Meeting the Global Challenge for Talent

© CAPITAL CONSULTING 2005

Meeting the Global Challenge for Talent

Professor William Scott-JacksonDirector, Centre for Applied HR ResearchOxford Brookes University

CEO, Oxford Strategic Resourcing LtdOxford, UK

Director, Mayo Learning International Ltd

[email protected]+44 7785110910

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Meeting the Global challenge for Talent:Agenda

Talent Strategy

& Planning

AcquiringTalent

Developing&

DeployingTalent

Summary and Key action areas

Talent Management:the threat and the opportunity

RetainingTalent

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Talent Management: The threats and the opportunity

• ‘War for talent’ is a recurrent theme• Intangible assets, mainly human, now represent the largest contributor to

overall market value for many organisations.• The effective acquisition, management and retention of human resources has

a direct and significant impact on the bottom line and on share price.• Needs surgical precision to identify, acquire and retain the key high-

performing talent that will add sustainable competitive advantage• Global market for talent presents significant opportunities – and risks• Many global organisations have no resourcing strategy –

– many don’t even have a manpower plan, – many don’t even know what talent they have– many don’t know what they need

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War for Talent: 1998 recommendations

We affirm all our people but invest differentially in our A,B and C players

We treat everyone the same, and like to think that everyone is equally capable

We fuel development through stretch jobs, coaching and mentoring

Development happens in training programmes

Recruiting is like marketingRecruiting is like purchasing

We shape our company, our jobs, even our strategy to appeal to talented people

We provide good pay and benefits

All managers, starting with the CEO, are accountable for strengthening their talent pool

HR is responsible for people management

The New WayThe Old Way

We know which critical capabilities will be needed to achieve our strategy - and we know how we are going to build them

We know how many we need in defined roles

We know what our strategic skills gaps are and we have clear plans to fill them

We recruit when we need to

Scott-Jackson 2006 recommendations

Michaels.E., Handfield-Jones. H & Alexroyd. B (1998, The war for Talent, Harvard Business School Press

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Top global management issues

26%Developing employees into capable leaders10.

26%Being flexible and adaptable to rapidly changing market conditions10.

27%Using IT to reduce costs and create value8.27%Increasing shareholder value8.28%Improving workforce performance7.29%Managing risk6.29%Increasing customer loyalty and retention5.

29%Developing new processes and products to stay ahead of the competition4.

32%Acquiring new customers3.

33%Changing organizational culture and employee attitudes2.

35%Attracting and retaining skilled staff1.

Percentage of respondents

selecting issues

Top 10 current business issues for senior executives

Accenture (2005) Global survey of management issues, July 2005

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How has business responded?

• at the top level, as a series of one-off responses to unplanned tactical issues– e.g. reorganisation, new business stream, resign, retire or die

• in the mid-tiers as a tactical responsibility of specific line managers working uneasily with HR, preferred suppliers and ‘pet’ search consultants/agencies

• at the lower, high volume, levels - a procurement problem to be solved at the lowest cost.

89 percent - more difficult to attract talented people now than it was three years ago,90 percent - more difficult to retain them. Just 7 percent strongly agreed that their companies had enough talented managers to

pursue all or most promising business opportunities.Only 14% strongly agreed that their companies attract highly talented people.Only 3% strongly agreed that their companies develop talent quickly and effectively.89% said candid performance feedback was essential, only 39% said they received it

(Axelrod. E.L, Handfield-Jones. H. &Welsh T.A. (2000) War for Talent updated in 2000)

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Barriers to effective Talent ManagementMcKinsey: interviews with 50 CEOs across 29 global organisations.

% of interviewees who rated obstacles amongst the 8 most critical

0 10 20 30 40 50 60

CEO and/or senior team don't have shared view of mostpivotal roles.

