ASSIGNMENT NO. 2 TALENT MANAGEMENT RESEARCH PAPER

TABLE OF CONTENT
I. Executive Summary…………………………………………………...............3

II. Introduction…………………………………………………………................4 III. What is the meaning and nature of talent or global talent management and succession planning in particular organizational contexts?.................................5 IV. What are the key challenges faced by organizations in their approach to talent management?.......................................................................................................7 V. What are the measures of success/critical success factors for talent management initiatives for both the management of the organization and its employees?......9 VI. Conclusion……………………………………………………………..….....13 VII. Bibliography & Reference..……………………………….…………………14

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I. EXECUTIVE SUMMARY
What is talent management? Wide variations exist in how the term ‘talent’ is defined across differing sectors, and organizations may prefer to adopt their own interpretations rather than accepting universal or prescribed definitions. That said, it is helpful to start with a broad definition and, from our research, we have developed a working definition for both ‘talent’ and ‘talent management’:  Talent consists of those individuals who can make a difference to organizational performance either through their immediate contribution or, in the longer-term, by demonstrating the highest levels of potential.  Talent management is the systematic attraction, identification, development, engagement, retention and deployment of those individuals who are of particular value to an organization, either in view of their ‘high potential’ for the future or because they are fulfilling business/operation-critical roles. These interpretations underline the importance of recognizing that it is not sufficient simply to attract individuals with high potential. Developing, managing and retaining those individuals as part of a planned strategy for talent is equally important, as well as adopting systems to measure the return on this investment.

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II. INTRODUCTION
Although the origins of talent management can be traced back to 1865 (Simonton, 2011) and to the fields of arts/entertainment management, sports management literatures, and early education, interest in talent management in the business context came in the 1990s with the ground breaking study entitled “The War for Talent,” by McKinsey (Michaels, HandfieldJones, & Axelrod, 2001). This study, reflecting the high tech boom times of the late 1990s, suggested that demand for talented employees exceeded the available supply, thus leading to the problem of talent shortage. One of the most significant developments in people management over the past fifteen years has been the focus on effectively managing the individuals who are most important to the strategic success of companies, both domestic and international. This focus has taken the general labels of “talent management” or more popularly, “global talent management.” This report is about the broader and more encompassing label global talent management (GTM). Because of its importance, there have been many academic and HR practitioner papers and reports published on global talent management, but because of it is recent, there are many viewpoints as to “what it really is, what it covers and what things remain to be explored and developed in the years ahead”. The changing demographics of the labor market, enduring skills shortages and employee demands for work–life balance have created a so-called ‘war for talent’. In this ‘war’, successful organizations look to improve their strategies, policies and practices for the attraction, development, deployment and retention of talent vital for their business needs. They therefore have to aim to understand the capabilities needed in their organization and determine the actual or potential talents required of employees. The preliminary research work undertaken so far by the CIPD “Chartered Institute of Personnel & Development” and others has shown that there is a variety of approaches to talent management and no one blueprint that can be applied to all organizational contexts. Each organization has different resourcing requirements for its current and future ‘talent pipeline’, as well as different issues concerning how best to meet these requirements. It’s these considerations that should determine the talent strategy an organization develops. The research addresses answers for the following questions 1) What is the meaning and nature of talent or global talent management and succession planning in particular organizational contexts? 2) What are the key challenges faced by organizations in their approach to talent management? 3) What are the measures of success/critical success factors for talent management initiatives for both the management of the organization and its employees? A set of references utilized in the preparation of this review is found at the end.
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III. What do we mean by “Talent Management”?
Talent management is difficult to define because it’s a complex undertaking that operates within the strategic human resourcing task generally. In the CIPD’s 2006 learning and development survey, only 20% of respondents specifically had a formal definition of talent management and, although 51% of respondents said they undertake talent management activities, there is generally a lack of consistency in defining talent and talent management. (CIPD 2006) Talent management requires HR professionals and their clients to understand how they define talent, who they regard as ‘the talented’ and what their typical background might be. It also requires thinking about whether such recruits should be seen as particularly gifted. Talent can be considered as a complex amalgam of employees’ skills, knowledge, cognitive ability and potential. Employees’ values and work preferences are also of major importance. An organization’s talent There are also questions to be answered when considering a talent management program. For example, should talent management be focused exclusively on an elite subgroup of future leaders of the organization or at least those capable of progressing through a number of levels? The ‘exclusive’ mode of talent management is characterized by a concentration on those in one or two segments (or talent ‘pools’) of the workforce who are either at the top or who are identified as having the potential to get to the top by demonstrating high levels of potential or performance. If operating in this mode, there needs to be clarity about what it is that makes ‘an exceptional manager’ (Delbridge et al. 2006, p141), that is, one who can make a strategic difference. However, some commentators have expressed concerns about strategies that concentrate exclusively on an elite high-potential few, rather than those that take a more inclusive ‘whole workforce’ approach. A more ‘inclusive’ approach is necessary, they argue, because ‘... an inclusive talent management strategy is a competitive necessity’ (Chris Bones cited in Warren 2006, p25). So, should there be a more inclusive approach that recognizes that there are various key positions to fill in any organization as well as a future pipeline of the ‘appropriate’ skills to fill all of these positions, whatever the level? This is no easy endeavor. Different organizations have different forms of inclusivity. Some organizations, in addition to capitalizing on those identified as having the potential to be the managers of the future, also take into account professional staff, technical experts and knowledge workers. What may be ignored is the talent management of certain groups of workers, including women, those from ethnic minorities and older workers.
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But, whatever the approach, it’s clear that mindful attention is required for the needs of the organization to survive current and anticipated strategic and operational challenges, as well as linking those needs to the development, performance and rewards needs of the employee. Global Talent Management: Global talent management is the standard human resource department practices and functions; and in the international context the term global talent management is used interchangeably with international human resource management.  Global talent management is more future oriented and is defined in terms of human resource planning and projecting employee/staffing needs. Here the focus is on the types of individual level capabilities needed in the future;  Global talent management focuses on high performing individuals also known as high potentials;  Global talent management focuses on strategic jobs. These jobs also refer to core jobs and are critical to the organization in terms of creating competitive advantage; and,  Global talent management is a capability based approach to strategic human resource management. Here talent management is treated as a subset of strategic human resource management. Regardless of which definition is used, there is a common theme across them. It seems that global talent management focuses on two important dimensions (Tarique & Schuler, Forthcoming):  Individuals with high and/or critical levels of talent (e.g., knowledge, skills, and abilities) that add value to the organization.  Complementary international human resource management policies and practices that are used to manage employees with high and/or critical levels of talent. Because they are implemented systematically, these international human resource management policies and practices refer to global talent management systems. Therefore, global talent management can be defined as: “A subset of IHRM activities (systematically linked IHRM policies and policies) to attract, develop, retain, and mobilize individuals with high levels of current and potential human capital consistent for the strategic directions of the multinational enterprise to serve the objectives of multiple stakeholders” (Tarique & Schuler, 2010).

