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Talent Management Factbook 2010

Best Practices and Benchmarks in U.S. Talent Management

Karen OLeonard,
Principal Analyst

Stacey Harris,
Principal Analyst September 2010

BERSIN & ASSOCIATES FACTBOOK REPORT | V.1.0

Talent Management Factbook 2010

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TABLE OF CONTENTS
Introduction Executive Summary
1. Restructuring Consolidates Talent Processes 2. More Companies Are Developing a Talent Management Strategy 3. Integration Is Still in the Early Stages 4. Competencies Are the Foundation of Talent Management 5. The Challenge of System Integration 6. Integration Pays off 10 10 8 9

5 7
7 7

What Is Talent Management?


Talent Strategy Workforce Planning Capability and Competency Management Talent Acquisition Leadership Development Succession Management Career Management Performance Management Total Rewards Learning and Capability Development Organization and Governance Business Metrics and Analytics Talent Infrastructure

12
13 14 14 15 15 15 16 16 16 17 18 19 19

Talent Strategy and Planning 21


Who Is Considered Talent? 26

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Organization and Governance 28


The Right Mix of Skills Business Ownership of Talent Management 38 39

Talent Management Maturity 41


The Path to Integration Fostering Integration 48 59

Measuring Success
What Metrics to Use? Metrics from Our Study

62
62 67

Impact of Mature Talent Management


Impact on Turnover and Promotion Rates Impact on Employee Productivity What Maturity Level Is Right for Your Organization?

76
80 82 83

Talent Systems
System Integration Impact of Talent Systems Keys to a System Integration Strategy

85
87 90 94

Appendix I: Study Methodology Appendix II: Key Talent Integration Points across Talent Processes Appendix III: Table of Figures

98 102 108

About Us About This Research

111 111

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Introduction
As the economic recovery unfolds, organizations are taking stock of their talent. For many companies, the last two years have meant restructuring, layoffs and salary freezes, creating an environment of low morale. Now that the economy is starting to improve, disengaged employees are beginning to look elsewhere. The Bureau of Labor Statistics reported in February that the number of employees voluntarily quitting their jobs surpassed involuntary terminations (through layoffs or discharges) for the rst time since October 2008. This is a signal to companies to look at their career planning, development and rewards programs to make sure that their employees are engaged and working toward long-term goals. Another factor shaping corporate talent strategies is projected job growth. As companies start to hire again, many are being cautious, often initially turning to outside contractors or part-time workers. Therefore, with only modest job growth expected in the near term, companies must nd ways to recruit, motivate and retain employees in an environment of limited career advancement.
KEY POINT
Disengaged employees are beginning to look elsewhere a signal that companies need to get their talent strategies in order.

But perhaps the biggest inuence on talent strategies has been companies redening their business strategies and goals in light of the new economy, with resulting shifts in the talent needed to achieve these goals. This, in turn, impacts all talent initiatives within the company, from workforce planning and recruiting to retention and compensation strategies.  Smart companies realize that these talent activities are inextricably linked. The success of an organizations talent strategy depends on the integration of its talent processes. This report summarizes our annual study conducted in partnership with Human Resource Executive. The research was conducted during March and April 2010, with 725 HR managers and executives from a large crosssection of U.S.-based organizations. In addition, in-depth interviews were conducted with HR executives from a range of company sizes and industries. Based on these qualitative and quantitative inputs, this report provides benchmarks and best practices in talent management. Specically, the study addresses the following key questions.

Source: More Workers Start to Quit, Wall Street Journal / Joe Light, May 26, 2010.

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KEY POINT
Companies must nd ways to recruit, motivate and retain employees in an environment of limited career advancement.

How are companies organizing their talent management functions? What is an effective roadmap to integrating and improving talent initiatives? What is the state of organizations talent systems and infrastructures? What are the current rates of retention and promotions among U.S. companies, and what other metrics are being used for evaluating talent initiatives? What is the impact of talent management on business and talent metrics? After reading this report, if you see areas that you would like to further explore for your organization, please contact us at info@bersin.com or at (510) 654-8500.

Karen OLeonard Principal Analyst

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Executive Summary
The following are key ndings from the research, which are explored in more detail in this report. In addition, throughout this report data is broken out by company size and industry.

1. Restructuring Consolidates Talent Processes


Many companies have consolidated their operations over the past few years in an effort to improve efciency. This restructuring has generally been benecial to talent management by bringing centralized ownership of talent initiatives. Today, 30 percent of U.S. companies have a dedicated talent management executive, a role that is responsible for some or all of the talent functions across the enterprise. This gure is up from 21 percent in 2008.  The responsibilities of talent management executives vary widely. In most companies, this role is responsible for the talent strategy, leadership development, succession management, performance management, and learning and development (L&D). Just more than one-half of the talent management executives are responsible for career management, competency management and talent acquisition. The talent management executive does not typically own the compensation / total rewards function, which often reports up through a different chain of command into the central HR organization. In most cases, workforce planning is also under the charge of a separate person or group.

KEY POINT
Today, 30 percent of U.S. companies have a dedicated talent management executive.

2. More Companies Are Developing a Talent Management Strategy


A dedicated talent management executive can help to dene and implement a cohesive talent strategy by aligning resources and improving the level of coordination across processes. Today, nearly onehalf of U.S. companies say they have a well-dened talent strategy and

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are working on implementing that strategy. Two years ago, this gure was just 37 percent. So, while there is still a lot of room for growth, companies are making progress.

3. Integration Is Still in the Early Stages


Mature talent management calls for an effective governance structure, a business-driven talent strategy and highly evolved, integrated talent processes. It also requires business leaders and managers to take ownership of talent initiatives and to be held accountable for talent outcomes.  This Level of Maturity does not happen overnight. Organizations typically evolve to this Level over a number of years, progressing through a series of stages, as depicted in Figure 1.

Figure 1: Bersin & Associates Talent Management Maturity Model

Fully integrated processes and systems used to make business decisions; talent mgmt. is business-driven

Level 4: Strategic Talent Management

7%

Heavy focus on connecting systems and processes; single person / team responsible for talent initiatives

Level 3: Integrated Talent Management

20%

Talent processes are consistent and tailorable, with some integration; several systems connected through manual processes

Level 2: Standardized Talent Processes

45%

Individual HR processes or silos; may have systems in place but not connected

Level 1: Siloed HR Processes

28%

Source: Bersin & Associates, 2010.

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KEY POINT
Today, nearly one-half of U.S. companies are at the stage in which they are beginning to connect their talent processes and systems.

Today, approximately one-quarter of organizations are at Level 1, in which talent processes are developed and managed individually. The processes and systems are silos, meaning that there is little or no coordination across processes. The organization may have automated talent systems in place (such as an LMS or an applicant tracking system), but these systems do not share data. Level 2 is the largest category, with nearly one-half of organizations at this stage. Here, the organization develops a set of consistent talent processes that can be tailored as needed to meet business-unit and regional needs. In addition, the organization begins to identify connection points across its talent processes and to manually link talent systems. In these organizations, HR owns talent management initiatives and seeks input from business leaders. Only about one in four companies has progressed to Levels 3 and 4, in which talent processes and systems become more tightly integrated, and business leaders and managers assume greater responsibility for talent initiatives. We expect the number of organizations in these top two categories to increase as companies emerge from the recession and refocus on long-term talent initiatives.

4. Competencies Are the Foundation of Talent Management


KEY POINT
Competencies are a common starting point for integrating talent processes.

Organizations may take many different paths to integrate their talent initiatives (all of which can be successful) but, for many, there is one common starting point competencies. These are used across nearly all talent processes and, therefore, serve as the foundation for process integration. Often, companies dene competencies for use in performance reviews, then extend these for use in recruiting, L&D, leadership development and succession planning efforts. From here, many companies focus on linking their performance management processes with learning and development, since these activities have a natural synergy. Or, they may look at linking performance management with compensation initiatives. Whatever path an organization chooses, it should be laid out as part of the overall strategy. A good way to plan for integration is to create a map of talent processes, including current state and desired future state, along with a roadmap for achieving these goals.

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5. The Challenge of System Integration


Integrating talent processes requires sharing data across systems. For example, competencies should be stored and accessible in the recruiting, performance management and learning management systems. Today, 60 percent of companies have two or more separate talent systems, in addition to an HRIS or employee data warehouse. Most of these companies report that the sharing of data between these systems is poor or nonexistent. Without this integration between systems, talent management cannot be wholly effective. Talent systems should reinforce the processes, not drive the processes. Companies should rst make sure that they have the right people in talent management positions, then design the right processes, and then choose the right systems to make the processes more efcient. Furthermore, our research found that talent systems do not guarantee an organizations success in meeting talent and business goals. Installing a complicated system or using multiple point solutions that do not share data can be less productive than using simple paper-and-pencil processes. A well-integrated system infrastructure can help the organization make better decisions about its talent but, as mentioned above, the organization must rst have the right people and processes in place.

6. Integration Pays off


KEY POINT
As companies move up the maturity ladder, they have lower turnover, greater employee engagement and greater success in nearly every talent area.

Building a mature talent management organization takes time and resources, but it does pay off. This study shows that, as companies move up the Maturity Ladder (see Figure 1), their rates of employee turnover decline, their promotion rates increase, and they score better on employee engagement, development and talent planning. As an example, companies in Level 4 (with strategic, business-driven talent management) had one-half the rate of turnover among high performers, as compared with companies in Level 2 (with standardized talent processes).

A high performer is an employee who is a key contributor, demonstrates

high performance, is capable of a lateral move, may be qualied for a broader role within the same profession; and, has reached the potential to move upward in a management capacity.

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In addition, Level 4 companies performed better in the following areas: Twenty-nine percent higher scores on employee engagement; Thirty-six percent higher ratings on leadership development; and, Forty-one percent higher ratings on creating a pipeline of ready successors. The data clearly shows that moving up to higher Levels of Maturity has a signicant impact on talent initiatives and metrics. These ndings should serve as motivation for companies to improve their talent management efforts. 

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What Is Talent Management?


KEY POINT
Talent management initially referred to the programs used to manage the top talent in an organization.

If you ask 10 HR leaders, What is talent management? you are likely to get 10 different answers. The phrase talent management was coined many years ago and initially referred to the programs used to manage the top talent in an organization. More recently, organizations have extended the denition to include a broader employee population. Organizations also vary in the processes which they consider to be part of talent management. Talent acquisition and compensation have traditionally been silos or separate functions within the organization. Although these functions still remain separated in many companies, an increasing number are integrating these from an organizational and process perspective with other talent functions. We have a fairly broad view of talent management that includes all elements affecting the ow of talent, which encompasses attracting, developing, motivating, moving and retaining talent. From an organizational perspective, it encompasses the governance structure, measurement approach and systems infrastructure. Our Talent Management Framework depicts how these different elements come together (see Figure 2) to support that goal. Let us briey discuss these areas, which are described in more detail in our report, The Talent Management Framework: A Modern Approach for Developing and Mobilizing Talent.

For more information, The Talent Management Framework: A Modern Approach

for Developing and Mobilizing Talent, Bersin & Associates / Josh Bersin, Stacey Harris, Kim Lamoureux, Madeline Laurano and David Mallon, May 2010. Available to research members at www.bersin.com/library.

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Figure 2: Bersin & Associates Talent Management Framework

High-Impact Talent Management Framework


Talent Strategy & Business Alignment Workforce Planning Capability & Competency Management Leadership Development Succession Management Career Management Performance Management Learning & Capability Development Talent Infrastructure Business Metrics & Analytics

Organization & Governance

Talent Acquisition

Total Rewards

Source: Bersin & Associates, 2010. Copyright 2008 Bersin & Associates. All rights reserved. Page 1

Talent Strategy
Talent management begins with a business-driven talent strategy, which is how the organization plans to meet its talent challenges and enable its critical talent to support the organization in fullling its business goals. For some companies, talent includes everyone in the organization; for other companies, talent is limited to senior leaders, high potentials or critical roles that create the most impact on business goals. The talent strategy encompasses a number of different components. One of the fundamental elements is the talent planning process, which is used

A high-potential employee is an employee who has been identied as having the

potential, ability and aspiration for successive leadership positions within the company. Often, these employees are provided with focused development as part of a succession plan and are referred to as HiPos.

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to identify talent challenges and solutions at the enterprise and businessunit levels. A second key element is the integration strategy, which addresses how the organization will integrate its talent processes. Together with this is the change management strategy, which is the plan for transitioning from the current state to a desired, future talent approach. Another key component is dening the talent measurement approach which will be used to evaluate the talent strategy and expected outcomes.

Workforce Planning
KEY POINT
In workforce planning, organizations identify critical roles, dene their talent segments and analyze organizational skill gaps both current and future.

Alignment to the business strategy is also critical for the next area, workforce planning. More than a headcount analysis, it is here that organizations will identify critical roles, dene their talent segments and analyze organizational skill gaps both current and future. This discipline helps organizations understand the current state of talent, forecast talent gaps and take the actions necessary to close these gaps - typically in the form of succession, recruitment, and development initiatives. An effective workforce planning process will consistently help business leaders make informed decisions regarding their talent. Although bestpractice companies use workforce planning as an integral part of their business and nancial planning, the majority of companies still conduct workforce planning as a simple headcount analysis for budgeting purposes or on an as needed basis, such as during a reorganization.

Capability and Competency Management


After talent strategy and workforce planning, a company enters the solutions phase of talent management. Capability and competency management was placed in its current location of the Framework for a very specic reason. It is this information skills, competencies and experiences that provide the foundational data to support the other talent processes, including development, talent acquisition, career and succession management; and, performance management. In addition to dening competencies, job proles should be developed (at a minimum) for all critical roles, which should have been dened in the previous area of workforce planning.

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Talent Acquisition
Talent acquisition encompasses identifying, attracting and onboarding talent to full the workforce plan and to meet dynamic business needs. Whether lling positions with internal or external candidates, it is at this stage that a new cycle begins for an employee. The main elements of talent acquisition include sourcing, assessments, selection, and onboarding.

Leadership Development
KEY POINT
Without leadership development, the bench strength of an organization becomes weak and leadership pipelines are truncated putting the company at signicant risk.

Leadership development prepares talent for future leadership positions. Without it, the bench strength of an organization becomes weak and leadership pipelines are truncated putting the company at significant risk.  Through our ongoing research and experiences, we have developed a denition of leadership development that is broad but necessarily so, because of the complexity that leadership development brings. The key elements of leadership development include executive education, assessment and evaluation, coaching and mentoring, job rotations, and a well-designed leadership curriculum that addresses all levels of management, utilizing multiple learning modalities, and targeting the development of key leadership competencies, knowledge and experiences.

Succession Management
Succession management refers to an organizations processes for selecting and managing talent in order to build organizational bench strength. These processes ensure the readiness of talent to move into key positions when necessary, such as when a position becomes vacant as a result of a resignation or dismissal, or when a position is newly created to meet a business need. Succession management is one of the primary ways that a company meets its workforce plan requirements. Key elements of a succession management program include talent proles, HiPo identication, talent calibration, and talent review meetings. 

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Career Management
Career management is an employees progression through a logical sequence of jobs, resulting in greater experience or responsibility. The progression can be upward (in the form of promotions) and / or lateral. Characteristics of a modern career management strategy include promoting job exibility and fostering talent mobility. Today, businesses need to partner with employees and foster a collaborative approach to career development that meets the needs of the business, while fullling employees career aspirations. A key element here is the career plans that employees put in place (with the support of their managers and HR) to develop the skills and capabilities for moving through a desired career path. Another component is talent mobility, which is a companys ability to make talent decisions based on an alignment of employee capabilities and aspirations, as well as what is best for the business as a whole.

Performance Management
KEY POINT
When done well, performance management becomes the anchor of an organizations integrated talent management strategy.

Performance management represents all of the processes that managers use to effectively lead, manage, assess and develop people. In reality, performance management is management. Effective performance management is not an isolated annual event focused on an appraisal or review meeting. It is best described as an ongoing process or cycle that takes place throughout the year. When done well, performance management becomes the anchor of an organizations integrated talent management strategy. It gives people clear direction building clarity, alignment, engagement and morale. These key elements of employee performance management include goal setting and alignment, performance evaluations, skills gap analysis, and development planning.

