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Dispelling the Myth: Talent Management in the Mid-Market

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Executive summaryTalent matters. That’s as true for medium-sized businesses (MSBs) as it is for large enterprises – if not more so. In an uncertain economic environment, organisations that fail to attract, retain and develop talented employees run the risk of missing out on opportunities for revenue growth and market expansion, regardless of their size. In this white paper, we will see how, by applying talent management processes and technologies to a few key tasks – recruitment, training/development and performance appraisals – MSBs can start to reap the benefits of increased workforce motivation and productivity.

In the CBI’s report, Future Champions: Unlocking Growth in the UK’s Medium-Sized Businesses, it defines MSBs as companies with revenues between £10 million and £500 million. Even at the lower end of this range, it estimates, firms with between £10 million and £100 million in revenues may represent less than 1% of UK firms, but they account for 22% of UK revenue and 16% of total employment.

They may not have the size, scale and budgets of their larger rivals, but MSBs have other advantages. Their comparatively smaller size makes them more agile and responsive than blue-chip multinationals when presented with market changes and new opportunities. They often enjoy closer, more personal relationships with their customers and suppliers. Consensus is typically reached quicker in an MSB; innovations can be introduced faster. An MSB’s larger competitors may be able to outspend it but, hampered by bureaucracy and layers of organisational hierarchy, they won’t be able to move as quickly.

At the same time, an MSB often expects more from its most talented employees and relies on them to deliver. In a smaller workforce, individual members must be able to use their initiative, show entrepreneurial flair, take proactive decisions and contribute to the free flow of ideas in the business. In fact, the MSB’s distinctive culture is often shaped as much by its team as by its founder or owner.

In defining talent, the Chartered Institute of Personnel and Development (CIPD) makes no mention of workforce size. Talent, it says, “consists of those individuals who can make a difference to organisational performance either through their immediate contribution or, in the longer term, by demonstrating the highest levels of potential.” That’s as true in an MSB as it is in a large enterprise or a tiny start-up.

Talent management, meanwhile, is defined by the CIPD as “the systematic attraction, identification, development, engagement, retention and deployment of those individuals who are of particular value to an organisation.” Again, there’s no reference to workforce size.

In this white paper, we will argue that talent management is just as important to MSBs – if not more so – as it is to large enterprises, and that, regardless of size, companies that fail to attract, retain and develop talented employees run the risk of missing out on opportunities for revenue growth and market expansion. This is a risk that few organisations – regardless of size or industry sector – can afford to take in an uncertain economic environment.

By putting in place robust talent management processes and tools, MSBs can help their most talented employees stand up to the challenges of this environment and better assist the organisation they work for in achieving its goals.

Introduction: why talent mattersTalent management is often seen as an issue that only the largest enterprises with the largest workforces need to address – but why should that be the case?

Why should employees with ‘natural aptitude or skill’, the dictionary definition of talent, be any less valuable to mid-market companies than they are to larger organisations?

Medium-sized businesses, or MSBs, “make a significant contribution to the UK’s overall economic well-being, creating jobs and prosperity in all regions of the UK,” according to a late 2011 report from the Confederation of British Industry (CBI), the UK’s top business lobbying organisation. In order to do that, they need talent.

Talent management is often seen as an issue that only the largest enterprises with the largest workforces need to address – but why should that be the case?