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Slide 1: TA L E N T A N D O R G A N I Z AT I O N C O N S U LT I N G H Best-in-Class Global Talent Management
Slide 2: Contents Ensuring a Ready Talent Supply: One World, One Workforce What Is Global Talent Management? Business Context Talent Challenges Five Road Rules for Global Talent Management Making it Work 1 1 3 4 6 12
Slide 3: Ensuring a Ready Talent Supply: One World, One Workforce Hardly a major corporation remains untouched by the global marketplace. Globalization has changed the face and fabric of today’s workplace and given a new meaning to “human capital.” While getting the right talent for the right job at the right cost remains a top priority for business leaders, the rapid pace of globalization is forcing companies to apply a global lens to how they manage talent. Whether that means deploying talent in different parts of the world, sourcing talent from a specific market, or developing talent with a global mind-set, global talent management is clearly a top-of-mind issue. In the words of a recent cover story from The Economist, “The talent war has gone global.”1 As organizations extend and expand their labor footprint around the globe, they must tackle a number of fundamental questions: • How do we define global talent management and global talent? • What are the key global issues (e.g., global economics, growing competition or rapid market growth and talent availability in emerging countries) that influence global talent management? • What are the main challenges in sourcing, developing and retaining a global talent pool? • How can we optimize the value of our global talent management programs? Drawing from Hewitt Associates’ vast experience and research in global talent management, the following brief highlights basic challenges and leading practices in this increasingly critical area. What is Global Talent Management? Amidst an undeniable transformation of the global workforce, prevailing premises about talent and talent management processes are being examined. With demand for outstanding talent far exceeding the supply, the old paradigm “people are our most valuable asset” is being revisited. Increasingly, it’s being replaced by a new adage that stresses the need for high-performing talent. In the words of Jim Collins, “People are not your most important asset.The RIGHT people are.” Just who are these “right people”? Simply put, they are those employees who are the most capable of making vital contributions to a company’s performance. When it comes to defining global talent management, there exist a number of different baseline approaches. For the purpose of this brief, we define global talent management as an organization’s comprehensive and disciplined approach to leveraging and managing talent across the world. This includes the integration of various talent management processes, all of which enable an organization to acquire, develop, deploy, and motivate its global talent.The degree of integration depends on where the organization stands in its evolution as a global company. For companies with limited international operations, the management of talent often remains primarily a local practice with some global implications. For those companies with truly global reach, however, talent is managed and sourced globally, particularly at the leadership level. Best-in-Class Global Talent Management 1
Slide 4: Where Are You on the Global Map? As organizations evolve toward a more global outlook, the sourcing and management of talent must also evolve. In recent years, internet business models have redefined global business paradigms. Most of today’s FORTUNE 500 companies fall within the multinational category, though the trend is toward even more global operations and leveraging of global talent. Over time, experts predict that organizations, particularly non-US-based organizations, will no longer require a core headquarters, instead operating virtually and without borders. Global Continuum International Multinational Global International Talent Pool–An organization with predominantly domestic operations and limited overseas activities. It typically draws from a centralized talent pool, generally located in the country/region where it has corporate headquarters. Its international businesses are often managed independently, utilizing separate resources. Multinational Talent Pool–An organization with business activities in multiple locations. Typically, each country’s operations are managed as separate entities by local employees, with corporate headquarters relocating expatriates to manage leadership positions or business-critical assignments in local entities. Global Talent Pool–An organization with operations around the world which utilizes a series of differentiated talent pools. A cadre of talent is shared and leveraged globally, regardless of national or geographic boundaries to service both global and local markets. 2 Best-in-Class Global Talent Management
