Unemployment remains high and there are many people actively looking for work. From the employers’ perspective this represents a ‘people glut’ rather than a ‘talent glut’. The truth is that there is a lack of individuals with the necessary skills to fill existing job openings.

One legitimate response businesses may have to this situation is to focus on finding ‘good people’, then develop these people in the skills they need to fill specific roles.  Increasingly, though, organisations want to concentrate on building from within and on retaining and developing the proven talent that they already have. 

Focusing on internal talent makes sound business sense. High staff turnover levels can be very expensive to a business, with replacement costs conservatively reaching 150% of the departing employee’s annual compensation figure, according to a recent Talent Management report from industry analysts, IDC. Estimates suggest that the cost is significantly higher (200% to 250% of annual compensation) for managerial and sales positions.

Concentrating on the talent and skills of existing employees also helps to raise staff morale.  If employees see that there are opportunities for career flexibility and advancement, they are more likely to feel positive about their career prospects in their current organisation.

However, if businesses are to be successful in developing their internal talent, they first need to ensure that they work in parallel to retain their best employees. This can be a difficult Challenge.

Many businesses have become leaner in recent years. Consequently, they are typically asking their employees to take on more responsibility, without having the ability to reward them as handsomely as before. So retention strategies are becoming increasingly critical because companies cannot afford to lose more staff.

There is a very limited choice of people that organisations could bring in from outside that would be capable of making an immediate impact during 2010.

So, how can companies go about retaining staff? The most effective approach is to engage fully with employees to ensure that they are given the best possible opportunities to grow internally and to ensure that they are empowered to formulate their own career objectives. It's also important to show staff the positive impact they are having for the company and to match their personal aspirations with career positions and career progression.

This message is starting to get through to businesses. As a result, SumTotal predicts that one of the key trends impacting on the human resources arena during 2010 will be the ongoing unification of HR systems. There is a growing body of research to indicate that point systems consistently fail to drive efficiencies within HR departments. 

In order to rectify this problem and ensure that they have the right people with the right skills in the right jobs in order to advance their business goals, they must first ensure that key components, principally around learning and performance management, are in place. Second, they must develop a unified process around those components, enabling them to develop an effective talent development strategy.

By closely linking modules within performance and learning management systems and helping to combine otherwise isolated learning and performance tasks, businesses can help drive enhanced organisational productivity; reach their core objectives more quickly and effectively and in turn, deliver better overall business Results.

At SumTotal, we believe there are now real signs that organisations are beginning to more closely understand the Benefits of linking learning and performance management within unified talent development suites. It is a trend likely to continue during 2010. 

This unified approach helps drive employee engagement by translating valuable performance reviews and ratings into career and leadership roadmaps and then following those roadmaps to bridge skills gaps and implement true succession plans. It also engages employees by providing clear objectives to work towards, recognising achievement and helping to show the employee how they are positively affecting the business by aligning their objectives with those of the organisation itself.

If organisations are engaging effectively with their employees, they are also much more likely to see one of the other likely major trends of 2010, the growing influence of Web 2.0 and social media based communication as a means of employee empowerment as a positive rather than a negative development.  

These kinds of approaches and, in particular, the increasing use of sites like Facebook, LinkedIn and Twitter by employees to communicate, capture knowledge and access development opportunities could potentially be seen as a threat by some organisations. However, if a business is confident that it is engaging effectively with its staff, there should be no such concerns. Instead, such organisations should be open to the Benefits of these new forms of technology and should ultimately be looking to integrate these new opportunities within their own unified talent development approach.  

In today’s hostile economic climate where there is a surfeit of people for employers to choose from but a shortage of true talent, organisations need to focus on retaining and developing the proven talent within their existing workforce. To do this, they need to engage effectively with their employees though a unified talent development approach that integrates learning and performance management.

In 2010, we believe that we will see the unification of HR systems continue to pick up pace as organizations increasingly come to appreciate that point systems are failing to drive the business efficiencies they are looking for. The Results of this increasingly enlightened approach will be overwhelmingly positive both for employees and for the businesses for which they work.