Total Rewards
Total rewards is an organizations approach to incenting and rewarding its talent. This is much broader than just compensation elements it

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focuses on a total package that is tailored to the needs of different talent segments. Flexible total-reward approaches allow organizations to incent critical talent to join the organization, make decisions to move and develop within the organization, and stay with the organization. A comprehensive approach to total rewards allows organizations to show the benets of development, work assignments, exible working environments and other talent-based benets in employees total packages.  Typical components include rewards and recognition, pay for performance approaches, benets packages, and compensation modeling and risk benet analysis.

Learning and Capability Development


KEY POINT
Learning and capability development is truly an enabler for talent management strategies.

Learning and capability development, or what is most commonly referred to as learning and development (L&D), was placed toward the bottom of our Talent Management Framework, across the entire employee lifecycle, because it is truly an enabler for talent management strategies. (See Figure 2, repeated in this section.) Without learning, a company and its talent become stagnant. It is essential that talent continues to learn and develop as the business evolves and grows, and as the workforce needs change.  Fundamental elements of learning and capability development include the dening a learning strategy, designing formal programs and informal approaches to create skills and capabilities within a specic audience, and knowledge management, which encompasses a range of practices used to create, represent, and distribute insights and experiences.

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Figure 2: Bersin & Associates Talent Management Framework

High-Impact Talent Management Framework


Talent Strategy & Business Alignment Workforce Planning Capability & Competency Management Leadership Development Succession Management Career Management Performance Management Learning & Capability Development Talent Infrastructure Business Metrics & Analytics

Organization & Governance

Talent Acquisition

Total Rewards

Source: Bersin & Associates, 2010. Copyright 2008 Bersin & Associates. All rights reserved. Page 1

Organization and Governance


Considerable thought should be placed into deciding the optimal structures and supporting governance models for an organizations talent strategy and processes. These supporting efforts allow the organization to clearly dene roles and responsibilities, and keep critical lines of communication owing from the business to supporting HR functions. The appropriate governance structure allows an organization to make timely decisions concerning critical talent, communicate plans and needs (both up, down, and within an organization), as well as build engagement in the process as a whole.
 For more information, The High-Impact Learning Organization: WhatWorks in

the Management, Governance and Operations of Modern Corporate Training, Bersin & Associates / Josh Bersin, May 2008. Available to research members at www.bersin.com/ library or for purchase at www.bersin.com/highimpact.

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Business Metrics and Analytics


KEY POINT
Process design and mapping includes identifying the critical inputs and outputs between talent processes and tools.

The second bookend in our Talent Management Framework includes business metrics and analytics. Every area of our Talent Management Framework has its own individual measurement requirements, but a critical nal step includes pulling together all the various talent management measurements. Once compiled, analyzed and eventually trended, the data can be monitored for the overall health of critical talent pools and to ascertain whether the talent strategy is meeting its goals.  This area is the ultimate culmination of an organizations integrated talent management efforts, allowing leaders to make data-driven decisions on the people aspects of the business.

Talent Infrastructure
Talent infrastructure refers to the processes, systems, and network that must be in place in order for disparate parts to function both individually and collaboratively as one. One of the elements is process design and mapping, which includes identifying and implementing the critical inputs and outputs between talent processes and tools. This process mapping effort is the center of an organizations strategy. (See Figure 3.) The other key element is the talent systems or software that support the talent processes. Organizations can implement a talent management suite on one platform or integrate separate point solutions to achieve this goal. Integrated talent systems share data across processes and provide reporting and analytics tools to improve alignment, planning, and decision-making on key talent issues.

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Figure 3: Integrated Talent Management

Performance Management Talent Infrastructure Talent Acquisition Competency Management

Career Management

Succession Management

Total Rewards

Leadership Development Learning & Capability Development


Source: & Associates, 2010. Page 1 Copyright 2008 Bersin & Associates. All Bersin rights reserved.

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Talent Strategy and Planning


As mentioned in the preceding section, talent management begins by dening a talent strategy, which can be articulated in different ways. For example, a forestry products company describes its talent strategy as having the right people with the right skills in the right jobs at the right cost. The HR executive at the Manchester Airport in the U.K. says its talent strategy revolves around both attracting and retaining great people, and developing a performance culture.
KEY POINT
When determining how to implement the talent strategy, an organization must ensure that its talent goals and initiatives are aligned to the business strategy.

These statements describe how each organization looks at its talent strategy at a high level. Behind these strategy statements are a number of talent goals and initiatives. Our research shows that the most effective talent strategies are aligned with the organizations business strategy, with talent initiatives focused on meeting business goals. For example, if cost-containment is a key part of the business strategy, then this should be addressed in the organizations talent goals for example, by creating new (nonmonetary) rewards and recognition programs. Similarly, if increasing customer satisfaction is a key business objective, then new development programs may be needed for customer-facing roles. The following case in point shows how one organization aligns its talent initiatives with its strategic business plan.

Case in Point: Right Managements Talent Strategy and Planning Model


Right Management (the talent and career management consulting arm of Manpower) uses a model to facilitate the organizations talent strategy and planning process. This model is used by the entire Manpower group of companies to ensure alignment and consistency around the corporate vision. (See Figure 4.) The process starts in July with a review of the companys strategic execution framework, which lists the goals and initiatives outlined in its three-year strategic plan. These business objectives are divided into ve main sections:

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Case in Point: Right Managements Talent Strategy and Planning Model (contd)

22

1. Revenue; 2. Business development; 3. Protability; 4. Thought leadership; and , 5. Organization and culture. From this strategic execution framework, the HR team can then discuss the implications on talent strategy and planning, which are organized into four categories: 1. Mindsets; 2. Leadership; 3. Organization; and, 4. Skills.
KEY POINT
Based on its three-year strategic plan, the HR team can discuss the implications of the business objectives on the organizations talent.

Once the team members understand how the business objectives will impact the organizations talent, they can then dene specic talent goals and initiatives that will become their talent commitments for the year. These may include initiatives such as communicating and engaging employees in the companys new strategy, deploying a new model for high potentials, expanding succession planning to the next level down in the organization, and creating an action plan for improving diversity. Once the talent commitments have been determined, the model is used to communicate the objectives and commitments throughout the organization. This way, the HR staff understands what goals and deliverables are expected, and how these support the business strategy. The model has been extremely successful in ensuring that talent initiatives are aligned with business objectives. The model has also proven to be an effective communications tool in helping staff members understand and work toward their objectives. e

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Figure 4: Right Managements Talent Planning Framework

Example: Talent Planning Framework


Talent Commitments
Right Management Key TYSP / Local SEF Objectives

Revenue

Business Development

Profitability

Thought Leadership

Organization & Culture

Key Talent / Organization Implications

Mindset Mindset

Leadership Leadership

Organization

Skills

Key Talent / Organization Actions and Commitments

TYSP = Three-Year Strategic Plan SEF = Strategic Execution Framework

Source: Right Management, 2010.

Right Management is a great example of a company with a mature process for talent strategy and planning. Not every company has such a process in fact, very few do. In our study, 16 percent of companies reported that they have not yet developed a talent strategy. Another 38 percent of companies are still in the novice stage in which they have just started to dene their talent strategies. These numbers, while substantial, have declined over the past two years, as companies have matured their strategies. (See Figure 5.)

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KEY POINT
U.S. companies are making progress in implementing their talent strategies.

Today, nearly 40 percent of companies say they are in the intermediate stage, in which they are implementing their strategies and have some integrated talent processes in place. Seven percent of organizations have now reached the advanced stage, with mature strategies and wellintegrated talent processes in place. The number of companies in these two stages has grown over the past two years. So, while there is still a lot of room for growth, companies are making progress.

Figure 5: Talent Management Strategy U.S. 2008 to 2010*

2010

7%

39%

38%

16%

2009

5%

38%

40%

17%

2008

5%

32%

37%

25%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Advanced

Intermediate

Novice

No Talent Management strategy

*Numbers may not total 100% due to rounding.


Source: Bersin & Associates, 2010.

KEY POINT
Government and healthcare organizations have the least mature talent strategies, but that is starting to change.

Company size makes a difference generally speaking, the larger the company, the more mature the strategy and its implementation. One in 10 large enterprises describes its talent strategy as advanced and fully one-half say they are in the intermediate stage. We nd large companies that have survived many business cycles have learned how to evolve and adapt their talent management initiatives along the way. Comparing industries, the banking / nance and technology sectors are generally more advanced than other industries. (See Figure 6.) Conversely, government and healthcare organizations have the least mature talent strategies. These two latter sectors have traditionally

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lacked sophistication regarding HR and talent issues but that is changing. For example, an increasing number of hospitals are following the model of the Mayo Clinic, in which doctors are hospital employees rather than independent contractors. This trend is elevating the need for more mature talent management practices in this sector. Talent management is also changing in the government sector. The new leadership at the Ofce of Personnel Management (OPM) has brought signicant changes to federal personnel policies and practices, and the work has just begun. The OPMs future plans promise to revolutionize the way government agencies hire, develop and manage their workforces.

Figure 6: Talent Management Strategy by Company Size U.S. 2010*

Large (10,000+ employees)

11%

50%

30%

9%

Midsize (1,000 - 9,999 employees)

6%

43%

40%

11%

Small (100 - 999 employees)

6%

33%

40%

22%

0%

20%

40%

60%

80%

100%

Advanced
*Numbers may not total 100% due to rounding.

Intermediate

Novice

No Talent Management Strategy

Source: Bersin & Associates, 2010.

Source: http://www.opm.gov/strategicplan/StrategicPlan_20100310.pdf.

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Figure 7: Talent Management Strategy by Industry U.S. 2010*

Banking
Technology

9% 11% 8%
8%

52% 50% 42%


41%

31% 31% 38%


41%

9% 8% 13%
9%

Manufacturing
Business Services / Consulting Insurance Retail

7%
7%

41%
38%

54%
55%

5% 7%

Healthcare / Medical 3%

38%
21%
10% 20% 30% 40%

46%
48%
50% 60% 70% 80%

13%
27%
90% 100%

Government

4%
0%

Advanced
*Numbers may not total 100% due to rounding.

Intermediate

Novice

No Talent Management Strategy

*Numbers may not total 100% due to rounding.


Source: Bersin & Associates, 2010.

Who Is Considered Talent?


KEY POINT
Technology companies, for example, may identify critical engineering roles for career development and special rewards programs.

An important piece of talent management is dening talent a denition that will determine which employees or talent segments to include in certain talent initiatives. For some companies, talent includes everyone. For example, an HR executive at a small Southeastern insurance company noted that every one of its 170 employees is included in talent initiatives from L&D to succession planning. This includes the companys receptionist, a critical role in the company that touches every client and internal employee. For other companies, talent initiatives are targeted to certain job levels, critical roles or talent segments. Many companies target their leadership teams for specic development programs and succession planning efforts. Technology companies may identify critical engineering roles for career development, and special compensation and rewards programs.

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These talent segments are determined during the workforce planning process and are used to tailor many talent initiatives. As an example, a large U.S. bank collects information on skills, experience and assessments for the top three management tiers as part of its enterprise talent review process. In addition, the company tailors its recruiting efforts for high-volume, retail banking positions and has also created special development programs for different ethnic groups, since diversity is a key initiative within the company. In this way, talent initiatives are tailored to specic segments. Many companies take a hybrid approach, in which some talent activities are offered enterprisewide and others are targeted to specic talent segments. At Qualcomm, for example, L&D programs cover the entire global workforce. At the same time, the company has identied critical talent pools, including top leaders and high-potential engineers, which are the focus of targeted talent management activities, such as succession planning, talent reviews and specic leadership development initiatives.
KEY POINT
Talent segments may be based on job level, potential, criticality of role, ethnicity, tenure and many other factors.

Most organizations we interviewed said that they identify high potentials as a talent segment requiring tailored programs, such as development, career management, succession planning and compensation. Beyond that, talent segments vary widely, with some companies segmenting employees by job level, gender, tenure, ethnicity, union membership or exemption status.

For more information, Talent Segmentation within Your Companys Talent Strategy,

Bersin & Associates / Stacey Harris, March 23, 2010. Available to research members at www.bersin.com/library.  Talent pools are groups of employees identied for a specic leadership level or type of role for example, identifying individual contributors who have the potential to become a rst-level manager or identifying junior engineers who have the potential to become senior engineers.

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Organization and Governance


The choice of an organizational structure and governance model for talent management is important to the success of talent initiatives. These supporting structures allow the organization to clearly dene roles and responsibilities, and keep lines of communication owing. An effective governance model allows the organization to make timely decisions concerning critical talent, and communicate plans and goals up, down and across an organization. An ineffective structure causes talent initiatives to be disjointed and disconnected. For these reasons, more companies are appointing a dedicated talent management executive to manage some or all of their talent functions. Today, 30 percent of U.S. companies have a dedicated talent management role; this gure is up from 21 percent in 2008. (See Figure 8.) This executive can help by aligning priorities and focusing resources toward talent goals. Although titles of director of talent management and vice president of talent management are becoming more common, particularly in the U.S., these positions do not always have the words talent management in their titles. For example, it may be a vice president or director of HR who is the dedicated talent management role within the organization. Large organizations are far more likely to have a dedicated talent management role than small and midsize companies. In fact, more than one-half of large enterprises have a dedicated talent management role. But more small and midsize companies are also putting in place talent management executives. Among industries, retail, technology and nancial services rms are more likely to have a dedicated talent management executive. (The high gure for retail may be due, in part, to the over-weighting of large retailers in our sample. See section, Appendix I: Study Methodology, for more information.) Government, healthcare and manufacturing rms are least likely to have this role.

KEY POINT
Today, 30 percent of U.S. companies have a dedicated talent management role, up from 21 percent in 2008.

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Figure 8: Percent of Organizations with a Dedicated Talent Management Executive U.S. Total 2008 to 2010

2010
2009 2008
0% 10% 20%

30% 28% 21%


30% 40% 50% 60% 70% 80% 90% 100%

Source: Bersin & Associates, 2010.

Figure 9: Presence of Dedicated Talent Management Executive by Company Size U.S. 2010

Small (100 - 999 employees) Midsize (1,000 - 9,999 employees) Large (10,000+ employees)
0% 10%

17% 38%

58%
20% 30% 40% 50% 60% 70% 80% 90% 100%

Source: Bersin & Associates, 2010.

Figure 10: Percent of Organizations with a Dedicated Talent Management Executive by Industry U.S. 2010

Retail
Technology

59%
42%

Banking
Insurance Business Services / Consulting

41% 41%
33%

Manufacturing
Government (Federal / State / Local)

31%
27%

Healthcare / Medical
0% 10% 20%

23%
30% 40% 50% 60% 70% 80% 90% 100%

Source: Bersin & Associates, 2010.

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KEY POINT
Today, talent management executives do not typically own the compensation / rewards function, nor the workforce planning process.

The responsibilities of talent management executives vary widely. In most companies, this role is responsible for the talent strategy, leadership development, succession management, performance management, and learning and development. (See Figure 11.) Just more than one-half of the talent management executives are responsible for career management and competency management initiatives. Recruiting also is split in just more than one-half of the cases, recruiting is under the purview of the talent management executive; the other half of the time, recruiting is a separate function, often reporting into the business units, and driven by local managers or departments. The talent management executive does not typically own the compensation / total rewards function, which often reports up through a different chain of command into the central HR organization, or into the regional structures within global enterprises. Workforce planning is also typically under the charge of a separate person or group. In some cases, workforce planning is partnered with recruiting, since many companies think of workforce planning solely in terms of headcount needs. Other times, this activity is owned by business leaders and nance, as part of the annual budgeting cycle, or under the direction of a strategic HR staff person.

Figure 11: Functions for Which the Talent Management Executive Is Responsible (among companies that have a dedicated executive) U.S. 2010
Talent strategy Leadership development Succession management Learning & development Performance management Career management Competency management Recruiting Workforce planning Compensation
0% 10% 20%

78% 73% 72% 62% 62% 56%


54%

54% 39%
21%
30% 40% 50% 60% 70% 80% 90% 100%

Source: Bersin & Associates, 2010.

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To be fully effective, the talent management executive needs to be actively engaged in all talent management activities. If the talent functions are not under one central authority, then they must at least work cooperatively to bring an integrated and systematic approach to talent management across the organization. The following cases in point describe a few examples of organizational structures for talent management. Each is different in terms of the reporting structure and responsibilities of the talent management executive. They are all effective, however, because the talent functions work collaboratively with each other and with the business-unit leaders to bring a cohesive, business-driven approach to talent management.