Slide 5: So, exactly who represents ‘global talent’? Is it someone with connections to multiple countries? Foreign students seeking employment somewhere other than their home country? Cross-border migrants? Employees who are deputed to international assignments in a company’s worldwide operations? Simply stated, every employee is a local national of at least one country, but often he or she can claim a connection with several. More frequent international travel, population mobility, and cross-border university education are creating a pool of available global talent. Each country connection an individual can claim increases the individual’s potential competitive advantage, as well as that of the organization. ratio is 4 to 1. By 2050, it is predicted to be 6 to 1. For demographers, the explanation is twofold: declining mature populations in many developed nations and explosively growing, ever-younger populations in much of the developing world. Within developed nations, the “graying of the workforce” is expected to cause shortages in leadership and a loss of institutional knowledge and critical skills. At the same time, the center of gravity for skilled talent is tipping toward India and China. Global imbalance in education and skill levels. In today’s knowledge-driven world, there is an intense demand for high-end technical and scientific talent. Countries with sound higher-education systems produce well-trained cohorts of highly skilled engineers, scientists, and doctors.Yet, 33 million young professionals with both university degrees and valuable work experience live in 28 low-wage countries. By contrast, 15 million highly skilled young professionals reside in eight high-wage nations, including 7.7 million in the United States, according to McKinsey & Company. Thus, the bulk of the global talent pool lies outside the United States. What’s more, U.S. universities will produce about 400,000 new scientists and engineers in 2010, while China, India, and Russia are expected to produce more than 2 million scientists and engineers combined.2 International cross-border migration. Where work is performed is becoming less dependent on where the work is actually sold. Worker mobility and migration are on the rise, with employees far less likely to remain in one physical location throughout their careers. During the past 40 years, global migration of both less-skilled and highly skilled workers has doubled. In large part, international mobility of talent is driven by the expected income differential—that is, how much a person can earn in a more developed economy, compared with how much he or she could earn in the home economy. Since the demand for talent is Business Context As we move into the 21st century, globalization has become a universal reality. Far-reaching, fundamental changes in the global economy have significantly influenced and redesigned the global employment scenario, creating a human capital supply chain that is more integrated into the global system than ever before. Rapid increases in international trade, dramatic advancements in communication and technology, and rising education and skill levels in the developing nations have combined to effectively make the world flatter.This has led to significant changes in labor market dynamics, most notably the flight of cross-border capital in the form of outsourcing and free flow of labor caused by migration. A number of trends are driving organizations to create a global talent pool.They include the following. Global demographic divide.The downstream effects of a massive worldwide shift in demographics are significantly affecting the supply of local talent. In terms of sheer numbers, population patterns have become unevenly distributed across the globe. In 1950, for every person in the developed world, there were two in the developing world.Today, that Best-in-Class Global Talent Management 3
Slide 6: ubiquitous, many talented individuals relocate to stronger economies where the reward package allows them better purchasing and saving power. Strategic business imperatives (offshoring, global sourcing). Business imperatives such as decreasing costs by labor arbitrage—popularly called offshoring—allow global corporations to access hubs of talented individuals in different countries, instead of relying on talent from a single location. Increasing interdependence of world economic systems and rapid advancement in communication has led organizations to build their talent supply as a globally integrated value chain. Increasingly, organizations are coming to recognize the value of global teams. Not only do they help companies leverage greater economies of scale by locating activities in the most advantageous locations, but they also aid in the development of global products and services– those that meet the needs and priorities of a global consumer. As the competition for talent has intensified, companies have started applying a gamehunting approach to talent acquisition: “Hunt where the game is!” Consequently, they have begun tapping into local markets around the world, particularly high-growth economies like China, India, Brazil, or Russia, in their efforts to procure the best talent. To build a world-class global talent supply chain, companies must proactively address talent challenges occurring at two levels: (i) Organizational Level: Challenges associated with a company’s strategy, processes, infrastructure, and