Talent Strategy

Five Reasons to Focus on Recruiting in 2009

Posted on December 30, 2008. Filed under: Sourcing and Recruiting, Talent Strategy, Workforce Planning | Tags: , , , , , , |

Here we are entering the worst recession in more than 30 years, reading about layoffs, downsizing, and restructuring in almost every industry.   So why would I start our 2009 research with a discussion about the need to focus on recruiting?   Well, contrary to what many may believe, even in times of job reductions recruiting must take a top priority.  Let me give you five good reasons:I Want You

1.   Even in times of an economic slowdown, many organizations still suffer from severe skills and leadership shortages.  Our Fall 2008 TalentWatch® research shows that 36% of organizations have severe shortages in line managers;   17% cite major shortages in technical roles, and industries like healthcare, government, and professional services still have shortages in many line positions.   While the pool of job candidates is much greater now, organizations must still focus on identifying and selecting the best candidates and this must be accomplished with fewer dollars for recruiters, headhunters, and job placement advertisements.

Bottom line:   recruiting teams must continue to seek out top candidates, despite reduction in budgets.

2.  Job seekers become more desperate, making the recruiter’s job more difficult.   In today’s economic climate, job-seekers will aggressively seek out positions — meaning that you will receive more applicants and a much higher job acceptance rate than normal.   Managers must carefully decide if today’s passionate candidate really believes your organization is the perfect fit or if he or she is just desperate to find a position.   And in some cases the pool of highly qualified candidates may have shrunk:   in tough economic times top candidates may want to avoid a risky relocation, making it hard to attract a highly qualified candidate from another geography.

Bottom line: recruiters must slow down and screen candidates more carefully than ever.

3.  Downsizing initiatives may cause an increase in turnover and reduction in engagement.   Many studies show (and common sense bears this out) that organizations which go through severe or sudden downsizing then get a “double whammy” — an increase in voluntary turnover and a reduction in engagement.   I distinctly remember going through sudden layoffs at two of the high-tech companies I worked for.   In both cases the good people immediately started looking around for jobs, knowing full well that they could be the next ones to go.  And those who may not have as many opportunities start to lay low and hide, hoping to avoid the next round of cuts.  The employees who survive a layoff often feel like “survivors” – and often feel less committed to the company and its turnaround efforts.  This is why so many companies go through multiple rounds of layoffs:  the first cut seems deep, but problems get worse if the process is not handled carefully.

Bottom line:   any downsizing effort requies a heavy dose of communication, vision, and strategy to bring people together.   Read our brand new research, A Manager’s Guide to Successful Downsizing, for more tips and examples.

4.   A strong recruiting program brings new ideas and excitement into an organization.   The toughest challenge to deal with during a downturn is the need to create a strong sense of commitment and focus to rebuilding the business.  We ask people to take on new roles, work longer hours, and often lead change programs which are new and challenging.  We want our people to be committed to restructuring and growth.  One of the greatest ways to build such a spirit is to see key new people entering the organization in critical roles.  Not only does it give people a sense of excitement, but it brings new ideas and creativity into the organization.

Bottom line:  do not be afraid to bring new pe0ple into the organization during a restructuring — the right people can create the urgency and change needed to succeed.

5.  Remember that recruiters must continuously recruit existing people into new roles.   When a company restructures, downsizes, or goes through a reorganization there is a tremendous need to “recruit” people into new roles.   I distinctly remember the terrible feeling I had when I had to “take over” a role from a sales group which had been downsized at one of my prior employers.   Rather than being “recruited” into the position, I was “assigned” the job.  It took me many months to get excited about the opportunity and build a network of people to support the reduced function.  In retrospect, if someone had professionally “recruited” me into the role I would have been far better prepared and excited about the new opportunity.

Bottom line:  stay focused on your internal recruiting and job migration efforts, as these changes will be as important as ever.

Sourcing, recruiting, onboarding, and employee lifecycle management are vital parts of high impact talent management.   Stay focused on this important part of your organization and you will be well prepared for growth when your business cycle turns – which may be sooner than you think.

PS, as part of our continuing efforts to provide you with world-class, highly actionable research and advisory services I am very excited to introduce Madeline Tarquinio Laurano, our new Principal Analyst focused on sourcing, recruiting, and workforce planning.  Madeline comes to us most recently from ERE, where she was the primary recruiting analyst among their 80,000+ readers, and research experience at Linkage Group and Aberdeen where she studied leadership development, succession management, and onboarding.   We welcome Madeline to our research team — and her new blog “All Aboard” will focus exclusively on the important and rapidly changing areas of sourcing, recruiting, job boards, and the use of social networking in talent acquisition.

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After Talent Management: Enter People Management

Posted on December 17, 2008. Filed under: Talent Management, Talent Strategy | Tags: , , , |

Business and HR leaders have been focused on integrated talent management for the last three years now, and it is clear that talent management concepts, strategy, and solutions have started to transform HR.  Most HR organizations today now have an owner of “talent management” and this person is pulling together formerly silo’d HR processes like performance management, succession management, career management, and leadership development.

Bersin & Associates Talent Management Framework

Fig 1:  Bersin & Associates Talent Management Framework

But something continues to be missing: many of these programs and strategies arevery HR-focused. They are often cost-justified and driven by the HR or L&D organization’s desire to become more aligned and efficient.  (I have sat through five presentations called “One-HR” in the last six months).  And yes, as we talked about in our research, “Business-Driven Talent Management” is our ultimate strategy.  But today many organizations have not yet reached the “business-driven” part of the solution – so the “talent management” strategy looks like an “HR-strategy.”

As we have written about many times in the past, the solution here is to do two things:  first, clearly identify and document the business problems you want to address (today this is pretty easy!);  second, translate these into the talent strategies you want to implement which support these business problems.  If you are transforming yourself from an investment bank to a retail bank, for example, you have many new roles to train, people to migrate, and processes to implement.  If you are moving from a healthcare service company to a preventive healthcare company (more on this below), then your talent strategy should include a process of retraining and re-thinking the roles of everyone in the healthcare value chain.

