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Meeting the Global Challenge for Talent

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1 Meeting the Global Challenge for Talent
Professor William Scott-Jackson Director, Centre for Applied HR Research Oxford Brookes University CEO, Oxford Strategic Resourcing Ltd Oxford, UK Director, Mayo Learning International Ltd

2 Meeting the Global challenge for Talent: Agenda
Talent Management: the threat and the opportunity Talent Strategy & Planning Developing & Deploying Talent Retaining Talent Acquiring Talent Summary and Key action areas

3 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

4 War for Talent: 1998 recommendations
The Old Way The New Way HR is responsible for people management All managers, starting with the CEO, are accountable for strengthening their talent pool We provide good pay and benefits We shape our company, our jobs, even our strategy to appeal to talented people Recruiting is like purchasing Recruiting is like marketing Development happens in training programmes We fuel development through stretch jobs, coaching and mentoring We treat everyone the same, and like to think that everyone is equally capable We affirm all our people but invest differentially in our A,B and C players Scott-Jackson 2006 recommendations We recruit when we need to We know what our strategic skills gaps are and we have clear plans to fill them We know how many we need in defined roles We know which critical capabilities will be needed to achieve our strategy - and we know how we are going to build them Michaels.E., Handfield-Jones. H & Alexroyd. B (1998, The war for Talent, Harvard Business School Press

5 Top global management issues
Top 10 current business issues for senior executives Percentage of respondents selecting issues 1. Attracting and retaining skilled staff 35% 2. Changing organizational culture and employee attitudes 33% 3. Acquiring new customers 32% 4. Developing new processes and products to stay ahead of the competition 29% 5. Increasing customer loyalty and retention 6. Managing risk 7. Improving workforce performance 28% 8. Increasing shareholder value 27% Using IT to reduce costs and create value 10. Being flexible and adaptable to rapidly changing market conditions 26% Developing employees into capable leaders Accenture (2005) Global survey of management issues, July 2005

6 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)

7 Barriers to effective Talent Management
McKinsey: interviews with 50 CEOs across 29 global organisations. % of interviewees who rated obstacles amongst the 8 most critical Guthridge.M., Komm.A.B. and Lawson. E (2006) The people problem in talent management The McKInsey Quarterly

8 Meeting the Global challenge for Talent: The Talent Strategy
Talent Management: the threat and the opportunity Talent Strategy & Planning Developing & Deploying Talent Retaining Talent Acquiring Talent Summary and Key action areas

9 Talent Strategy: What it is and what it isn’t
A plan to meet strategic talent needs of the business and create competitive advantage through differentiating capabilities. 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

10 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

11 Talent to enable business strategy Supply 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

12 Example – Global Oil Co We will need 200 less programmers by 2006
Resource Implications: Exit strategy? Turnover levels? Redundancy costs?

13 Example – Global Oil Co Actually we need 500 less Cobol programmers but 300 more C++ programmers Resource Implications: Exit strategy? Turnover levels? Redundancy costs? Recruitment? Employer of choice? Retraining?

14 Example – Global Oil Co By the way … we’ll need the C++ people by 2002 and some of the Cobol people till 2005 Resource Implications: Exit strategy? Turnover levels? Redundancy? Recruitment? Employer of choice? Retraining? Retention? Temporary staff?

15 Example – Global Oil Co … and don’t forget …..
The C++ will be based in Plymouth, Current Cobol people are in London Both Cobol and C++ must be experienced in ‘extreme’ programming Twice as many Team Leaders needed for C++ people C++ salaries are rising fast - they are in demand and not being trained. 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!

16 Example – Global Oil Co: Actions
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

17 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!

18 Strategic Capabilities: example
Identify strategic intent Top 3 in Australasian Fertiliser market within 5 years -via acquisition Identify capabilities needed (particularly ‘key capabilities’) 20 M&A specialists with Australian agribusiness expertise Identify what we have 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? Gap and Flow analysis Plan to meet gaps (+ve and –ve) Redeploy, develop, recruit

19 Strategic capabilities – Sources of competitive advantage (e.g.):
Global IT provider Project and Deployment Managers International bank ‘Friendly’ cashiers Communications company Global telecoms experts Consultancy Knowledge Managers Diverse global holding group Internal Search consultants Strategy Consultancy Product builders ?? Global Petrochemicals conglomerate

20 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?

21 the threat and the opportunity Summary and Key action areas
Meeting the Global challenge for Talent Developing and deploying talent Talent Management: the threat and the opportunity Talent Strategy & Planning Developing & Deploying Talent Retaining Talent Acquiring Talent Summary and Key action areas

22 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 Solution ‘Passport’ to success Solution Internal Executive search

23 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

24 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’

25 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?

26 Meeting the Global challenge for Talent Retaining Talent
Talent Management: the threat and the opportunity Talent Strategy & Planning Developing & Deploying Talent Retaining Talent Acquiring Talent Summary and Key action areas

27 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”

28 Example - High Tech firm losing high value people
Project Objectives 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)?

29 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 Of course, not all staff turnover is bad. In the first place turnover can be voluntary, where the staff member decides to leave or involuntary, where the organisation decides not to retain the staff member. The other dimension is that turnover can be of high value or low value staff. If someone of low value is at high risk of leaving voluntarily - encourage and celebrate!