KEY POINT
The organizational structure at BDC promotes communication and coordination across the talent processes, since all talent functions are under one organization.

Case in Point: Business Development Bank of Canada


At the Business Development Bank of Canada (BDC), the director of talent management is responsible for talent acquisition, performance management, succession planning, career management, employee engagement and employer branding. At the same organizational level is a director of learning strategy who is responsible for leadership development, soft skills and technical skills training, as well as a director of total rewards who is responsible for compensation and rewards. All three directors report into the assistant vice president of HR, a senior-level position two levels down from the companys president and CEO. (See Figure 12.)

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Case in Point: Business Development Bank of Canada (contd) Figure 12: 5 Regional HR Business Partners + Head Ofce

32

President / CEO

SVP of HR

AVP of HR

5 Regional HR Business Partners + Head Office Dir of Talent Mgmt

Dir of Org Design

Dir of Total Rewards

Dir of Learning Strategy

1 Direct Report 9 Direct Reports Advisor, Soft Skills & Leadership Dev. Advisor, Technical Skills Advisor, Workforce Initiatives Sr. Advisor, Talent Retention Mgr, Talent Attraction Sr. Advisor, Organ. Effectiveness

Coordinator

Coordinator

Source: Business Development Bank of Canada, 2010.

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Case in Point: Business Development Bank of Canada (contd)

33

A peer to the assistant vice president of HR is the director of organizational design. This role provides strategic organization design and job evaluation advice to senior management in support of the companys business needs. The regional HR business partners work closely with the teams of total rewards, learning strategy and talent management in the design and implementation of processes and solutions in the regions. For example, in a recent review of the organizations competency models, the director of talent management conducted focus groups in collaboration with the HR business partners to validate the right behaviors associated with the competencies. The regional HR business partners also work closely with the regional leadership teams. For example, regional performance management committees meet annually, led by the regional HR business partner and senior business leader. The committee reviews and calibrates employee assessments for fairness and consistency. A similar process is followed for succession planning, wherein the business leader and HR business partner in each region meet to identify and discuss pools of succession candidates. Overall, the organizational structure at BDC promotes communication and coordination across the talent processes, since all talent functions are under one organization. The structure also promotes a healthy relationship between the centralized talent functions and the regional HR business partners. As a result, there is a high degree of consistency of talent processes across regions, with some exibility for tailoring to individual business needs. Finally, there is a partnership between HR as the facilitators and business leaders as the owners of talent management. Whenever there is a communication to employees, the HR staff encourages business leaders to deliver the message. This underscores the notion that talent management belongs to the organization it is not just an HR issue. e

KEY POINT
In communications to employees, the HR staff encourages business leaders to deliver the message underscoring the notion that talent management belongs to the organization.

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Case in Point: Talent Management Structure at a Financial Services Company


A U.S.-based nancial services company has 1,400 employees, with primary operations in North America and Latin America. The company segments its talent management activities for executives and non-executives. For executives, a global HR function handles performance management and succession planning. A separate organization (see Figure 13) manages talent activities for non-executives.

Figure 13: Talent Management Structure at Financial Services Company

VP of HR

Senior Manager, Compensation

Senior Manager, HR Operations

Senior Manager, Latin America

Manager, Talent Management

Manager, HR Operations

Supervisor, Talent Acquisition 1 Direct Report

Supervisor, Skills Development 6 Direct Reports

Supervisor, Leadership Development 2 Direct Reports

Supervisor, Performance

Source: Financial Services Company, 2010.

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Case in Point: Talent Management Structure at a Financial Services Company (contd)

35

This organizational structure is very uid. Although people are assigned to specic talent management roles (such as talent acquisition and skills development), in reality staff members work on many projects cross-functionally. For example, the organization recently launched a new skills development program for credit analysts and discounters. Two staff members worked together to design and deliver the program one from skills development and the other from the talent acquisition function. Both of these individuals were uniquely qualied to contribute to the project the skills development supervisor for her knowledge of instructional design and learning principles, and the talent acquisition supervisor for her knowledge of participant skills and proles from the screening and recruiting process. This type of cross-functional collaboration brings a broader perspective to the project, underscoring the point that every talent process affects and supports the other processes. Figure 14 shows the organizations perspective on the interrelationships of talent processes and how these ultimately impact performance. The process starts with acquiring talent, then developing skills and leadership qualities. The eNeRGy initiative (which stands for Network, Rotate and Grow) is a special leadership program for recent MBA graduates. The two-year program includes strategic, high-prole projects designed to develop participants for management roles within the company. Employees and managers at all levels are encouraged to pursue coaching, cross-functional projects and other development opportunities. The result is a high-performance organization. e

KEY POINT
A special leadership program for recent MBA graduates, the eNeRGy initiative is a two-year program designed to develop participants for management roles within the company.

Figure 14: Relationships between Talent Processes

Talent Acquisition

Skill Development

Ldr / Mgr Development

eNeRGy (NetworkRotate-Grow)

Performance

Source: Financial Services Company.

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Case in Point: McDonalds


Like the preceding example, McDonalds segments its talent management activities by job level. For restaurant managers and employees, talent processes (such as recruiting and performance management) are handled at the local level. For directors and above, a corporate organization drives talent initiatives, with implementation of these initiatives conducted by regional teams. The corporate team is led by an executive vice president of HR (see Figure 15). Reporting into this role are a senior vice president of international and corporate HR, a vice president of benets and compensation, and the vice president of McDonalds global talent management and Leadership Institute, the crux of the companys talent management efforts. The Leadership Institute designs global development and transition programs for directors and above. The work of the Leadership Institute is closely integrated with that of global talent management, which has responsibility for creating frameworks, processes and practices for the following areas: Strategic workforce planning; Performance and competency management; Succession planning; Career management; and, Assessment and selection for senior leaders. Two other talent processes, recruiting and compensation, are outside the purview of the global talent management team. Recruiting is driven primarily at the country and local levels with restaurant employees recruited externally through local sources, and mid-level and more senior positions lled through succession and targeted external executive search efforts. Compensation and benets are managed at two levels. The corporate group creates the global compensation philosophy, strategy and frameworks for mid-level managers through executives. The regional (area of the world) and local HR teams benchmark and complete compensation analyses, and then tailor compensation packages for their organizations.

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Case in Point: McDonalds (contd)

37

In addition, the global group sponsors a talent management advisory board, comprised of HR and talent management leaders from each area of the world. The advisory board helps forecast ofcer-level openings and discusses the potential movement of talent across areas of the world. This governance structure has proven to be effective at McDonalds, a company with decentralized decision-making. The global talent management organization operates as a center of excellence, keeping abreast of trends, best practices and benchmarks. The team collaborates with the areas of the world to create frameworks and processes, pilot these for effectiveness, and then consult on the implementation. The processes must be exible enough to be tailored by each area of the world or country to meet their needs. The phrase freedom within a framework is often used at McDonalds to describe how the corporate team works with the areas of the world to drive the right balance between a centralized strategy and decentralized execution. Although it can take considerable time to roll out a process globally, the result is a more business-driven solution that is embraced at the local level. e

Figure 15: McDonalds Talent Management Structure


Corporate Structure
Exec VP of HR

Area of World (AOW) Structure


AOW President

Sr VP, International & Corporate HR

VP, Benefits & Compensation

VP, Global Talent Mgmt & Leadership Institute

SVP (or VP) of HR AOW

Sr Dir, Leadership Institute

Sr Dir, Global Talent Mgmt

Sr Dir (or Dir) of Talent Mgmt

HR Business Partner(s) or Field Implementation Leader(s)

Sr Dir (or Dir) of Benefits & Compensation

5 Direct Reports

4 Direct Reports

Source: McDonalds, 2010.

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The Right Mix of Skills


KEY POINT
When selecting a talent management executive, look for someone who when he or she talks, people listen.

Finding the right people to lead and implement an organizations talent management efforts is essential. A talent management executive can act as a tremendous change agent for the organization and, with a strong team in place, can drive the strategy and processes forward. Increasingly, companies are looking for business-savvy talent management professionals, since an understanding of business issues and challenges is critical. These skills go beyond the typical prole of an HR generalist or specialist. For example, the majority of HR executives at Right Management come from a business background. The executive vice president global HR was formerly the rms general manager in France. Its HR leader in Asia formerly held a post in marketing. Similarly, its head of HR in Europe has a consulting background. This is one of the keys to connecting HR with the businesses. If there is a disconnect between HR and the business, the company believes it is because HR people do not understand the business. Other companies stressed the need to nd a talent management executive who is inuential. The person needs to be someone who, as one company put it, When he or she talks, people listen. Good communication and leadership skills are key ingredients here. It appears that, within many companies, HR staff do not understand the business and nor do they have good persuasive skills. One of our recent studies found that 42 percent of U.S. organizations rated their HR staff as just fair or poor on basic business acumen, and 31 percent rated the HR staff as fair or poor on presentation and communications skills. (See Figure 16.) These organizations will need to hire for these positions or develop their current HR staff in order to move their talent management strategies forward. Some organizations may need to redene their existing HR roles in terms of the necessary skills sets and job descriptions. A FORTUNE 500 manufacturing company set about this task by taking an inventory of the work being done by its HR generalists. Based on this analysis, the company eliminated the administrative tasks from these roles, outsourcing some of these functions, such as payroll and benets, to
 For more information on our upcoming research, High-Impact HR Organization, due

to be published H22010, please visit www.bersin.com/hihr.

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Figure 16: HR Prociency Ratings U.S. 2010*10

Basic business acumen

8%

48%

33%

9%

Presentations, speaking, communications

13%

55%

27%

4%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

World class
*Numbers may not total 100% due to rounding.

Good

Fair

Poor

Source: Bersin & Associates, 2010.

third parties. The HR generalist roles were redened solely as business partners, so that these personnel could provide more strategic consulting and solutions to the businesses.

Business Ownership of Talent Management


KEY POINT
For talent management to be successful, a top business executive needs to be actively engaged in the strategy.

Our research shows that the most effective talent strategies are owned and driven by business leaders and managers.11 The HR or talent management executive plays the important role of steward for the talent strategy efforts by: Ensuring foundational structures are in place; Assigning appropriate supporting resources; and, Implementing tools, processes and systems that enable the business to manage talent effectively, based on business goals.
10 For more information on our upcoming research, High-Impact HR Organization, due

to be published in H22010, please visit www.bersin.com/hihr. 11 For more information, please see these two reports: (1) The High-Impact Learning Organization: WhatWorks in the Management, Governance and Operations of Modern Corporate Training, Bersin & Associates / Josh Bersin, May 2008. Available to research members at www.bersin.com/library or for purchase at www.bersin.com/highimpact; and, (2) High-Impact HR Organization, due to be published H22010, please visit www.bersin. com/hihr.

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Business leaders and managers must take ownership of talent initiatives, including attracting, developing, engaging and retaining people. Success ultimately depends on the extent to which business leaders adopt talent management processes and accept responsibility for the results. Therefore, in order for talent management to be successful, a top business executive needs to be actively engaged in the strategy. The good news is that 70 percent of companies have a business executive actively participating in their talent strategy. (See Figure 17.) Without the active support and participation by a top business executive, companies will likely struggle in their talent management initiatives.
Figure 17: Top Business Executive Drives or Actively Participates in Talent Management Strategy by Total and by Company Size (among companies that have a strategy) U.S. 2010

U.S. Total Small (100-999 Employees) Midsize (1,000-9,999 Employees) Large (10,000+ Employees)
0% 10% 20% 30% 40% 50% 60%

70%

73%
67% 65%
70% 80% 90% 100%

Source: Bersin & Associates, 2010.

Figure 18: Top Business Executive Drives or Actively Participates in Talent Management Strategy by Industry (among companies that have a strategy) U.S. 2010
Manufacturing

82% 74% 72% 71% 67% 62% 61% 32%


0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Retail
Healthcare / Medical

Insurance
Banking

Business Services/ Consulting


Technology Government (federal, state, local)

Source: Bersin & Associates, 2010.

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Talent Management Maturity


Mature talent management calls for an effective governance structure, a business-driven talent strategy and highly evolved, integrated talent processes. It also requires business leaders and managers to take ownership of talent initiatives and to be held accountable for talent outcomes.  This Level of Maturity does not happen overnight. Organizations typically evolve to this Level over a number of years, progressing through a series of stages, as depicted in Figure 1 (repeated in this section). We briey describe these stages in the following sections12.
Figure 1: Bersin & Associates Talent Management Maturity Model

Fully integrated processes and systems used to make business decisions; talent mgmt. is business-driven

Level 4: Strategic Talent Management

7%

Heavy focus on connecting systems and processes; single person / team responsible for talent initiatives

Level 3: Integrated Talent Management

20%

Talent processes are consistent and tailorable, with some integration; several systems connected through manual processes

Level 2: Standardized Talent Processes

45%

Individual HR processes or silos; may have systems in place but not connected

Level 1: Siloed HR Processes

28%

Source: Bersin & Associates, 2010.

12

For a more detailed description of this Maturity Model, please see Bersin & Associates

Talent Management Maturity Model, Bersin & Associates / Karen OLeonard and Stacey Harris, August, 2010. Available to research members at www.bersin.com/library.

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KEY POINT
Today, nearly one-half of U.S. companies are at Level 2, with a set of consistent talent processes that are in the early stages of integration.

Level 1 describes a traditional HR organization in which talent processes are developed and managed individually across business units or functions. The processes are silos, meaning that there is little or no coordination across processes. The organization may have automated talent systems in place, such as an LMS (learning management system) or an applicant tracking system but these systems do not share data. In Level 2, the organization develops a set of consistent talent processes that can be tailored as needed to meet business-unit and regional needs. In addition, the organization begins to identify connection points across its talent processes and to manually link its talent systems (i.e., taking data by hand from one system and entering it into another system). In these organizations, HR owns the talent management initiatives and seeks input from business leaders. This is the largest category today, with nearly one-half of all organizations at this stage of maturity. In the next stage, Level 3, organizations are heavily focused on integrating talent processes and systems. Individual talent processes are highly evolved and priorities are set based on talent planning outcomes. A talent management executive or team is responsible for talent initiatives, but business leaders share equal responsibility for achieving talent goals. At the most sophisticated stage (Level 4), organizations have fully integrated systems and processes. A talent management executive serves as the steward of the strategy and processes, but talent management is owned by business leaders and line managers, who are held accountable and rewarded for talent outcomes. Talent management is part of the annual business planning process, so that talent initiatives are aligned with business objectives. Strategic workforce planning is used to set priorities and talent data helps to drive business decisions.

KEY POINT
Advancing through the maturity stages takes time, as well as resources one reason why large companies generally are more mature.

As mentioned above, advancing through these stages takes time, as well as resources. That is one reason why large companies, in general, are more mature. Just more than one-third of large companies have advanced to Level 3 or 4. A far greater number of small companies, by contrast, are in the early stages of maturity, with 35 percent still at Level 1. (See Figure 19.) Maturity also varies by industry. The government sector is the least mature, with 43 percent of organizations still in Level 1, in which most processes are silos and systems are not connected. Banking / nancial services rms have the most mature, integrated talent

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 anagement initiatives. Many retailers in our study also had mature m practices, but since the retailers in our study were predominantly large rms, the sector may look more sophisticated than it is in the real marketplace. (See section, Appendix I: Study Methodology for more details.) We expect organizations to continue to evolve their talent management practices as they emerge from the recession and refocus on long-term planning. Nearly one in ve companies reported that integrating its talent processes is a high priority. (See Figure 21.) In particular, companies in the technology, banking / nancial services and retail sector are focused on integrating their processes. The one exception is the government sector, in which very few organizations said that integration was a high priority. The reason is that organizations in this sector are still focused on creating a talent strategy, which is a precursor to integrating processes. Once the strategy is dened, then these organizations can look at the integration piece.

Figure 19: Talent Management Maturity by Company Size U.S. 2010*

Small Midsize

8% 7% 8%
7%
0%

14% 23% 28%


20%
10% 20% 30%

43% 48% 47%


45%
40% 50% 60% 70%

35% 23% 17%


28%
80% 90% 100%

Large U.S. 2010

Level 4: Strategic Talent Management Level 3: Integrated Talent Management

Level 2: Standardized Talent Processes Level 1: Siloed HR Processes


*Numbers may not total 100% due to rounding. Source: Bersin & Associates, 2010.