Succession planning and/or resource allocation processesare not rigorous enough to match right people to roles

Line managers do not address chronic underperformanceeffectively

Senior leaders in organisation do not align talent-management strategy with business strategy

Line managers are unwilling to differntiate their peole as top,average and underperformers

Organisation is siloed and does not encourage collaboration,sharing of resources

Line managers are not sufficiently committed to peopledevelopment

Senior Managers don't spend enough high-quality time ontalent management

Guthridge.M., Komm.A.B. and Lawson. E (2006) The people problem in talent management The McKInsey Quarterly 2006. 2. 6-8

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Meeting the Global challenge for Talent:

The Talent Strategy

Talent Strategy

& Planning

AcquiringTalent

Developing&

DeployingTalent



RetainingTalent

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Talent Strategy: What it is and what it isn’t

• NOT the plan for HR developments in recruitment, training, employee relations etc

• NOT simply how HR will deliver various services• NOT how HR will introduce the latest HR thinking• NOT a plan for HR’s internal activities

A plan to meet strategic talent needs of the business and create competitive advantage through

differentiating capabilities.

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Talent Strategy: main elements

• Dealing with current resource issues – keeping a ‘seat on the board’Immediate: tactical problem solver

• Meeting strategic business needs:– How will the people (numbers, skills, characteristics) required to achieve the business’

objectives be made available in the most (cost) effective way?– Define the demand (predict resource flows – in, out, across)– Review supply over the period (5 years?)– Gap analysis, – Proposals for action: costs, benefits and business case.

Medium term: enabler of strategy• Creating strategic advantage

– How can we create differentiating human resources to provide real competitive advantage?

– Competitive analysis– Identify potential differentiating resources– Actions to build differentiating resources– Business case to support their development

Long term: driver of strategy• Benefits summary in business terms

– increase revenues, decrease costs, shareholder value, cost income ratio etc

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Talent to enable business strategySupply and Demand Questions

• Demand - Resource flows: numbers, skills, competencies e.g:– We will be reducing sales of ‘x’ but increasing our focus on ‘y’– We will be competing in new global territories– We will be outsourcing more but will need more people able to manage supplier

relationships– We will need more specialist ……..– We will need far less ….....– We want to be seen as the most technically advanced company

• Supply– All our competitors will need exploration engineers– GIS expertise is only available from 3 Universities– China is starting to hire petrochemical analysts from European Universities– European and Japanese workforce is aging– Chinese Engineering graduates are too theoretical – only 13% useful– We lose x% of our Dutch graduates within 3 years

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Example – Global Oil Co

0

200

400

600

800

1000

1200

1400

2001 2006

Programmers

We will need 200 less programmers by 2006

Resource Implications:

Exit strategy?

Turnover levels?

Redundancy costs?

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0

200

400

600

800

1000

1200

1400

2001 2006

Cobol

C++

Actually we need 500 less Cobol programmers but 300 more C++ programmers


Exit strategy?

Turnover levels?

Redundancy costs?

Recruitment?

Employer of choice?

Retraining?

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0

200

400

600

800

1000

1200

1400

1600

2001 2002 2003 2004 2005 2006

Cobol

C++

By the way … we’ll need the C++ people by 2002 and some of the Cobol people till 2005


Exit strategy?

Turnover levels?

Redundancy?

Recruitment?

Employer of choice?

Retraining?

Retention?

Temporary staff?

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The C++ will be based in Plymouth, Current Cobol people are in LondonBoth Cobol and C++ must be

experienced in ‘extreme’ programming

… and don’t forget …..

Twice as many Team Leaders needed for C++ people

Takes about £8000 and 12 months to retrain a Cobol programmer – 10% fail!

Costs c£60k and 6 months to make a Cobol programmer redundant and recruit a C++ programmer – 15% leave within 1 year!

C++ salaries are rising fast - they are in demand and not being trained.

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• Training and retention plan for Cobol programmers in C++ and extreme programming.

• Cobol contracting as exit path (set up own business).• Early career counselling to allow self-selection for new roles or exit.• New sources for trainee C++ people (non IT/science grads, older people, non

IT mid-career people, admin staff with aptitude.• Early liaison with colleges worldwide and regional schools/colleges• Creating programming centres in Eastern Europe and Australia• Outsourcing some work to Pakistan

Example – Global Oil Co:Actions

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Opportunity for the business …. And for HR

• Resource flows are the critical strategic enabler/limitation for most large organisations

• They are poorly understood, rarely analysed properly and, if unplanned, can cause strategy to fail

• No one has time• They are completely within HR’s remit• They are quantifiable, business oriented, involve big scary numbers

and are extremely important!