As we discuss in our research “every business strategy has an underlying talent strategy.”

As we talk with literally hundreds of companies over the past few years, we continuously remind them to work on these two levels first.  Only after these strategies are in place, can you design and implement your new performance, succession, and career development program.


Economic Downturn Creates a New Focus – An Expanded Role for Talent Management

Now, however, the business world has changed.   The critical problems organizations face in 2009 are very different: rapid market changes, restructuring, downsizing, mergers and acquisitions.  These problems not only create a need for better alignment and leadership, but a heavy focus on rapid talent planning, employee mobility, rapid skills development, and what we call “business agility.”  (You will see a lot more from us on this topic in 2009.)  This means that many of the 2006 and 2007 and 2008 concepts of talent management are no longer enough.  

Today I hear more and more HR and business leaders telling me “we have our talent management strategy well underway” but what we really need is a “People Strategy.”

What they are really saying is that while the traditional definition of talent management is important, they really need more — and I believe this concept of the “People Strategy” is the next “big thing” coming in the world of business-driven HR.

Consider the challenges of one of the nation’s largest healthcare providers, Kaiser Permanente.  This organization has 160,000 employees and is one of the country’s largest insurance providers, healthcare service providers, IT organizations, and facilities management organizations. It is transforming itself from a “healthcare service provider” to a “wellness provider,” which means a tremendous change in focus on preventive medicine. This transition will affect every role in the company, and it is accompanied by tremendous changes in organization structure.

The Concept of the People Strategy

The company’s “people strategy” must include things which go beyond what we would call “talent management:”

  • Talent segmentation or “audience analysis” – identifying the critical pools of people in the organization and how they will be managed, compensated, trained, and hired differently.   These segments will be used for many purposes:  different sourcing and recruiting policies, different compensation programs, different training and career development strategies, and different general management approaches.
  • Understanding pivotal talent – the concepts of “pivotal talent” have been around for a few years.  Which roles in your organization drive the greatest level of value today – and which will be even more important into the future?  If you had only one dollar to spend on development, where would you spend it?  When you need to downsize, which roles can you afford to do without?  Organizations do not yet know how to identify their pivotal talent, but I believe they will focus on this in the coming years.
  • Integrated compensation or total reward strategies – most “talent management” teams are very OD focused.  They do not directly integrate with the compensation function yet.  But once you think about your organization’s business strategies, talent segments, and pivotal talent, it is now important to consider compensation within the same framework.  While “total rewards” may not fit into today’s definition of the talent management strategy (in some organizations it does), it definitely fits into the “People Strategy.”  For example, during a downturn, which groups will get lower bonuses and compensation, which will suffer layoffs, and which may in fact see compensation increases?  Where and how should we implement pay-for-performance over different pools of talent?  Where can we afford to pour more money and where should we hold back?
  • Diversity – how will we dovetail our diversity strategy into our talent management strategy?  Several HR leaders have asked me why diversity is not included in our framework, and I told them that I have yet to see it included in most organizations’ view.  Yet in today’s rapidly changing labor market, diversity is not just a compliance issue, it drives your competitive advantage.  If you cannot hire, manage, and operate as a diverse organization your business opportunties will be severly limited.  It must be part of the “people strategy.”
  • Talent planning – how will we plan, model, forecast, and manage the pool of people we have, the people we need, and their requisite skills and capabilities?  This is one of the emerging areas we are studying in early 2009.  The term “workforce planning” is widely used today, but in most cases it refers to a system of collecting open headcount.  In a “people strategy” workforce planning must be accurate, dynamic, and integrated with the business.  For example, can you get a handle on the contingent workforce in your company and identify whether those roles are strategic or tactical and how cost-effective they are?  Using highly skilled contingent workers is a business strategy, not just something to account for in HR.
  • Career models and deep specialization and skills – most organizations now realize (and I hope all do soon) that their core business is dependent on deep levels of skills within certain critical roles.   New books like “Talent is Overrated” have driven home the principle that only by practice (read “training”) can someone become an expert.  Where are the critical career models in the organization and how will we allocate resources to build these skills, provide mobility into and out of these roles, and facilitate growth in these roles?  How can we create a development planning process at the manager level which drives the skills and mobility we need?  While this kind of thinking goes on in L&D today, it must be integrated into the company’s bigger strategies for people.
  • Learning Culture and Business agility – a big topic we are now studying.  How can the organization “learn” more quickly?  When a business downturn hits, one of the first things the CEO says is “how did this happen to us?”  “what can we do to prevent this from happening again?”  The topics of innovation, leadership, new business growth, harvesting of existing businesses, all depend on the “people strategy.”

So what I believe we are seeing is a “growing up” of the concepts of talent management.  Think about where you are in your own organization’s talent management plan.  My guess is that if you build a multi-year roadmap, what you will find is that today’s “performance management” project, which turned into an “integrated talent management” program, will soon turn into an integrated “people management” strategy.

We will be publishing much more on this topic in the coming year – and most importantly including examples and case studies at our IMPACT 2009 Research Conference.   I personally think it is very important to think ahead and understand that today’s focus on talent management will evolve soon.  And remember that in today’s economy your talent management program must be business-driven, focused on your organization’s short and long term strategy, and executed with speed and efficiency.

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Life or Death: Building a Corporate Learning Culture

Posted on December 3, 2008. Filed under: Enterprise Learning, Talent Strategy | Tags: , , , , |

Witness the number of companies undergoing a wrenching transformation (read “potential death”) in today’s economy: the US Auto industry (GM, Ford, Chrysler) , the US Newspaper industry (LA Times, NY Times), and many elements of the financial services industry.

