August 02, 2007

Why Companies Need To Manage Their Talent

The Star - If you head a local company that is losing employees to multinationals (MNCs) which can afford to offer better remuneration packages and career opportunities, how do you compete for the best workers? 

Companies such as yours may find the answer in using a talent management system, according to local software solutions provider Nixfon (M) Sdn Bhd.  

Manu: The ETWeb Enterprise talent management solution makes performance evalution very transparent, and reduces favouritism issues in a company.

"The Government has been focusing a lot on human capital management. When we are moving from an industrialised country to a services-based country, we need to look at managing talent seriously," said Nixfon chief executive officer G. Gunasekaran. 

He said Malaysia is facing a brain drain in its workforce where skilled labour is concerned (see Pressing brain drain issue, StarBiz, July 9).  

According to Gunasekaran, Nixfon started out as a customised software solutions provider. As the company progressed, it started focusing on the human resource industry. 

"Talent management is becoming increasingly important in Malaysia. Many skilled workers are moving elsewhere, even to other countries – for higher salaries, or if they feel undervalued working in local companies," he said.  

And the situation will only worsen in the future, if nothing is done to address it, he said.

 "Next year, it is known that the baby boomers will reach retirement age. Research shows that there will be an acute shortage of workers, especially in the finance industry," Gunasekaran said. 

"Right now, there is a shortage in senior management positions, as many local companies realise they have a hard time finding the right people to replace those who retire." 

Nixfon has partnered with Germany-based company ExecuTRACK Solutions (owned by online recruitment company Lumesse), which is developing an extensive talent management system called ETWeb Enterprise. 

It is now a distributor for the software in Malaysia. The software provides strategic tools that analyse the skills, performance and potential of employees and how they will fit with the overall goals of a company. 

"It can measure the performance of an employee based on education level, internal project experience, past experience, training and other factors," said Manu Gopinathan, Nixfon business development director. 

The software also comes with tools that can monitor the job market – to see how much other workers in similar fields are getting paid. 

"From here, it can find out if the employee is getting paid below the market rate and calculate the likelihood of the employee leaving for another job," said Manu. 

This enables the company to have a proper retention-risk portfolio. "The system will show if the employee is deserving of a promotion, and if he is, it finds out what other skills and experience he needs to get that promotion," he said. 

A company can then chart out the career progression of its employees. From here, it can determine who is next in line for a certain position, Gunasekaran said. "The company can then make a strategic choice of training another employee to take up the role, so that there is continuity in succession," he said. 

"Overseas, MNCs manage their talent very systematically – developing their employees from the time they join until they leave – and this enables them to hold and retain knowledge even after the employee leaves." 

Manu said that in Malaysia, companies sorely lack the ability to find out who its high-performers are. 

"Doing this manually is possible, but when a company is growing, it needs a systematic approach," he said. 

He pointed out that many local companies undermine the importance of performance evaluation. 

"Performance evaluation shouldn't be like something a company does once at the end of the year, it should be a continuous and transparent process," Manu said.  

He said the ETWeb Enterprise talent management solution makes performance evaluation very transparent, and reduces favouritism issues in a company.  

"A company is as good as the people who work for it. If Malaysian companies cannot compete with MNCs in terms of wages, they need to provide an environment where employees are appreciated and have job satisfaction," Manu said.  

The system also includes a feature that enables companies to set individual, departmental and corporate goals, so that employees know where and how they can fit into the company.  

"It is important that employees align themselves to the company's goal," said Manu. 

"If you're a bricklayer, you're going to feel a lot more passionate about laying bricks if you know that you're building the next wonder of the world instead of being just good for laying bricks," Manu said. 

The ETWeb Enterprise costs from RM100,000 to RM1mil, said Gunasekaran. For a company with 200 employees, it can cost around RM150,000. Deployment would take an average of one to six months, depending on customisation, he said. 

"ETWeb Enterprise is a 100% web-based system, so it can integrate with a company's current infrastructure and works well with current ERP (enterprise resource planning) systems," he said.  

Nixfon is also providing a more cost-effective on-demand module for companies with less than 300 employees. 


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