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Talent Strategy
Vo lu me 1 , I ssu e 1 Published by Business Intelligence for talent professionals. To register for your free copy, go to www.business-intelligence.co.uk
Sharpen your talent management skills Welcome to the first edition of Talent Strategy, a new publication dedicated to supporting talent managers in meeting their corporate and personal objectives.
results · How to evaluate talent management effectiveness · Socialization techniques to improve new hire engagement
Talent management is at a critical stage of its evolution. In the current economic climate, there is unprecedented pressure to deliver business benefits and demonstrate value for money.
Plus the latest research and analysis.
In this launch issue of Talent Strategy you will find practical, to-the-point articles on a range of topical issues:
We are also pleased to announce our association with the New Talent Management Network (see below). Talent Strategy will be carrying news about NTMN activities and research in future issues. NTMN will be promoting Talent Strategy to its members.
· Improving the contribution of senior executives to talent initiatives · Using networking to amplify talent value – an exclusive interview with Rob Cross · Why bigger bonuses do not generate better
The first independent global network for talent managers The New Talent Management Network (NTMN) is the world's largest (and only free), global network for talent management professionals. The network includes more than 1,200 talent management professionals who are interested in advancing this field. We share three primary goals: · Coordinate opportunities for local, free networking among TM professionals · Improve talent management effectiveness by conducting and sharing research that benefits our community · Increase the capabilities of TM professionals and raise the bar for this profession
and non-commercial. We believe that we should rely on ourselves to network and learn; not pay others $10,000 to participate in "networking" groups. NTMN members may participate in as many or as few activities as they like. All research and other features will always be free to members. This network is "by us, for us." We hope to provide a platform and some passion behind making this field as impactful as possible
“2009 is going to be a very tough year, but managing the demands of talent investment in the context of that difficult climate and long-term objectives is absolutely critical.” Sir Martin Sorrell, CEO of the WPP Group (Threading the Talent Needle, Deloitte, 2009)
Contact Marc Effron, NTMN founder, marc@newtmn.com and learn more about the network at: www.marceffron.com
Unlike other talent networking groups, everything about the NTMN is 100% free
Individual Highlights: In-house talent – 2
Recessionary pressures – 2
Talent effectiveness – 3
Reward and performance – 4
Socialization benefits – 5
Tapping into Informal Networks – 6
Building the Talent-Driven Business -
Master talent management best practice A Business Intelligence-CRF Research Report
“…concise, accessible and very current ... well researched ...” David Adams, Group HR Director, Harsco
Identify the talent gaps in your organisation Apply smart ideas for improving talent processes Learn from AstraZeneca, Cisco, BAE Systems and many other companies Develop an effective talent strategy Build a solid case for investing in talent Measure the returns from talent management Win buy-in from business managers
Find out more about this exceptional report and download your complimentary extract: www.business-intelligence.co.uk
More companies turn in-house for tomorrow’s talent “Going outside is not the first choice,” says Hayko Kroese, Global Head of Human Resources Management, Philips Electronics. Adidas’ Chief Human Resources Officer, Matthias Malessa agrees: “Strong brands and cultures have a clear identity. This requires a very strong talent pipeline, because to preserve the culture you have to promote from inside and can only have a limited share of external senior guys coming in.”
Ford: you can’t start too young on the trail for talent
These are two of the 28 senior executives quoted in Threading the talent needle, produced by Deloitte and Forbes Insight. Their report finds growing support in favour of promoting and developing key people from inside the organization. Other trends identified include the close
link between corporate responsibility and attracting talent, the importance of the employer brand, and global sourcing. For Felicia Fields, group vice president of Human Resources & Corporate Services at Ford Motor Company, there are longterm implications for the way the problem is tackled: “The workforce is shrinking in terms of people who have the right skills and competencies in science, technology, engineering, and math—as well as in leadership and management. Our objective is to really get in front of this shrinking workforce. We have to begin to work more aggressively with the pipeline, with kids as far back as elementary school.”
Companies slow to adapt to recessionary pressures Research carried out by UK consultancy Talent Q, shows that almost two thirds of financial service companies surveyed have no plans to update their development and retention practices in the coming 12 months.
“The key imperative should be to identify potential and develop high performance.”
This despite the fact that almost two thirds admitted that ‘significant attention’ was needed to address the development of high-performance teams. Over half also confessed that succession planning needed to be overhauled, particularly in the light of the large scale cuts taking place in the financial sector. By contrast, the public sector shows signs of far greater agility and adaptability. Over 80 percent are rejigging their talent management strategies and 44 percent are redefining what they look for in employees.
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Utilities and infrastructure are also responding to the changing needs of the times. A quarter of those in this group are planning to update recruitment, development and retention practices while half are revising their skills and capabilities requirements.
The obvious conclusion for Dr Alan Bourne, director of Talent Q, is that companies are not doing themselves any favours: “Mass redundancies and the increased pressures brought about by the economic situation mean that it is more important than ever to get the best out of employees. The key imperative should be to identify potential and develop high performance, with succession planning and managing talent through periods of change being obvious priorities.” Full details of the survey can be found at www.talentqgroup.com.