A recent global survey of 1100 business leaders by Boston Consulting Group found that one of the top three things keeping CEOs awake at night was their ability to “build a learning organization.”   Our research shows clearly that organizations can be broadly grouped into two types: those that “learn” and those that “don’t.” Those that “learn” have an uncanny ability to evolve: they are what we call “enduring” companies, and they find ways to continuously change their products and services as markets change.

Examples of companies that “learn” include UPS – which started as a horse and buggy delivery company and is now a global logistics company operating in every mode of transportation.   Another is Caterpillar, a company which has evolved its products from steam-driven tractors to a broad array of building equipment and services around the world.

Our High Impact Learning Organization® research demonstrates that companies which have a “learning culture” have much greater financial returns over a 10-20 year period – in fact the HILO 80, the 80 top companies in our 780 company research group, deliver more than 10% greater earnings growth and over 15% revenue growth over a 10 year period than the average in their industry.

Building a Learning Organization is a Matter of Life or Death

Today, with the economy clearly at a low point, an organization’s ability to learn is a matter of life or death.

So what is a “learning culture” and how do you build one?  Well there When we look at companies which endure and prosper over long periods of time, we see that they have an uncanny ability to innovate, reinvent themselves, and adapt to change.   Our research and upcoming Learning Culture assessment discovered that there are nine independent pillars which drive an adaptable learning organization:

  1. Executive Culture.  Do line executives truly support and reinforce the business processes and investments needed to support innovation and learning?  Do they take a personal interest in employee and leadership development?  Do they regularly move business leaders throughout the company to gain new perspectives?  Do they maintain funding for learning and innovation initiatives?  Do they drive and manage change?  Do they take risks and encourage and support new products?
     
  2. Managerial Culture.   Are line managers incented, coached, and directed to build capabilities in their teams?  Are they paid to develop people and innovate?  Are they empowered and motivated to be coaches and not just managers?  Are their a variety of support and development programs for managers to provide feedback and development for their people?  Are they rewarded for experimentation and innovation?  Are they open to “bad news?”
     
  3. Customer Culture.  How close are product, service, and support teams to customer needs?  Are there vigorous and regular processes for customer input?  Do customers have many ways to interact with the company and provide input?  Is customer input considered sacred and valuable?  Are customer facing roles given high priority and respect in the organization?  Is there a free-flowing set of customer needs available to everyone who creates or produces a product or service?
     
  4. Operational Culture and Process.  How are line organizations incented and organized?  Are employees provided with the opportunity to change processes and products when necessary?  Are their programs and systems to monitor and improve quality and customer service?  Are customers intimately involved in process and product development?  Are their processes in place to learn from mistakes or does the team “shoot the messenger?”  
     
  5. HR, L&D, and Leadership Development.  Does the HR and L&D organization have the funding, mandate, and executive support to build organizational and leadership development programs?  Do they support knowledge sharing programs?  What stage of maturity is the company’s leadership development program?  Are their regular opinion surveys and other forms of feedback from employees and customers which drive organizational change?  Is innovation rewarded and incented?
     
  6. Financial Support.  How is employee development, knowledge management, innovation, and training funded?  Does each business unit or operational unit have to find money in their own budget to accomplish such tasks?  Is there budget for skunk works or new ideas?  Is there a corporate funded group which promotes innovative development teams and programs?  Are such programs monitored and supported year after year or do they get cut during bad times?  Does the organization benchmark its spending against its peers?
     
  7. Career Planning and Employee Mobility.  Does the company have a plan, model, or process for career planning?  Is it easy or possible for someone to change roles or move into a new position regularly?  When a reorganization takes place, is there a way for people to move from team to team without penalty?  Are job rotation and developmental assignments regularly offered?  How well do managers understand and participate in the career planning process?
     
  8. Employee Development and Alignment.  How are employees developed and measured?  Do they have an incentive to build new skills, learn new things, and get involved in new projects?  Is development considered a valuable part of an employee’s career?  Is there a widespread goal development process and how does it accomodate the time needed to build new processes and systems?
     
  9. Technology Investment.  Is there an ongoing investment in technology infrastructure to support learning, knowledge sharing, employee connectivity, social networking, e-learning, content management, and other tools.

 

These nine pillars are not easy to build.  In fact, they often take years to build – but we find that high performing, enduring companies do each of these things well.  In the coming months we will be introducing a new set of research and assessment tools to help organizations understand their ability to “learn.”  

While many of these things seem “soft” – in fact they are “hard.”  They demand a focus from business leaders, HR, IT, and line management.  They touch the way a company is managed and the way the company works.  Does this matter today, in the middle of a recession?  You bet it does:  if your company wants to survive during a slowdown, you must be able to adapt quickly and effectively.

Watch for more on this topic in coming months – and a major launch of our research in this area at IMPACT 2009®.

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MetLife’s Multi-Generational Workforce

Posted on November 11, 2007. Filed under: Content Development, Enterprise Learning, Sourcing and Recruiting, Succession Planning, Talent Management, Talent Strategy |

I recently completed a meeting with 200 of the top HR executives at MetLife, one of the most successful and sustainable global insurance companies.  MetLife’s Vice-President of People, Deb Capolarello, is developing an integrated talent management strategy to help the organization integrate all its well-established HR processes into business solutions. 

One of the problems MetLife faces, a problem similar to most older global companies, is the rapid change in workforce demographics.  To give you a sense of the challenge, today at MetLife 14% of its workforce are Millenials (20’s) and 35% are Generation-Xers (late 20’s to early 30’s).  This transition is continuing to change quickly – with as many as 23% of the company’s employees eligible for retirement in 5 years and 40% in 10 years.

This workforce population is very common in large organizations today – HR must serve the needs of four generations:  Millenials, Generation X workers, Baby Boomers, and the Traditional or Silent Generation.  Organizations like MetLife are working hard to build learning and HR processes that appeal to these younger workers, including virtual workplaces, online community tools, flexible work hours, and career planning programs.  Most importantly of all, organizations must identify these talent profiles across the organization and create business-specific solutions – some organizations at MetLife are more than 80% young workers, and others are still dominated by older workers.