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IV. What are the key strategic challenges of talent management?
There are a number of specific factors that are expected to influence talent management strategies, policies and practices. Externally, dramatic shifts in the make-up of the workforce can influence the way organizations recruit, develop and retain key talent in the future. These can include: • An increasingly global labor market • An increasingly virtual workplace • A vastly diverse workforce, in terms of age, race and culture • A workforce with independent views about their own lifestyles and access to information about career opportunities. Demographic, legislative and social challenges to talent management The demographic, legislative and social challenges to talent management for all organizations are immense. The characteristics as well as the aspirations and preferences of the available workforce can also have a serious impact on talent management initiatives. For example in the UK current and future new entrants to the labor market are delaying making commitments to career and to family life to an older age. Competition for talent will therefore become more intense. And this isn’t just a UK phenomenon. In the USA, the rate of increase in population size in the USA has decreased from 13% to just 5% in less than 15 years, and in Russia the Government is providing cash incentives to families to increase the birth rate. With regard to other diversity issues, UK labor markets will increasingly consist of non-UK talent whose ethnic origins are either as direct immigrants or as children of direct immigrants, and there has been a rapid escalation in the use of skilled migrant labor (Tatli et al. 2006). Competition for labor is also becoming increasingly internationalized. The growth in membership and size of the European Union will accelerate this, not only in the UK but in other countries too. For example, because the USA and Russia are likely to experience difficulties attracting sufficient talent from their own populations, employers in those economies will look to other countries to attract the talent they need. UK employers are therefore likely to experience more international competition for labor in their domestic labor markets and will have to compete internationally themselves. Because of this demographic variety, employers are making changes to their HR practices to reflect their search for new talent, such as recruitment practices, diversity policies, training and development, and integrating and managing organizational cultures. Strategic considerations of talent management The CIPD’s 2006 learning and development survey found that 74% of respondents reported that their organization didn’t have a well-developed plan for talent management. This was backed
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up by a survey undertaken with executive and senior managers in over 1,500 organizations, where it was found that, overall, ‘there is no systematic and coordinated approach in the public and private sectors to developing and nurturing the next generation of business leaders,’ with ‘judging talent ... still very much an intuitive and “gut feeling” response’ (SOCPO, 2005, p3). However, this doesn’t mean that nothing is being done. The CIPD found that 75% of respondents to their survey from organizations with over 500 staff are doing some form of talent management. In this research so far, we’ve also found evidence of different strategic levels of engagement in the talent management process, as shown in Figure 1. The levels range from having no talent management strategies, policies or formal practices and managing talent in an informal way, to a fully integrated process that incorporates distinct talent management strategies and practices that are not only informed by corporate strategy development but also inform them. One question that might be raised here is: ‘should organizations be aiming to move from the left to the right of the diagram as a stepped progression for talent management?’ For some organizations, talent management has become a key strategic issue, with the recruitment, development and retention of talent increasingly being seen as critical success factors in the search for organizational objectives such as competitive advantage. It has therefore become a subject on the CEO’s agenda (EIU, 2006) for board-level dialogue and increasingly highlighted in company reports and accounts. As a result, talent management will inevitably be bound up with the wider question of corporate governance – that is, the way in which an organization is run and controlled – as well as raising questions about the relationship between talent management and succession planning. Succession planning and talent management Like talent management, succession planning is a complex process with many levels, layers and commentators (Giambatista et al. 2005). Succession planning is part of a succession management process where ‘one or more successors are identified for key posts (or groups of similar key posts) and career moves and/or development activities planned for these successors’ (Hirsch 2000). The delineation between talent management and succession planning isn’t always clear. The focus of succession planning tends to be only on the most senior of staff, such as the CEO, members of the board or other key senior organizational positions (although it can also be used for more junior posts – particularly those that are operationally critical and/or hard to fill). Senior staff leaves for a variety of reasons: illness or death, a new job, unsatisfactory performance, personal reasons, retirement, and so on. When a top-level vacancy occurs, a decision needs to be made about how to source suitable candidates for that vacancy. The CIPD 2005 recruitment, retention and turnover survey found that managerial and professional
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vacancies are often difficult to fill externally, so it can make sense to look for internal candidates who have demonstrated potential to grow. Being able to source these candidates easily through effective human capital metrics held in succession planning or talent management systems can prove worthwhile. Unfortunately, as the same survey found, ‘one in five participants report that no succession planning activity took place and those who did were most likely to do so on an ad hoc basis.’ The recent unexpected exit by the president and chief operating officer of McDonald’s and the quick naming of his replacements prompt such questions as: ‘is the organization in a good state of readiness to replace a key person?’ and ‘are there robust succession plans in place and replacements ready for both planned and unplanned vacancies at senior level?’ Pitney Bowes Inc., whose revenue grew 11% last year from $5.5 billion, has at least two people in line for most positions, including 10–15 potential candidates for CEO and other senior positions (Economist Intelligence Unit 2006). At different stages in their careers, potential successors may be ranked in order, such as: 1. Being ready to do the next job now Being ready for a certain higher-grade position in, say, two years 2. 3. Being ready for job rotation at the same level 4. Being ready for lateral assignments on temporary relief or project work. Succession planning in the international domain is particularly complex because of possible constraints to senior staff mobility and lack of transferable skills in language and cultural aspects. Succession planning is often a highly secretive process and is invariably expensive because it takes account of both internal and external candidates.