technology that prevent it from leveraging its global talent pool. (ii) Individual Level: Challenges associated with an individual’s working style and worldview, as well as those influencing the interaction and relationships between teams working globally. Organizational Level Naturally, every corporation would like to have on-demand access to high-end global talent. Unfortunately, several significant operational challenges often restrict employers from effectively using available talent pools. They include the following. Commitment from leaders. Time and again, evidence has shown that the most important determinant of global talent management success is the degree of involvement by the CEO, the board of directors, and the leader in talent management activities. All too often, however, senior leaders fail to dedicate adequate time or attention to managing global talent, thereby creating a deep chasm between the rhetoric and reality of their companies’ global talent management programs. Building global capabilities.The majority of companies are not making adequate or timely investments in building the leadership capital required to deliver superior performance in markets across the world. Ethnocentric career progression and development programs offered by most organizations allow high performers to shine locally, but fail to provide them with the kinds of learning and work experiences essential for exchanging ideas with colleagues around the world, exploring the complexities of a global economy, and developing the type of international mind-set necessary to succeed in a global environment. Talent Challenges In many ways, the challenges of building and running a global workforce are surprisingly similar to managing a local talent bench. Thus, organizations should resist the temptation to discard their existing talent management playbooks and success recipes. While they may need to be adapted to address the talent challenges of the 21st century, they are by no means obsolete. 4 Best-in-Class Global Talent Management
Slide 7: Attracting and retaining global talent. Despite the existence of large candidate pools, there is still an ongoing war for talent in many emerging markets. Many non-U.S. markets face large turnover issues because of a wide gap between open positions and qualified candidates. Talented local managers with global competencies are in high demand. Understandably, they desire rewards, effective talent utilization, and career opportunities that match their global counterparts. As a result, organizations are finding they have to resort to double-digit salary and benefit increases to recruit and retain key positions. Integrated talent management frameworks. Consistent criteria for defining talent in different locations is a must.Yet most organizations do not have a single fully integrated talent strategy, structure, and process across borders and cultures. What’s more, they are also juggling multiple, overlapping talent technology and software across different functions and geographies. Employment legislations. Movement of talent across the globe means navigating the rapidly changing regulatory landscape. Some governments have not only imposed higher taxes on companies that hire foreign workers; they also have reduced employment quotas and slashed work permits for specific jobs. As a result, obtaining approval for talent working in a foreign country can be a frustrating and time-consuming experience. Cultural diversity,The global talent force must be continuously aware of— and sensitive to—the barriers that differences can create. Cultural disparities restrict talented individuals from broadening their perspective and integrating in an environment that appears different from their own. Norms that are commonplace in one country may clash with those of another culture.Thus, expectations of a leader may vary by country. In a more ascription-based culture like China or the Middle East, for example, a leader may be expected to give specific instructions to the team. However, many Americans would view these instructions as “marching orders” or micromanagement. Communication. Differences in usage and style of language—coupled with the inclusion of abbreviations, acronyms, and slang—may create serious misunderstandings among talent from different countries. This could range from simple communications protocols—who gets copied on written documents, for example—to weightier matters such as decision-making, leadership, and conflict resolution.Virtually located talent is also at a disadvantage due to heavy dependence on technology and a lack of face-to-face communication. Location and lifestyle. Location of a particular assignment often determines whether incentives will need to be given to attract the right global talent. Many global managers would consider Vietnam a less attractive assignment destination than Paris, for example. Some locations also have more appeal and attraction to a particular talent population than others. While both the United States and Finland are interested in attracting talent in science and technology, the average Indian scientist may be more at home in New Jersey, where there are more Indian restaurants and shopping than in Helsinki. Individual Level It’s not just the organization that faces challenges when working with a geographically diverse and/or dispersed workforce. Individuals are also plagued by a number of formidable challenges, including the following. Best-in-Class Global Talent Management 5