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Strategic Capabilities: example

Identify strategic intent

Identify capabilities needed (particularly ‘key capabilities’)

Identify what we have

Plan to meet gaps(+ve and –ve)

Gap and Flow analysis

Top 3 in Australasian Fertiliser market within 5 years -via acquisition

20 M&A specialists with Australian agribusiness expertise

50 European M&A specialists, 5 ‘worldclass’.

Can we develop existing? Do we need to buy-in? Where from? Buy some experience and develop rest?

Redeploy, develop, recruit

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Strategic capabilities – Sources of competitive advantage (e.g.):

Global IT provider

International bank

Communications company

Diverse global holding group

Strategy Consultancy

Project and Deployment Managers

‘Friendly’ cashiers

Global telecoms experts

Knowledge Managers Consultancy

Internal Search consultants

Product builders

Global Petrochemicals conglomerate ??

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The Talent Strategy:Questions for you

• What are the CRUCIAL talents that you will need in the future?

• Do we own that Talent now?

• Do we need to build more of it?

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Meeting the Global challenge for Talent

Developing and deploying talent

Talent Strategy

& Planning

AcquiringTalent

Developing&

DeployingTalent



RetainingTalent

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Global Gas Co: the problem

• Fast track graduates (and high-performers in general) tended to leave after 3 years – because there was no planned career progression– Because they were no longer treated as ‘special’ or looked after

• Individual Divisions tended to protect and defend their best people – not allow them to be moved to other key roles.– Hide them - so the organisation’s best talents were invisible– Much easier to find someone from outside via executive search– Much easier to leave the company to progress, rather than move internally

‘Passport’ to success

Internal Executive search

Solution

Solution

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Passport to Success (web based)

• For every senior role (destination):– The competencies and skills required to do that role– The experience necessary to be considered for such a role– The kinds of jobs and roles necessary to gain that experience

• On-line ‘passport’ for each high-potential– CV and personal details– Jobs done and experiences gained (Visas)– Competencies and skills achieved

• Internal talent market– All vacant or future roles accessible by everyone on the web– Everyone’s passport available via intranet – Matching facility via intranet

• Individual responsibility– Up to the individual to make sure they moved into jobs to gain the necessary experiences

and competencies– No handholding or career planning

• Internal search

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Internal Executive search

• Executive search consultants were allowed to actively search internally• Advantage:

– Accessed ‘hidden’ talent– Lone managers can focus on building., protecting and building loyalty in staff

Search consultant focuses on unearthing talent for the business as a whole.– Movement is healthy– Better to be poached for an internal job than an external

• Disadvantage:– Some Managers object– Deliberate ‘unsettling’

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Developing and Deploying Talent:Questions for you

• How can you encourage people to develop their own talents?

• How can you ensure that top people are seen as organisational assets and move between business?

• What would be the advantages of deploying internal search?

• What would be the disadvantages?

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Retaining Talent

Talent Strategy

& Planning

AcquiringTalent

Developing&

DeployingTalent



RetainingTalent

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Retention: A differentiating strategic capability

Survey of 500 Global organisations

• 68% - retaining talent is ‘far more’ important than hiring

• Over 50% altered salaries, bonuses or stock options to retain talent

• Only 27% tried to provide employees with advancement opportunities within their

organizations

• Most companies continue to struggle with retention because they rely on salary

increases and bonuses to prevent turnover.

• Why doesn’t this work?

* Accenture: "The High Performance Workforce:Separating the Digital Economy's Winners from Losers”

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Example - High Tech firm losing high value people

To reduce turnover in key groups Who should we retain and how?

Identify root causes and solutions why do people stay or go?

The Manager’s role What can we do?

To identify and use non-financial intervention How can we retain (and spend more wisely)?

Project Objectives

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Dimensions of Staff Turnover:

Involuntary -

organisation decides not to retain the staff member (or retain). Voluntary -

individual decides to leave the organisation (or stay). High Value or Low value staff

Short term and long term Risk of quitting

Catch ‘intention to quit’ early in the process

If someone of low value is at high risk of leaving voluntarily - encourage and celebrate!

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Some turnover is OK!