Bottom line .. the multi-generational workforce is changing much of what HR will do:  how learning is developed, how careers are managed, how managers coach employees, how employees interact with each other, and most of all, how HR and other internal systems are used.

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High Impact Talent Management: Top 22 High-Impact Processes

Posted on July 17, 2007. Filed under: Enterprise Learning, HR Systems, Leadership Development, Organization & Governance, Performance Management, Sourcing and Recruiting, Succession Planning, Talent Management, Talent Strategy, Workforce Planning |

The Top 22 Business Processes which Drive Business Impact


In 2007 we conducted one of the largest-ever studies of corporate talent management:  we interviewed and surveyed more than 750 corporations to gain an understanding of their business problems, their talent challenges, and their levels of maturity and sophistication in 62 different talent management processes.

This research was designed to do three things:  first, gain a clear understanding of how corporate talent management is defined;  second to understand the trends and directions in implementing these processes;  and third, most importantly, to see how talent management drives business results.

The research was extremely successful and also very enlightening.  Readers who would like to get a good understanding of the findings should read the executive summary

The full 300+ page report is available at www.bersin.com/hitm or by joining our research membership program.

The most interesting, and perhaps controversial part of the research, however is the following.  When we looked at the 62 different things which organizations can do to improve their talent processes (the list is available in the report), we found that there were 22 in particular which drove particularly high impact.  These “top 22” as we call them represent the “priority list” for HR executives, managers, and business leaders to consider when they decide they want to “do a better job of managing and developing talent.”   In other words, they tell you precisely where to focus.

When we looked at the final results, the findings were both obvious and subtle at the same time.  While many books and articles have been written about the value of various HR processes, we consider this list “modern,” “unbiased,” and “scientific.”  We have not applied any personal opinions to this list – it was generated from the research statistics and analysis.  (For a description of the methodology, please read the executive summary.)

Top 22 High Impact Talent Management Processes

Fig 1:  Top 22 High Impact Talent Management Processes

Here is the list.  Each process is clearly described, and color coded into process areas (performance management, sourcing & recruiting, workforce planning, competency management, learning & development, and leadership development).  Let me spend some time explaining some of the startling findings here:

1.  The #1 process organizations should focus on is coaching.  Coaching?  Is that really a talent management initiative?  Yes it is.  Organizations with strong coaching cultures, programs, and support structures develop much higher levels of engagement, leadership, flexibility, and performance.  For more details on coaching, read our article “Coaching, a new imperative for Leadership.”  This article explains why this process is so hard-hitting and what you can do to develop a better coaching program in your company.
2.  Workforce planning must become far more scientific and must identify skills gaps.  Skills-based workforce planning processes (#2 and #3) are critical today.  Most organizations have a workforce planning function, but it often consists of little more than a collection of headcount requirements for each business unit.  Organizations that succeed in today’s “tight talent” market must gain a deep understanding of their skills gaps.  They must understand these gaps among the “mission-critical” jobs first, and they must have visibility into the future of these gaps. 

One of our research clients embarked on a 9 month study of workforce skills gaps and factored in retirements, attrition, new project demands, and known demographic shifts only to find that in order to make their business plan for the next 5 years they needed to find 45,000 new engineers.  This startling finding led them to a whole series of initiatives to change their sourcing, internal career development, and job placement strategies – including moving job to people and not vice-versa.

3.  Competency management is now fundamental.  While we do not recommend that organizations try to build enterprise-wide models up front, this research (and much of our other research) shows clearly that competency management is the “currency” for talent processes and decisions.  Without a fundamental understanding of the “secret sauce” which makes your organization succeed, much of your talent decisions sit on quicksand.  Well-defined competencies help you set goals, appraise people, identify high-potentials, create development plans, identify leaders, and develop the leadership pipeline.  Seven of the top 22 processes fell into this area.

4.  Performance management is a heavy hitter.  But high-impact performance management is not what you think.  While annual appraisals are important, they are far less important than coaching, goal-setting, goal alignment, and development planning.  In fact, performance appraisal and linkage to compensation is less important than coaching, goal-setting, and development planning. 

Our research clearly shows the following:  performance management is “management.”  It takes place every day, not once or twice a year.  It describes the way that individuals interact with their immediate managers, their executives, and their work teams.  The appraisal is no more than a single point in this wide continuum of activities.  By the way, most mature organizations realize a simple fact:  all we really have in business is management.  Your company is not successful because of its products – it is successful because of its people.  How they are managed is the backbone of success.

5.   Sourcing and recruiting is becoming a science.  In today’s labor market it is harder and harder to meet hiring targets.  We estimate that over the next 15 years there will be more than 10 million jobs available than there are ready skilled people.  This means several things:  you have to do a far better job of targeting, sourcing, assessing, recruiting, and marketing to the right candidates.  Recruiting has moved from a “purchasing” function to a “sales and marketing” function.

Moreover, there are a wide variety of new tools now available to improve the efficiency and effectiveness of talent acquisition:  exciting new assessment systems, fine-grained job boards and sourcing sites, innovative university recruiting programs, and new competitive intelligence approaches.  In addition, the days of “career development” programs are back.  Organizations must now invest in training and development programs which take the “unrefined new hires” and move them into key positions throughout their career.  Most of the learning & development managers we speak with are rebuilding a wide variety of “talent development” programs to develop engineers, sales people, manufacturing managers, and executives.

6.  Finally, a surprising fact.  HR systems, for all their excitement, don’t add as much value as people think.  In fact, in our ranked list of 62 processes which drive impact. HR systems ranked in the mid 50s.  There are more than 50 more valuable things to focus on than the selection and implementation of an “applicant tracking system” or a “talent management suite.”

