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Best practice in Talent Management and its role in turbulent times

Paul Turner
Professor of Management Practice Ashcroft International Business School

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Paul Turner is Professor of Management Practice at Ashcroft International Business School, Cambridge as well as Non Executive Director of Blessing White Europe and a Non Executive Director on the European Advisory Board of OPI. He was formerly President of Europe, Middle East and Africa, Employee Care for the Convergys Corporation,responsible for the HRBPO business across the region. Paul joined Convergys in 2003 as Vice President for both EMEA and ASPAC. Paul Turner was previously Group HR Business Director for Lloyds TSB and Vice President of the CIPD as well as a Director of BT. Paul obtained a first degree from the University of East Anglia, a PhD from the University of Sheffield and is a Companion of the CIPD. He has written extensively on management subjects and has spoken at conferences throughout the USA,Europe and Asia as well as the CIPD national conferences in Harrogate and London. Paul Turner is the author of HR Forecasting and Planning (2002) and Organizational Communication (2003), both published by the CIPD and was one of the authors of the 2007 CIPD Report Talent. Paul¶s new book, with Michael Brown,The Admirable Company, will be published in 2008

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Corporate reputation relies on outstanding Quality of Management- key messages
Be accessible, wily, shrewd and confident; never be arrogant. Strike the right balance between dynamism and radicalism- and conservatism Have high visibility when it¶s right and low profile when it¶s not Be authentic and have the right touch with stakeholders Show personal commitment to the company Communicate the company vision and strategy clearly and demonstrate that performance is being delivered against strategic objectives Don¶t come across as being better than you are. Beware of hubris!
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The Effect of Talent Improvements in a Global Retailer

Community & environmental Responsibility

Use of corporate Assets Quality of Management

2001

Quality of Marketing 1 2 3 4 5 6 7 8 9 10

Financial Soundness

2006
Capacity to Innovate

Quality of Goods and Services

The Admirable Company Michael Brown and Paul Turner, 2008

Value as a long term investment

Ability to attract, develop and retain top talent

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Increasing talent bench strength can change to fortunes of an organisation!

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And a study by McKinsey in 2008 showed talent management also to be a key issue for CEO¶s

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LOX-ZZV583123-20070112-SM-SM

McKinsey¶s Research- 2008-CIPD Conference UK 2008
Talent management is the most important strategic challenge for today's business leaders
Biggest managerial challenge in next 5 years 1 Finding talent 2 Greater competitive intensity 3 Increasing size of company 4 Increasing number of markets served Growing number of 5 regulations 6 Increasing use of technology 7 Growing complexity of supply chain 8 Greater geopolitical risk

Constraints on growth*

31 22

Competitive environment 2 Cost/availability of talent 3 4 Increasingly sophisticated consumers Substitutions/innovations by competitors

77 73

0 52

5 5 4

5 Excessive regulations

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A study by the CIPD in 2007 showed the various forces at work when considering talent and talent management

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Talent - Demand and Supply in a Global Context
EXTERNAL CONTEXT Globalisation Government policies Technological development Employment levels

WORKFORCE (supply) Demographic trends Work force diversity Sources of labour Perceptions of leaders and managers Work-life balance

TALENT MANAGEMENT/ SUCCESSION PLANNING

EMPLOYERS (demand) Global markets Competitive advantage Workforce flexibility/agility Competition for labour µEmployer of Choice¶ agenda

ORGANISATIONAL CONTEXT Corporate governance Business strategy HR strategy, stewardship & policy Approaches to Performance management Line management capability Role modelling/mentoring Successful approaches to talent management

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The talent war goes beyond simple economics which makes it much more complex. Social and attitudinal factors are critical as well.

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LOX-ZZV583123-20070112-SM-SM

McKinsey¶s Research- 2008-CIPD Conference UK 2008 The youngest generation entering the workforce are challenging to attract and retain, but respond well to social connection

War generation
War II, Great Depression

Baby boomers
in government

Generation X
diversity, unemployment, parental divorce rates

‡ Born before 1945 ‡ Shaped by: World

‡ Born 1945 - 1964 ‡ Born 1965 - 1980 ‡ Shaped by: less trust ‡ Shaped by: Internet,

Generation Y ‡ Born after 1980 ‡ Shaped by: information overflow, overzealous parents, globalisation

‡ Sees career in chapters
of 2±3 years each

‡ Sees flexibility as a must,
will make trade-offs for better lifestyle

‡ Expects quick reward
and individual development

‡ Demands freedom and
control

‡ Has low barriers to
separation and high selfconfidence

‡ Wants meaningful job
and positive effect on society
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The War for Talent- what can we conclude?
Changes in the global labour market and demographic trends have had a significant effect on talent demand and supply It permeates every aspect of the working population and is worldwide. The ability to attract and retain talent has become a strategic priority Success in talent management requires excellence in strategy and policy as well as flawless execution.

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What are people saying about talent?