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Figure 20: Talent Management Maturity by Industry U.S. 2010*

Banking

8%
8%

30%
24%

43%
48%

22%
20%

Retail
Technology Manufacturing

14% 10%
7%

9% 21%
19%

51% 43%
48%

26% 26%
28%

Insurance
Healthcare / Medical

6%

19% 14%
41%
20% 40%

48% 53%
43%
60% 80%

28% 28%

Business Services / Consulting 5%

Government (federal, state, local) 0% 16%


0%

100%

Level 4: Strategic Talent Management Level 3: Integrated Talent Management Level 2: Standardized Talent Processes Level 1: Siloed HR Processes
*Numbers may not total 100% due to rounding. Source: Bersin & Associates, 2010.

Figure 21: Priority to Integrate Your Talent Processes by Total and by Company Size U.S. 2010

U.S. Total Small (100 - 999 employees)

19%
14% 21%

Midsize (1,000 - 9,999 employees)


Large (10,000+ employees)
0% 10% 20%

28%
30% 40% 50% 60% 70% 80% 90% 100%

Percent saying a high priority


Source: Bersin & Associates, 2010.

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Figure 22: Priority to Integrate Your Talent Processes by Industry U.S. 2010

Technology
Banking

32%
30%

Retail
Insurance

28%
21%

Manufacturing
Healthcare / Medical

21%
19%

Business Services / Consulting


Government (federal, state, local)
0%

14%
2%
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Percent saying "a high priority"


Source: Bersin & Associates, 2010.

The Business Development Bank of Canada is one company that has made talent management a high priority over the past several years. As a result, the company has well-integrated and effective talent processes, as described in the following case in point.

Case in Point: Talent Management Integration at BDC


At the Business Development Bank of Canada (BDC), talent initiatives are closely interwoven. The linchpin is the companys career management process, which is formally conducted in the fall of each year. During this time, employees discuss their career aspirations with their managers and then create a development plan based on these goals. Employees are responsible and accountable for development plan creation, follow-through and managing their own career aspirations. Managers provide feedback, support and advice via ongoing discussions throughout the year.

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Case in Point: Talent Management Integration at BDC (contd) KEY POINT
At BDC, the career management process includes special conversations with employees who are eligible to retire in the next three years.

46

During the career management process, managers have special conversations with employees who are eligible to retire within next three years. These discussions focus on employee interests and plans going forward, and how his / her knowledge can be transferred. If the employee is a high performer, the manager explores options for retention. Another key component of the career management process is identifying high potentials. These individuals will become part of the discussion during the succession management process, at which time the regional business lead and HR business partner review candidates for potential promotion to rst-line manager roles. The names of the targeted employees are then provided to L&D to schedule these individuals for the Transitional Leadership course.  The succession management process also targets higher-level positions. A group of senior business and HR leaders identify successors for critical positions, which include all positions at the vice president-level and above, plus some targeted functional positions. The succession plan is reviewed annually and presented to BDCs board of directors. Development plans are put in place for all succession candidates and are linked to L&D opportunities. These plans (along with the development plans created by employees as part of the career management discussions) are reviewed formally at midyear and year-end as part of the performance management process. All employees are evaluated on a dened set of competencies, as well as in three key responsibilities areas: Client; Leadership; and Results (based on qualitative or quantitative objectives).

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Case in Point: Talent Management Integration at BDC (contd)

47

The evaluation on the third piece, results, is used to calculate variable pay. The employees overall rating is used to calculate his / her merit increase. All of these activities are part of BDCs talent management cycle and are closely integrated. These processes work together to ensure that talent is engaged, high performing, and mobile upwardly and laterally throughout the organization. (See Figure 23.) e 

Figure 23: Business Development Bank of Canadas Integrated Talent Processes

Career Management

Career planning Retirement planning HIPO identification

Development Plans Plan for knowledge transfer Names of HIPOs

Succession Management

HIPO selected Successors IDed Board approval

Development Plans

Learning and Development

HIPO enrolled Skills gaps targeted

Transitional Leadership program

Formal and informal programs

Performance Management

Mid-year review Annual appraisal

Rating on Results vs. Objectives Weighted average of ratings

Compensation

Merit increase Bonuses

Source: Business Development Bank of Canada, 2010.

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The Path to Integration


When trying to advance their talent management initiatives, companies often ask, Where should we focus our efforts? Although our research found that organizations may take many different paths to integrate their processes (all of which can be successful), there appears to be one common starting point competencies. When developing a talent management strategy, organizations quickly realize that many of their design decisions are dependent on a set of dened competencies. Competencies are used in many ways, to: Codify the job requirements used to recruit the right candidates; Establish the criteria for evaluating performance and identifying high potentials; and, Assess the skills needed to build L&D programs. Therefore, competencies serve as the foundation for other talent processes. 
KEY POINT
Competencies are the foundation for talent processes.

Our research found that competencies were the most common integration point across processes. For example, nearly two-thirds of companies reported that they use standard competency models to recruit candidates and to assess employees in performance evaluations. (See Figure 24.) These same competency models can then be leveraged for learning and development, leadership development, and career and succession management initiatives. The next step for many companies is to integrate their performance management and L&D processes. These functions have a natural synergy. For example, employee development plans, created in the performance management process, can be linked to recommended L&D programs. From a higher-level perspective, L&D leaders should regularly review skills gaps across the employee base and create new development programs to ll these gaps. Just more than 40 percent of organizations reported that their performance management and L&D processes are consistently linked in these ways.

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Figure 24: Connections between Talent Processes U.S. 2010

Standard competencies used for recruiting and performance evaluations L&D programs created to target critical skills gaps Employee development plans tied to recommended L&D programs Compensation / rewards differentiated for HiPos Talent planning identifies critical talent based on business goals Succession planning used to prioritize leadership program participants
0% 10% 20% 30%

62% 45% 42% 40% 36% 34%


40% 50% 60% 70% 80% 90% 100%

Percent saying "in most cases / companywide standard"


Source: Bersin & Associates, 2010.

Another area of natural synergy is between performance management and compensation. Many companies tie bonuses or annual merit increases to employee performance evaluations. Beyond that, the connection is spotty. For example, just 40 percent of organizations provide special rewards and incentives for employees identied as high potentials. These high potentials should be targeted for tailored compensation packages, which can include short- or long-term monetary and non-monetary rewards (e.g., recognition, time off and special projects). 
KEY POINT
Linking performance management and L&D is a key factor in helping employees meet their performance goals.

High potentials are one of the talent segments typically identied during the workforce or talent planning process, but there are other critical segments, as well. For high tech companies, critical talent segments may include senior engineers; for healthcare organizations, they may include nurses and clinical staff. Only 36 percent of organizations, however, identify critical talent segments based on their business goals. As mentioned earlier (see section, Who is Considered Talent?), talent segmentation is a vital part of the workforce planning process, since many initiatives (such as development, compensation / rewards and succession planning) should be tailored for these segments.

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KEY POINT
One of the outcomes of succession planning is targeted development plans for identied successors, which should then be linked to the organizations leadership development programs.

Finally, our study measured one other area of integration succession planning and leadership development. One of the outcomes of succession planning is targeted development plans for identied successors. These development plans should then be linked to the organizations leadership development programs, giving priority to the identied successors for inclusion in the programs. Today, however, just one-third of organizations have this level of coordination between the two processes. Without it, identied successors may not get the development they need to ensure readiness to take on their next roles. These are some of the typical connection points across talent processes there are many, many more possible ways to integrate these processes. Key linkages between processes are shown in Appendix II: Key Talent Integration Points across Talent Processes. Although companies tend to follow different paths in integrating their talent initiatives, the following case in point shows how one company began its journey to more mature and effective talent management.

Case in Point: Path to Integrated Talent Management


KEY POINT
The HR team recognized that performance management needed to be more user-friendly for managers and more accessible to employees, as well as incorporating competencies and goal-alignment.

For many years, a midsize U.S. manufacturing company followed a somewhat traditional approach to talent management, with independent HR programs and processes. Some functions (such as recruiting and L&D) were driven primarily by individual business units, and were lacking in standards and consistency. The processes for performance management and succession management were standardized across the company, but needed better coordination and linkage to other talent processes. In 2008, the companys talent management approach began to evolve. The impetus for the change came from two sources. One was driven by HR, which advocated for improving the performance management process. Based in part on feedback from the employee engagement survey, the HR team recognized that performance management needed to be more user-friendly for managers and more accessible to employees. The process also needed to incorporate competencies and goal-alignment.

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Case in Point: Path to Integrated Talent Management (contd)

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Initially, two competency models were developed for use in performance evaluations one set of competencies for individual contributors and another one for people leaders. These models provided a framework that could be further built upon later. In addition, the performance management process was revamped to accommodate midyear reviews, to cascade organizational goals, and to enable employees to take greater ownership of their own individual performance and development. To automate the process, the company acquired a performance management system in late 2008, choosing a solution that could be extended to other talent management modules in the future.
KEY POINT
Two competency models were developed for use in performance evaluations one set of competencies for individual contributors and another one for people leaders.

The other catalyst for change, initiated by the companys CEO, focused on learning and development. At that time, L&D was decentralized and varied in its effectiveness. An L&D taskforce (comprised of leaders from across the company) was chartered to develop a new, more comprehensive L&D framework. The initial focus of the taskforce was identifying performance gaps and the learning programs needed to ll those gaps. Besides targeting certain skills, the programs also needed to incorporate the core competencies used in the performance management process.  In discussing how learning systems and programs would be managed and delivered, the taskforce recognized the need for a more effective organization structure. The taskforce recommended establishing a federated model13 in which a centralized L&D resource would create and implement enterprisewide programs, while additional L&D resources would exist within the business units to support training specic to their needs. By the end of 2008, the L&D organizational structure was dened and new companywide learning programs were underway. 

13

A federated model has a small core team that manages some technology and

corporate programs, and empowers business and functional units to run their own training programs.

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Case in Point: Path to Integrated Talent Management (contd)

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It was around that time (late 2008) that the company realized it needed to look at the broader picture of talent management, rather than individual talent processes. The L&D taskforce thus evolved into the talent management council, a team of approximately a dozen business and HR leaders from across the company. The councils mission was to guide the companys talent management strategies, processes and practices. During 2009, one of the councils initiatives was to select an LMS to automate course enrollments, reporting and online delivery. In addition, the council worked to revamp the companys leadership training to incorporate the dened leadership competencies, as well as to roll out a new front-line supervisory training program enterprisewide. Another key initiative was to standardize onboarding and set up the process in the new LMS to provide a smooth transition for new recruits into the company. The companys recruiting process also underwent a major change during 2009, driven primarily by the HR team. Recruiting activities (such as candidate sourcing, screening and applicant tracking), which had been decentralized and largely driven by individual hiring managers and HR generalists, were outsourced to a thirdparty rm. In addition, the competency models were extended to the recruiting process, so that candidates could be evaluated, based on the same set of skills and behaviors. In 2010, the talent management council began working on a number of initiatives to further improve the consistency and integration of talent processes. One was linking employee development plans with L&D opportunities. The goal is to have all information in one place, so that managers and employees can access an employees performance review, development plan and L&D programs completed and pending in a single view. The company also plans to further enhance its succession planning process, including talent reviews and implementation of an automated solution to view talent proles and track succession candidates.  Another important project underway this year is piloting a new workforce planning process, closely linked to the strategic

KEY POINT
The L&D taskforce evolved into the talent management council, a team of approximately a dozen business and HR leaders from across the company.

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Case in Point: Path to Integrated Talent Management (contd)

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business planning process, to identify and address critical future talent needs. This companys example shows how far a company can progress in a relatively short amount of time. Two years ago, talent management at the company was in its very early stages. Today, the company has more consistent, coordinated processes for L&D, leadership development, performance management and recruiting. Importantly, the company is dening a roadmap for further optimizing these processes, and for improving its workforce and succession planning processes.

BEST

PRACTICE

Change management includes enlisting the support of champions throughout the company as key inuencers.

The organization has learned that the right governance model and leadership are critical to improving talent management. In addition, a change management strategy is essential to help guide the organization along this path. Change management is not just a training class it also includes enlisting the support of champions companywide to inuence and help others work through any changes or new processes. With these lessons under its belt, the company is well-positioned along its path to mature and effective talent management. e

Boulay, Heutmaker, Zibell & Co. followed a somewhat similar path as that described in the previous case in point. The rm created a new leadership position to advance its talent initiatives. This executives initial work was around dening competency models, which were then used as the basis for improving the consistency and integration of other talent processes. Boulays path to integration is described briey in the following case in point. 

Case in Point: Boulay, Heutmaker, Zibell & Co


Boulay, Heutmaker, Zibell & Co. is a Midwestern accounting rm of 135 employees. Just two years ago, the company had few formal talent processes in place. Performance appraisals

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Case in Point: Boulay, Heutmaker, Zibell & Co (contd)

54

consisted of a Microsoft Word document outlining an individuals strengths and weaknesses. No L&D opportunities were offered outside of the standard accounting requirements and a few general courses. Employee development and career planning were virtually nonexistent.  In 2008, the rm hired a director of talent development to help build the organizations talent management capabilities. This role was responsible for performance management, learning and development, leadership development, career development, and workforce planning. The companys director of HR continued to manage recruiting and compensation initiatives. Both of these positions reported to the rms managing partner. Among the rst tasks of the new talent development director were to dene a competency model and revamp the rms performance management process. A series of focus groups with staff members were conducted to nalize a list of competencies. These were then incorporated into employee performance reviews. Under the new performance management process, reviews are conducted twice per year, in January and June, during which employees are evaluated against the dened competencies. The new process also calls for setting employee goals, which are then evaluated in the next performance review cycle. The company chose a software solution to automate the activities of goal-setting and performance reviews. The next step was to link the performance management process with employee development. In the spring and fall, a few months after each performance review cycle, the company holds partner discussions. In these discussions, each employee meets with a partner to review his / her performance gaps. Together, they establish a development plan based on these gaps and defined competencies.  To fulll these development plans, the organization created a new competency-based learning curriculum. Specic tax and audit skills were identied as part of the competency discussions and, by mid2010, the organization began testing an online catalog of

KEY POINT
Among the rst tasks of the new director of talent development were to dene a competency model and revamp the rms performance management process.

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Case in Point: Boulay, Heutmaker, Zibell & Co (contd) KEY POINT
The companys newhire orientation program is now linked to the competencies, and new hires are assessed and offered appropriate development opportunities.

55

accredited courses. These courses (along with programs targeting communications, teamwork and leadership capabilities) will be available in the organizations new LMS, to be implemented by the fall of 2010. The LMS will be accessible from the rms intranet site, which has been built out to serve as a portal to development opportunities and the learning calendar. The next step in the talent cycle is the annual partner retreat, which occurs in August. During this retreat, partners meet collectively to determine employee bonuses and to identify staff for future potential partnership positions. In this way, the performance management, development, succession planning and compensation processes are tied together. It is clear that competencies are the glue that binds the organizations talent processes. The companys new-hire orientation program is now linked to the competencies, and new hires are assessed and offered appropriate development opportunities. During the semiannual performance reviews, all employees are assessed on these competencies and assigned training based on the identied gaps. Career paths are also based on these competencies, which drive career counseling discussions. Employees wanting to follow a certain career path know what is expected and how to nd the appropriate development to help them achieve the goals. In just 18 months, Boulay has been able to advance its talent management efforts considerably. (See Figure 25.) From virtually ground zero, the rm now has consistent and integrated processes for onboarding, performance management, learning and development, career planning, succession planning, and compensation. The rms partners have given these talent initiatives their complete support, without which these efforts would not have been successful. e

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Figure 25: Boulays Path to Integrated Talent Management

Define Competencies Revamp Performance Mgmt Process

Select & implement PM System

Link PM process to compensation & succession planning Create competencybased learning curriculum Link competencies to onboarding Link competencies to career paths Select & implement LMS

2008

2009

2010
Source: Boulay, Heutmaker, Zibell & Co., 2010.

The Boulay and U.S.-based manufacturing company stories are just two examples of how companies can embark on a path toward effective talent management. These efforts should be laid out as part of the organizations overall talent strategy. A good way to plan for integration is to create a map of talent processes, including current state and desired future state, along with a roadmap for achieving these goals. An example of three-year roadmap for integration is shown in Figure 26. This plan begins with determining the appropriate organizational structure and governance model. Once the right talent management leadership and team are in place, the organization can then look at dening job roles and competency models. As mentioned previously, these are the foundation for other talent processes.