V. What are the measures of success/critical success factors for talent management initiatives for both the management of the organization and its employees?
Creating the conditions for success by the following: Define your own value proposition As we noted earlier, there are very few blueprints that companies can rely on when they bring a Head of Talent into the organization. The winning Head of Talent will therefore take the lead in proposing the value that he or she intends to add to the company, and what it will take to deliver that value. Beth Axelrod was the first Head of Talent appointed by WPP; she is now the global head of HR for eBay. In an interview about her experiences, she explained how such a conversation might begin:
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“You’re trying to drive ad sales from X to Y. You need growth to come in these particular areas. And for the growth to come in these areas, let’s talk about the implications for talent and for the organization. Then, let’s talk about what capabilities you have today – where you’re good and not so good. So, we’ll have to fill out those capabilities. In addition, you’ll need a different cost structure because your margins are going to start to be squeezed. Let’s talk about where you have people and why you’ve got so many of them in high-cost locations.” 5 By taking the lead in this way, the Head of Talent can catalyze a productive discussion about talent in the company, and about the value that the CEO and other executives expect their Head of Talent to contribute. It is worth revisiting this value proposition periodically, to ensure that the company and Head of Talent remain aligned on the value that this role is to deliver. Achieve alignment around seven key dimensions Alignment around the Head of Talent’s expected contribution is critical. Our interviews suggest that it is also important to seek consensus around the ways in which the Head of Talent will work with other executives in the company. The following checklist – 7Ps – will be helpful in structuring the role of the Head of Talent. Pressures How immediate are the company’s talent issues? Where are talent problems interfering with corporate performance? Where are the ‘pain points’ that existing leaders (in HR, in the line, etc.) seem unable to address? Purpose Why has the company hired a Head of Talent? What are the problems that they are asking the manager to solve? Are they primarily about recruitment, retention, succession? The purpose of a Head of Talent will depend on many things: the company’s culture and its traditions, the capabilities already present in HR, and the willingness and ability of line managers to act as talent managers themselves. Person What skills should the Head of Talent possess? What experience should he or she have? For example, a leading investment bank has regional talent leads (Europe, Asia, and North America) who don’t have wholesale banking experience. But the CEO recently decided that the global Head of Talent needed to be deeply rooted in investment banking to facilitate easier communication with people at headquarters. Profile What internal and external profile should the talent manager maintain? Our interviewees emphasized the importance of ‘getting around the company’, meeting their portfolio executives in person. A CEO who wants such a broad internal profile for the Head of Talent will need to support the executive in gaining access to diaries, key internal business events and even some client facing meetings.
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The CEO and Head of Talent also need to agree on the right external profile. Some of the Heads of Talent we interviewed have relatively modest external profiles, but communicate widely within their companies. Power What decision making powers does the company want to invest in its Head of Talent? Will they have veto over senior hiring decisions? Over deployment of leaders in ‘high potential’ pools? Where will the Head of Talent have to operate through persuasion and where through direct decision making? Process Where will the Head of Talent get involved in top executive processes and forums? To clarify, it is often a good idea to pose some challenging scenarios: for instance, suppose that the company wants to take over a smaller competitor. Will the Head of Talent be involved before the deal is agreed? Or will he or she read about it in the newspapers and then be told to help integrate top talent in both companies? There is no ‘right’ answer here; alignment is what matters. Pools Finally, which talent pools will the Head of Talent manage? Some companies divide their pools; one large industrial company for example, has one talent manager for roughly the top 100 and another for the next 250. It is essential that everyone on the top team understands who falls into the Head of Talent’s portfolio, and what interaction he or she will have with them. Few of our interviewees had