Slide 8: Five Road Rules for Global Talent Management Behind the implementation of any global talent management program is the goal of building a sustainable competitive advantage by attracting, developing, and deploying the best managerial talent in each of the company’s markets. Hewitt Associates’ collective knowledge, client experience, and thought leadership in building a worldwide talent bench has enabled us to identify a few well-grounded “rules of the road” for successful global talent management. Cornerstones of an Effective Global Talent Strategy Alignment and Govenance How does global talent management link with the company’s business strategy and support key business imperatives and value drivers? What financial and people resources are needed to execute the strategy? What programs will be deployed—now and in the future—and how will the ensure maximum quality and efficiency? What criteria will be used to show success? What new investments are required to execute the strategy and how will these investments contribute to the bottom-line? Operations Measurements Rule 1:Take a Deliberate, Long-Term Approach Managing global talent doesn’t happen by accident. Companies that excel in global talent management have a strategy and plan in place focused on long-term strategic business priorities. This includes planning for the company’s long-term talent needs; understanding global talent supply dynamics including global, socioeconomic, and cultural issues; and implementing a holistic process for sourcing and managing a global talent pool. Unfortunately, most organizations take a short-term, reactive approach to managing talent around the world. Many organizations continue to rely on expatriates from corporate headquarters to run local operations, even though the practice is not cost-effective and actually hinders the long-term aim of establishing a robust pipeline of talented local professionals who can lead their own local markets. Leading companies start with a global talent strategy derived from their business and human resource planning process and informed by strategic business decisions such as revenue targets, new market expansions, planned business partnerships, sales and production changes, and staffing demands. Investments Take IBM, for example. Its core business strategy of being an on-demand company is realized by optimizing key operations around the world, integrating them horizontally and globally, and leveraging world-class talent around the world. “IBM’s research organization is a good example,” says Nicholas Donofrio, Executive Vice President for Innovation and Technology at IBM. “Operating in strategic locations around the world, the research organization focuses on technology and business needs relevant to those countries and integrates science and technologies from across IBM. Each of IBM’s global research labs is a hub for nurturing local talent and for partnering with local academic institutions on global projects. In addition, IBM is practicing global integration by reaching into local markets around the world, especially the high-growth economies. The company is fueling investments in these markets by reallocating talent from slower-growing maturing markets and creating cross-border teams.”3 6 Best-in-Class Global Talent Management
Slide 9: Another key component is to build a plan for managing global talent across the organization. Beyond sourcing, an organization needs to design a holistic approach for how key talent is developed, moved, and retained across the globe.This is not always easy given local business and cultural needs, but leading companies manage to establish some sort of integrated approach. IBM, for example, takes a global supply chain approach to how it manages its talent, so that its workforce is always available and ready “on demand.” The Workforce Management Initiative maintains a global inventory of employee skills, experiences, and career interests and automatically matches key talent to upcoming opportunities. The database is also linked to workforce planning tools to help managers assess the various pros and cons of different staffing strategies (e.g., buy, build, or borrow) across the globe. Likewise, at Bank of Ireland, an enterprise-wide global talent plan was recently developed under the leadership of Brian Goggin, Group Chief Executive. Key focus areas include diversity, executive movement, knowledge transfer, responsibility and accountability, and metrics. All senior executives are assessed against these areas in their performance evaluations.4 Cornerstones of an Effective Global Talent Strategy Specific talent groups and markets are targeted to catch the right global talent. This includes moving work to where the talent is. Catchers Cherry Pickers Increase in global mobility, international migration and foreign students provide a new source of capable global talent that can be cherry picked locally. Connectors Enabling technologies and flexible working arrangements connects to talent that can “plug and play” from any location around the globe. Rule 2: Source Talent Where You Find It Best-in-class companies no longer source talent solely in their own backyards. Rather, they scour the world in search of the best and brightest. Physical boundaries and geographies are of secondary concern, as organizations increasingly embrace the notion of a global talent pool. In their efforts to globally source talent, leading companies employ three fundamental strategies, as illustrated at right. Best-in-Class Global Talent Management 7
