David is the HR Director for a large county hospital in California. While thousands of people in the county have been laid off, David´s hospital and many others are starving for skilled healthcare workers, particularly nurses and pharmacists. Currently, job seekers can apply online, but resumes are sorted and reviewed manually. In addition, there is no automated process for employees to announce career goals, request mentoring, or communicate completion of certifications and training that might make them eligible for internal opportunities. David knows the current recruiting and retention methods are ineffective, and will become an even greater liability as the job market improves. He knows he must find a way to capture, inventory and communicate workforce skills in order to attract and retain the talent that will keep his hospital competitive.

The U.S. Workforce: Then and Now

David is experiencing the results of a trend that has been developing for decades. The U.S. is rapidly approaching a critical point in its 50 year transition from a manufacturing/industrial based economy to a services and knowledge based economy. James W. Hughes, Dean of the Bloustein School of Planning and Public Policy at Rutgers University, said: "In 1992, no economist predicted that the driving force of the economy by the end of the 1990s would be information technology and the Internet. But what we can predict is that the jobs of the future are going to require much more knowledge, much more skill, higher levels of education, and much more retraining of existing workers."

Other trends are significantly impacting how we staff our evolving workplace. The proportion of women workers almost doubled between 1948 and 2000 (Bureau of Labor Statistics 2000a). The overall U.S. workforce is older. The age group between 35 and 54 - the so-called Baby Boomers - has increased from 41 percent in 1975 to half of U.S. workers in 2003. According to the Bureau of Labor Statistics (BLS), the 55 and older segment of the workforce will grow by 48 percent between 1998 and 2008, by far the largest projected growth of any age group, gender, race, or ethnic identification (U.S. Department of Labor 1999).

Trends, Skills, and Talent Management

This brief overview of the changing workforce, while only a snapshot from dozens of in-depth studies and reports, clearly indicates some of the major staffing challenges facing US employers. Fortunately, awareness has grown significantly in the last few years: BLS statistics are frequently quoted in publications, on websites, and at conferences. The emergence and growth of the Talent Management industry (also called Human Capital Management) indicate that the marketplace is taking the projections seriously: today, there are hundreds of software products that address everything from applicant tracking to contingency workforce management to human resource procurement systems for Global 2000 companies.

The question arises, however, as to whether the solutions are adequately dealing with the balance of skills, which are the very foundation of any company and the meat of Talent Management. Talent unsupported by skill is like a diamond in the rough - it takes time and money to develop its value. The effective allocation of resources for recruitment, career development, and succession planning must be based on a clear picture of the skills mix within the current workforce; companies must understand what they have before they can determine what adjustments are necessary to achieve future business goals. Since employee-related costs are the single largest expense a company incurs, this process cannot be taken lightly. The tangible costs alone to replace an employee are between $10-50 thousand. Factoring in the "intangibles" can move the cost well into six figures (Tips & Techniques for Recruiting and Retaining a Stronger Workforce, Dr. Jac Fitz-Enz, 1997). "Planned retention" through skills management (even if some retraining is required to keep those skills relevant) can position companies to weather the inevitable economic storms with less damage.

Skills Management: From Theory to Practice

Whether you have 50 employees or 5,000, it is not an easy task to inventory and maintain skills information that is both easily accessible and useful to HR and line managers: Excel spreadsheets simply are not up to this challenge. Traditionally, employers have relied on resumes to communicate the skills and experience for both job applicants and current employees. While resumes continue to have their place, they also have limitations. As Katherine Jones, managing director of business applications for the Aberdeen Group, points out in Enterprise Talent Management: Sourcing, Staffing, Hiring 2002, "... the reality is that resumes and applications age rapidly. The shelf life is frequently only a week. With hourly workers, it may only be a day. Growing databases of yesterday´s resumes - despite the attempts to update them - has yet to prove valuable." In addition, managers are frequently swamped with resumes for each job posting, with no efficient means of review. This is a particular hardship for small to mid-sized companies, where recruiting may be only one of many jobs assigned to an HR manager.

During the recruiting process, candidates have current resumes because they know they will be required to submit one as part of the job application. Keeping up-to-date resumes on existing employees is an entirely different challenge. Even with a resume management system in place, extracting skills information in any useful form with any depth of information is unlikely. Remember the premise: a balanced and appropriate mix of skills within a workforce, and the ability to track and manage that mix, is the basis for effective Talent Management. HR professionals must look beyond the resume and find a better solution.

What to Look for in a Skills-Based Talent Management System

Before you start your search for the perfect solution, you should have a few basic facts so that you understand your requirements:

• What system do you use for your HR functions?

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• Is your system installed on your company computers (and supported by your IT department) or is it hosted by a provider (ASP)?

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• Do you currently have one or more databases of applicants, employees, and reserve talent (retirees, former employees, seasonal, part-time, consultants)?

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• Do you have any system in place that allows you to inventory and search skills? If so, what is that system (Excel, Access, etc.) and what functionality does it have, e.g., what areas does it track, can you search those areas, can you organize results, and can you share that information with others in your company?

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• Are your systems Employee and Manager Self-Service?

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• Is there a plan to change the current system?

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• What is your budget?

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You may think of other points that are relevant to your company, but this list is a good starting place. Armed with answers to these questions, you will be able to evaluate products based on how they complement your existing system. Product features that you should consider include:

• Depth of skills information gathered: Does the design allow applicants / employees to explain their skills and how they applied them in different settings and industries?

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• Ease of use for employee, manager and HR: Is it employee and manager self-service? Is there a steep learning curve?

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• Security of information: How is access to information controlled?

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• Ability to search and organize information: Can HR and designated managers search using various methods, e.g., keyword, key phrase, name? Can search results be searched again to "fine tune" the results? Can the results be organized into folders for future access?

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• Consistent presentation of results: Are results presented in a consistent format for easy review?

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• Flexibility: Can the product - both technology and design - conform to your needs over time without major customization?

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• Effectiveness as a communications tool: Does the product facilitate communications between applicant / employee, HR, and managers via features such as automated email and notifications?

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• Cost: Does it fit your budget, and do you get real value for the money spent? Are there any hidden costs, for example, steep implementation and /or maintenance fees?

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Using these guidelines will help you to objectively evaluate your options without getting lost in the maize of products on the market. It will still take time, but in the long run you will have paved the way for managing the skills - and therefore the talent - of your workforce.

Last Thoughts

The concept of Talent Management is now fairly well accepted, and viable solutions are emerging daily. The link between talent and the skills that make talent valuable to employers is unbreakable. What´s left is education followed by action. Skills-based talent management, using the right tools for your company´s business needs, creates a picture of your workforce that cannot be captured by a file full of resumes or word-of-mouth.

At the January 2003 Governor´s Conference on Workforce Planning, New Jersey Governor James E. McGreevey stated: "... now more than ever, it is critically important to understand that a worker''s ability to earn a sound wage is fundamentally based upon the ability to develop needed skills. ...it is our moral obligation to provide for a skilled workforce."

The US is fortunate to have a highly skilled workforce. Managing those skills to provide maximum benefit to both employees and employers takes vision, teamwork, and technology tools that promote, not obstruct, progress.