Business implications and responses
There are no easy, one-size-fits-all solutions to talent management problems.
Solutions that all companies should consider in order to strengthen their talent strategies.
We believe that there are solutions that all companies should consider in order to strengthen their talent strategies. These solutions address some of the challenges that we have explored on previous pages:
- Align and integrate talent management across the business
- Rethink approaches to international mobility and re-integration
- Create the right blend between global and local talent management
- Use analytics to identify talent gaps and gain a better understanding of workforce behavior
- Take a long-term approach to developing the next generation of leaders
Align and integrate talent management across the business
Successful talent management is not just a question of recruiting, retaining and developing a high-performing workforce. Companies also need to ensure that they align their talent management processes with their culture, values and strategic goals, and that they integrate these programs across the entire organization.
“You have to look at your workforce and determine whether it can fulfill each element of the corporate strategy and, if not, what will need to be done through career development, leadership development, recruitment and succession,” says EY’s Leisy.
“Companies must be able to identify gaps and fill them in a way that both aligns with business strategy and enables the development of a strong leadership pipeline for the future.”
Integration takes this process one step further by ensuring that there is a cycle of workforce planning, feeding into recruitment, which in turn feeds into functions such as onboarding, learning and development, and succession planning.
Rethink approaches to international mobility and reintegration
As companies diversify their international footprint, it becomes increasingly important for executives who occupy senior leadership positions to have work experience and knowledge within international markets.
Rather than rely on a small group of highly paid expatriate workers, companies should embed mobility into their leadership and high-potential programs, creating a multi-directional flow of talent between and among developed and rapid-growth markets.
“Companies need to consider mobility as part of building the career path for future leadership,” says EY’s Leisy.
“This means taking a strategic rather than a reactive approach to career planning so that there is a formalized and structured model for personal development to ensure that potential leaders have the right mix of experiences, skills and competencies to be successful in a variety of global markets.”
“They also think about the effectiveness of the assignment both for an individual’s development and meeting business needs. Repatriation becomes one step in the development and succession of future leaders and managers, taking them to the next stage in their careers.”
Create the right blend between global and local talent management
Multinationals have become accustomed to thinking about the right mix between globalization and localization when it comes to their customers. They may seek economies of scale with activities such as procurement, but they will typically ensure that their go-to-market strategies are, to some extent, localized within each market.
When it comes to talent management, few companies have made this leap. Most will do what they can to standardize and globalize their talent management practices in the hope that this will enable them to compete more effectively for talent on an international basis.
Tammy Erickson explains that this one-size-fits-all model will not work. “I get very nervous when companies talk about globalizing their talent management practices, because people are so different around the world,” she says.
Although there are certain efficiencies companies can achieve, for example by having a global IT system for the HR department, it is absolutely essential that they think locally about how to attract talent, shape their messages and position their company as an attractive destination to work.
Joerres believes that companies should think in terms of frameworks when deciding which talent management decisions should e determined centrally and which allow local interpretation.
By splitting a framework into two components – fixed and flexible – you can remove a lot of the mystery from accountability for decision-making. “The fixed parts of the framework are non-negotiable and that means that you need to abide by them regardless of where in the world you are,” he says.
Use analytics to identify talent gaps and gain a better understanding of workforce behavior.
Workforce analytics offers companies the opportunity to gain a better understanding of where skills gaps lie and how talent management decisions feed into broader corporate performance objectives.
Effective workforce analytics starts with having accurate, complete data. Some companies already have this in place. By aggregating data into a single source, companies can have the foundations in place to perform more detailed analytics.
At the advanced end of the spectrum, companies are using predictive workforce analytics to forecast potential shortages or surpluses of talent, or to assess how industry cycles will affect the availability of the right human capital resources.
Dow Chemical has mined three years of historical data on its 40,000 employees to anticipate workforce needs based on predictions of promotion rates, internal transfers and overall availability in the labor force. It has created a custom modeling tool to segment the workforce and calculate future headcount for the entire company 3.
Take a long-term approach to developing the next generation of leaders
Companies need to take a much longer-term approach to leadership development. They must extend succession planning beyond the immediate top team to encompass other high-potential leaders across the organization.
High-potential programs are expensive and can, if not run correctly, turn into training grounds for the competition. A high-potential manager who becomes disengaged from the process or one who fails to secure an expected promotion may quickly become disillusioned and decide that the opportunities for advancement are better elsewhere.
Past performance is not always a predictor of potential. Managers who excel in the early stages of their career will not necessarily maintain that high level of performance, and this means that high-potential programs may not always select the best people for future senior-level roles.
“It’s hard to predict future performance, so any high-potential program needs to be crystal clear about how it defines potential in the first place,” says Groysberg.
“That is not any easy thing to do, and not enough companies take the fundamental step of determining what they are trying to measure and predict.”