This is not to say that automation is not important – it is.  But take it for what it is – automation.  HR systems do not “create processes” – they automate processes which you must design.  A few interesting facts:  organizations that have automated performance management software are 14% more effective than those with paper processes.  But organizations with in-house developed systems are 9% more effective than those with vendor solutions.  Vendor software, then, actually reduces overall impact for the first 2-3 years.  Only after 2.4 years do vendor solutions “catch up” to internally developed systems.

What this illustrates is that software systems which automate well-designed, well-implemented processes (typically home-grown systems) add value.  Software systems which automate non-existing processes or poorly defined processes simply create overhead.  Do not fall into the trap of thinking that your talent management “strategy” is centered around buying software.  Your strategy should focus on implementing business-driven, carefully governed processes which focus in the 22 areas above.  Each of these 22 processes takes years to implement.  They require a close alignment with business managers.  They require careful investments in training and change management.  Software may facilitate these processes, but it does not create them.  Do not let the next big wave of software vendors convince you otherwise.

Bottom line:  we have clearly entered a “third wave” of HR – a time when HR can add strategic value by focusing on high-value roles, solving business-specific talent problems, and helping the organization adjust to the changing workforce.

 

Evolution of HR

 

Fig 2:  The Third Wave of HR

Focus your time on three things:  First, focus on the processes and people that matter to the business.  Find the 30% of your workforce which generates 70% of your organization’s value and spend your time there.  Second, work with your business leaders to design and implement processes that drive impact, with a careful focus on change management, governance, and monitoring and maintenance.  Third, automate as much as you can, but focus on automating processes which work – not using software to drive change.

We believe that if you follow the guidance from this research you will find talent management to be a transformational, exciting, business-changing experience.  As always, we welcome your feedback and comments on this article.

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What is Talent Management?

Posted on July 16, 2007. Filed under: HR Systems, Performance Management, Sourcing and Recruiting, Succession Planning, Talent Management, Talent Strategy, Workforce Planning |

Talent Management” has become one of the most important buzzwords in Corporate HR and Training today.  In this article we will explain the history, principles, and processes of talent management and help readers understand our research agenda in this important area.

From Personnel to Strategic HR to Talent Management

To understand why Talent Management has become so important, we must first look at the evolution of corporate HR:

Stage 1:  Personnel Department: 

In the 1970s and 1980s the business function which was responsible for people was called “The Personnel Department.”  The role of this group was to hire people, pay them, and make sure they had the necessary benefits.  The systems which grew up to support this function were batch payroll systems.  In this role, the personnel department was a well understood business function.

Stage 2:  Strategic HR: 

In the 1980s and 1990s organizations realized that the HR function was in fact more important – and the concepts of “Strategic HR” emerged.  During this period organizations realized that the VP of HR had a much larger role:  recruiting the right people, training them, helping the business design job roles and organization structures (organization design), develop “total compensation” packages which include benefits, stock options and bonuses, and serving as a central point of communication for employee health and happiness. 

The “Head of Personnel” became the “VP of HR” and had a much more important role in business strategy and execution.  The systems which were built up to support this new role include recuiting and applicant tracking (ATS), portals, total compensation systems, and learning management systems.  In this role, the HR department now became more than a business function:  it is a business partner, reaching out to support lines of business.

Stage 3:   Talent Management:   

We are now entering a new era:  the emergence of “Talent Management.”   While strategic HR continues to be a major focus, HR and L&D organizations are now focused on a new set of strategic issues:

  • How can we make our recruiting process more efficient and effective by using “competency-based” recruiting instead of sorting through resumes, one at a time?

  • How can we better develop managers and leaders to reinforce culture, instill values, and create a sustainable “leadership pipeline?”

  • How do we quickly identify competency gaps so we can deliver training, e-learning, or development programs to fill these gaps?   How can we use these gaps to hire just the right people?

  • How do we manage people in a consistent and measurable way so that everyone is aligned, held accountable, and paid fairly?

  • How do we identify high performers and successors to key positions throughout the organization to make sure we have a highly flexible, responsive organization?

  • How do we provide learning that is relevant, flexible, convenient, and timely?

These new, more challenging problems require new processes and systems.  They require tigher integration between the different HR silos — and direct integration into line of business management processes.  Today organizations are starting to buy, build, and stitch together performance management systems, succession planning systems, and competency management systems.  The HR function is becoming integrated with the business in a real-time fashion. 

Best-practice examples of companies embarking on these processes include Aetna, Capgemini, Eastman Chemical, Kimberly-Clark, PitneyBowes, SCI, Seagate, Steelcase, Textron, and more.  You can read about these companies’ talent and performance management initiatives in Performance Management 2006.

Defining the Talent Management Process

Organizations are made up of people:  people creating value through proven business processes, innovation, customer service, sales, and many other important activities.  As an organization strives to meet its business goals, it must make sure that it has a continuous and integrated process for recruiting, training, managing, supporting, and compensating these people.  The following chart shows the complete process:

 

1.  Workforce Planning:  Integrated with the business plan, this process establishes workforce plans, hiring plans, compensation budgets, and hiring targets for the year.

2.  Recruiting:  Through an integrated process of recruiting, assessment, evaluation, and hiring the business brings people into the organization.

3.  Onboarding:  The organization must train and enable employees to become productive and integrated into the company more quickly.

4.  Performance Management:  by using the business plan, the organization establishes processes to measure and manage employees.  This is a complex process in itself, which we describe in detail in our new research Performance Management 2006.

5.  Training and Performance Support:  of course this is a critically important function.  Here we provide learning and development programs to all levels of the organization.  As we describe in the Death of the Corporate University, this function itself is evolving into a continuous support function.

6.  Succession Planning:  as the organization evolves and changes, there is a continuous need to move people into new positions.  Succession planning, a very important function, enables managers and individuals to identify the right candidates for a position.  This function also must be aligned with the business plan to understand and meet requirements for key positions 3-5 years out.  While this is often a process reserved for managers and executives, it is more commonly applied across the organization.