Assess your organization’s talent management effectiveness Speaking at a recent event organized by the Corporate Research Forum, CRF director Mike Haffenden argued that the environment in which talent management is practiced is as important as talent management policies and practices themselves. Using a four-box model, below, he posed these questions to enable talent managers to position the current and desired status of talent strategies. “Are you wanting to improve people or the context in which you employ them? “Which quadrant is your organization
in – and where should you be?” To illustrate the types of organization in each quadrant, Haffenden provided practical examples. •Top left: Prêt a Manger – or, in Premier League football terms, Aston Villa and Everton. •Top right: Hewlett-Packard – or Manchester United. •Bottom right: Government departments/agencies – or Chelsea. •Bottom left: some NHS units and trusts – or Newcastle United. Talent – the top table discussion is one of a series of regular CRF member events.
“All aspects of talent
www.crforum.com
management must be logically connected.” Mike Haffenden, CRF
or picture.
No simple answer to what kinds of talent matter most Since the spotlight was turned on talent by McKinsey’s call to arms in its 1998 Harvard Business Review War for Talent article, companies have had plenty of time to ponder what kinds of talent matter most. Some are preoccupied solely with candidates for the top jobs. But others see the issue in broader terms. For many organizations, answering this basic questions presents the first challenge in developing a strategy for talent. It is also fundamental in setting the scope for defining the scope, reach and
purpose of talent management for any organisation. Ashridge Consulting found a wide variety of opinions about what constitutes talent, but no consensus. Definitions can include several elements: personality traits, high performance, high potential, key roles and key competencies. “Companies need to decide for themselves how they define talent and whether to take an inclusive or exclusive approach,” it concluded in Talent Management – A Strategic Imperative.
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Opinion: bigger bonuses fail to drive performance at the top
“If I had been paid 50% more, I would not have done it better.” Shell’s van der Veer
Talented leaders are meant to unlock exceptional corporate performance. But as the grisly aftermath of the banking crisis revealed, far from having the Midas touch, several now-departed CEOs succeeded in destroying value on an unprecedented scale. Yet they still received rewards that defied the negative impact of the financial disasters over which they presided. It has brought the whole simmering executive remuneration debate to a head. Just beneath the surface is a closely related and highly relevant question for all companies: what role does reward have in bringing out the best in people’s performance? As a rule, those who benefit from the largesse of executive schemes are tightlipped on the subject. But Shell’s chief executive, Jeroen van der Veer, has broken ranks. He has confirmed what Fred Herzberg and many have argued – that cash is not a motivator.
equation: "you have to realise: if I had been paid 50% more, I would not have done it better. If I had been paid 50% less, then I would not have done it worse." Despite this, van der Veer’s remuneration for the previous year grew handsomely, from £4.5m to £8.2m. Unsurprisingly, the oil giant’s shareholders voted against Shell's remuneration policy that gifted bonuses despite target-missing performance. Looked at industry-wide, top pay appears at best like the triumph of blind hope over experience. While the average remuneration of FTSE 100 chief executives rose 295% over the past decade, the average value of FTSE 100 companies fell 23% over the same period. Sceptics who doubt that the price of top talent reflects its measurable value would seem to have compelling data on their side. Topped off by Van der Veer’s admission, faith in a bonus culture to lift performance looks equally ill-founded.
In a Financial Times article, van der Veer, Shell’s CEO, admits that money was, at best, a neutral factor in the performance More generous CEO rewards fail to boost shareholder returns.
Strategic recruitment: the antidote to the waste of talent Even in downturns, staff turnover continues to drive the need for recruitment. According to a Taleo research paper, there are significant savings to be made adopting a strategic approach to recruiting and using online technologies to streamline processes and improve recruitment effectiveness.
competencies, performance and potential posting job opportunities on the company’s web portal. Companies with good visibility of internal talent pools have: •
a better chance of filling key positions faster without incurring external hiring costs.
Typically, savings from 25% to 50% can be achieved in sourcing costs alone by taking advantage of online or erecruitment systems.
•
lower induction and training costs
•
improved retention because of more opportunities for career development
•
faster appointment-to-productivity times than with external hires.
This reduces or cuts out external agency fees that can amount to 35% of annual salary costs by allowing direct contact between candidates and company.
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But there are potentially greater benefits to be gained from using e-recruitment systems internally to build a detailed database of internal candidates, their
Smart sourcing along these lines means less waste of talent. For a copy of Recruiting: Reducing Direct Costs and Reaping Results, go to www.taleo.com
Socialization offers a fast track to improved productivity In addition to ensuring that new recruits find their feet in the formal organisation, smart companies also help new recruits to build their own networks inside the business in a number of ways: •
• •
•
Organising pre-employment contact with people who have similar interests/responsibilities On joining, meet the executives session with Q&A opportunities Buddying system (pairing up with an employee with shared background/interests) to help new recruits build relationships Use of web-based social networks to allow newcomers to create and maintain relationships in the organisation and allow people to share ‘hidden’ areas of expertise.
