Forging the new talent compact
It is difficult to attract and keep top talent, acknowledges Douglas Ready, Visiting Professor of Organisational Behaviour, but he believes that your company’s culture and climate are key to creating a system that works
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Attracting, engaging and retaining great people have never been easy for companies. By definition, great people have a great many options. Even in difficult economic times, companies must develop talent policies that will attract, motivate and retain the best talent; but I would argue that today's talent challenges are tougher than ever before.
They don't just feel tougher; they are tougher.
A variety of factors are at play that present challenges for top teams and HR professionals looking to attract and retain the talent they need to get and stay out in front. Taken individually, these factors, while formidable, don't appear to be overwhelming. But when we look at the factors as a series of forces coming together at the same time, we can see that a perfect storm is brewing in the global race for talent.
What are these forces? You may know exactly what they are, because you are probably facing them every day.
Globalisation We used to think of globalisation from a very ethnocentric perspective, asking questions such as: "In which countries should we pursue our growth objectives, selling which suite of products?" Today, of course, globalisation is a double-edged sword, in that companies such as Tata Group, Lenovo and Cemex, once viewed as fledgling operators in obscure regions, are now recognized as serious competitors, not only for mature companies' best customers but also for their top talent.
Adding to the fundamental challenge of globalisation is the fact that most companies have targeted emerging markets as core to their growth plans. As such, companies are rushing into Greater China and Pacific Asia, India and the Middle East, Russia and Eastern Europe, Brazil and other regions within Latin America. The talent management challenge is obvious: companies are struggling to understand how to identify, develop, engage and retain talent in these regions because they don't understand the rules of engagement concerning how business is conducted there, let alone the factors that motivate behaviour of the people native to these regions.
Digitisation and the knowledge economy A company's capacity to innovate has always been key to its prospects for generating superior value for customers and shareholders. We just need to look at Honda, RIM, Sony, Vestas, Tesco, Samsung or Facebook to see the benefits to these companies from focusing on process and product innovations. In most of these cases, the application of technology has produced cost, quality and customer experience advantages. But technology has become more than a tool that produces innovation. In a world in which Google has become a verb and a Blackberry enables us to share experiences with loved ones thousands of miles away, technology has become rooted in the DNA of our social and work lives.
Deloitte, the professional services firm, recently conducted a survey of approximately 125,000 of its employees and found that, on any given day, more than 70,000 of them are on Facebook. A generation ago this might have been viewed as a pervasive employee engagement problem. To Deloitte, it is an acknowledgment that their employees are finding new and creative ways to stay connected with their communities of interest - globally. The talent management challenge becomes one of understanding how technology can be used in sourcing, developing, engaging and retaining great people. We are seeing employee blogs that eclipse a company's traditional engagement surveys and YouTube videos being used to attract key prospects on college campuses. What's next? Will we be excited about it or afraid of it?
The influence of demography and ideology Our current adult population consists of the Greatest Generation, the Baby Boomers, Generation X, Generation Y and the newest cadre - what many are referring to as the Facebook Generation. While most members of the Greatest Generation are now enjoying retirement, the rest of us are in various stages of our careers, each with our own set of aspirations. While I don't buy the notion that whole generations think alike, the incidence of multiple generations (with varying priorities in the same work environment in a globalised, digitised world) does present companies with unique talent management challenges.
All companies want people practices that will attract, engage and retain the best people. Easy enough, right? Not so. It is not an easy task for companies to design a performance management process that works across a variety of cultures. What about a career management system? A system viewed as attractive to mid-career workers may be considered stifling to high-expectation Gen Ys or highly mobile Chinese software engineers. And what about working climate and job design? Perhaps the Gen Xs and Ys were the pioneers in calling for the democratisation of the work environment, but the desire for purpose, voice, and balance goes far beyond those who happen to be in their 20s and early 30s. How work gets done and the cultural climate that a company creates will have a significant impact on its capacity to attract, engage and retain talent in all age groups, in all sectors and in all regions around the world.