Type A

Inadequate selection for dismissal etc

Type C

Dismissal, etc

Type B

Retention Problem

Type D

Career development moves, management

persuasion etc

Involuntary Voluntary

Value to the organisation

High

Low

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Segment the ‘voluntary’ population

High Risk

High value

Target retention actions

Target improvement

or cost effective exit

Maintain

No action - or encourage

to leave

Low value

Low Risk

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The Quitting Process

JobSatisfaction

Organisational

Reward/recognitionQuality of supervision

Work and socialstimulation

Conditions of workand environment

Personal

Personality (e.g. Self esteem +ve) Congruence of job with interests (-ve)

Status/seniority (-ve)General satisfaction with life (+ve)

External

Unemployment ratesEconomic situation

Scarcity of/demand for skillsGeography

Demographics

Thoughtsof quitting

Intentionto search

Intention toquit or stay

Actionquit or

stay

Probability ofachieving

alternative/attractiveemployment

Thoughtsof quitting

Organisational Commitment

Pull (e.g. Search Consultants)

PUSH

PULL

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Type B Turnover - When to attack

Job SatisfactionSelf esteemManagement style

Action quitor stay

Probability ofalternative/attractive

employment

Thoughtsof quitting

Intention tosearch

Intention toquit or stay

Main factors

Job offer atsame/more

money

Perception ofjob market vs

internal

Stage

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Actions

Regular confidential survey to identify high risk groups/individuals

Confidential interview to identify individual and general USPs

Confidential feedback form completed

Managers agree individual and group actions

Actions and monitor via survey

Identify high value groups/individuals

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Example Value/Risk spreadsheetValue Score (1-5) Weight (1-3) Total/5Impact of losing on next 3 months 5 1 5Impact of losing on long term 1 2 2Difficulty/cost of replacement 5 3 15TOTAL 3.7

*Risk 55 - Likely to look in next 2 months4 - Likely to look in next 6 months TOTAL 18.53 - Thinking of looking2 - Disatisfied1 - Happy

Can be used at Group or individual level

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Example potential actions

Special projects - recognition Golden handcuffs (stock options, bonus) Patents and publications awards Internal fellowship & instructor (external publicity) Dual careers (non-managerial ‘Star Tracks’ strategic role) Career counselling Self driven working (time, projects, place, invest) Learning accounts Cafeteria benefits Innovation Banks Personal Growth Leave Management attention Communication involving employees in company decision-making processes. project-oriented work, employees work on diverse, limited-term assignments. Developing internal "talent exchanges,”

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Summary – Targeted Retention: resourcing at its best!

• Retention much more cost effective than replacement• Retention must be targeted• Aim to minimise involuntary quitting (low or high value)• Take control/influence over voluntary staying and quitting• Need information – segment the internal market

– Who is valuable?– Who is at risk?– What they think– What they want

• Need deliberate highly targeted action - Marketing• Demonstrable, significant savings possible!

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Retaining key Talent:Questions for you

• How could you segment its own talent

• Which key talents need to be retained

• How can we best retain these people?

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Acquiring Talent

Talent Strategy

& Planning

AcquiringTalent

Developing&

DeployingTalent



RetainingTalent

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Strategic Talent Acquisition

• Proactive continuous search– Search out the right people – don’t wait for them to come to you– Look continuously for key skills – don’t wait till you have vacancies– Plan ahead (see previous section)

• Global Talent intelligence– Know where the best talent is and how to reach it– Web based geographic database of universities, competitors, alternative employers

etc– Tracked database of global potential hires – traced from University through career

and including searches, applications, etc• Internal Talent Market

– Line managers build and protect their own talent– Internal search helps make sure it ends up in the best place– Is it better for one of your people to be poached by a competitor or a colleague?

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• Use the intranet to access information

– knowledge x speed x accessibility = competitive advantage• Understand the market so well that information can be used to disrupt competitors• Extend information gathering internally – learn from the huge knowledge resource of

our current employees• Form relationships with key information ‘nodes’ – databases, professional organisations,

publications, universities – to get the inside track• Link to Talent database of current and future candidates – fully tracked!• Develop everyone to use the information

– Competitive intelligence isn’t a department – it’s a way of working!