7.  Compensation and Benefits:  clearly this is an integral part of people management.  Here organizations try to tie the compensation plan directly to performance management so that compensation, incentives, and benefits align with business goals and business execution.

8.  Critical Skills Gap Analysis:  this is a process we identify as an important, often overlooked function in many industries and organizations.  While often done on a project basis, it can be “business-critical.”  For example, today industries like the Federal Government, Utilities, Telecommunications, and Energy are facing large populations which are retiring.  How do you identify the roles, individuals, and competencies which are leaving?  What should you do to fill these gaps?  We call this “critical talent management” and many organizations are going through this now.

In the center of this process are important definitions and data:  job roles, job descriptions, competency models, and learning content. 

How do you Develop and Implement a Talent Management Strategy?

As I describe above, Talent Management is a natural evolution of HR.  It is a series of business processes — not a “product” or “solution” you can buy. 

Organizations we speak to are focused on different elements — driven by their maturity and the urgent business problems they face today.  While a few mature organizations have dealt with most of the processes above, most organizations focus on several of the key elements and build an integrated approach over time. 

Additionally, Talent Management is a “forward-looking” function.  Not only should talent management improve your organization’s flexibility and performance, it should give you the information and tools to plan for growth, change, acquisitions, and critical new product and service initiatives.

A few critical issues we have identified in our research:

1.  Talent Management requires integration and communication between existing HR-L&D functions. 

Training can no longer be “left on an island.”  As we detail in our workshops, the L&D organization must align much more closely with the performance management and recruitment process.  Training programs should be developed and updated to continuously address problems which surface in the performance management process.  New hires which are hired because of certain competencies should see a set of training offerings which complement and reinforce these competencies.  Compensation program should naturally tie to the performance management process.

2.  Competency management, a mis-understood and difficult part of training and HR, has become critical. 

The job descriptions, roles, and competencies used for performance management are shared by L&D, recruiting, and succession planning.  There are many techniques for effective use of competencies – many are described in our performance management systems research.  A simple best-practice is for your organization to have a small set of consistent, easy-to-understand competencies which can be applied across the organization.

3.  Software solutions are maturing, but not the solution. 

Despite vendor claims, there is no complete “talent management” software solution yet.  Vendors each offer different elements of this solution.  To solve urgent problems, most companies today buy standalone systems:  standalone learning management systems, standalone standalone performance management systems, standalone recruiting and standalone compensation systems.  As the market matures and companies press harder for integration, vendors will create more integrated solutions.

Our research has found, however, that software is not the solution.  In fact, of the 62 processes we studied, HR software was ranked 55 or lower in business impact.  You cannot “buy” a software solution to implement your talent management strategy.  You must focus on the top 22 process areas of greatest impact and build this strategy through a business-driven process.  Our research and workshops will help you develop this strategy.

What does this mean to your Organization?

Talent Management is a powerful and important trend across HR and L&D.  It changes the way you are organized, how you use technology, how your resources are allocated, and how you measure what you do.   If you are a training manager, director, or CLO, talent management will impact your role.  You may be asked to integrate your learning programs with the company’s performance management initiative. 

Many organizations have a new job:  The VP of Talent Management.  This role typically includes Learning & Development, Performance and Competency Management, and Succession Planning fucntions.  We believe that this integrated “HRD” function is an important evolution in the way HR organizations are run.

What does this mean to your HR-IT Strategy?

Talent Management will also impact your systems strategy:  For example, do you want a stand-alone LMS or should your LMS be integrated with the company’s performance management systems?  What systems integration are the most important?  How do you use competency models to tie learning to performance management?  What “suite” products are mature enough for your particular organization’s needs?

The role of HRIT has also become much more complex.  It is no longer possible to focus on HRIS systems alone – HRIT must understand learning technology, competency management technology, portal technology, and the integration of these different applications.  In many organizations LMS systems, for example, are not managed by HRIT.  Over time we believe the role of HRIT will be more strategic than ever.

Despite these issues, our research has shown that very few organizations have “integrated talent management systems” and most of the vendors of such products are far away from delivering a totally integrated solution.

For more information on our in-depth research on talent management, including best practices in each of the 8 key areas, the top 22 high-impact talent processes, and benchmarks for your HR organization, read High Impact Talent Management, our groundbreaking research on this important new business strategy.

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Talent Management Changes HR

Posted on June 1, 2007. Filed under: Talent Management, Talent Strategy, Workforce Planning |

“Talent Management” has become one of the most important buzzwords in Corporate HR and Training today.  In this article we will explain the history, principles, and processes of talent management and help readers understand our research agenda in this important area.

From Personnel to Strategic HR to Talent Management

To understand why Talent Management has become so important, we must first look at the evolution of corporate HR:

Stage 1:  Personnel Department: 

In the 1970s and 1980s the business function which was responsible for people was called “The Personnel Department.”  The role of this group was to hire people, pay them, and make sure they had the necessary benefits.  The systems which grew up to support this function were batch payroll systems.  In this role, the personnel department was a well understood business function.

Stage 2:  Strategic HR: 

In the 1980s and 1990s organizations realized that the HR function was in fact more important – and the concepts of “Strategic HR” emerged.  During this period organizations realized that the VP of HR had a much larger role:  recruiting the right people, training them, helping the business design job roles and organization structures (organization design), develop “total compensation” packages which include benefits, stock options and bonuses, and serving as a central point of communication for employee health and happiness. 

The “Head of Personnel” became the “VP of HR” and had a much more important role in business strategy and execution.  The systems which were built up to support this new role include recuiting and applicant tracking (ATS), portals, total compensation systems, and learning management systems.  In this role, the HR department now became more than a business function:  it is a business partner, reaching out to support lines of business.