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µTalent. I love that word.
So different from employees So different from personnel So different from human resources Talent. Just uttering the word per se makes you puff up and feel good about yourself.¶
Source- Talent, Tom Peters,2005

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µPeople hold the key to our success- we cherish them¶ Indra Nooyi, Chair, Pepsico, 2006 "Can we hire the quality and quantity of people we want to? No. We're under investing in our business because of the limitations of hiring." Sergei Brin, Google, 2005 µWe are driven by a need for innovative, flexible and highly responsive thinking.¶ Maurice Levy, CEO of the Publicis Group, after recruiting talented executives from a competitor, 2006 µThe HR function gives a company the ability to attract and retain the best and the brightest from all over the world and the ability to manage that talent within the confines of the company's values and philosophy. Without that ability, a company is nowhere.¶ HR Director- ATT

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Managing talent is a hard, not a soft issue. Getting it right adds value to the bottom line. The ability to attract and retain talent has become a board level issue.

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What do leading organisations do to ensure that they maintain an effective supply of talent and then keep their talented people?

In 2007 the CIPD undertook in depth research with a number of companies. This followed on from the 2006 survey which found that 51% of organisations undertake talent management activities; 38% had a formal talent management strategy and 38% had a formal definition of talent management

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An important step was to define talent and talent management

µTalent consists of those individuals who can make a difference to organisational
performance, either through their immediate contribution or in the longer term by demonstrating the highest levels of potential¶

µTalent management is µthe systematic attraction, identification, development, engagement/retention and deployment of those individuals with high potential who are of particular value to an organisation.¶ (CIPD Change Agenda, 2006)

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McKinsey¶s Research- 2008-CIPD Conference UK 2008
1 "Everybody is a talent" 2 "Various types of talent" 3 "Top management, high potentials, and specialists on all levels" 4 "High potentials independent of hierarchy level" 5 "Top management and high-potential senior managers"

All employees are considered talent

Talent includes employees on various career tracks and levels

Top management and high-potentials/highperforming employees on all levels are called talent

All high-potentials/highperforming employees are part of talent pool

Talent pool limited to top management and highpotential/high-performing middle management Narrow definition reduces complexity and allows for comparability among sample firms Focus on most important positions Neglect of potential among lowerlevel employees

Full leverage of potential within workforce

Differentiated approach targeted at specific roles

Continuous development programs on all levels

One continuous development program

No discrimination among workforce Increased complexity and workload due to ‡ Various needs/ career paths ‡ Amount of employees to tackle

Development of individual career paths possible Increased complexity and workload due to various needs/career paths

Early identification of talent Some complexity due to 2 parallel, yet distinct talent development programs

Early identification of talent Neglect of talents in other areas, e.g. specialists

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Source: "Identifying and managing your assets: talent management" ± Rhea Duttagupta, PwC; "Reflections on talent management" ± Rebecca Clake, Victoria Winkler, Chartered Institute of Personnel and Development; Next Generation Talent Management Initiative

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We found that talent management was most effective when:

-It was directly linked to the corporate strategy and related business objectives (well-designed talent management activities can have a positive impact on an organisation¶s bottom line) -And to other HR processes- it wasn¶t a stand alone activity -In particular it was desirable to link talent management into other learning and development activities

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Talent management was best viewed as an end to end, joined up, holistic activity

Evaluating Talent

Attracting Talent

Managing Talent

Developing Talent
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There were various types of talent interventions
One to one development by coaches/mentors briefed on corporate strategy

Training and education for core technical or professional skills

Training and education for management roles

Leadership Development

Rising Talent

Emerging Leaders

Corporate Exceptional Next Next Talent Generation Generation Leaders Leaders

Potential and determination to progress
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Managing talent - who does what?
CEO and Senior Management Strategy development Communicating the aims of talent management Selecting the talent pool Executive coaches and mentors Researching and evaluating alternative approaches Advice and support with the design and implementation Information flow about TM activities Monitoring TM interventions Tracking the progress of the TM pool Identifying talent Nurturing talent Performance review and individual personal development Coaching and mentoring Ownership of personal development Maximising learning opportunities Monitoring and evaluating strategic outcomes Organisational overview and consistency of approach 24 Tracking the progression of the talent pool Reviewing and amending initiatives

Human Resources

Line Managers

Individuals Talent Management

The talent management balanced scorecard
Attraction ‡Employer branding ‡Competitive rewards ‡Creative recruitment measures ‡Measured selection tools

Performance management ‡Clear expectations ‡Appraisal ‡Development ‡Measurement ‡Rewards

Strategic Objectives

Retention ‡Identifiable culture ‡Appropriate benefits ‡Leadership branding ‡Employee engagement ‡Exit interview data

Development ‡Formal and informal interventions ‡Stretching projects ‡Career management /deployment ‡Coaching and mentoring

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What were the Implications for practitioners from the research?
A successful approach is based on an agreed, organization-wide ± 1. definition of talent and talent management.. ± 2. In addition, a language for talent management activities that is understood by all the parties ± 3. A proactive, strategic approach to talent management offers considerable organisational benefits ± 4. Support for talent management needs to flow from those at the very top of an organisation and cascade throughout. ± 5. Engaging line managers from an early stage is critical to ensure they are committed to organisational approaches to talent management.

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What were the Implications for practitioners from the research?
6. Talent management can be used to enhance an organisation¶s image and supports employer branding Talent management activities should be developed with other HR policies and practice for a joined up approach Developing talent may be based on a blend of informal and formal methods. HR specialists have an important role to play

7.

8. 9.

10. Processes need to be developed to track the performance and progress of those identified as talent

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