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KEY POINT
Organizations can create a map of talent processes, including current state and desired future state, along with a roadmap for achieving these goals.

Once competencies are dened, they can be incorporated into the organizations performance management process. This process should be reviewed for consistency across the company, in terms of evaluation criteria, rating scales, and how and when reviews are conducted. A process for creating and reviewing development plans should also be established, as these are important to employees being able to meet their performance goals. These development plans can then be linked to learning and development opportunities. In addition, overall performance ratings can be used to identify skills gaps across employee groups, so that L&D programs can be created to close these gaps. This integration between performance management and L&D is important to organizational effectiveness. It is through this integration that L&D leaders can design programs to improve employee performance which, in turn, impacts business metrics, such as customer satisfaction, product quality and company revenue. The next major step is to integrate leadership development and succession management efforts. After identifying successors, companies must ensure the readiness of this talent to move into the next positions when necessary. Therefore, succession candidates need to be assessed and development plans created to close any identied gaps. These development plans, in turn, are linked to leadership development activities, such as coaching, mentoring, job assignments or rotations, as well as formal training programs. This is another very important linkage, leading to the accelerated development of successors to ensure future organizational bench strength14. Career management efforts are closely related and should also be linked to development activities. All employees in critical roles, whether or not they are being groomed as successors, should have dened career paths. Career paths are not always upward trajectories they may also include lateral movements and job rotations. Development plans are needed to help employees acquire the skills and capabilities for moving through these career paths. Compensation and pay-for-performance initiatives come next. These should be tied into the performance management process, so that

KEY POINT
Linking leadership development and succession management activities can accelerate the development of successors to ensure future organizational bench strength.

14

Bench strength refers to the capabilities and readiness of potential successors to

move into key professional and leadership positions.

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rewards are tied to meeting specic performance results. In addition, rewards packages, both monetary and non-monetary, should be tailored for high potentials and other talent segments, based on individual needs and subject to business goals. In this way, these activities are also tied in with the organizations workforce planning efforts. The nal steps in this roadmap cover recruiting and onboarding. Recruiting activities should incorporate the competencies used in other processes, so that candidates can be assessed against the same set of criteria. In addition, characteristics of high performers can be used to build proles of successful candidates to improve recruitment efforts. Recruiting should be closely linked with the workforce planning process, which identies current and future skills gaps and headcount needs. After candidates are hired, their assessments can be used to determine development needs, which are then met with training during the onboarding process and afterward.
KEY POINT
Organizations must build their own roadmaps according to their business and talent strategies.

Note that this is just one example of an integrated talent management roadmap. Organizations must build their own roadmaps according to their business and talent strategies. For example, a global technology company was in the process of redening the job proles15 and competencies associated with one of its critical talent segments. In this case, the company needed to prioritize the integration of its recruiting efforts with its competency management and workforce planning initiatives, in order to ensure that it acquired the right talent for the newly dened roles. For each organization, the business and talent needs, as well as the current maturity and integration of processes, will vary. Thus, the roadmap for each organization will be different.

15

Job proles dene the required skills, competencies, certications, work

experiences and other attributes required for success in a particular job or role.

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Figure 26: Sample Three-Year Talent Management Roadmap

Organizational Structure Job Profiles Competencies Performance Management

Integrated Learning & Development Plans


Leadership Development Succession Planning Career Management Compensation Pay for Performance Recruiting / Talent Acquisition

Onboarding

Q1 Year 1

Q2

Q3

Q4

Q1

Q2

Q3 Year 2

Q4

Q1

Q2

Q3

Q4 Year 3

Source: Bersin & Associates, 2010.

Fostering Integration
Integrating talent processes goes beyond organizational processes and data-sharing. It calls for communication and cooperation from the people involved in different talent functions. Whether talent management staff is all under one executive or spread out across multiple functions, our study revealed a number of best practices for fostering collaboration among these personnel. These are described briey as follows. Cross-Functional Projects One way to improve coordination across talent processes and people is through cross-functional projects. As mentioned in a previous case in point (see section, Case in Point: Talent Management Structure at a Financial Services Company), when a nancial services company set out to create a new skills development program, staff members from two different talent management

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KEY POINT
Job rotations across talent management functions can promote a better understanding of talent processes and more effective teamwork.

functions were selected to co-lead the project. Both of these individuals were uniquely qualied to contribute to the project the L&D professional for her knowledge of instructional design and learning principles; and, the talent acquisition professional for her knowledge of participant skills and proles from the screening and recruiting process. This type of cross-functional collaboration brings a broader perspective to each project and also expands the skills sets of staff members. Job Mobility Some companies encourage job rotations across talent management functions to promote a better understanding of talent processes and better teamwork. At General Mills, about one-half of all HR generalists rotate into one of the talent management roles, such as talent acquisition, L&D or compensation / rewards. The job rotations last approximately two years for managers and three years for directors. These rotations help to build skills and experiences, as well as to enhance communication and teamwork across the talent management and HR functions.  Team Discussions Talent management staff (and business leaders) should meet regularly to discuss talent issues. Reviewing talent metrics and progress against goals will help the team understand what is working and what is not working and then allow the team to work collaboratively to correct any issues. At a midsize nancial services company, for example, the talent management team meets on a bimonthly basis. The team looks at the ow of talent, and whether people are in the right positions to meet current and future needs. If an employee or manager leaves the company (voluntarily or involuntarily), the team members explore the reasons for the departure, asking themselves questions, such as, Did we hire the wrong person? Was the person given the right development? Did we manage the persons career appropriately? These questions look at talent challenges from multiple perspectives and foster collaboration on the entire talent cycle. Communications Finally, a way to strengthen connections between talent processes is through internal communications. These can help to reinforce the relationships between talent management activities to managers and HR staff across the company. For example, General Mills uses graphics and communications to promote the continuity across processes. The companys email (see Figure 27) provides managers with instructions for entering employee performance ratings, and how to access training programs and resources. This communication reinforces the linkage between L&D, performance management and rewards.

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Figure 27: Example of Communications at General Mills

Source: General Mills, 2010.

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Measuring Success
As part of their talent strategies, companies need to identify how they will measure the success of their efforts. The organization must have a plan for how to compile, analyze and communicate talent metrics and success indicators. This information should be monitored for the overall health of the organizations talent management strategy. Moreover, these metrics are the culmination of the organizations talent management efforts, allowing leaders to make data-driven decisions on the people aspects of the business.

What Metrics to Use?


KEY POINT
Metrics should align with business and talent goals, and may be tailored for different audiences.

One of the challenges, however, is determining what metrics are important to the organization. Many organizations waste a great deal of time and resources on their measurement activities, with little consideration regarding the usefulness of the metrics. Figure 28 shows some of the metrics commonly tracked by organizations. Organizations should choose a set of key metrics that are aligned with their business and talent goals. The metrics should be actionable, meaning that they are under the organizations control, as well as being cost-effective to collect and analyze. These metrics should be analyzed and communicated on a monthly or quarterly basis to enable the organization to take prompt action on the information. 16

16

For more information on talent measurement strategies, please see the following

two reports: (1) The State of Learning and Talent Measurement, Bersin & Associates / Josh Bersin, April 2009; and, (2) Measuring the Business Impact of Your Talent Strategies, Bersin & Associates / Stacey Harris, July, 2010. Both reports are available to research members at www.bersin.com/library.

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Figure 28: Example of Talent Management Metrics

Talent Strategy & Planning

% of key positions vacant % of employees with critical skills Turnover rate Employee engagement Average tenure Time to productivity Cost of external hire vs. promoting within Cost to maintain critical talent pools % of key positions vacant Time to fill critical vacancies Reduction in vacancy rates Source of hire for high level performers Cost of bad hires Tenure by source of hire Time to productivity Cost of external hire vs. promoting within

Career & Succession Management

Employee engagement % of key positions vacant Turnover rate of key employees % of individuals in key positions who are promoted from within % key positions with qualified & diverse replacements % of employees with development plans Expected continued service of high level performers % of employee on actively pursuing career paths

Sourcing & Recruiting

Leadership Development

Employee engagement Retention of leaders Rate of Progression/Promotion Individual Performance/Behavioral Change Organizational Performance (effectiveness measures)

Performance Management

Positive performance ratings following promotion % of employees with development plans Employee engagement (all measures ) Retention of high performers Time to productivity Turnover rate Turnover rate of key employees Turnover rate of diverse employees Turnover rate by performance rating Tenure by source of hire Tenure by performance ratings

Learning & Development

Employee engagement % of employees with development plans Impact of development program (effectiveness measures) Employee engagement MBO payout / attainment by performance rating Compare to performance rating Compare to job / salary grade level Compare to critical positions Compare to critical positions vs. competitors

Compensation Management

Source: Bersin & Associates, 2010.

The importance of metrics will vary by audience. Many companies create separate reports or dashboards for different talent functions and for their executive teams. Among the most popular metrics tracked are the following17:  Employee engagement; Performance ratings; Employee turnover; Time / cost to hire;

17

For more information, Measuring the Business Impact of Your Talent Strategies,

Bersin & Associates / Stacey Harris, July, 2010.

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KEY POINT
Employee engagement is one of the most frequently tracked talent metrics.

Training and development hours; and, HR spending. Employee engagement is one of the most frequently tracked talent metrics. This measure is seen today as one of the key indicators of the health and wellness of organizations. Engagement metrics can be used to gauge critical organizational issues (such as retention, manager capabilities and career opportunities), as well as provide insights as to how connected employees are to the companys goals and directions. Companies (such as Phillips and WellPoint) have identied engagement metrics as a key component to ensuring their workforces have the leadership, tools, resources and motivators necessary to meet organizational goals. Additional metrics often viewed by senior leaders include retention or turnover rates, performance ratings distributions, recruiting metrics (time / cost to hire), L&D utilization, and HR spending. In addition, some companies look at external awards or lists as measures of their success. Several companies we interviewed mentioned Best Company to Work For lists, FORTUNEs Top Companies for Leaders and FORTUNEs Most Admired Companies lists.

A N A LY S I S
The real value of metrics can be realized when they are combined with business data, as well as trended over time.

All of these metrics are individual snapshots which only provide a single point of reference for decision-making. The real value of metrics can be realized when they are combined with business data, as well as trended over time. The following case in point describes the metrics analyzed and tracked by a midsize nancial services rm.

Case in Point: Metrics for a Financial Services Company


A midsize nancial services rm has identied metrics in four key talent areas diversity, stafng, recognition and development. A report that tracks these metrics is sent to the CEO and executive staff on a quarterly basis. The report resembles that shown in Figure 29, with metrics divided into four quadrants.

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Case in Point: Metrics for a Financial Services Company (contd) KEY POINT
Based on talent metrics, the team can discuss what is working and what is not working, to further advance the organizations talent efforts.

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1. Diversity One of the companys talent goals is to improve diversity. Therefore, data is tracked on the employee and executive populations according to ethnicity, gender and tenure. 2. Stafng The company has identied the following critical workforce metrics: a. Total employees; b. Turnover; and, c. Lateral moves. 3. Recognition A key talent initiative is to improve recognition programs. The company has established an annual budget for a number of awards and recognition opportunities. Metrics tracked include:  a. The number of recognition awards granted; b. Total spending; and, c. The percent of annual recognition budget that has been used year to date. 4. Development The company considers development to be critical to building employee skills and furthering career paths. The annual target is 40 hours of development per employee, which is the driver of the slogan, Invest 2 percent in Yourself. The key metrics tracked include L&D completions and spending. This quarterly report keeps the talent management team and executives focused on the key talent measurements of the company. (See Figure 29.) The data serves as the basis for discussion about talent initiatives, enabling leaders to take prompt action when necessary. Based on these quantitative inputs, the team can engage in a qualitative discussion around what is working and what is not working, in order to further advance the organizations talent efforts. e

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Figure 29: Quarterly Metrics for Financial Services Company

Source: Bersin & Associates, 2010.

As another example, Figure 30 shows a subset of metrics tracked by U.S. government agencies. Each agency must include these metrics in its annual report. The metrics are geared toward ensuring an effective workforce by focusing on talent management outcomes from three perspectives organization, employee and merit system.18

18

Source: Human Capital Assessment and Accountability Framework (HCAAF):

Systems, Standards, and Metrics, available at http://www.opm.gov/hcaaf_resource_ center/assets/hcaaf_ssm.pdf.

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Figure 30: Human Capital Assessment and Accountability Framework (HCAAF) Talent Management System Metrics Required Metric Organization Metric Competency Gaps Closed for Mission-Critical Occupations Description Difference between competencies needed and competencies possessed by employees in mission-critical occupations Purpose To determine how the agency should target its recruitment, retention and development efforts to bring the competencies of its workforce into alignment with the agencys current and future needs To determine the extent to which employees think the organization has talent necessary to achieve organizational goals To determine the extent to which employees are satised with their jobs and various aspects thereof To determine that decisions, policies, processes and practices executed under the talent management system comply with the merit system principles and related laws, rules and regulations
Source: Bersin & Associates, 2010.

Employee Perspective Metric Talent Management Index

A score based on items from the govermentwide annual employee survey

Employee Perspective Metric Job Satisfaction Index

A score based on items from the govermentwide annual employee survey An assessment, conducted by OPM or by agencies with OPM oversight, of compliance with metir system principles and related laws, rules and regulations governing the talent management system

Merit System Metric MeritBased Execution of the Talent Management System

Metrics from Our Study


KEY POINT
Voluntary turnover declined in the U.S. from 10 percent in 2008 to six percent in 2009, due largely to the agging job market.

Our study captured data on turnover rates, which are important metrics to nearly every company. As shown in Figure 31, total turnover in the U.S. averaged 12 percent in 2009. Voluntary turnover accounted for onehalf of this gure or six percent overall a decline from the 10 percent voluntary turnover rate found in 2008. Another important metric is turnover among high performers these individuals are important to the organization. Unfortunately, most companies do a poor job of tracking this metric. Only one-half of the companies in our study were able to provide a gure for high-performer turnover. Among these companies, the gures show an average turnover rate of two percent among high performers in 2009, slightly below the three percent turnover found in 2008.

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Figure 31: Turnover Metrics U.S. Total 2008 to 2009

Total turnover (voluntary and involuntary)

12% N / A* 6% 10% 2% 3%
0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20%

Voluntary turnover

High-performer turnover

2009

2008

*N/A: Total turnover (voluntary and involuntary) was not measured in our 2008 study.
Source: Bersin & Associates, 2010.

KEY POINT
Large companies have higher turnover, causing them to spend more on recruiting, onboarding and development.

Turnover rates also declined in every company size category from 2008 to 2009 due largely to the agging job market. (See Figures 32 to 35.) Employees are more apt to stay in a position, even if unsatisfactory, during a down economy. This, of course, is poised to changed as the job market picks up in the coming year. Large companies had higher voluntary turnover rates and turnover among high performers. Large companies often nd it harder to retain employees due to their more impersonal nature. Employees in a large company may not feel as connected or engaged as those in smaller companies. They may not feel as valued or as close to the business, thus leading to higher turnover. These higher turnover rates are problematic for large companies because it means that they are spending more resources on recruiting, onboarding and development. It is much less costly and more effective to retain and develop current employees.

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Figure 32: Total Turnover by Company Size U.S. 2009

Small (100 - 999 employees)

12%

Midsize (1,000 - 9,999 employees)

12%

Large (10,000+ employees)


0% 2% 4% 6% 8% 10%

12%
12% 14% 16% 18% 20%

Source: Bersin & Associates, 2010.

Figure 33: Voluntary Turnover by Company Size U.S. 2008 to 2009

Small (100 - 999 employees)

6% 10% 6% 10% 8% 12%


0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20%

Midsize (1,000 - 9,999 employees)

Large (10,000+ employees)

2009

2008
Source: Bersin & Associates, 2010.

Figure 34: High-Performer Turnover by Company Size U.S. 2008 to 2009

Small (100 - 999 employees) Midsize (1,000 - 9,999 employees)

2% 2% 2% 3% 4% 6%
6% 8% 10% 12% 14% 16% 18% 20%

Large (10,000+ employees)


0% 2% 4%

2009

2008
Source: Bersin & Associates, 2010.

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Figure 35: 2009 Turnover Metrics by Industry Total Turnover Banking Business Services / Consulting Government (Federal, State, Local) Healthcare / Medical Insurance* Manufacturing Retail* Technology* 14% 15% 10% 16% 9% 11% 29% 12% Voluntary Turnover 8% 9% 8% 8% 8% 5% 12% 5% High-Performer Turnover 2% 4% 4% 2% 2% 1% 4% 2%
Source: Bersin & Associates, 2010.