Slide 10: As research and innovation become top priorities for employers, companies are overcoming the shortage of science and engineering graduates in the United States and European nations by anticipating future staffing needs and identifying the best ways to source this talent from global locations such as India and China. Consider Microsoft’s Global Technical Engineering Center, which occupies five floors of the famous Metro Tower in Xu Jia Hui, one of Shanghai’s busiest commercial districts. Every morning, hundreds of Microsoft employees spend long hours in modern but tight cubicles, providing research and technical support to the world.This focus on sourcing and tapping into local talent is not only a smart people play; it’s also a logical business move, given that growth in these parts of the world is explosive. General Electric expects the developing world to drive 60% of its growth over the next 10 years, compared with just 20% from the previous decade.5 In China, about 70% of executive jobs within Western multinational organizations are filled by local Chinese talent, compared with the mid-1990s when most such roles were taken up by expatriates.6 At Caterpillar, low- to midlevel leaders from emerging markets are brought in through partnerships with government and local organizations.The company then moves them quickly to international assignments for learning and positions them to become leaders in their home locations. In the 21st century, the global exchange of labor is an absolute necessity. Currently, just 10% of U.S.-based recruiters routinely scan the globe for U.S.-based positions. According to a recent survey by consulting firm Global Learning Resources, however, 53% of respondents consider it important to recruit from other countries and 35% expect to do more global recruiting this year.7 The trend is clear and inevitable as the talent wars heat up on a global scale. Case in point: Dell Computers. In the past year, Dell has stepped up its local and regional recruiting to international levels, launching a major effort to source talent from a worldwide pool for its roughly 600 director, vice president, and senior vice president positions.8 The company also established formal positions and structures to support the global sourcing of talent by creating a new staffing position, Director of Executive Acquisition, responsible for managing global executive searches. On a weekly basis, the director reports directly to the CEO on the status of top searches. Leading companies are also moving beyond the traditional expatriate model to meet their global talent needs. Innovative approaches to sourcing top talent are breaking down physical borders and allowing a new generation of global talent—from all parts of the world—to emerge. Rule 3: Develop a Global Talent Mind-Set Next-generation talent must be capable and competent to manage both global integration and local responsiveness. Simply put, global talent needs to develop a “global mind-set”—that is, an individual’s orientation to the international experience. Legendary leader Jack Welch called this the “globalization of intellect,” explaining, “The real challenge is to globalize the mind of the organization…Until you globalize intellect, you haven’t really globalized the company.”9 Thus, best-in-class companies tend to place a high value on multicultural experience as a critical predictor of employees’ success in the global marketplace. Best-in-class organizations develop leaders with a global mind-set who can manage the complexity of a dynamic, global business environment. They are able to work with people from a variety of cultural backgrounds, including globally acclimatized individuals at company headquarters and local leaders with global capabilities. At Procter & Gamble (P&G), local talent is sent on international assignments to learn how business is conducted in another country. A manager who is groomed to take over a top 8 Best-in-Class Global Talent Management