30 Some turnover is OK! Involuntary Voluntary High
Type A Type B Inadequate selection for dismissal etc Retention Problem High Value to the organisation Type C Type D Taking both of these dimensions we can work out where to focus our efforts. Turnover Type Impact (-ve) Type A 10/10 Losing high value people through redundancy programmes etc Type B 5/10 Losing high value people through retention problems Type C 5/10 Paying low value people to leave! Type D 1/10 Low value people leave voluntarily Estimated costs of Type B Turnover (per consultant): Recruitment Training Salary while training 30000 Lost revenue Morale, ? productivity ? management time ? At least Obviously can reduce costs of recruitment etc but still a big number! 10% turnover - (100 senior consultants) - £3m per annum off bottom line. Also include costs of exits of Type Cs- can be one year’s salary And, even worse, costs of exits of Type Bs - Also 3 month’s salary Average services firm with cadre of c100 highly paid professionals. Could be costing over £4m per annum. Low Dismissal, etc Career development moves, management persuasion etc

31 Segment the ‘voluntary’ population
Low Risk High Risk High value Target retention actions Maintain The involuntary are either expensive (to exit) or mistakes (where we’ve exited then wrong people). Ideally, therefore, we would encourage voluntary staying or leaving in line with company requirements always. We can then target different actions to the different segments of our population Target improvement or cost effective exit Low value No action - or encourage to leave

32 The Quitting Process The process of resignation commences with ‘thoughts of quitting’ which in itself is often caused by internal (push’) factors such as low job satisfaction. The thought of quitting may or may not turn into a job search depending on whether the individual believes it will be worthwhile and how serious is the thought of quitting. Once an individual has started a job search then intention to quit will be mitigated by how many offers, at what level and so on the individual receives. It is normally only at the ‘intention to quit’ stage that money is seriously taken into consideration. The action of quitting is then dependent on relative offers and whether the individual’s job satisfaction is still low. Search consultants bypass most of this process by raising the perceived probability of gaining alternative employment and easing the search process dramatically. If a company wishes to retain a key individual then the best place to start is at the beginning of the process. Organisations who try and persuade at the final stages (intention to quit) can only offer more money as the individual will have persuaded themselves that the alternative is preferable in every other way. At the later stages of the process, the phenomena of ‘cognitive dissonance’ will ensure that the person finds lots of reasons to support the intention to quit ( in the same way that once having purchased a car, most people will find difficulty in accepting reasons not to have bought it).

33 Type B Turnover - When to attack
Stage Thoughts of quitting Intention to search Intention to quit or stay Action quit or stay Job Satisfaction Self esteem Management style Perception of job market vs internal Probability of alternative/ attractive employment Job offer at same/more money The most cost effective place to attack retention is at the front end - ‘thoughts of quitting’ as the factors here are to do with management, the person themselves and/or the job the least effective is at the end - ‘Action’ - as the factors here are money, conditions etc It has been shown that ‘thoughts of quitting’ are highly correlated with management style and personal resilience Main factors

34 Actions Identify high value groups/individuals
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

35 Example Value/Risk spreadsheet
Use at Department, team or individual level Can be used at Group or individual level

36 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,” Golden handcuffs - Texas 14% of base, Xerox, 10% bonus on profit Patents and publications awards - Dell - application filed = $1000 cash, $5000 stock, Publications - Internet and company recognition, $750 cash Internal fellowship (ICL) & instructor programme (external publicity and credibility) Dual careers (National Semiconductor) Technical positions ‘Star Tracks’ (allows technical strategic role) Career counselling (Pactel, Sorbus, HPS) independent career counselling to allow people to take control - significant increase in retention (ICL) Self driven working (Hewlett Packard, 3m) 15% of time on own projects, place, invest) Learning accounts (Fujitsu) Cafeteria benefits Innovation Banks (3m, Kodak) - Research grants and funding new ideas Personal Growth Leaves or Sabbaticals (Apple, Silicon Graphics, Intel etc) up to one year off(10 weeks for 5 years service?) on emergent technology or IT certification etc

37 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!

38 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?

39 Meeting the Global challenge for Talent Acquiring Talent
Talent Management: the threat and the opportunity Talent Strategy & Planning Developing & Deploying Talent Retaining Talent Acquiring Talent Summary and Key action areas

40 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?

41 TELECOM PLC Global Talent Intelligence: Aims
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!

42 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).

43 TELECOM PLC Global Talent Intelligence: Intranet Portal
TELECOMS PLC Global Talent Intelligence Portal Home News Archive Talent Maps Discuss CV Database Breaking News… Cisco's Components Feast Marconi and Compaq join for service management Quick CV search Keywords: Recent discussions… Find a supplier… Search:

44 Overview Data: Europe Professional Services KPMG PWC Analysis Etc…

45 By Country Alcatel Paris, France Address Employees Advertising News

46 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

47 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

48 TELECOM PLC Global Talent Intelligence: Functions
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

49 Executive Search integrated with Resourcing and Talent Management
Resourcing strategy drives search strategy Induction begins with first call Database built for future requirements Internal candidates ‘searched’ and compared Succession allows early planning Reward data incorporated from search Competency frameworks utilised Competitive intelligence from market research Mgt development - part of screening Retention via mentoring for first six months Promote company values and ‘Employee brand’ Fast track project managed selection Pre-selection Selection Post-selection

50 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?

51 Meeting the Global challenge for Talent
Talent Management: the threat and the opportunity Talent Strategy & Planning Developing & Deploying Talent Retaining Talent Acquiring Talent Summary and key action areas

52 Meeting the Global challenge for Talent: A major source of competitive advantage
Identify strategic intent Identify capabilities needed (particularly key capabilities) Identify what we have Gap and flow analysis Strategic Plan to meet gaps (+ve and –ve) Talent Strategy & Planning Developing & Deploying Talent Create an internal market for talent Self development ‘passport’ for individuals Internal executive search Identify critical talent that must be retained Assess ‘propensity to leave’ Intervene at early stage of the leaving process Retaining Talent Create Global Talent Intelligence web tool Global database of potential external talent Internal executive search Acquiring Talent

53 William Scott-Jackson
Thank you very much! William Scott-Jackson

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