*Due to missing data, these industries have sample sizes <30.

Promotion Rates
KEY POINT
With limited projected job growth, one insurance rm changed its strategy to recruit for potential and then build the necessary skills in various disciplines.

Another useful metric is the number of promotions awarded to employees in a given year. This is an indication of job mobility, which is a key talent initiative within many companies. Our study found that only about one-in-four companies promoted 10 percent or more of their employees in 2009. We would expect that, in a recessionary year, fewer employees would be promoted. Although many companies will initiate hiring in the coming year, a return to signicant job growth is still a long way off. Therefore, upward promotions facilitated by an expanding employee base will not be possible for some time to come. Many companies are, therefore, looking at ways to motivate and retain employees with lateral career opportunities. In this type of environment, L&D programs must be adjusted to build a diversity of skills through job rotations and other development activities. Leadership development and succession management initiatives must also incorporate lateral movement. Furthermore, recruiters must look for candidates who are comfortable moving around a career lattice, rather than up the career ladder. 

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As an example, a midsize insurance rm reported that its recruiting strategy has changed considerably during the past two years. Rather than looking for highly skilled, upwardly mobile candidates (the target prole in past years), the company now looks for candidates, with a more diverse set of skills, who have the potential to succeed in a culture of lateral career moves. The rms interviewing process now uses panels to incorporate a diversity of perspectives. The talent philosophy is to recruit for potential and then build the necessary skills in various disciplines. This is a very different approach from prior years and impacts nearly every talent process from recruiting to development to career and succession management. 

Figure 36: Promotion Rates U.S. Total 2009 (percent of employees promoted in 2009)
20% - 29% were 30% or more were promoted promoted 3% 15% - 19% were 4% promoted 6%

10% - 14% were promoted 17%

Fewer than 5% were promoted 42%

5% - 9% were promoted 28%


Source: Bersin & Associates, 2010.

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Figure 37: Promotion Rates by Company U.S. 2009 (percent of companies promoting 10 percent or more employees in 2009)

Small

27%

Midsize

32%

Large

30%
0% 10% 20% 30% 40% 50% 60%

*Percent of companies promoting 10% or more employees in 2009.

Source: Bersin & Associates, 2010.

Figure 38: Promotion Rates by Industry U.S. 2009 (percent of companies promoting 10 percent or more employees in 2009)

Banking Technology Retail Insurance Business Services / Consulting Government (federal, state, local) Manufacturing Healthcare / Medical
0% 10%

48% 39%

39%
33% 28%

25%
23% 20%
20% 30% 40% 50% 60%

*Percent of companies promoting 10% or more employees in 2009.


Source: Bersin & Associates, 2010.

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Effectiveness Measures
KEY POINT
Smart companies are putting in place the people, processes and systems now to manage their sourcing challenges when hiring picks up in earnest.

As an additional gauge to determine how well companies are executing on their talent initiatives, we asked HR professionals to rate how well their organizations perform in a number of areas. Given that most companies are just beginning to develop their talent management strategies, it is not surprising that none of the categories received exceptionally high ratings. Companies gave themselves the best scores on retaining top performers. Still, only 38 percent of companies gave themselves high marks in this area.19 (See Figure 39.) Of course, it is a relatively easier task to retain employees in a nascent job market. As the economy picks up and companies begin to hire again, retention issues will come to the forefront. Without the right development, career opportunities and rewards programs, employees will begin looking elsewhere. The second-highest rated category was hiring the best people, with approximately one-third of organizations giving themselves high ratings in this area. With an overabundance of job seekers, companies will soon face signicant hiring challenges. Smart companies are putting in place the people, processes and systems now to manage internal and external sourcing challenges when hiring picks up in earnest.

A N A LY S I S
A key part of talent management is looking at the ow of talent, assessing talent gaps, and making sure employee skills and interests are well-aligned with their roles.

In the second tier of ratings, between 20 percent and 24 percent of organizations gave themselves high marks in the following areas: Having the right people in the right jobs; Creating high engagement; and, Improving employee productivity. With all of the restructuring that has occurred over the past few years, we might have expected more organizations to say that they now have the right people in the right jobs. This is a key part of talent management looking at the ow of talent, assessing talent gaps, and making sure employee skills and interests are well-aligned with their roles. But, as we have seen previously, most organizations talent management practices are immature. Many companies have responded reactively to the changes that have occurred over the past two years, with little planning or forethought to talent needs.
19

A high mark is dened as a rating of 6 or 7 on a seven-point scale.

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KEY POINT
Companies gave themselves the lowest ratings in the areas of development and future talent planning.

As for employee engagement and productivity, the lower scores are not surprising, given the layoffs, restructuring and salary freezes that have occurred in many companies over the past two years. Engagement is certainly an area that has garnered signicant attention of late. Companies realize that engagement is a key ingredient to retention and productivity. The ndings show, however, that organizations will need to improve their efforts signicantly in this area. The lowest ratings came in the areas of development and future talent planning, specically: Developing employees; Developing great leaders; Planning our future talent needs; Having a pipeline of ready successors; and, Building career paths for critical employees. As Figure 39 illustrates, just 10 percent to 16 percent of companies gave themselves high ratings in these areas. This is troubling, since these are all areas that help organizations remain competitive and successful in the long term. This underscores the point that HR organizations are least equipped to help their businesses with long-term talent planning.

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Figure 39: Effectiveness Measures (self-rated) U.S. 2010

Retaining top performers

38%

Hiring the best people

31%

Right people in the right jobs

24%

Creating high engagement

21%

Improving employee productivity

20%

Developing employees with right skills

16%

Building career paths for critical employees

14%

Developing great leaders

14%

Planning future talent needs

13%

Pipeline of ready successors


0%

10%
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Percent of companies rating themselves as 6 or 7 on a seven-point scale


Source: Bersin & Associates, 2010.

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Impact of Mature Talent Management


KEY POINT
Our research demonstrates a large payoff in integrating talent management initiatives.

Companies spend a great deal of time and resources integrating and improving their talent management initiatives. So what is the payoff? Our research provides some answers to this question. We compared the effectiveness ratings of companies in each Level of the Maturity Model (see section, Integrating Talent Processes for a description of the Maturity Model). The ndings show that the higher the Level of Maturity, the more effective companies are in each of the talent areas studied.  The areas exhibiting the greatest differences are shown in Figure 40. As this chart demonstrates, an organizations talent management maturity has the greatest impact on the following areas: Developing great leaders; Having a pipeline of ready successors; Building career paths for critical employees; Planning for future talent needs; and, Creating high engagement.

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Figure 40: Impact of Talent Management Maturity on Effectiveness Measures Areas of Highest Impact

Developing great leaders

-24%
Pipeline of ready successors

1%

16%

38%

-26%
Building career paths

1%

19%

42%

-23%
Planning future talent needs

0%

19%

37%

-25%
Creating high engagement

1%

19%

38%

-23%
-30% -20% -10% 0%

2%
10%

16%

31%

20%

30%

40%

50%

Percent difference from the average rating. Level 4: Strategic Talent Management Level 3: Integrated Talent Management Level 2: Standardized Talent Processes Level 1: Siloed HR Processes

Source: Bersin & Associates, 2010.

In Figure 40, the vertical line at zero percent represents the mean rating across all organizations in the study. The horizontal bars represent the percent of difference from this mean rating. So, for example, in the area of developing great leaders, Level 1 organizations (those with siloed HR processes) scored 24 percent below average meaning that they are much less effective at developing great leaders than companies with higher Maturity Levels. Level 2 organizations (those with standardized talent processes that are in the early stages of integration) scored just above the average. With the large number of organizations at this Maturity Level (nearly one-half of all companies), it naturally follows that these companies will be at or near the average rating for all areas.

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KEY POINT
The higher the maturity level, the more effective organizations become at engaging employees, developing great leaders and creating a pipeline of ready successors.

Level 3 companies show a signicant improvement in effectiveness scores. These are companies that have a talent management executive or team responsible for talent initiatives, and are heavily focused on connecting processes and systems. These companies scored 16 percent above the average, which means that they are more effective than both Level 1 and 2 companies at developing great leaders. Finally, Level 4 companies received the highest scores on effectiveness. These are companies with fully integrated talent processes and systems and in which business leaders and managers are held accountable for talent outcomes. These companies scored nearly 40 percent above the average, meaning that they are signicantly more effective than companies in Levels 1, 2 and 3 at developing great leaders. The same holds true for the other areas. As an organization moves from one Level of Maturity to the next, its effectiveness improves on each of these talent areas. In other words, as organizations advance their integrated talent management strategies, they become more effective at developing great leaders and having a pipeline of ready successors. They also become more adept at career management, talent planning and creating an environment in which employees are highly engaged. These are all critical aspects to a companys success. Figure 41 shows the differences in effectiveness in the remaining talent areas. Although the differences are not as pronounced as in the former areas, the message is the same. Again, as companies move up the maturity ladder, they become more effective at each talent initiative.

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Figure 41: Impact of Talent Management Maturity on Effectiveness Measures Other Talent Areas

Developing employees with the right skills

-18%

0%

13%

32%

Improving employee productivity

-18%
Right people in the right jobs

1%

11%

29%

-17%
Retaining top performers

2%

11%

20%

-13%
Hiring the best people

1%

7% 14%

20%

-12%
-30% -20% -10% 0%

1%

8%

10%

20%

30%

40%

50%

Percent difference from the average rating.

Level 4: Strategic Talent Management Level 3: Integrated Talent Management Level 2: Standardized Talent Processes Level 1: Siloed HR Processes

Source: Bersin & Associates, 2010.

KEY POINT
Companies with separate or stovepiped talent processes are much less effective at hiring, developing and retaining employees.

So for example, as demonstrated in Figure 41, Level 1 companies have the lowest scores on developing employees with the right skills with scores 18 percent below the average. Level 2 companies score at the average. Level 3 companies score 13 percent above average meaning that they are more effective at developing employees than companies in Level 1 and 2. Level 4 companies score even higher, at 32 percent above the average. They are signicantly better at developing employees with the right skills than even Level 3 companies. The same pattern holds true for the remaining talent areas. As company progress from one Maturity Level to the next, they become more effective at improving employee productivity, having the right people in the right jobs, retaining top performers and hiring the best people. With each successive level, the organization is better able to implement its talent strategy and successfully meet its talent objectives.

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Impact on Turnover and Promotion Rates


KEY POINT
Companies with mature, fully integrated talent management have onehalf the rate of turnover.

We also compared the turnover rates of companies at each Level of Maturity. The results are shown in Figures 42 to 45, which again demonstrate that as a company advances its integrated talent management strategy, it improves its ability to retain employees. As shown in Figure 42, total turnover among Level 1 companies was 15 percent in 2009. Among Level 2 companies, this gure drops to 13 percent and, among Level 3 companies, the gure drops still further to 11 percent. Level 4 companies have the lowest turnover of all at just seven percent. Note that total turnover among Level 4 companies is just one-half the rate as in Level 1 companies a huge disparity, with implications for recruiting, development, succession planning and workforce planning efforts. The same trend can be seen in the voluntary turnover gures, which is highest among Level 1 companies at eight percent. Among Level 2 companies, voluntary turnover drops to six percent; at Level 3, the gure drops still further to ve percent. Voluntary turnover among Level 4 companies is again the lowest, at four percent or one-half the rate of turnover as Level 1 companies. (See Figure 43.) Again, this has serious implications for companies productivity and talent initiatives. The third metric is turnover among high performers. This metric is quite low overall, so we do not see as dramatic a drop by Maturity Level as in the previous turnover metrics. Companies in Levels 1 through 3 show two percent turnover among high performers, whereas turnover among Level 4 companies is one percent. (See Figure 44.) Retaining high performers is important to creating a productive, high performance workforce.

KEY POINT
Promotion rates are important to employee engagement and retention. Companies with limited promotion opportunities will need to create other options for internal mobility.

The fourth metric is promotion rates. As shown in Figure 45, 23 percent of companies in Levels 1 and 2 promoted 10 percent or more of their employees in 2009. Promotion rates rise at Level 3, with 31 percent of companies promoting 10 percent or more of their employees. Figures rise even higher at Level 4 to 45 percent. Promotion rates are important to employee engagement and retention. Companies with limited promotion opportunities will need to create other options for internal mobility such as lateral moves or job rotations. They will also have to look at creating tailored rewards programs to retain employees. In addition, they may need to readjust their recruiting strategies to target employees who are comfortable with an environment of lateral, rather than upward, career moves.

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Figure 42: Impact of Talent Management Maturity on Total Turnover

Level 1: Siloed HR Processes Level 2: Standardized Talent Processes


Level 3: Integrated Talent Management

15%

13% 11% 7%
0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20%

Level 4: Strategic Talent Management

Source: Bersin & Associates, 2010.

Figure 43: Impact of Talent Management Maturity on Voluntary Turnover

Level 1: Siloed HR Processes Level 2: Standardized Talent Processes


Level 3: Integrated Talent Management

8% 6%
5% 4%
0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20%

Level 4: Strategic Talent Management

Source: Bersin & Associates, 2010.

Figure 44: Impact of Talent Management Maturity on High-Performer Turnover

Level 1: Siloed HR Processes Level 2: Standardized Talent Processes


Level 3: Integrated Talent Management

2% 2% 2% 1%
1% 2% 3% 4% 5% 6% 7% 8% 9% 10%

Level 4: Strategic Talent Management


0%

Source: Bersin & Associates, 2010.

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Figure 45: Impact of Talent Management Maturity on Promotion Rates

Level 1: Siloed HR Processes

23% 23% 31% 45%


0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Level 2: Standardized Talent Processes

Level 3: Integrated Talent Management

Level 4: Strategic Talent Management

Source: Bersin & Associates, 2010.

Impact on Employee Productivity


KEY POINT
More mature companies continued to invest in talent initiatives despite the worsening economy.

The nal area we studied was employee productivity, as measured by revenue per employee. Last year, our research showed a clear correlation between talent management maturity and productivity. As shown in Figure 46, revenue per employee was $141,000 among Level 1 companies, rising to $163,000 for Level 2 companies, and jumping up to $195,000 for Level 3 and 4 companies.20 In 2009, however, the pattern is not so clear-cut. Level 1 companies again had the lowest revenue per employee, at approximately $163,000. But Level 2 companies actually had the greatest productivity, at $200,000 of revenue per employee higher than the $188,300 revenue per employee for companies in Levels 3 and 4. We believe that a primary underlying factor here is the impact of the recession. As shown in Figure 46, revenue per employee increased from 2008 to 2009 among Level 1 and 2 companies. Our research last year revealed that these companies laid off larger numbers of employees during the recession than companies with higher maturity levels.21 In addition, companies in Levels 1 and 2 were more likely to cut back
20 21 Due to missing data, companies in Levels 3 and 4 were combined. For more information, 2009 Talent Management Factbook: Best Practices and

Benchmarks in Talent Management, Bersin & Associates / Karen OLeonard, July 2009. Available to research members at www.bersin.com/library or for purchase at www.bersin. com/tmfactbook.

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signicantly on their employee development, leadership development and spending on other talent initiatives. Although these actions may have resulted in higher revenue per employee, these companies face signicant problems with employee engagement and retention as the job market improves. Conversely, revenue per employee declined from 2008 to 2009 among Level 3 and 4 companies. These companies did not lay off as many workers during the recession, and continued to invest in leadership development, employee programs and talent systems despite the worsening economy. These more mature companies have a long-term outlook on talent, and have sacriced employee productivity in the short term to keep their employees engaged and committed in the long term.

Figure 46: Impact of Talent Management Maturity on Revenue per Employee 2008 to 2009

Level 1: Siloed HR Processes

$162,900 $141,000 $200,000 $163,000 $188,300 $195,000


$$50,000 $100,000 $150,000 $200,000

Level 2: Standardized Talent Processes

Mature companies continued to invest in employees, sacricing productivity

Levels 3 and 4: Integrated / Strategic Talent Management

$250,000

2009

2008

Source: Bersin & Associates, 2010.