Slide 11: Global Mind-set • Seeks universals and commonalities across cultures, trying diverse groups together • “Imagine all the people sharing all the world” • Effective when working at a global level, integrating different ideas, approaches, businesses into a unified approach finance position in Russia might go to Britain for a few years to work in a more structured and complex market, for example. What’s more, P&G employees who go on international assignments are expected to develop local talent to replace themselves.10 Along a similar vein, best-in-class companies bring local talent from emerging countries to corporate headquarters, thereby enabling them to network, develop relationships, build credibility with the company’s leadership, and obtain appropriate business training that will allow them to advance at local leadership levels. A close examination of the career tracks of many top executives reveal that international experience is clearly a prerequisite for assuming senior leadership roles. At some big multinationals, such as Coca-Cola and General Electric, international exposure is a requirement for reaching the C-suite. At P&G, 39 of the company’s top 44 global officers have experience on international assignments, and 22 were born outside the United States.Two of P&G’s top officers—Chairman, President, and CEO Alan G. Lafley and Vice-Chairman Bruce Byrnes—serve as perfect illustrations of this strategy, Lafley having executive responsibility for Asia in the mid1990s, while Byrnes worked for P&G Europe in the early 1990s. Leading companies infuse development opportunities with a deliberately global focus. P&G, IBM, Intel, and others encourage employees to build cross-cultural relationships by offering compensation to those who learn a foreign language for business-related reasons. P&G and IBM send willing employees to foreign language training programs offered by external organizations. Meanwhile, Intel’s global leadership development program is spread across various global locations to provide exposure to all leaders. Managers who are selected for the weeklong global culture immersion session fly to locations outside their home region. Recent locations have included Ireland, China, and Israel.11 Intel employees also have the Geocentric “Integrators” Global Mind-set Model Ethnocentric “Self-Affirmers” Polycentric “Assimilators” • Assumes one’s own nationality, culture, values to be superior over others • “The sun never sets on the British Empire” • Effective in standardizing operations globally • Adapts to and bridges cultural differences • “When in Rome do as the Romans do” • Effective when focusing on local market or regulatory situation Source: Guy & Beaman 2003, Sullivan 2001, Perimutter 1969 Best-in-Class Global Talent Management 9
Slide 12: option of attending one-day classes, such as “Working With Russia” and “Doing Business With the Japanese," which provide basic information on building relationships and working cross-culturally.12 GE recently set up Global Talent Forums that take place during regional senior leadership meetings. A handful of top performers are assessed on the spot through interactions with and presentations to the senior team. Nearly 50% of the time, promotions are granted instantly.These forums are an explicit effort to accelerate and spotlight the leadership development of non-U.S.-based talent who may not benefit from networking opportunities connected to more regular exposure to top leadership at headquarters. and global talent management.14 Within many of these companies, top leaders are considered “corporate assets.”Thus, they are not tied specifically to one business or region for an extended period. At GE, for example, this select group encompasses the company’s top 600 leaders. Similarly, Philips Electronics manages top leadership as an enterprise-wide asset, with key recruiting and development activities conducted in a centralized fashion. Meanwhile, Johnson & Johnson’s executive committee oversees and “owns” 75 leadership positions across the company, and it makes sure that explicit succession plans are in place for all 75 roles.15 At GE, CEO Jeff Immelt is even more involved in the company’s legendary Session C process than was his predecessor, Jack Welch, spending more than 30% of his time on people leadership development issues.16 Immelt stresses the need to look for future leaders from across the globe, and he personally participates in regular talent reviews of GE’s most critical global leaders. Below any leadership position, he expects to see three levels of depth—of folks who are ready today, not just “stretch depth.” GE’s Board is also involved in the grooming and development of top global talent, as Board members regularly meet with new executives and participate in global talent planning discussions. Another global leader who “walks the talk” is Jay Crotts, CIO of Royal Dutch Shell PLC. Every one to two weeks, Crotts travels for 10 days at a time, overseeing a team of 8,000 IT professionals in 145 countries. His goal is to source and groom the best IT person for every position, regardless of where that person lives.17 As we’ve seen, leaders at best-in-class companies are actively involved in all components of managing global talent—from talent reviews to global talent development initiatives to the actual sourcing of talent.These leaders share the unshakeable belief that talent is absolutely critical to the future of the organization and that global talent management is truly a business imperative. Rule 4: Get Leaders Into the Act Management of global talent is no small task and something that cannot be left solely in the hands of local HR practitioners. Business leaders— including the CEO, the board of directors, and key heads of both business units and