Paradigm shift - Building a new talent management model to boost growth

Paradigm shift

Building a new talent management model to boost growth

November 2012

Paradigm shift Page 2

Introduction

► Growth is at the top of every organization’s agenda.

► Competitive advantage is hard to find.

► Talent : an untapped opportunity.

► Investment in talent often requires deep organizational changes.

► High performing companies invest more in talent management.

► It’s time for a “paradigm shift”.


Agenda

► About the survey

► Survey highlights

► In search of a new talent paradigm:

1. Corporate workforces are becoming more global, but talent management is not

keeping pace.

2. Companies struggle to invest strategically in talent management

3. Measuring the effectiveness of talent management remains a challenge.

4. The skills and competencies required by future business leaders are changing.

5. Companies lack robust succession plans to identify the next generation of

leaders.

► Business implications

► Responses to business implications

► Does your talent model measure up?


About the survey

The survey of 596 executives was conducted and analyzed as follows:

Survey demographics:

► 1/3 of respondents were from the Asia-Pacific region

► 1/3 from Western Europe

► 1/3 from North America

► 10% were from Latin America, the Middle East and Africa, and Eastern Europe.

► 53% percent of the respondents were CEOs, CFOs or other C-level executives.

► 44% percent of the companies surveyed reported revenues of US$1 billion or more.

Analysis:

► Compared findings from rapid-growth market and developed markets.

► Compared findings from high-performers with low-performers.


Survey highlights


Survey Highlights Differences between high and low-performers

► High-performers:

► Place greater emphasis on linking pay with performance

► Provide more customized training and development

► Invest in talent management to meet the organization’s financial targets

► Choose people who can lead effectively in an international business environment

► Have a stronger pipeline of future leadership talent

► Build more robust succession plans and future leaders with diverse backgrounds


Survey highlights Differences between developed and rapid-growth markets

► Businesses in rapid-growth markets are more likely to:

► Offer variety in job descriptions and responsibilities

► Offer opportunities for employee mobility across functions

► Encourage working in different countries and offer greater freedom

to direct reports to make decisions

► Adopt an equal (less of a top-down) style of management


In search of a new talent paradigm


Scarcity of talent is becoming a key obstacle to growth

► In India, the percentage of employers jumped 51% in 2011.

► 60% of organizations were experiencing a leadership shortage, an

increase of 40% from the previous year.

► 72% of respondents reported difficulty finding and keeping the high-

potential employees essential to boost their global competitiveness.

Source: Corporate Executive Board 2012 survey.


Five key talent management challenges

1. Corporate workforces are becoming more global, but talent

management is not keeping pace.

2. Companies struggle to invest strategically in talent management.

3. Measuring the effectiveness of talent management remains

a challenge.

4. The skills and competencies required by future business leaders

are changing.

5. Companies lack robust succession plans to identify the next

generation of leaders.


The challenges


Challenge 1: Corporate workforces are becoming more global, but talent management is not keeping pace


It’s hard to find a company that isn’t global

9

34

23

17

10

7

4

24 22

22

18

10

0% 1%-20% 21%-40% 41%-60% 61%-80% 81%-100%

What percentage of your organization’s workforce is based in a country other than where the corporate headquarters are located?

Now In three years


But talent management is not keeping up

68%

56%

46%

41%

50%

37%

60%

56%

45%

Adapting talent management policies to changes in the business environment

Understanding clearly the relationship between employee performance and company performance (e.g., revenue growth)

Investing adequately in talent management to meet organization's financial targets

How effective is your organization at the following aspects of performance and talent management?

Overseas workforce <40% Overseas workforce >40% All respondents


The link between autonomy and performance

9

34

23

17

10

7

4

24

22 22

18

10

0% 0-20% 20-40% 40-60% 60-80% 80-100%

In the past three years, what changes has your organization made to the way in which managers manage direct reports?

Now In three years


Not enough opportunities for overseas experience

64%

59%

57%

55%

53%

48%

42%

41%

58%

50%

52%

47%

47%

46%

39%

42%

Create opportunities for employee mobility across functions

Put greater emphasis on linking pay and performance

Introduce greater varierty of responsibilities in job descriptions

Provide customized training and development

Create opportunities for employees to work in other countries

Encourage flexible working

Encourage employees to join mentoring programs

Offer pension schemes, health care and other benefits

Which of the following are part of your organization's strategy to manage a multicultural or international workforce?

Low perfomers High performers


Challenge 2: Companies struggle to invest strategically in talent management


Companies struggle to make the right investments in talent

66%

56%

46%

61%

50%

37%

Adapting talent management policies to changes in the business environment

Investing adequately in talent management to meet organization's financial targets

Understanding clearly the relationship between employee performance and company performance (e.g., revenue growth)

How effective is your organization at the following aspects of performance and talent management?

High performers Low performers


Challenge 3: Measuring the effectiveness of talent management remains a challenge


A focus on the wrong metrics?

53%

45%

40%

38%

34%

31%

26%

57%

42%

36%

41%

40%

25%

18%

Employee satisfaction

Retention rates

External reputation of organization as an employer

Employee productivity

Level of cross-functional collaboration

Diversity of management team

Extent of skills gaps in workforce

Which of the following metrics do you consider to be the most important determinants of an effective talent management program?