Since 2008, says the Aberdeen Group, it is fast becoming an integral aspect of talent management. Given that it is a universal necessity, the surprising fact is that just under a third of organizations have formalized their approach to onboarding. although Aberdeen says this
is expected to increase to over three quarters of the survey sample by 2010. The targeted outcomes are: improved new employee retention, engagement, shorter time to productivity and lower onboarding costs. The top fifth of the survey sample are rewarded by superior results in all these areas, says Aberdeen. These include year-on-year: • • • •
A 31% improvement in retention A comparable improvement in engagement A 24% reduction in time to productivity A 12 reduction in onboarding costs.
Among the approaches that help companies to achieve these results are methods for enabling people to integrate socially into the organization. When it comes to engagement, corporate commitment to the individual’s development is a best-in-class practice. More information about Fully on Board at www.aberdeen.com
What makes a company a great place to work A continuing challenge for any organization that aspires to keep talented individuals enthused and engaged is the working environment that will create the right conditions. After scouring the world for inspiring examples, Reed Elsevier concluded that leadership and management style are the keys. This is their recipe for an effective leader. C halle ngi ng a nd fai r. These leaders set high standards, hold people accountable, and provide the resources and information necessary to succeed. They are demanding but fair – and treat people equally. Cre dib le. They focus on clear, consistent, two-way communication. They are approachable and communicate frequently and openly with employees. They tell it like it is – and demonstrate high respect for others by actively seeking out their opinions and ideas.
Clea r. They ensure there is a wellunderstood sense of purpose. Everyone knows what the goals and priorities are, believes in them, and understands what their role is in delivering them. S upp orti ve. They proactively encourage and support the development of people and see it as their responsibility to progress their careers. They put the highest priority on this. They put the success of others before their own – and they acknowledge that their own success depends on employee contributions. Co llab orati ve. They generate a friendly, inclusive, team-orientated atmosphere, without boundaries. Inno vati ve. They focus relentlessly on the customer. They invest time and resources in innovation – and develop an environment where people are bold and feel able to take risks. (From the Reed Elsevier case study in Creating the Talent-Driven Business www.business-intelligence.co.uk)
“Leadership is key to creating a great place to work.” Reed Elsevier
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Interview: Bob Cross on leveraging talent through networking Tapping the hidden power of networks could be the next big thing in talent management. Talent Strategy talked to networking expert Bob Cross at a recent Corporate Research Forum meeting where he presented the latest findings from his research. Rob Cross, professor of management, University of Virginia describes networks as “invisible, highly misunderstood but key to the way work gets done”. Their value is derived from the fact that “People, not databases, are our key source of knowledge,” he says.
“People, not databases, are our key source of knowledge.” Rob Cross
Informal networks have always existed. But now there are tools to understand networks and ensure that they work to the advantage of the organization by channeling talent and expertise purposefully. Networks leverage talent in two directions. • First they enable an individual to access others’ expertise. • Second, they increase the value of talented individuals to the organization by sharing their knowledge and experience.
Talent Strategy Issue 2 • Competencies revisited • Interview with Marc Effron • Talent tools and systems PLUS news and insights
To make the most of these opportunities, organizations must make networks visible and discover who the key players and knowledge brokers are. Few companies have done this so far. Talent Strategy is published by B usiness Intelligence, a trading na me of Optima Publishing Ltd, publis hers of Creating the Talent-D riven B usi ness and other strategic HR and per for mance -impro veme nt researc h reports.The p ublisher welco mes suggestions for case studies, news, press releases, research, a nalysis o n all aspects of talent ma nage me nt. Co ntact davidharvey @busi ness-intellige nce.co. uk Advertising in Tale nt Strategy Talent Strategy is an ideal c ha nnel for tale nt mana ger rec ruitme nt or p rom otion o f talent mana geme nt softwa re and ser vices. Call +44 (0) 208 971 3 265 for details www.b usiness-i ntelligence.c o.uk © Optima Publis hing Ltd 20 09. All rig hts reserved.
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Because networks criss-cross functions and hierarchies they cannot be read from the formal structure of the organization. The snag is that until companies gain visibility into the dynamics of this informal, parallel world, it is impossible to make the most of the opportunities they present. Time and again, according to Cross, analysis of networking behaviour throws up unanticipated insights. “Managers always think they can predict who the key people are, but there are always surprises,” he says. Cross also points out that this analysis provides practical insights that help organizations to remove blockages in communications, improve information flows and increase productivity. Cross has helped 300 organisations to uncover the networking patterns through a questionnaire-based approach. This, he argues, is more powerful than simply analyzing email traffic since a survey reveals not only connection patterns but purpose and outcomes. Typically, the whole cycle of conducting a survey to coming up with the network analysis takes about six weeks. He sees three main network-related opportunities for improving talent management: •
“You can rapidly integrate newcomers to make them productive as soon as possible and improve retention. Structure personal networks for key people and experts.
•
“You can profile top performers from a networking perspective and understand their value better.
•
“You can also mitigate the dangers of knowledge loss by identifying key people in networks.”
For more information on network concepts, tools and downloads: http://www.robcross.org/