The War for Talent

I have been writing about the challenges faced by companies and even Malaysia as a nation in areas related to identifying, nurturing and retaining talent. Malaysia's brain drain and Singapore's brain gain are some of the often discussed issues.

The following is an illuminating piece of article written by my colleague, Shyamashree Rudra in Mumbai who recently attended the Young Leaders Conference in Italy.

With her permission, I am reproducing that article verbatim. Thank you Syhamashree.




THE WAR FOR TALENT

2008 YOUNG LEADERS CONFERENCE
Turin, Italy

“THE WAR FOR TALENT”


The demographics of the global workforce are changing. Patterns of migration and social change have altered the labour market and have increased competition for skilled workers and possibly also for low-skilled ones. This is a trend that is set to continue. All entities relying on skilled input are feeling the pinch, from universities to government bodies. Google, Microsoft, Apple, Goldman Sachs, Bank of America, Citigroup, and JPMorgan Chase are all companies based on very few 'hard assets', their value being almost entirely measured by their intellectual property and people. Communications and technology have created a world which is no longer bound by geography, but rather operates through a system of interconnected networks across the continents. Now global corporations are becoming “trans-nationals” – moving parts of their business to the places with the talent to handle it and the time to do it at the right cost. This means hiring the right people in the right place, fast, or finding talent that can be moved quickly around the globe.

It is said that in ancient Greece, talent was the most valuable currency used in the monetary system. Today, in a world where human capital is the key driver of present performance and future growth, the War for Talent is THE battle that organizations, both for-profit and non-profit, need to face and win.

46 Young Leaders, gathered in Turin for the 24th Young Leaders Conference, addressed this topic with a truly global mindset, bringing in perspectives from the United States & Canada, Europe (Austria, Belgium, France, Germany, Italy, Poland, Portugal, Russia, Switzerland United Kingdom,), Brazil, China, and India.

Participants discussed the essence of talent, the type of talent employers are looking for, how the demographic changes impacting the global workforce are heightening the quest for talent, and how talent can be fostered and managed.


I. WHO AND WHAT? – THE NEW GLOBAL LANDSCAPE


The first plenary focused on “what” is talent and “who” is the talent for employers. The Young Leaders agreed on a definition of talent, viewed as “A set of traits and characteristics, both innate and stemming from education and experience, which allows an individual to excel in the workplace, make an impact and add value to an organization, today and in the longer-term”. Talent is therefore a combination of (i) common traits of unusual value, such as a bright mind, the ability to make an impact, leadership skills and vision, and (ii) technical skills, such as industry-specific knowledge, experience, effectiveness in the workplace. One group highlighted that in several intellectual professions, such as art or journalism, individuals may not know how to lead other people, but nonetheless they produce work of exceptional value and ought to be considered talent. For this reason, the traditional concept of leadership might be limiting and leadership should rather be interpreted as the ability to influence the environment and make an impact.
The question: “Does talent exist only if it is perceived by others or is there a talent per-se?” sparked debate among the participants. While recognizing that artists like Michelangelo, Picasso and Leonardo were geniuses who produced unquestionable masterpieces, there was general consensus that recognition of talent by others is essential to the definition of the talent.
The Young Leaders also agreed that as much as talent is typically defined on the basis of objective elements, oftentimes there is an element of subjectivity when assessing value and talent, just like beauty, “is in the eye of the beholder”.
All three groups pointed out the important role played by education, considered as a key means to breed and develop talent. As a result, governments are asked to forge an educational system that facilitates the “birth” of talents and supports their development over time. Also, investments in the university system are key to fostering talent and enhancing a country’s competitive position.

On the question of “What are the employers looking for?” participants agreed that employers typically look for individuals that: (1) have specific technical skills required for the position to be filled, (2) fit with the organization’s culture, (3) show motivation and drive, and only in a few occasions look for people who are also capable of bringing a new perspective into the workplace. In other words, employers tend to look for managers rather than simply for talents. Managers are the strong performers that have the appropriate experience, can rapidly deliver results and fit in the professional environment. They represent the “low-risk bet” that an organization often prefers to make. However, by doing so, employers may miss the high-potential individuals, those who can bring in an innovative and creative approach, also by challenging the status quo, and are capable of adapting to change. These individuals may represent a “higher-risk bet” that will, though, yield a higher pay-off in the longer term. Many of these individuals proved themselves in times of crisis and came through with stronger character.

A distinction was made between public and private sector employers. All the groups highlighted that the public sector tends to be plagued by several issues, including lack of performance-based evaluation and limited hiring of young talents. A system that evaluates its resources on the basis of performance allows individuals to know what the organization’s expectations are with respect to deliverables and results, and what the career path associated with achieving those results is. Such a system increases effectiveness and efficiency of employed resources. Furthermore, an organization that hires an adequate number of young talents can benefit from the new perspectives that typically young people bring in and be in a position to breed the next generation of leaders. This is a particular challenge for many companies or organizations, which change their leadership every five years – “the only constant we face is constant unpredictability”.


