2017, p.20). Hence, in order for organisations to tackle the struggles for talent attraction, the management team should put into consideration less tangible perks such as career advancement and culture (Zhang et al. 2008, p.250). When organisations solely put their concentration on the reward system, they may believe that the issue of attracting and managing talent is solved since it becomes hard to identify the harm the approach cause over the long-term. Investing a lot of resources on reward systems do not improve the working environment, but rather mask the existing issues and challenges temporarily (Resnick et al. 2017, p.66). The masking of the issues affecting firms does not lead to long-term positive outcome or change. Instead, the approach may bring forth the negative psychological effect that will correspond to employees performing and getting attracted to the company only when there is the presence of a better incentive system. Reliance on a reward system as an approach to attract and manage talent may have a punitive effect due to the fact that the method is manipulative (Khandelwal and Rajotia 2017, p.354). When employees are given particular conditions in order to receive certain rewards, it is more of a manipulative approach and it is not different from outright punishment.

One of the ways through which organisations can attract and manage talent is through the introduction of a system of payment where workers are paid according to the level of their performance. In this system of rewarding the workers, it links the level of performance of each individual with the amount of payment. On the foundation level of the pay structure in a firm, the management team should introduce a culture where an employee is paid based on his/her level of performance. In this case, an individual will be rewarded based on his/her flexibility to work either at home or remotely (Mohamed-Padayachee 2017, p.44). Moreover, on this level of payment, an employee may be provided with additional perks that are contingent on the level of his/her performance. On the base pay level of the organisation, the management team should offer an increased pay to individuals whose performances have relatively improved on a particular financial period. In addition, on the variable pay level, an organisation should pay out a certain specified amount of money when a person meets or exceeds particular goals and objectives set. In the top individualised recognition level, the employees who are most deserving are recognised by the organisation (Barrows 2017, p.200). Today, most organisations struggle with the issue of payment, which in return adversely affect them when attracting talent. Thus, paying the most based on the performance of an individual, it provides a competitive edge when attracting and managing talent. When firms become employers of choice, it implies that they should have staff experience complete with intentional rewards, opportunity, culture and transparency (Cuñat and Guadalupe 2009, p.200).

The current generation of workers wants to feel that they form an asset to the company they work and want to make a positive impact in the entire industry and the world. Thus, such employees look forward to seeing how their contribution to the greater success of the firms they work for can translate into rewards (Mohamed-Padayachee 2017, p.44). In this regard, there is no better way most corporations can achieve this other than through pay-for-performance. Although this form of reward system can prove to be an effective approach to attracting talent to an organisation, this compensation program puts an individual’s pay “at risk” since the payment is directly linked to the performance of the firm, the outcome of a business unit, and a person’s accomplishments (Schlechter et al. 2014, p.10). Thus, although variable pay program may provide motivation to the staffs to work hard while aligning to the goals and objectives of the corporation; it can also prove to be an obstacle. When incentives are stretched beyond the optimal levels, the existing employees may decide to quick, which in return will trigger a chain reaction that will discourage new talent from joining the organisation (Weibel et al. 2009, p.400).

The increasingly intense competition in the current market environment demand organisations to know where they stand in relation to the competition. When a firm fails to know where they stand in the competition, they risk losing their employees and further worsen the situation by “chasing” away potential talented staffs (Resnick et al. 2017, p.50). Thus, the understanding of the compensation structures and various recruitment approaches is critical when avoiding to get left behind. Today’s employees want to get paid based on the market price for their skill set (Shujaat and Alam 2013, p.30). When firms build a compensation plan that mirrors the value of their employees, chances of attracting new talent are up surged (Matos et al. 2012, p.290). The development of a good compensation plan can be significant in evaluating the market trends, appreciate the value of jobs, and continue to offer fair payment. However, this approach faces a challenge of compensation mismatch from different organisations. Today’s competitive market landscape is going through drastic changes which make it difficult for firms to keep up with the high market wages (Jalan 2018, p.34). In this regard, the resentment and disengagement can fester, which in return may send or discourage the talented individuals in search of better or improved pay-check. In a bid to counter this situation, most organisations respond by raising the wages of their top talent. However, this may not work out for all the staffs since they may feel that their pay increment had been linked to the threats of leaving to a company that pays better. The employees may feel that they have been let down by their employers since they had to provide threats of leaving before the pay increase was initiated. Thus, the perception of the pay increment matters more than the amount paid to the staffs (Dewhurst et al. 2009, p.14). Planning a formal compensation structure can play a central role of aligning the company’s goals and strategy that can bring about transparency, boost engagement, increase retention rate, encourage fairness, and further attract talented individuals (Jensen and Murphy 2010, p.65).