What Maturity Level Is Right for Your Organization?


Overall, the ndings demonstrate the value of a mature talent management strategy. As companies move up the maturity ladder and integrate their talent processes, they have lower turnover and higher promotion rates. These companies are more effective at developing leaders, creating a pipeline of ready successors and boosting employee engagement. Furthermore, these companies excel at employee development, career planning and hiring great talent.

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KEY POINT
Each company needs to assess the time and resources required to achieve its desired future state for talent management.

These ndings should serve as motivation for companies to improve their talent management efforts. Of course, an organization needs to develop a plan for integration, including the time, costs and resources required. One high-tech company we talked with said that its operations are extremely decentralized. Each business unit has its own processes and systems, and the company operating philosophy in general is process-light, meaning that the focus is on just enough process to get the job done, rather than on complex process redesign efforts. Because of these factors, the company said it has no plans to advance its talent management integration efforts beyond its current standing (which is somewhere between Levels 2 and 3). Instead, the talent management team has put in place exible processes, and has determined the integration points that provide the most value without excessive time and resource requirements. This is a good example of how a company needs to evaluate its current state and map out its desired future state which may or may not include a path to full integration within the next few years. In some companies, the cost and effort to reach this level may not be worth it, at least in the foreseeable future. Companies should focus on improving and integrating the talent processes that will provide the most value according to their talent and business goals. In the case of the high-tech rm just mentioned, if the company decided to centralize its operations at some point in time, then that could present an opportunity to begin mapping out a strategy for more integrated talent management.

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Talent Systems
KEY POINT
Today, 60 percent of U.S. companies are using multiple talent systems with little sharing of data.

Technology plays an essential role in an organizations talent management strategy. Organizations cannot realize the benets of integrated talent management if they have disconnected platforms and islands of talent data. In addition, gathering the metrics discussed in the previous section can be extremely time-consuming, if not altogether impossible, without automated access to consolidated talent data. Unfortunately, standalone systems are the reality in most companies. Today, 60 percent of U.S. companies have multiple talent systems in place. (See Figure 47.) The majority of these companies report that the integration of these systems is poor or nonexistent.

Figure 47: Number of Talent Systems* U.S. Total 2010


6 or more systems 3%
4 - 5 systems 15%

No system (use manual processes) 17%

Half of these organizations report little or no integration between their systems

1 system 24% 2 - 3 systems 42%

*Not including an HRIS / HRMS. Numbers may not total 100% due to rounding.
Source: Bersin & Associates, 2010.

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The most popular automated (software-based) systems are recruiting / applicant tracking systems, used by two-thirds of all U.S. organizations. This market is heating up now that companies are looking at hiring again. Faced with stiff competition in a highly saturated market, solution providers are offering innovation for the rst time in many years in the form of new tools to replace the rsum, social networking, search engine optimization and mobile recruiting. As a result, organizations are reassessing their current talent acquisition technology investments.22 Just more than 60 percent of U.S. organizations are using automated systems to administer compensation. These traditionally homegrown systems have centered around payroll administration. There is, however, an increasing need for pay-for-performance capabilities, which enable managers to establish complex pay rules based on individual and group performance indices. Todays integrated solutions provide capabilities for pay-for-performance initiatives, merit-pay programs and manager-led incentive programs. These applications are powerful and complex handling bonuses, long- and short-term incentives, and commission calculations.23 
KEY POINT
Performance management is typically the rst module organizations implement in pursuing an integrated systems strategy.

More than one-half (57 percent) of U.S. organizations stated that they have implemented a performance management system. Many of these systems are internally developed solutions, or custom applications built on existing ERP or HR management platforms. Todays integrated performance management solutions provide support for development planning, goal alignment, career and succession planning, and managerfocused compensation management. Performance management is typically the rst module organizations implement to support a strategy of integrating talent management systems. Finally, 55 percent of organizations are using an automated system for L&D programs. These systems provide capabilities for delivering, managing and tracking learning programs. In the last few years, the leading LMS providers (Plateau, Saba and SumTotal Systems) have extended their offerings to include performance management, succession
22 For more information, The Demand for Innovation and Economic Recovery Spark

Growth in the Talent Acquisition Systems Market, Bersin & Associates / Madeline Laurano, April 7, 2010. Available to research members at www.bersin.com/library. 23 For more information, Talent Management Systems 2010: Market Realities, Implementation Experiences and Solution Provider Proles, Bersin & Associates / Leighanne Levensaler and Madeline Laurano, September 2009. Available to research members at www.bersin.com/library or for purchase at www.bersin.com/tmsuites.

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Figure 48: Use of Automated Talent Systems U.S. 200924

Recruiting / applicant tracking Compensation administration Performance management Learning management


0% 10% 20% 30% 40% 50%

67% 63%
57% 55%
60% 70% 80% 90% 100%

For more information on our upcoming research, High-Impact HR Organization, due to be published H2'2010, please visit www.bersin.com/hihr.

Source: Bersin & Associates, 2010.

management and compensation management. Thus, the lines between these systems are becoming blurred as solution providers strive to include more functionality and an integrated solution for buyers.

System Integration
Most buyers are overwhelmed with the sheer number of solution providers and how to approach the integration of their current siloed talent management systems.25 Our research conducted last year showed that 34 percent of buyers want the full suite from one solution provider which indicates they are planning to standardize on a talent management suite.26 (See Figure 49.) The vast majority of buyers purchase a suite for future value, with the goal of implementing one application at a time to address a specic need (such as performance management or L&D). Over time, they plan

24

For more information on our upcoming research, High-Impact HR Organization, due

to be published H22010, please visit www.bersin.com/hihr. 25 For more information, Talent Management Systems 2010: Market Realities, Implementation Experiences and Solution Provider Proles, Bersin & Associates / Leighanne Levensaler and Madeline Laurano, September 2009. 26 Ibid.

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KEY POINT
Thirty-four percent of organizations plan to implement a talent management suite from a single vendor.

to implement all of their talent management processes on one platform from one solution provider. (See section, Case in Point: Premier Inc. Implements Talent Management Suite.) Talent management suites offer many advantages. These systems offer a single, consistent view of talent data, providing a uniform experience for end-users. These suites also provide more actionable information to support workforce planning and talent initiatives, such as decisions regarding performance, development and compensation. For these reasons, many HR organizations (which currently have an array of point solutions) have undertaken large enterprisewide consolidation efforts to standardize on a talent management suite from a single solution provider. These consolidation efforts bring the additional advantages of reduced operational and support costs, as well as fewer resources required for vendor and contract management.

Figure 49: Implementation Plans for Integrated Talent Systems

We will design and build our own talent management systems. 3%


We will integrate our multiple point solutions. 24%

We will implement a talent management suite for multiple process areas and keep some point solutions. 22%

We will implement the talent management applications from our ERP or HRMS provider. 17%

We will implement a talent management suite from one vendor. 34%

Source: Bersin & Associates, 2010.

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KEY POINT
Twenty-two percent of organizations said they will implement a partial suite, meaning that they will use some pieces of an integrated suite, while keeping some point solutions from other vendors.

A single talent management suite is not the only approach to realizing the benets of integrated talent management or even the most suitable and pragmatic approach for every organization. Twentytwo percent of organizations said they will implement a partial suite, meaning that they will use some pieces of an integrated suite, while keeping some point solutions from other vendors. This approach brings some, but not all, of the full benets of a single suite, since there are still multiple systems to be integrated. However, this could be the most practical approach for organizations which have needs beyond what a single suite can provide. Approximately one in four companies intends to integrate its point solutions, largely due to the signicant investment they have made in their existing implementations. Depending on the number of solutions and their interfaces, stitching these together can be a lengthy and complex undertaking. Seventeen percent of organizations say they plan to standardize on their ERP vendors HCM solution. Many of these applications are very new offerings and are available on the current release of the ERPs platform. Organizations that are on earlier versions will need to upgrade to take advantage of these new capabilities. Still, many large, global organizations are committed to their ERP investments and will likely upgrade to these HCM capabilities over time. A brave three percent of organizations have decided that they will build their own talent management suites. Developing a common data model, as well as a sophisticated integrated workow and process management system, across multiple applications is not for the faint of heart. Furthermore, each individual process area is so highly complex and takes solution providers many months and years to develop basic support. Organizations pursuing this approach will require an empowered and highly engaged IT partner.

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Case in Point: Premier Inc. Implements Talent Management Suite


In 2004, Premier Inc. selected a talent management suite with the condence that the platform could service all of its talent management needs down the road. The company initially implemented only the learning management module to offer competency-based learning and to support its Learning Institute. Following that project, Premier implemented core performance management processes with deep links to the learning module to identify L&D experiences to close performance and competency gaps. For Premier, the next project on its roadmap will be adding support for succession planning, including process and data integration with performance management and development experiences. e 

Impact of Talent Systems


KEY POINT
Automated systems alone do not make an organization more effective.

Companies have high expectations of their talent systems but systems alone are not the answer to an organizations talent management challenges. Not surprisingly, our research found that talent systems do not guarantee an organizations success in meeting talent and business goals.  In comparing companies that use one or more talent systems with those using manual processes, we nd that the former group has higher ratings in their development and planning capabilities. As shown in Figure 50, companies with automated systems gave themselves higher ratings in four areas: 1. Developing great leaders; 2. Developing employees with the right skills; 3. Having a pipeline of ready successors; and, 4. Planning for our future talent needs.

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With respect to the rst three areas, a learning management system can help to deploy and manage development activities of employees, leaders and successors across the company. More importantly, though, all four areas are very future-focused they deal with developing employees and leaders, preparing a pipeline of future successors, and planning for the organizations talent needs for the future. Therefore, these four areas are important to an organizations long-term success. So companies using automated talent systems are more effective in these areas. They are not, however, more effective in their ability to hire, retain or engage employees. Moreover, their turnover and employee productivity metrics are no different from companies using manual processes. The bottom line is that automated systems are not the magic bullet to improve the success of talent initiatives. As many companies have learned the hard way, installing a system that is complicated to use and administer can be less productive than using simple paper-andpencil processes.

Figure 50: Impact of Talent Systems on Organizational Effectiveness

Companies with automated talent systems are better at:


Developing leaders Developing employees Planning future talent needs Building a pipeline of ready successors

Companies with manual processes are just as effective at:


Hiring the best people Having right people in right jobs Creating high engagement Improving employee productivity Retaining top performers Building career paths Promoting employees Overall retention Revenue per employee

These are future-focused activities.

Source: Bersin & Associates, 2010.

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KEY POINT
An integrated system architecture is an enabler of effective talent management helping the organization to make better decisions about its talent.

Our research found that what does make a difference is not just having systems but, rather, having well-integrated talent systems. As shown in Figure 51, companies with well-integrated systems (those that share data across talent processes and present a single, unied view to the user) have higher ratings on nearly every aspect of talent management. Managers in these companies have access to consolidated information in order to support talent planning. The research shows that these companies are better able to hire, develop and engage employees. They are also more effective at talent and career planning, and have higher employee productivity. The one exception is in the area of retention, which is not signicantly different across the categories. Interestingly, companies with no systems (that is, they use manual processes) have similar scores on most categories as do companies with poorly integrated systems. In other words, using manual processes can be just as effective (or as ineffective) as having a series of disparate, disconnected systems. Of course, an integrated system architecture is merely an enabler of effective talent management. Organizations with integrated systems are more likely to have strong leadership in place, business-driven talent strategies and optimized talent processes. Having integrated talent systems does not automatically make an organization more effective if that was the case, organizations could just purchase an integrated talent management suite and be done with it. But having integrated systems helps an organization to make better decisions about its talent. That, along with the right people and processes, will make for a more effective organization. 

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Figure 51: Impact of System Integration on Organizational Effectiveness (self-rated measures)

Building career paths for critical employees Planning future talent needs Improving employee productivity Right people in the right jobs Creating high engagement Retaining top performers Developing employees with the right skills Pipeline of ready successors

-9% -7% -12% -7%

11% 10%
9% 7% 8%

26% 23%
21% 17% 22%

Companies with wellintegrated systems score highest in every area

-6% -9% -4% -8% -9% -2%

-4% -5% -12% -19% -15% -9%


-40% -20%

6% 8%

14% 29% 39% 31% 18%

Companies using manual processes have similar scores to companies with poorly integrated systems

-5%

-8% -4% -2%


0%

13% 11% 7%

Developing great leaders Hiring the best people

20%

40%

60%

80%

Systems are well-integrated

Systems are somewhat integrated

Systems are poorly or not at all integrated

Use manual processes

Source: Bersin & Associates, 2010.

Figure 52: Impact of System Integration on Talent Metrics


System integration can impact productivity and promotions but not retention.

Use Manual Processes 12% 7% 2% 14% $185.70

Systems Are Poorly or Not at All Integrated 12% 5% 3% 24% $178.50

Systems Are Somewhat or Well-Integrated 12% 6% 2% 32% $200.00


Source: Bersin & Associates, 2010.

Total turnover

Voluntary turnover High performer turnover Promoted 10% or more employees in 2009 Revenue per employee ($000s)

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Keys to a System Integration Strategy


KEY POINT
Talent systems should reinforce the processes, not drive the processes.

Integrating talent systems can be a lengthy and resource-intensive process yet one with many benets, as seen in the preceding charts. When selecting or integrating systems, companies should take a careful and systematic approach. Many companies rush into the system selection process before they are ready. Talent systems should reinforce the processes, not drive the processes. Companies should rst make sure that they have the right people in talent management positions, then design the right processes and then choose the right systems to make the processes more efcient. In particular, companies are nding that having the right people involved is essential. A talent management executive can act as a tremendous change agent for the organization and, with a strong team in place, can drive the strategy and processes forward. Many HR professionals do not have the necessary skills sets and organizations need to recruit for these positions. Too many times companies jump into the system selection without the right people and processes in place, and nd themselves stuck with the wrong system and broken processes. As a representative from Deloitte explained, We believe people are ultimately the force that drives sustained transformation. Not technology. Not processes. Not even strategy. People. In the end, it is the collective behavior of the people in the organization that can make or break a transformation. Another key piece is identifying the talent metrics needed for analysis and reporting. These will align to the organizations key talent initiatives. Examples may include: Increase leadership bench strength by two levels deep; Reduce costs by 10 percent in supporting functional areas; and / or Increase sales by 20 percent in three business areas through performance improvement in critical positions. The organization should identify the data ow, with inputs and outputs from different system components, and where the data will aggregate for reporting purposes. Determining these requirements will aid in the system selection or integration decision.

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KEY POINT
A three-year roadmap for system integration should mirror the organizations plans for talent process improvements.

Another consideration is who will be using the system and for what purposes. These can include learners, who will need access to different views of the data, managers who will need to analyze the data, administrators who will need to congure the system, and business leaders who will need to view reports. Building several use-case scenarios27 will be a key part of system evaluation. Of course, your organizations IT personnel will be key contributors to any discussions around system selection or integration. Involve them early in the process. They can provide input to the current technology landscape, and current and future system integration opportunities. They will also be crucial in predicting operational budget and staff requirements. Finally, the organization should dene a three-year roadmap for system integration which mirrors its plans for talent process improvements. We have seen successful system implementations rolled out in stages, with system requirements dened by three categories: Tier 1: Absolute requirements needed now; Tier 2: Requirements within the next 12 months; and, Tier 3: Nice to have functionality. Using the above criteria, the organization can evaluate systems based on a phased implementation. The Tier 1 requirements are deal-breakers. If a system does not have these capabilities, it is excluded from consideration. The Tier 2 requirements are items that are required, but will not be implemented until the second or third phase of the implementation. Finally, Tier 3 features are useful in making nal decisions on the short list of vendors. These are not requirements, but if a system has one or more of these capabilities (together with Tier 1 and 2 capabilities), it holds an advantage over its competitors.

27

A use case provides a description of a sequence of interactions between actors, and

the system necessary to complete a specic goal or function. Use cases are often co-authored by systems analysts and end-users, and are presented as a sequence of simple steps.

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Figure 53: Keys to Successful Integrated Systems Strategy Develop effective governance model and put team in place Determine key talent initiatives based on business goals Dene metrics for measurement Research process and system integration opportunities Design a process and system architecture with three-to-ve-year roadmap
Source: Bersin & Associates, 2010.