countries—must play an active role in ensuring that strategy is set and plans are executed.This involvement from the very top is key, as evidenced in a recent survey on global talent management by Industrial Relations Counselors, Inc. Indeed, it demonstrates that the most important determinant of global talent management success is the degree of involvement by the CEO, the board of directors, and the global talent leader in talent management activities. On average, CEOs spend 16% of their time speaking publicly about global talent management, mentoring high potentials, participating in talent reviews, and approving succession plans. Meanwhile, board members in 46% of companies provide input into assessment of key employees, and 39% meet with high potentials during the year.13 Leaders at best-in-class companies truly “walk the talk,” operating with a global mind-set and dedicating significant time to building global talent. Consequently, they are viewed as sponsors of global business expansion 10 Best-in-Class Global Talent Management
Slide 13: Lessons for Leaders Global Talent Management A Business Imperative • Achieve a competitive advantage not by using global workforce as a reactive, cost saving option but by tapping into world-wide talent to build a global corporation. • Create a truly global company culture that can be calibrated to on-theground, local realities. • Disperse leaders and managers geographically so that they can appreciate the business from all vantage points and excell in the global playing field. • Leverage the emerging awareness and assertiveness among talent across the world with regards to their importance, value and contribution at a global scale. • Foster innovation and operational excellence by benefiting from the uniqueness and differences in experience and capabilities of the global talent pool. Rule 5: Create Connections Through Integrated Structures, Technologies and Tools Managing global talent is complex. From an operational perspective, it requires a myriad of networks and partnerships to work together across the globe. A defined infrastructure—in terms of organizational structure, technologies, and tools—can go a long way toward ensuring that talent management efforts are integrated and supported. Of course, this comes as no surprise to best-in-class companies.They routinely establish up front the enabling architecture to integrate and break down stand-alone functions and barriers. Oftentimes, it is the daily work experiences and interactions among global employees that most effectively build a global work environment and develop global leaders (versus formal global training programs).This belief was confirmed by a recent Conference Board study, which cited the use of international cross-functional teams as the most extensively used practice for developing global leaders.18 The company’s organizational structure, particularly as it relates to formal and informal governance and decision making, can strongly impact the efficacy of managing talent globally. A rigid, siloed structure, for example, can hinder the sourcing and development of global talent, while a flexible collaborative structure can have just the opposite effect. By definition, best-in-class global talent management requires a more integrated approach to managing key talent. Among the best known is GE’s “Session C” talent review process. With 320,000 employees across 100 countries, the company has to establish clear and integrated structures and programs for assessing and developing its most critical global talent. For GE, Session C serves as the key talent management and succession planning process across the entire organization—one in which top performers are compared across businesses and geographies. While the process starts at the local level, the final review of leadership talent is rolled up at the global level and assessed by the CEO and his executive team. Best-in-Class Global Talent Management 11
Slide 14: Leading companies are also actively establishing internal labor markets to enable the fluid movement of incumbent talent. Employees essentially sell their services for short- and long-term engagements with the mediation of an internal market mechanism that helps match skills, interests, and capacity. Consultants at two of the top firms—McKinsey and PricewaterhouseCoopers—are encouraged to apply for projects anywhere in the world. Likewise, Hewlett-Packard runs what it calls the Venture Capital (VC) Café.The goal is to encourage employees from across the globe to propose a new project. If approved by senior management, an open application process is established to quickly assemble a global team.19 Technology provides another connection point. Best-in-class companies have led the charge in utilizing effective talent management systems with global access and capabilities.Today, many vendors are evolving toward a “talent management suite” solution that bundles various global talent management needs into one system, including recruitment and applicant tracking software, employee performance management, and rewards planning systems.20 Such sophisticated, global technology can be rolled out internationally as a single, unified system configured