The strategy of creating a pool of monies that should be disbursed to the workers by dividing a particular portion of the firm’s profits may play a significant role in attracting talent. In this form of reward, teach employee is given a certain amount that is equal to the percentage of his /her salary and is made available to all the workers after the closure of a business at the end of the year (Resnick et al. 2017, p.66). The incentives can either be in form of cash deposits or the products that are equal to the amount. Thus, when potential employees note an organisation that offers profit-sharing incentives, chances of attracting them to the firm upsurge and it further encourages the existing staffs to remain (Pouliakas and Theodossiou 2009, p.680). However, when profit-sharing approach provides everyone with the share, it may fail to motivate individuals, which in return may affect the performance of the organisation. In a bid of countering this drawback, the management team should foster team spirit where each staff pulls together to achieve a particular target (Shujaat and Alam 2013, p.28). In this regard, when a firm focus on this reward system, more people will likely remain within the organisation and further attract talented individuals.

In the modern day organisational setup, the management teams have changed and are now putting emphasis on the provision of stock options as a form of reward system in order to attract and successfully manage talented individuals (Aboody et al. 2010, p.80). In the recent years, stock options have become a popular strategy for rewarding the middle management members and other staffs. Today, employees want to be part of the company they work by providing their best skills and expertise. Thus, by providing workers with the right to buy a particular number of shares at a certain price, act as a motivation factor for potential employees to be attracted to the firm and further increases the retention rate of the existing workers (Blasi et al. 2008, p.34).

Although most organisations largely rely on provision of hefty salaries and benefits based on the level of employees’ performance, these methods do not solely determine the number of talented individuals who will be attracted to the offer, but rather the issue lies on how the message is communicated to the target individuals (Mohamed-Padayachee 2017, p.12). The management team should ensure that the staffs feel that they have been rewarded a pay increment in an equitable and willing way. The firm should indicate a direct line of sight from the description of the work back to the market. When particular employees are circled and considered for a particular pay range without any base for the increase, the other workers may feel that they are discriminated and may invite lawsuits (Resnick et al. 2017, p.54). In this regard, the reputation of the organisation may be ruined, which in return may discourage talented individuals from joining the firm. Thus, despite the fact that nonfinancial recognitions and other incentives might act as an encouragement for talented people to get attracted to the firm, allowing “exceptions” may prove to be a drawback on achieving this target (Barrows 2017, p.198).

In today’s closely-held business enterprises, it may not be possible to offer employees equity compensations in the form of stock options. Thus, deferred compensation package may act as a way of attracting and managing talented individuals. In most situations, workers may who earn good salaries may not need the entire amount they get at once. Hence, abiding by the proper format, staffs may be encouraged to have a particular percentage of their current compensation package deferred to a specified future (Jalan 2018, p.22). Although deferred compensation plan may offer more benefits to workers and assure the security of their future financial status, the approach faces a number of risks such the staffs being the general creditors of the organisation as it may decide to invest the amount it holds on behalf of employees (Barrows 2017, p.196). In this regard, in case the company goes bankrupt, it may be very for the staffs to ultimately get back their deferred compensations. However, apart from the potential risk of an employer becoming bankrupt, deferred compensation plan can be an ideal reward strategy that may play a critical role of attracting and managing the talent (Pelger and Schäfer 2018, p.46).