responsibility for external pools, a key source of ‘ready now’ talent. We saw several Heads of Talent use this type of checklist to define the current position of their role and impact and set a plan for the future. In the appendix we offer a template for CEOs and Heads of Talent to use to review the current situation and future goals of their senior talent management strategy. Operate as a diplomat, well connected to colleagues With very few exceptions, Heads of Talent operate with little formal power. They succeed or fail primarily through influence and persuasion. The winning Heads of Talent seem to get two things right. First, they get plenty of ‘air time’ with their colleagues – not necessarily the CEO, but certainly the executives who matter. One Head of Talent told us of “an open, continuous dialogue with the business in terms of people asking what they need and what I and my team can deliver.” Many Heads of Talent meet regularly with line executives to conduct succession and development reviews. This is a role where walking around and talking can be essential to success. Most Heads of Talent had somewhat less frequent access to their CEOs. In many cases, these meetings took place less than once a month, and often with a corporate executive team or
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executive committee. A formal report to the board or executive committee was often a motivator for meetings between the Head of Talent and CEO. Second, successful Heads of Talent are diplomatic, managing their relationships like politicians. One interviewee said: “I have profile with the business heads. I knew it was important to have high impact early on, and to build good relationships quickly.” Many of our interviewees were quick to distinguish their roles from HR, feeling that ‘not talking like HR’ gave them more credibility with line managers. All were aware that, in most cases, they were not the decision makers around hiring, retention or reward. Connectivity – linking business and talent strategy Our interviewees recognized the difficulty, but told us that a strong Head of Talent will find ways to connect talent and business strategy. A few interviewees felt that they were running tightly ‘joined up’ systems. According to one, “Business strategy feeds talent strategy which in turn feeds succession.” But the majority reported breaks in the chain linking business strategy and talent strategy, and they saw this as a problem. “If we don’t connect business and talent strategy,” said one of the managers we interviewed, “we will be nothing more than a typical HR unit, focusing on activities and not on impact and outcomes.” We don’t find this result surprising. In company after company, functional leaders – finance, IT, marketing, HR – struggle to connect their planning with the flow and direction of the business. The task is easier for the older functions; ones that CEOs know how to work and how to lead. For a relatively new area like talent management, line managers often don’t know how to take the first steps in aligning it with their business strategies. As we suggested above, the Head of Talent needs to take the lead here. What is the best way to forge a strong connection with company strategy? A good starting point: work backward from the company strategy to the talent requirements it implies. Many global firms are seeing their areas of strongest growth shifting from North America and Western Europe to Asia, the Middle East, Africa and Latin America. What implications does such a shift have for executive talent? What does this imply for senior executive mobility? For leadership development in the company? Another approach we have found helpful is to work forward, looking at talent or leadership risk facing the company. The oil and gas industry, for example, faces a severe shortage of senior engineering leadership, because of demographic shifts and a decline in enrolment in petroleum engineering courses in the past. What risks does this imply for these firms’ growth? How should talent risk impact an oil firm’s forward investment program? It is easy for the Head of Talent, concerned with the executives they are responsible for, to develop an inward focus. We encourage Heads of Talent to look forward and outward, as well. The concerns of baby boomer and ‘generation X’ executives are important, but the future of most companies rests with succeeding generations. These leaders have different views about
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work, communication and collaboration. A smart Head of Talent will get to know them and look carefully at their needs. The board of any company will be concerned both with implementation of its strategy and with risk to future performance – and therefore, the CEO will also be so concerned. Focusing on these issues will help Heads of Talent keep their work directly relevant to the most pressing issues of the company. It will also keep the CEO’s door open.