II. DEMOGRAPHY AND PRODUCTIVITY

The second plenary addressed two key phenomena that are changing the workplace: (1) Demographics of the global workforce rapidly changing, with a rising population in developing countries that offer large pools of labor, and an aging population in developed countries, facing a looming shortage of skilled-labor; (2) Globalization of the workforce with corporations becoming “transnationals” and the labor pool becoming more and more mobile.
The Young Leaders agreed that addressing these phenomena requires the cooperation between the private and the public sector, which together ought to develop a concerted strategy and shared policies. Moving to the heart of the discussion, the debate became heated.
The demographic imbalances between developing and developed countries result in global migration, mainly from the “young world” to the “old world”. In this context it is very important that governments define an immigration policy that attracts the talent that is mostly required and that ensures a structured, efficient visa-authorization process. This policy is meant to favor the economic development of the home country, as well as support corporations in meeting their hiring needs. The participants highlighted that corporations tend to have a more open and global view regarding immigration as compared to governments. While companies are focused on attracting skilled labor from all over the world at the lowest possible cost, governments need to serve the “higher good” of the nation, taking into account multiple interests, which include preserving jobs in the home market.

On the question of “brain drain”, the shared view was that while developing countries are primarily affected by this plague, also developed nations suffer from it. For example, Europe experiences a constant migration of top scientists to the U.S. This, too, needs to be addressed by devising appropriate policies that motivate talents to remain in their country of origin, by offering them rewarding career paths. Young Leaders coming from the military pointed out that talent retention has become a serious challenge for the Army and has risen as a top priority in senior officials’ agenda. Another proposal was to encourage bilateral talent circulation with bilateral government agreements between developed and developing nations.
On the issue of an aging population, there was broad consensus that senior talent should be optimized, both for economic and social reasons. In particular, retired people can continue to contribute to economic development, by sharing their knowledge with the younger generations and thus supporting productivity. In Ireland, for example, retired people teach English to immigrants. The 60+ year old should also continue to feel engaged in society and connected with the working world. Here, again, the role played by public policy is crucial.
The discussion then turned to the second phenomenon changing the workplace: globalization of the workforce, which can be summarized as “jobs moving to people and people moving to jobs”. For corporations, globalization is mainly driven by the need to reduce costs and access available talent pools, consequently outsourcing segments of the business to low-cost countries, such as China, India, Eastern Europe and Latin America. For individuals, globalization is driven by the desire to find the best opportunities, where these “modern nomads” can thrive.
On the one hand, “young countries” that want to lure investments from global companies need to have an educational system, which breeds workers and graduates that are mostly sought after by foreign employers, including engineers and English speakers. Sometimes “young countries” pay even higher salaries than “old” ones and offer tax incentives as well. On the other hand, corporations that want to build a global workforce need to understand what motivates and inspires people in the different countries where they set operations and develop an inclusive culture that embraces and integrates diversity, rather than imposes, with a colonialist mindset, the head-office policies. Multinational firms should also be supported by their governments, who, in concert with the local governments, draw the political and legal framework where corporations can effectively operate.
Participants concluded that, as the workforce changes its demographics and becomes increasingly global, new kinds of talents are required, talents capable of understanding different cultures and leveraging resources coming from a larger and more diverse pool.


III. TALENT MANAGEMENT

The third and final plenary put the spotlight on talent management, defined as the ability of an organization to recruit, motivate, and retain its most valuable employees. Every participant agreed that talent management is a key competitive advantage for organizations and ought to be “elevated to a burning corporate priority”.
One group observed that there are actually two main categories within talent management: (i) self-management of your own career, (ii) talent management conducted by the organization. The former is becoming increasingly relevant in a society where “modern nomads” frequently change jobs and work with bosses that have the opportunity to know only a portion of their overall abilities.
Research shows that key to talent attraction are employer’s branding and cultural fit. More specifically, employers that are mostly attractive to employees share attributes such as a credible management, a culture of respect, fairness and pride, and an environment of camaraderie. Diversity of the workforce is also relevant, especially for women, who are looking for evidence of a company’s openness to career development for female professionals.
When talking about retention and development, mentoring and feedback were identified as essential tools to nurture talent. Coaching and mentoring were recognized as critical to gain a broader perspective about contingent situations while also receiving support to effectively navigate the system and be able to progress. But sometimes a “generational divide” prevents feedback. Feedback was considered necessary to enhance behavioral competencies and become more effective in the work environment.
Broad consensus was reached on the fact that the Human Resources (HR) Department plays a greater pivotal role in talent management: HR should, from an organizational standpoint, directly report to the CEO (for example as a Senior Vice President) and be an active player also in the definition of company strategy. In well-run organizations, Human Resources performs regular talent reviews and screens the work population, at the various seniority levels, to identify highly-valuable resources and devise a talent strategy that matches their ambitions. HR talent planning provides for an independent, longer-term perspective, which ensures that talents are offered the most suitable development path for them, even if this might be in contrast with their direct bosses’ short-term interests.
Another question raised was how to measure effectiveness of talent management. Several participants suggested retention rates, employee satisfaction rates, employee referral rates, productivity or productivity per employee, as well as success in managing work/life balance.
There was agreement that development of talents ought to be combined with a clear organizational framework and a strong culture that supports talent development, while, at the same time, preventing the excesses associated with the Enron “star culture”.
The Young Leaders agreed that talent management requires also having a clear understanding of what skill gaps might arise in the future in order to proactively recruit those talents capable of filling the needs of tomorrow.


“Great talents are the most lovely and often the most dangerous fruits on the tree of humanity. They hang upon the most slender twigs that are easily snapped off.”
Carl Gustav Jung

January 26, 2009