TELECOM PLC Global Talent Intelligence:

Aims

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TELECOM PLC Global Talent Intelligence: Foundations

• Talent Market Data – in-depth knowledge about skills markets, competitors, strategies and tactics– Third party research (commissioned)– Published data– Sales & Marketing– Research & Development– Professional Services– Customer Services– Major Educational Establishments

• Competitive Company Reports– Supporting the business on specific bids and resourcing initiative– Responsive, pragmatic and focused

• Global Talent database– Tracks potential future employees from graduation through career– Fed through employee brand advertising, agencies, University careers offices, our own

employees, speculative applications (over 2000 pa).

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Intranet Portal

TELECOMS PLC Global Talent Intelligence Portal

News ArchiveHome CV DatabaseDiscussTalent Maps

Breaking News…Cisco's Components Feast

Marconi and Compaq join for service management

Find a supplier…

Search:

Quick CV search

Keywords:

Recent discussions…

http://www.lightreading.com/document.asp?doc_id=1804

http://www.lightreading.com/document.asp?doc_id=1804

http://www.totaltele.com/view.asp?ArticleID=31893&Pub=TT&CategoryID=823

http://www.totaltele.com/view.asp?ArticleID=31893&Pub=TT&CategoryID=823

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Overview Data: Europe

Professional Services KPMG

PWC

Analysis

Etc…

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By Country

AlcatelParis, France

AddressEmployeesAdvertising

News

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Talent Map – Italy

• Accessible through TELECOM PLC Intranet and via web

• Maps now for all strategic countries• At-a-glance picture of TELECOM PLC’s

talent competition• This map shows ‘associated

industries’ – darker colours = more employees in region

• Stars highlight company sites• Geographic link to ‘prospect’ database

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Italy in Detail – Rome (Lazio)

• Maps are interactive – zoom in to any region

• Information from regularly-updated database – ‘live’

• Show all competitors, or slice information by technology, company, skillset etc.

• Next steps – link this to individual employee details

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• Questions the portal can answer (examples)– “What’s the current average salary for project managers in Paris?”– “What experience do fellow talent managers have of recruiting in Qatar?”– “Who can I ask about recruiting in Holland?”– “How many people do Alcatel employ in Japan?”– “What is the potential skills market for 3G engineers in Northern Russia?”– “Where can I find Thai-speaking Project Managers?”– “What have Cisco been doing recently?”– “What can I tell my business about Lucent’s recent joint venture?”

• Search: Italy based GIS experts with Geology– John Cvanagh – 1990 MSc Spatial Analysis Milan – 10 years GIS for Shell global £70k– Abdullah Kaziz – 2000 BSc 1.1. Oxford Geology – 5 years BP Middle East £50k– Etc etc


Functions

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Executive Search integrated with Resourcing and Talent Management

Pre-selection Selection Post-selection

Promote company values and ‘Employee brand’

Induction begins with first call

Retention via mentoring for first six months

Succession allows early planning

Fast track project managed selection

Resourcing strategy drives search strategy

Competency frameworks utilisedCompetitive

intelligence from market research

Internal candidates ‘searched’ and compared

Reward data incorporated from search

Database built for future requirements

Mgt development - part of screening

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Acquiring Talent:Questions for you

• How can you track and access key external talent

• Should you recruit key talent – even when it hasn’t got specific vacancies?

• How can you keep track of all the people who apply?

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Talent Strategy

& Planning

AcquiringTalent

Developing&

DeployingTalent

Summary and key action areas


RetainingTalent

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Meeting the Global challenge for Talent:A major source of competitive advantage

Talent Strategy&

Planning

Developing &

DeployingTalent

RetainingTalent

AcquiringTalent

Identify strategic intentIdentify capabilities needed (particularly key capabilities)Identify what we haveGap and flow analysisStrategic Plan to meet gaps (+ve and –ve)

Create an internal market for talentSelf development ‘passport’ for individualsInternal executive search

Identify critical talent that must be retainedAssess ‘propensity to leave’Intervene at early stage of the leaving process

Create Global Talent Intelligence web toolGlobal database of potential external talentInternal executive search

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Thank you very much!

William [email protected] +44 7785110910

mailto:[email protected]

Meeting the Global Challenge for Talent

Business

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