for each region. However, companies must ensure that their home country solution is scalable to a multilingual, multicultural and transregulatory environment. If it is not, the organization does not necessarily need to abandon the solution. Instead, it can deploy any of a number of viable options.21 Making It Work While managing a global workforce is clearly fraught with challenges, leading companies are paving the way—crafting an agenda, identifying innovative means of getting talent in the door, developing managerial capabilities with cultural intelligence, and embedding smart systems and practices to ensure that talent is developed and retained. Led by the chief executive and blessed by the board, global talent initiatives are deemed business critical, which is clearly evident by the amount of time and resources dedicated to them. It is not a simple endeavor, and there are no off-the-shelf solutions that can be put in place. As these companies have shown, however, global talent management can be done—and done well, with a high degree of success. The talent war has most definitely gone global, but savvy organizations can win this essential battle by carefully considering the relevant issues, taking a few cues from leadingedge companies, and putting in place a comprehensive and disciplined strategy for leveraging and managing talent across the world. Taking such a careful, calculated approach to the global talent war will enable them to bolster their arsenal and ultimately develop a truly world-class global talent supply chain. 12 Best-in-Class Global Talent Management
Slide 15: Options Maintain a solution at corporate HQ allowing subsidiaries to keep the solution they are using. Agree to standard metrics and deploy a central warehouse that can receive/transfer data from all disparate systems. Select one solution for global implementation. The solution is calibrated for each subsidiary and operated, more or less, on a stand alone basis in each region. All relevant data is transferred to central analytics or reporting databases. Pros • Least upfront effort and expense Cons • More restricted pay-off • High operational cost in the long-term • Only integrates at analytics and reporting layer • Achieves economies of scale and price discounts (by achieving or leasing multiple licenses) • Common solution • Allows staff mobility from region to region with understanding of eHR solution throughout • Makes transfer of employee information easy • Offers complete integration • Achieves the lowest total cost of ownership • Provides the greatest opportunity to leverage HR intelligence world-wide Select a global solution that can be rolled out internationally as one, unified system configured for each region. • Most initial effort and expense • High risk for regions in terms of autonomy and access to a highly centralized solution Source: Chaisson, J., and Schweyer, Allan.,“Global Talent Management: Fostering Global Workforce Practices that are Scalable, Sustainable and Ethical” Human Capital Institute, June 2004 Best-in-Class Global Talent Management 13
Slide 16: References 1. “The Battle for Brainpower – a survey of talent,” The Economist, October 7, 2006 2. BCG Focus, “Navigating the Five Currents of Globalization,” January 2005 3.The Evolving Global Talent Pool: Issues, Challenges and Strategic Implications,The Levin Institute,The State University of New York 4. Redmond, Jennifer, “Global Talent Management: How Businesses Attract, Develop and Retain the Best,”The Conference Board, September 2006 5. The battle for brainpower—a survey of talent, The Economist, October 7, 2006. 6. “Firms in China Think Globally, Hire Locally,” Wall Street Journal, Feb 27, 2006 7. Frauenheim, Ed., “Dell Reboots Recruitment for International Approach,” workforce.com, April 2006 8. Ebid 9. Rohwer,J., & Windham, L, “GE Digs into Asia,” Fortune, October 2, 2000 10. Schoeff, Mark., “P&G places a premium on International Experience,” workforce.com, April 2006 11. Frauenheim Ed, “Crossing Cultures,” workforce.com, November 21, 2005 12. Weber, Gretchen, “Intel’s Internal Approach”, workforce.com, May 2004 13. IRC Survey of Global Talent Management Practices, 2003 14. “Organizing for Global Advantage in China, India and other Rapidly Developing Economies,” Boston Consulting Group Report, March 2006 15. “Developing Global Leaders: Enhancing Competencies and Accelerating the Expatriate Experience,” Conference Board Research Report, March 2006 16. Byrne, John A., “The Fast Company Interview: Jeff Immelt,” Fast Company, July 1, 2005 17. Brandel, Mary, “Fishing in the Global Talent Pool,” Computerworld, November 2006 18. “Developing Global Leaders: Enhancing Competencies and Accelerating the Expatriate Experience,” Conference Board, Research Report 1373-05 19. “Staffing for the Future” by Gandossy and Kao, chapter 6 in Workforce Wake-up Call, John Wiley & Sons, 2006 20. Fox, Adrienne, “Global talent management systems go ‘transnational,” SHRM.org, March 22, 2006 21. Chaisson, J., and Schweyer,Allan., “Global Talent Management: Fostering Global Workforce Practices that are Scalable, Sustainable and Ethical”, Human Capital Institute, June 2004 14 Best-in-Class Global Talent Management