A new talent compact
With global, digital and attitudinal forces shaping this perfect storm in the war for talent, what can organisations do, not just to weather it but to lead in these turbulent times? Research that I have conducted (as well as my involvement over the past five years with dozens of companies in pursuit of this question) leads me to believe that companies must create a new talent compact with their employees. With so much emphasis on understanding the differences brought on by globalisation, technological innovation and cross-generational perspectives, it is easy to overlook the fact that there is perhaps more that binds us together than separates us. Throughout the world, no matter where business is conducted, we all strive to find meaning in our lives. We all want to be connected to our communities, and we all want working environments that offer challenge and fairness.
As such, the hallmarks of the new talent compact must be characterized by the dual principles of promises made and promises kept. "Promises made" reflects the company's sense of purpose, its brand promise, and the opportunities it provides for talent to grow and develop at a pace in keeping with the growth of the enterprise. "Promises kept" reflects the culture and climate that the company has created that will enable it to keep its promises.
Unfortunately, there are many examples of companies with disconnects between promises made and kept, but there are also excellent examples of this talent compact being held sacred. HSBC's promise made to be the world's local bank is upheld through its talent strategy of cultivating local talent pools and through its robust cross-border deployment of talent. Built into Novartis' purpose statement is the dedication to improving lives around the world; and the company has committed to deploying not just anyone, but its top talents, to initiatives such as Project Arogya, a nutrition project aimed at helping millions of poor villagers in rural India.
What we see in companies such as HSBC and Novartis is the dual attention to driving performance and creating climate, enabling the concept of promises made and kept to remain core to their companies' purpose statements and business strategies. As Daniel Vasella, Novartis' Chairman and CEO recently told me: "There is so much to be done to help improve people's health in underdeveloped regions, but there are also good business opportunities for Novartis. This combination of being successful and doing good is a powerful recipe for attracting outstanding people."
But my research shows that while important, promises made and kept is about more than providing a compelling sense of purpose in organisations: it is about creating cultures characterized by authenticity, connectivity and meritocracy. A company with a high authenticity culture is one that is true to itself in its policies and practices, including, of course, its talent management practices. High connectivity is about placing a premium on collaboration, enabling voice, boundary spanning and breaking down silos. A culture of meritocracy is one in which people believe that their efforts and results will be rewarded regardless of where they reside in their organisations. Take Standard Chartered Bank (SCB) as an example. Even with the global economic slowdown, it is difficult to find high-calibre commercial banking talent in China. But Katherine Tsang, CEO of SCB China, refuses to get into a compensation escalation war for talent. SCB's talent strategy is to tell a compelling story of the bank's future and offer employees the opportunity to be a central part of that future. As Tsang sums up the challenge:
"We tell lots of stories here about our mission, our sense of purpose, our brand, and the many opportunities that young talent will get when they come to work for us. But, we need to keep those promises. We back up our stories by executing our strategic intent and by making sure that there is a consistency between our external brand promise, our employee brand and the value proposition that we deliver to employees".
By better understanding the forces that are forming this perfect storm, and by creating, executing and living up to a new talent compact, we can begin to set a proactive talent agenda that will enable our organisations to be game changers rather than passive participants in the global war for talent.
Listen to Doug's podcast
Resources
www.entrepreneur.com/tradejournals/article/170730469.html, David Sirota, "Ask the expert: attracting and retaining talent", 2007.
Peter Cappelli, "A market-driven approach to retaining talent",
Harvard Business Review 78, no.1, 2000.
Arthur K. Yeung and Douglas A. Ready, "Developing leadership capabilities of global corporations: A comparative study in eight nations", Human Resource Management 34, no. 4, 2006.
Douglas A. Ready (dready@icedr.org; dready@london.edu) is Visiting Professor, Organisational Behaviour, London Business School. He is also Founder and President, International Consortium for Executive Development Research.