In the modern organisational structure, the issue of how effective the motivation of staffs is had increasingly become a hot topic. However, despite the many years of researches and studies, organisations still solely rely on financial rewards as a form of motivation and ways of attracting talent (Resnick et al. 2017, p.45). Various studies have linked financial rewards to the motivation of workers since it provides them with tangible recognition for their contribution. However, more recently, firms have shifted focus and are now turning on non-financial recognition since it provides a competitive difference. For instance, when a senior manager or the owner of an organisation writes to each individual appreciating for the improved performance or inviting him/her to a special dinner, it encourages more talented individuals to join the firm and further ensures that the existing workers are retained (Harunavamwe and Kanengoni 2013, p.3929). In other words, when a perceived action is appreciated by the top leadership, it indicates how the efforts of a particular individual is appreciated and makes him/her feel as part of the firm, thus increasing the possibility of retaining him or her and further offers a competitive edge when attracting new talent (Pelger and Schäfer 2018, p.33). The current market environment largely focuses on increasing the level of wages for their employees; thus, taking a different approach such as offering a memento to indicate the appreciation for the work well done can be an effective tool of attracting and managing talent in an organisation (Harunavamwe and Kanengoni 2013, p.3929). This form of nomination or “awarding” may be based on the identification by a friend for a particular contribution towards the achieving the goals and objectives of the company.

Once an organisation has successfully attracted talented individuals, it is always a challenge to ensure that they have been retained. In this regard, ensuring that the employees are satisfied in the work environment should be the key to maintaining the existing workers (Abebe et al. 2017, p.22). One of the ways through which most firms fail to retain their skilled personnel is failing to make them happy and satisfied by assuming that they are going to be motivated by the same kind of incentives or rewards (Resnick et al. 2017, p.65). Thus, understanding that workers are motivated by different factors can play a significant role when structuring a reward strategy that mirrors the different tastes of the staffs. When firms assume that the same rewards or incentives may have the same impact on everyone within the corporation may prove to be dangerous since reward and recognition are very personal. The type of motivational incentive should change with time for many reasons and is valued at a particular time may be insignificant at some point in life (Abebe et al. 2017, p.18). Thus, companies should focus on structuring a flexible reward system tailored for each individual, which in return will play a significant role in managing the skilled personnel. When business enterprises focus on developing a talent management strategy that is flexible enough to identify present opportunities for its workers, provide feedback for the employees, and appreciate all the skilled individuals within the workforce as the drivers of the organisation, it promotes their retention rate. The development of reward statements that clearly outline the strong believes of a firm on reward can be an effective tool for identifying and attracting talented individuals (Resnick et al. 2017, p.38).

In a concluding remark, when an organisation creates and develops a compensation system, the chances of its business strategy getting the required support are drastically increased. The structure should be created in such a way that it provides external competition, comply with the laws of the country in which it exists, and it is compatible with the culture of the organisation. Moreover, the compensation structure should be perceived as fair by all the employees. Although the introduction of a reward system in a firm involves a number of “moving parts”, the foundation for the success of the structure is solely determined by the pay philosophy. In this approach of rewarding the workers, the organisation's views and the management of the payment are identified by a formal statement. Through the formulation of the formal statement, the firm’s mission, external considerations, workforce, strategy, and workforce demographics are made aware to all the staffs, which in return play a critical role of attracting potential talented individuals and managing the existing employees. In a bid of attracting talented workers, an organisation should specify whether it intends to pay the staffs below or above the current market rates. Although the development of a system of payment with grades spreading across the workforce may be a challenging task, it is an essential process that creates and develops the foundation on which everything is built upon. In a bid of creating an enhanced collaborative team that will ensure the rewarding system suites the best interest of a firm as well as that of the workers, the program should clearly state the goal of the compensation structure to be developed, determine how the payment and reward plans of the firms will be able to provide a competitive edge, and further define the position of the corporations in the competitive market. Thus, with the right “central pillar” that holds the payment structure of an organisation, chances of attracting talented individuals and managing them are increased.

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