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VI. Conclusion & Summary
Academics and human resource practitioners alike are showing a strong interest in ‘‘global talent management’’ as evidenced by their work. In this Literature Review their academic and professional work on global talent management from the last five to seven years was reviewed. A major purpose was to identify important themes that can provide academics and HR professionals with an understanding of what is generally accepted and known and unknown about the “global talent management.” This Literature Review suggests that there are strong drivers shaping the field of global talent management including the shortage of talented workers, changing demographics, changing attitude towards work and structure of work, and country culture differences. These drivers in turn impact the need for and content of global talent management systems, that is, the general HR policies and specific HR practices that are used for attracting, developing, retaining, and mobilizing talent. As with any relatively new field of inquiry and practice, many questions remain to be answered, both in practice and in theory. Possible questions for academics and practitioners to address are described in the section on “Directions in Global Talent Management.” Because of the number of questions remaining and the importance of global talent management to multinational firms, it would appear that the field will continue to see many research articles and practitioner reports over the next 5-10 years. Clearly, there is a great deal of exciting and important work to be done!

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VII. Bibliography & References
          (Simonton, 2011). McKinsey (Michaels, Handfield-Jones, & Axelrod, 2001). (Delbridge et al. 2006, p141). (Chris Bones cited in Warren 2006, p25). (Tarique & Schuler, 2010). (Tatli et al. 2006). (SOCPO, 2005, p3). (Economist Intelligence Unit 2006). (Giambatista et al. 2005). (Hirsch 2000).

 Chaterted institute of Personnel and Development: https://www.eoeleadership.nhs.uk/downloadFile.php?doc_url=1209037715_qzlP_cipd_talent_management_understanding_the_dimensions.pdf.  HEIDRICK & STRUGGLES: Strategic Talent management http://www.heidrick.com/PublicationsReports/PublicationsReports/HS_StrategicTalentMa nagement.pdf.  Ibraiz Tarique & Randall Schuler; Global Talent Management Literature Review; Literature Review for the Society of Human Resource Management Foundation for Publication Autumn 2012; October 28, 2012. http://smlr.rutgers.edu/global-talentmanagement-literature-review-oct-28-2012. Readings on related web sites institutes:  INTERNATIONAL HUMAN RESOURCE MANAGEMENT  DEVELOPMENT DIMENSIONS INTERNATIONAL  HUMAN CAPITAL INSTITUTE

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