Challenge 4: The skills and competencies required by future business leaders are changing


It’s the soft skills that matter most

47%

44%

38%

33%

33%

30%

21%

12%

37%

37%

40%

37%

27%

32%

27%

13%

Can lead effectively in an international business environment

Can articulate and embody the values and culture of the organization

Can command the respect of colleagues and reports

Can engage effectively with multiple internal and external stakeholders

Decisiveness

Has industry expertise

Has strong grasp of financials

Is a good risk manager

What do you consider to be the most important attributes for potential C-level leaders of your organization?



Challenge 5: Companies lack robust succession plans to identify the next generation of leaders


Concerns about the next generation of leaders

78%

54%

48%

45%

43%

70%

43%

33%

36%

38%

Current crop of leaders with the right attributes and experience

A strong pipeline of future leadership talent

Robust succession plans for key leadership roles

Future leaders with sufficiently diverse experience and backgrounds

A clear set of qualification metrics for leadership candidates

To what extent do you agree that your organization has the following aspects of leadership development in place?



Business implications


1. Align and integrate talent management across the business

► Companies need to make sure that:

► They align talent management with culture, values and

strategic goals.

► They recruit and retain a workforce in a way that

supports their key objectives.

► Their HR function is embedded in the business and

serves as a partner to it.


2. Rethink approaches to international talent

► Companies need to review their approach to international mobility

and re-integration:

► Embedding mobility into their leadership and high-potential programs

► Adopting a strategic approach: overseas experience as part of long-term

leadership development programs

► Developing repatriation plans to take the executives to the next stage in their

career


3. Create the right blend between global and local talent management

► Most companies try to standardize and globalize their talent

management practices.

► The one-size-fits-all model will not work.

► Some standardization is desirable.

► But companies need to think locally about how to attract and retain

talent.

► Companies should develop a framework that combines fixed and

flexible components.


4. Use analytics to identify talent gaps and better understanding of workforce behavior

► Effective workforce analytics start with:

► Accurate data

► Complete data

► The ability to aggregate it

► Workforce analytics offer the opportunity to:

► Identify skills gaps

► Link talent management decisions with broader performance objectives

► Some companies are using analytics to:

► Forecast talent shortages or surpluses

► Assess how cycles will affect the availability of human capital resources

► Companies need to recognize that technology is a support

mechanism and not the solution to everything.


5. Take a long-term approach to developing the next generation of leaders

► Companies should:

► Take a long-term approach to leadership development

► Extend succession planning beyond the immediate top team

► High potential programs can be valuable, but there is

a risk that they could turn into training grounds for the

competition.

► Companies must also be aware that past performance

is not always a predictor of future potential.


Responses to business implications


Business implications and responses

1.Align and integrate

talent management

across the business

► Align talent management with company culture, values and strategic goals

► Recruit, retain and reward employees in a way that supports key objectives

► Integrate talent management programs across the entire organization and

adapt to keep pace with changes in the business environment

► Embed HR into the business, establishing a more strategic partnership with

the function

2.Rethink approaches to

international mobility

as well as re-

integration

► Build mobility programs into long-term leadership development, providing

high-potential executives with exposure to different markets to broaden

their knowledge and appreciation of different cultures

► Create a multi-directional flow of talent across developed and

rapid-growth markets

► Include a robust repatriation plan for international assignees

3.Create the right blend

of global and local

talent management

► Establish the right balance by which talent management decisions will be

made: centrally versus locally

► Think locally about how to attract and retain talent, as well as how to

position the company as an attractive place to work


Business implications and responses

4.Use analytics to

identify talent gaps

and gain a better

understanding of

workforce behavior

► Evaluate which metrics are most effective in supporting corporate

performance objectives

► Use data to understand where skills gaps might exist

► Look ahead to predict availability of talent (e.g., within an industry)

► Understand the link between company and employee performance

5.Take a long-term

approach to

developing the next

generation of leaders

► Consider the gap between current and future leaders, focusing on

the right attributes and experience

► Build a strong pipeline of future leadership talent

► Include succession planning that expands beyond top leadership in your

approach

► Establish an effective process for choosing a new leader, defining a

set of qualification metrics for these candidates

► Consider soft skills, which may be more important than having deep

subject-matter knowledge


Three key strategies for maximizing your return on talent

Think long term

► Investing in talent has a long-term outcome

► Look beyond the short-term expense of mobility, performance management

and recognition and rewards; instead focus on the long-term investment,

such as providing critical market experience

Measure the right

outcomes

► Move away from traditional measures, such as employee satisfaction,

productivity, engagement, collaboration and retention

► More effective measures include filling positions with internal candidates,

developing job-specific employee skills and competencies, assessing and

validating recruitment and selection processes, and evaluating talent

according to business-performance standards

Adopt a disciplined

approach

► Align your approach with the business strategy

► Integrate programs across the organization

► Measure results to validate business strategy execution


Does your talent model measure up?


Does your talent model measure up?

Three key takeaways from today’s event:

1. Think long term. Remember that investing in talent has a long-term

outcome, and it may be years before your company sees the results.

2. Measure the right outcomes. Move beyond traditional measures

such as employee satisfaction, productivity and engagement.

3. Adopt a disciplined approach. Treat talent management as a

disciplined process involving alignment, integration and

measurement.


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