Stage 3:   Talent Management:   

We are now entering a new era:  the emergence of “Talent Management.”   While strategic HR continues to be a major focus, HR and L&D organizations are now focused on a new set of strategic issues:

  • How can we make our recruiting process more efficient and effective by using “competency-based” recruiting instead of sorting through resumes, one at a time?

  • How can we better develop managers and leaders to reinforce culture, instill values, and create a sustainable “leadership pipeline?”

  • How do we quickly identify competency gaps so we can deliver training, e-learning, or development programs to fill these gaps?   How can we use these gaps to hire just the right people?

  • How do we manage people in a consistent and measurable way so that everyone is aligned, held accountable, and paid fairly?

  • How do we identify high performers and successors to key positions throughout the organization to make sure we have a highly flexible, responsive organization?

  • How do we provide learning that is relevant, flexible, convenient, and timely?

These new, more challenging problems require new processes and systems.  They require tigher integration between the different HR silos — and direct integration into line of business management processes.  Today organizations are starting to buy, build, and stitch together performance management systems, succession planning systems, and competency management systems.  The HR function is becoming integrated with the business in a real-time fashion. 

Best-practice examples of companies embarking on these processes include Aetna, Capgemini, Eastman Chemical, Kimberly-Clark, PitneyBowes, SCI, Seagate, Steelcase, Textron, and more.  You can read about these companies’ talent and performance management initiatives in High-Impact Talent Management.

Defining the Talent Management Process

Organizations are made up of people:  people creating value through proven business processes, innovation, customer service, sales, and many other important activities.  As an organization strives to meet its business goals, it must make sure that it has a continuous and integrated process for recruiting, training, managing, supporting, and compensating these people.  The following chart shows the complete process:

 

1.  Workforce Planning:  Integrated with the business plan, this process establishes workforce plans, hiring plans, compensation budgets, and hiring targets for the year.

2.  Recruiting:  Through an integrated process of recruiting, assessment, evaluation, and hiring the business brings people into the organization.

3.  Onboarding:  The organization must train and enable employees to become productive and integrated into the company more quickly.

4.  Performance Management:  by using the business plan, the organization establishes processes to measure and manage employees.  This is a complex process in itself, which we describe in detail in our new research High Impact Performance Management.

5.  Training and Performance Support:  of course this is a critically important function.  Here we provide learning and development programs to all levels of the organization.  As we describe in the Death of the Corporate University, this function itself is evolving into a continuous support function.

6.  Succession Planning:  as the organization evolves and changes, there is a continuous need to move people into new positions.  Succession planning, a very important function, enables managers and individuals to identify the right candidates for a position.  This function also must be aligned with the business plan to understand and meet requirements for key positions 3-5 years out.  While this is often a process reserved for managers and executives, it is more commonly applied across the organization.

7.  Compensation and Benefits:  clearly this is an integral part of people management.  Here organizations try to tie the compensation plan directly to performance management so that compensation, incentives, and benefits align with business goals and business execution.

8.  Critical Skills Gap Analysis:  this is a process we identify as an important, often overlooked function in many industries and organizations.  While often done on a project basis, it can be “business-critical.”  For example, today industries like the Federal Government, Utilities, Telecommunications, and Energy are facing large populations which are retiring.  How do you identify the roles, individuals, and competencies which are leaving?  What should you do to fill these gaps?  We call this “critical talent management” and many organizations are going through this now.

In the center of this process are important definitions and data:  job roles, job descriptions, competency models, and learning content. 

How do you Develop and Implement a Talent Management Strategy?

As I describe above, Talent Management is a natural evolution of HR.  It is a series of business processes — not a “product” or “solution” you can buy. 

Organizations we speak to are focused on different elements — driven by their maturity and the urgent business problems they face today.  While a few mature organizations have dealt with most of the processes above, most organizations focus on several of the key elements and build an integrated approach over time. 

Additionally, Talent Management is a “forward-looking” function.  Not only should talent management improve your organization’s flexibility and performance, it should give you the information and tools to plan for growth, change, acquisitions, and critical new product and service initiatives.

A few critical issues we have identified in our research:

1.  Talent Management requires integration and communication between existing HR-L&D functions. 

Training can no longer be “left on an island.”  As we detail in our workshops, the L&D organization must align much more closely with the performance management and recruitment process.  Training programs should be developed and updated to continuously address problems which surface in the performance management process.  New hires which are hired because of certain competencies should see a set of training offerings which complement and reinforce these competencies.  Compensation program should naturally tie to the performance management process.

2.  Competency management, a mis-understood and difficult part of training and HR, has become critical. 

The job descriptions, roles, and competencies used for performance management are shared by L&D, recruiting, and succession planning.  There are many techniques for effective use of competencies – many are described in our performance management systems research.  A simple best-practice is for your organization to have a small set of consistent, easy-to-understand competencies which can be applied across the organization.

3.  Software solutions are maturing. 

Despite vendor claims, there is no complete “talent management” software solution yet.  Vendors each offer different elements of this solution.  To solve urgent problems, most companies today buy standalone systems:  standalone learning management systems, standalone standalone performance management systems, standalone recruiting and standalone compensation systems.  As the market matures and companies press harder for integration, vendors will create more integrated solutions.

Even if you do find an integrated toolset which manages multiple talent processes, the biggest challenges in implementation are integrating you own business processes.  Our keynote new research report, High Impact Performance Management, details the state of this industry and provides detailed analysis of the top 20 performance and talent management systems providers.

What does this mean to your Organization?

Talent Management is a powerful and important trend across HR and L&D.  It changes the way you are organized, how you use technology, how your resources are allocated, and how you measure what you do.   If you are a training manager, director, or CLO, talent management will impact your role.  You may be asked to integrate your learning programs with the company’s performance management initiative. 