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Appendix I
Study Methodology

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Appendix I: Study Methodology


The study was conducted during March and April 2010, when contacts from the HR Executive magazine and Bersin & Associates databases were emailed an invitation to participate in an online survey. The nal analysis included U.S.-based organizations with 100 or more employees. The nal count of qualied respondents was 725. The survey yielded a large cross-section of company sizes, with 297 small companies (100 to 999 employees), 257 midsize (1,000 to 9,999 employees) companies, and 171 large (10,000 or more employees) participating (see Figure 54). Overall gures in this report are weighted by company size, so that the survey data better represents the U.S. marketplace. 

Figure 54: Respondent Count by Company Size

Small companies (100 to 999 employees) Midsize companies (1,000 to 9,999 employees) Large companies (10,000 or more employees) Total

297 257 171 725


Source: Bersin & Associates, 2010.

In addition, in-depth interviews were conducted with 17 companies representing a range of industries and company sizes. These interviews were designed to gather qualitative information on talent management activities in order to provide a keener understanding of trends and current practices. The study also yielded a large cross-section of industries (see Figure 55).

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Figure 55: Respondent Count by Industry 2010*

Wholesale / Distribution 2% Transportation 3% Utilities 1%


Other 3%

Aerospace 1% Banking / Finance 8%

Telecommunications 1% Technology 5% Retail Pharmaceuticals 4% 1%


Oil / Gas / Mining 1% Nonprofit 3% Marketing / Media / Entertainment 3%

Business Services / Consulting 10%

Construction 3%

Education 5%

Government 7%

Manufacturing 16%

Insurance 6%
*Numbers may not total 100% due to rounding.

Hospitality 3%

Healthcare / Medical 13%

Source: Bersin & Associates, 2010.

Due to the small sample sizes in some of these categories, we combined a few of the industries for reporting purposes. Even so, there were many industries with sample sizes too small to report. We include only industries with 30 or more respondents in our analyses. The industries included in our analysis are as follows: Banking / Finance; Business Services / Consulting; Healthcare / Medical;

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Government (federal, state, and local); Manufacturing; Retail; and, Technology (computers, software, ISPs).
KEY POINT
The retail segment in our study has a greater proportion of large companies, which may make the sector look more advanced than it truly is.

The data for each industry is weighted by company size, with approximately 40 percent to 50 percent small companies (100 to 999 employees), 30 percent to 40 percent midsize companies (1,000 to 9,999 employees) and 10 percent to 20 percent large companies (10,000-plus employees.) This is consistent with the marketplace, in which small and midsize companies dominate in terms of number of rms. One exception is the retail segment. In our sample, 38 percent of the retailers are large companies twice the proportion as in other industries. This is a sampling error, meaning that we were not able to get a representative sample of retailers from our study. When looking at the industry-level analyses, the reader should keep in mind that the gures for retailers represent a greater proportion of large companies, which are more mature in terms of their talent processes than are small and midsize companies. Therefore, the results may appear as though retailers are more sophisticated in terms of their talent processes than may be the case if we had surveyed a representative sample of retailers.

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Appendix II
Key Talent Integration Points across Talent Processes

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Appendix II: Key Talent Integration Points across Talent Processes


Figure 56 is an overview of the key integration points by each area of the talent management process.

Figure 56: Key Talent Integration Points By Talent Process Area Talent Process Area Key Integration Points Talent Strategy, and Learning and Capability Development: Talent planning drives strategic learning programs and initiatives focused on developing capabilities and addressing critical skills gaps. Talent Strategy and Performance Management: Evaluation processes provide actionable data regarding gaps in operational roles and skills for talent planning purposes. Goalsetting processes ensure alignment with talent goals. Talent Strategy and Competency Management: One common job prole can be used to develop requisitions for sourcing, populate performance plans, dene career paths, create development plans and plan for compensation. Workforce Planning and Talent Acquisition: Identifying the supply and demand of both internal and external talent necessary to close talent gaps (e.g., Southern Companys center of excellence involves talent acquisition professionals in the workforce planning process to help close talent gaps). Workforce Planning and Succession Management: The ability for organizations to plan ahead for changes in the leadership pipeline through scenario modeling and what-if scenarios (e.g., Braun company align its succession planning to its workforce planning process to ensure that it has the right individuals in the right roles). Workforce Planning and Career Management: The practice of identifying individual strengths to improve overall organizational capabilities and workforce planning. Workforce Planning and Performance Management: Understanding how key performance data impacts the identication of critical job roles and talent segmentation. Workforce Planning and Total Rewards: Providing organizations with internal and external data needed to build a pay for pay-for-performance culture.
Source: Bersin & Associates, 2010.

Talent Strategy

Workforce Planning

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Figure 56: Key Talent Integration Points By Talent Process Area (contd) Talent Process Area Key Integration Points Competency Management and Talent Strategy: One common job prole can be used to develop requisitions for sourcing, populate performance plans, dene career paths, create development plans and plan for compensation. Competency Management and Talent Acquisition: Provides benchmarks and criteria for hiring the right people for particular jobs. Competency Management and Succession Management: A common currency used consistently by managers for effectively assessing performance and potential for dening succession plans. Competency Management and Performance Management: Competency models are used to identify and assess talent, which provides a gap analysis that helps leaders and employees understand the needed skills, abilities and behaviors required to be successful in different roles. Competency Management, and Learning and Capability Development: Learning programs should be developed to teach to core competencies identied as critical for success in the company. Talent Acquisition and Workforce Planning: Identifying the supply and demand of both internal and external talent necessary to close talent gaps (e.g., Southern Companys center of excellence involves talent acquisition professionals in the workforce planning process to help close talent gaps). Talent Acquisition and Succession Management: Talent mobility programs that identify tools and resources for moving internal candidates throughout the organization (e.g., during a down economy, organizations such as Fidelity Investments focus their talent acquisition efforts on talent mobility). Talent Acquisition and Performance Management: Creating consistency between a job prole and a talent prole and providing an internal view of critical performance data necessary to identify top talent. Talent Acquisition and Total Rewards: Employee referral programs as a source of hire that identify top performers, and recognize, reward and engage existing employees (e.g., AmTrust enables higher retention rates and attracts 80 percent of its new hires through employee referral program). Talent Acquisition, and Learning and Capability Development: An internal development program for engaging new hires before their rst day of work and beyond the rst six months of employment (e.g., Northrop Grummans L&D led an onboarding program that fosters a positive new hire experience).
Source: Bersin & Associates, 2010.

Capability and Competency Management

Talent Acquisition

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Figure 56: Key Talent Integration Points By Talent Process Area (contd) Talent Process Area Key Integration Points Leadership Development and Talent Acquisition: For recruitment, LD supports talent transition and assimilation into leadership roles (e.g., the leadership development team at NSLIJ provides input and guidance to recruiting to make sure that leadership assessments are available and that new hires are enrolled in the right career planning processes).  Leadership Development and Succession Management: Supports succession and career plans. Succession management enables the identication of future leaders. The potential of current leaders can be assessed and appropriate developmental plans can be put into action. Leadership Development and Performance Management: Helps organizations to identify where skills gaps exist among leaders. With this information, organizations can create relevant and timely training programs and developmental assignments for leaders. Leadership Development, and Learning and Capability Development: When developing leaders, a number of learning and delivery mechanisms must be applied, such as coaching, e-learning, and key projects and assignments. Leadership Development and Total Rewards: Supports the differentiation of high-potential development, compensation and promotion. Succession Management and Competency Management: Competency models are used to identify and assess talent; they provide a gap analysis that helps leaders and employees understand the needed skills, abilities and behaviors required to be successful in different roles. Succession Management and Leadership Development: Succession planning drives the prioritization of participants for leadership development programs. Succession Management and Career Management: Organizations must be aware of employees career aspirations to be able to create sound succession plans. Succession Management and Performance Management: Performance management provides a wealth of data that is critical to identifying high potentials, and assessing gaps in the companys leadership and professional pipelines. Succession Management, and Learning and Capability Development: Most sophisticated organizations have successful succession management programs, in part, because their succession management processes include a development component. To build the bench for critical professional / technical roles, the company should institute a strategy for successors to build functional prociency through training, experiences and knowledge acquisition.
Source: Bersin & Associates, 2010.

Leadership Development

Succession Management

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Figure 56: Key Talent Integration Points By Talent Process Area (contd) Talent Process Area Career Management Key Integration Points Career Management and Talent Acquisition: Job postings systems that alert employees who have identied certain jobs or roles as part of their career plans. Career Management and Competency Management: Competency management enables an individual or manager to embark on career planning. Career Management and Succession Management: Career development is reective of an individuals needs and succession management is driven by the needs of the organization. When these two processes come together, an individual development plan is created, supporting both the companys and the employees goals. Career Management and Performance Management: In addition to performance ratings, best-practice organizations create and track individual development plans as part of their performance processes. Career Management, and Learning and Capability Development: Learning programs create opportunities for employees to enhance their capabilities, as well as their connections with others in the organization. Performance Management and Workforce Planning: Evaluation processes provide detailed data for enterprise skill gap assessments, planning and forecasting. Performance Management and Leadership Development: People development skills as utilized in performance management processes are a major part of leadership development. Assessment and evaluation data collected as part of performance management informs progress in the development of leaders. Performance Management and Succession Management: Assessment and evaluation data collected as part of performance management helps to highlight high potentials and informs readiness for advancement. Performance Management and Career Management: Evaluation processes lead into career discussions and development planning to prepare for future roles. Performance Management, and Capability and Competency Management: Job role and / or competency mappings used in performance management processes are dened as part of competency management processes.
Source: Bersin & Associates, 2010.

Performance Management

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Figure 56: Key Talent Integration Points By Talent Process Area (contd) Talent Process Area Total Rewards Key Integration Points Total Rewards and Workforce Planning: Flexible compensation / benets packages utilized for critical talent segment hiring practices. Total Rewards and Competency Management: Utilizing enterprise competencies to create pay range bands. Total Rewards and Succession Management: Differentiated compensation / total rewards packages for high-potential candidates. Total Rewards and Performance Management: Performance ratings utilized to differentiate annual pay increases and ranges. Total Rewards, and Learning and Capability Development: Including learning and development opportunities in total reward communications. Completion of learning programs can inform compensation decisions. Learning and Capability Development, and Talent Strategy: Talent planning drives strategic learning programs and initiatives focused on developing capabilities and addressing critical skills gaps. Learning and Capability Development, and Workforce Planning: New hire and new-role training programs prepare employees for success at key roles. Timing of such programs is a key factor for workforce planning efforts. Learning and Capability Development, and Succession Management: Learning programs support career paths and succession plans. Completion of learning programs informs selection for succession-related initiatives. Learning and Capability Development, and Performance Management: Development planning processes drive involvement in learning. Learning and Capability Development, and Competency Management: Learning programs should be designed to develop all skills and competencies identied as essential for the organizations key job roles.
Source: Bersin & Associates, 2010.

Learning and Capability Development

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Appendix III
Table of Figures

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Appendix III: Table of Figures


Figure 1: Bersin & Associates Talent Management Maturity Model Figure 2: Bersin & Associates Talent Management Framework Figure 3: Integrated Talent Management Figure 4: Right Managements Talent Planning Framework Figure 5: Talent Management Strategy U.S. 2008 to 2010 Figure 6: Talent Management Strategy by Company Size U.S. 2010 Figure 7: Talent Management Strategy by Industry U.S. 2010 Figure 8: Percent of Organizations with a Dedicated Talent Management Executive U.S. Total 2008 to 2010 Figure 9: Presence of Dedicated Talent Management Executive by Company Size U.S. 2010 Figure 10: Percent of Organizations with a Dedicated Talent Management Executive by Industry U.S. 2010 Figure 11: Functions for Which the Talent Management Executive Is Responsible (among companies that have a dedicated executive) U.S. 2010 Figure 12: 5 Regional HR Business Partners + Head Ofce Figure 13: Talent Management Structure at Financial Services Company Figure 14: Relationships between Talent Processes Figure 15: McDonalds Talent Management Structure Figure 16: HR Prociency Ratings U.S. 2010 Figure 17: Top Business Executive Drives or Actively Participates in Talent Management Strategy by Total and by Company Size (among companies that have a strategy) U.S. 2010 Figure 18: Top Business Executive Drives or Actively Participates in Talent Management Strategy by Industry (among companies that have a strategy) U.S. 2010 Figure 19: Talent Management Maturity by Company Size U.S. 2010 Figure 20: Talent Management Maturity by Industry U.S. 2010 Figure 21: Priority to Integrate Your Talent Processes by Total and by Company Size U.S. 2010 8, 41 13, 18 20 23 24 25 26

29 29

29

30 32 34 35 37 39

40

40 43 44 44

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Figure 22: Priority to Integrate Your Talent Processes by Industry U.S. 2010 Figure 23: Business Development Bank of Canadas Integrated Talent Processes Figure 24: Connections between Talent Processes U.S. 2010 Figure 25: Boulays Path to Integrated Talent Management Figure 26: Sample Three-Year Talent Management Roadmap Figure 27: Example of Communications at General Mills Figure 28: Example of Talent Management Metrics Figure 29: Quarterly Metrics for Financial Services Company Figure 30: Human Capital Assessment and Accountability Framework (HCAAF) Talent Management System Metrics Figure 31: Turnover Metrics U.S. Total 2008 to 2009 Figure 32: Total Turnover by Company Size U.S. 2009 Figure 33: Voluntary Turnover by Company Size U.S. 2008 to 2009 Figure 34: High-Performer Turnover by Company Size U.S. 2008 to 2009 Figure 35: 2009 Turnover Metrics by Industry Figure 36: Promotion Rates U.S. Total 2009 (percent of employees promoted in 2009) Figure 37: Promotion Rates by Company U.S. 2009 (percent of companies promoting 10 percent or more employees in 2009) Figure 38: Promotion Rates by Industry U.S. 2009 (percent of companies promoting 10 percent or more employees in 2009) Figure 39: Effectiveness Measures (self-rated) U.S. 2010 Figure 40: Impact of Talent Management Maturity on Effectiveness Measures Areas of Highest Impact Figure 41: Impact of Talent Management Maturity on Effectiveness Measures Other Talent Areas Figure 42: Impact of Talent Management Maturity on Total Turnover Figure 43: Impact of Talent Management Maturity on Voluntary Turnover Figure 44: Impact of Talent Management Maturity on High-Performer Turnover Figure 45: Impact of Talent Management Maturity on Promotion Rates

45 47 49 56 59 61 63 66 67

68 69 69 69 70 71 72

72

75 77

79 81 81 81 82

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Figure 46: Impact of Talent Management Maturity on Revenue per Employee 2008 to 2009 Figure 47: Number of Talent Systems U.S. Total 2010 Figure 48: Use of Automated Talent Systems U.S. 2009 Figure 49: Implementation Plans for Integrated Talent Systems Figure 50: Impact of Talent Systems on Organizational Effectiveness Figure 51: Impact of System Integration on Organizational Effectiveness (self-rated measures) Figure 52: Impact of System Integration on Talent Metrics Figure 53: Keys to Successful Integrated Systems Strategy Figure 54: Respondent Count by Company Size Figure 55: Respondent Count by Industry 2010 Figure 56: Key Talent Integration Points By Talent Process Area

83 85 87 88 91 93 93 96 98 99

102, 103, 104, 105, 106

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About Us
Bersin & Associates is the only research and advisory consulting rm focused solely on WhatWorks research in enterprise learning and talent management. With more than 25 years of experience in enterprise learning, technology and HR business processes, Bersin & Associates provides actionable, research-based services to help learning and HR managers and executives improve operational effectiveness and business impact. Bersin & Associates research members gain access to a comprehensive library of best practices, case studies, benchmarks and in-depth market analyses designed to help executives and practitioners make fast, effective decisions. Member benets include: in-depth advisory services, access to proprietary webcasts and industry user groups, strategic workshops, and strategic consulting to improve operational effectiveness and business alignment. More than 3,500 organizations in a wide range of industries benet from Bersin & Associates research and services. Bersin & Associates can be reached at http://www.bersin.com or at (510) 654-8500.

About This Research


Copyright 2010 Bersin & Associates. All rights reserved. WhatWorks and related names such as Rapid e-Learning: WhatWorks and The High-Impact Learning Organization are registered trademarks of Bersin & Associates. No materials from this study can be duplicated, copied, republished, or reused without written permission from Bersin & Associates. The information and forecasts contained in this report reect the research and studied opinions of Bersin & Associates analysts.

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