Many organizations have a new job:  The VP of Talent Management.  This role typically includes Learning & Development, Performance and Competency Management, and Succession Planning fucntions.  We believe that this integrated “HRD” function is an important evolution in the way HR organizations are run.

What does this mean to your HR-IT Strategy?

Talent Management will also impact your systems strategy:  For example, do you want a stand-alone LMS or should your LMS be integrated with the company’s performance management systems?  What systems integration are the most important?  How do you use competency models to tie learning to performance management?  What “suite” products are mature enough for your particular organization’s needs?

The role of HRIT has also become much more complex.  It is no longer possible to focus on HRIS systems alone – HRIT must understand learning technology, competency management technology, portal technology, and the integration of these different applications.  In many organizations LMS systems, for example, are not managed by HRIT.  Over time we believe the role of HRIT will be more strategic than ever.

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Talent Management: Too Important to Delegate to HR

Posted on May 11, 2007. Filed under: Talent Management, Talent Strategy, Workforce Planning |

Talent Management is a Business Problem, not an HR Problem

As we complete our High Impact Talent Management® research (to be launched this May), we are uncovering some very important issues.  One in particular is the critical need to understand that talent management is not an “HR process ” but rather a “business process” which must be implemented through line of business executive leadership.  This article highlights this critical issue and previews our upcoming High Impact Talent Management findings in this area.

The Linkage between Business Issues and Talent Issues

Underlying this finding is the obvious but often subtle issue that in today’s tight labor markets almost every major business challenge has an underlying talent challenge.  Talent management strategies, then, should not be developed except in the context of your particular business strategy.

For example, in our research we found that the two biggest challenges facing US corporations today are a combination of growing markets (a need to expand globally or into new products and services) coupled with a need to hold back costs.  While the economy is expanding, business executives remain afraid of committing large sums of cash to growth – a problem well documented in the business press.

What this has done is create a talent squeeze.  Organizations are finding skills gaps, headcount gaps, and leadership gaps in their workforce which they must fill to grow – yet they do not have the resources to dramatically increase salaries to compete for labor.  As a result, we are seeing a tremendous focus on sourcing and recruiting strategies, internal career development, and leadership development.  

These problems are very business and organization-specific.  In some cases the challenges involve a shortage of critical skills which create shortages in particular job roles.  This takes the form of shortages of production engineers in the oil and gas industry (Hess Petroleum, Shell, Chevon), regional managers in the retail industry (Starbucks, The Gap), nurses in the healthcare and insurance industries (HealthNet, Intermountain HealthCare), or mid-level managers in manufacturing and most industries(GM). 

While these problems are similar, the solutions vary widely from company to company and industry to industry.   The solution to a shortage of mid-level regional Starbucks managers, for example, is very different from the solution to a shortage of petroleum production engineers.

Creating a Business-Driven Talent Strategy

What this means, then, is that you cannot buy “the book on talent management.”  You must develop a talent management strategy unique to your business, using best-practices, tools, research, and principles of HR and L&D.  In fact, the approach we have developed from our research is shown below:

High Impact Talent Management Strategy Process

Figure 1: High Impact Talent Management Strategy Process

This process, which is described in detail in our research, starts with your organization’s business plans and overall business strategy.  If you are expanding into Eastern Europe, for example, you will find a series of talent gaps required to implement that strategy.  Your sourcing, staffing, training, and performance management processes must be designed to solve that problem.

(Notice also, that this methodology places the system selection at the bottom.  Our research has shown that HR software, while important, has far less impact than careful process design and implementation.  More on this in a future article.)

Therefore the Business must Lead the Solution

Therefore, if you want the talent management solution to be effective and well-adopted throughout your organization, it must be led by a line executive (not HR).  While HR is clearly the subject-matter and process expert (we think of HR as the “steward,” not the “owner”), an HR-driven approach usually creates a high level of compliance but a low level of true adoption. 

Consider the following data: this data, taken from our High Impact Talent Management research (which analyzed more than 1 million different elements of strategy and impact) clearly shows that business-driven solutions have much greater impact than HR-driven initiatives.

Governance of Talent Management

Figure 2: Impact of Governance in Talent Management

Is Talent Management too Important to Delegate to HR?  

In a sense, the answer is yes.  It is too important to be “left” to HR – while HR must steward the process and implement much of the solution elements, ultimately talent management solutions must be business-driven.  Our research details the process for developing and governing these solutions, and also helps you identify the best-practices for such solutions.

Not Sure How to Define your Talent Management Strategy?

In our Talent Management Framework, we describe how organizations can integrate their people processes (sourcing & recruiting, performance management, succession planning, leadership development, learning & development, and succession planning) to address their urgent talent challenges.  Read and listen to us describe this framework to help you get started.

Bottom Line:  Key Thoughts to Remember

1.  Talent challenges exist in the context of the underlying business strategy. It is because the business is growing (or shrinking) that a certain skills or talent gap exists.  It is because of the company’s expansion into a new market that new managers are needed.  If you, as an HR or L&D manager do not understand this underlying business strategy, you cannot possibly hope to design, implement, and manage a process to solve it.2.  The detailed solution to these problems is unique to your organization, but can leverage best practices. You cannot buy a book on talent management to solve these problems.  There is no textbook answer to the problem of hiring more engineers, for example.  At Raytheon, the problem is manifest by a huge increase in US Federal contracts which demand US citizens.  At NetworkAppliance the problem is manifest by hyper growth and the need to hire customer-facing engineers that understand the network storage industry. 3.  The solutions to these challenges demand ownership by business leaders and managers. The solution to the problem of a shortage of engineers cannot be solved by the staffing and recruiting organization:  it must be solved by managers, directors, and executives in the product and engineering organization who carefully define the skills needed, work with recruiters to attract these people, develop the internal candidates for these positions, and manage their teams to increase retention and job mobility.   It is the VP of Engineering or Product Operations who feels the pinch when he or she cannot hire the right caliber of people, not the VP of HR.

 

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