Talent Management in the 2020s TDN 5 th September 2014 Catherine Shepherd

Objectives for today Define talent management Remind ourselves why talent management is important (to organisations and individuals) Identify future trends in work generally and talent management particularly Share practical tools, techniques, methods, hints and tips Discuss personal implications to us as coaches/consultants of future trends in talent management

What is Talent Management?

What is Talent Management? Inclusive Succession planning and management is the process that helps ensure the stability of tenure of personnel. It is perhaps best understood as any effort designed to ensure the continued effective performance of an organisation, division, department, or work group by making provision for the development, replacement and strategic application of key people over time. Rothwell, W. (2005). Effective Succession Planning: Ensuring leadership continuity and building talent from within. AMACOM, New York Succession planning sits inside a a much wider set of resourcing and development processes that we might call succession management. This encompasses the management resourcing strategy, aggregate analysis of demand/supply, skills analysis, the job filling process and management development (including graduates and high fliers). Hirsh, W. (2000). Succession Planning Demystified, IES Report 372. Talent management is the process through which employers anticipate and meet their needs for human capital Cappelli 2008b as cited in Thunnissen, M et al (2013). A Review of Talent Management: Infancy or Adolescence. International Journal of Human Resource Management, 27 (9), 1744-1761.

What is Talent Management? Exclusive Talent management is the additional management processes and opportunities that are made available to people in the organisation who are considered to be talent. Chartered Management Institute & Ashridge Consulting (2007). Talent Management: Talent for business performance. Talent management is the systematic attraction, identification, development, engagement, retention and deployment of those individuals who are of particular value to an organisation, either in view of their 'high potential' for the future or because they are fulfilling business/operation-critical roles. www.cipd.co.uk/hr- resources/factsheets/talent-management-overview.aspx www.cipd.co.uk/hr- resources/factsheets/talent-management-overview.aspx Talent management is the systematic attraction, identification, development, engagement/retention and deployment of those individuals with high potential who are of particular value to an organization Davies and Davies 2010, as cited in Thunnissen, M et al (2013). A Review of Talent Management: Infancy or Adolescence. International Journal of Human Resource Management, 27 (9), 1744-1761.

What is Talent Management? Exclusive Activities and processes that involve the systematic identification of key positions which differentially contribute to the organisations sustainable competitive advantage, the development of a talent pool of high potential and high performing incumbents to fill these roles, and the development of a differentiated human resource architecture to facilitate filling these positions with competent incumbents and to ensure their continued commitment to the organization Collings and Mellahi 2009, as cited in Thunnissen, M et al (2013). A Review of Talent Management: Infancy or Adolescence. International Journal of Human Resource Management, 27 (9), 1744-1761. Global talent management includes all organisational activities for the purpose of attracting, selecting, developing, and retaining the best employees in the most strategic roles (those roles necessary to achieve organisational strategic priorities) on a global scale Scullion and Collings 2011, as cited in Thunnissen, M et al (2013). A Review of Talent Management: Infancy or Adolescence. International Journal of Human Resource Management, 27 (9), 1744-1761.

What is Talent Management? Inclusive approach, employee as subjectExclusive approach, employee as subject Talent is the entire workforce Talent = human capital Talent mgmt = Human Resource Management Criticised that so broad meaningless Talent = small segment of workforce Selection of segment in terms of (potential) performance Criticised for self-fulfilling prophecy, too focused on individual, and high performance is not a talent Inclusive approach, employee as objectExclusive approach, employee as object Allows every employee to reach their potential Development of the talents of every employee emphasised Talent mgmt = Human Resource Development Talent = small segment of workforce Selection of segment in terms of above average abilities and application of those abilities to deliver excellent performance Talent mgmt = giving employees who are highly capable and motivated opportunities to develop self Subject =talented people. Object = talent as characteristic of people (innate, mastery, commitment, fit). Inclusive (all employees). Exclusive (select group). Gallardo-Gallardo, Dries & Gonzalez-Cruz (2012). What is the meaning of talent in the world of work? Human Resource Management Review, 23, 290-300

Several authors have stated, however, that workforce differentiation is the key differentiating principle between talent management and strategic human resource management more generally. Dries (2013). The psychology of talent management: a review and research agenda. Human Resource Management Review, 23, 272-285.

When an organisation takes an object approach more likely to see competence management and knowledge management as central practices. Organisations that take an subject approach more likely to rely on succession planning and organisational career management. Dries (2013). The psychology of talent management: a review and research agenda. Human Resource Management Review, 23, 272-285.

While an inclusive approach to talent management is believed to lead to a more pleasant working environment characterised by openness, trust and overall employee wellbeing, the exclusive approach is assumed to to generate higher return on investment in terms of profit and productivity, brought about by increases in achievement motivation of star employees . Dries (2013). The psychology of talent management: a review and research agenda. Human Resource Management Review, 23, 272-285.

Often the practice of leaving room for interpretative flexibility results in discrepancies between organisational discourse and practice poses a serious threat to the reputation of HR practitioners as legitimate business partners. Dries (2013). The psychology of talent management: a review and research agenda. Human Resource Management Review, 23, 272-285.

Why is Talent Management important?

Companies with level 4 talent programmes: Generate A% more revenue per employees than their peers Have B% lower voluntary turnover amongst high performers than peers Were C% less likely to downsize during the 2008 recession than peers Bersin & Associates 2010 Investing in 16 talent management practices, as opposed to not, leads to: D% higher fulfillment of psychological contract E% less violation of psychological contract F% more commitment G% less turnover Tilburg University in cooperation with Accenture, October 2009

Why is Talent Management important? Companies with level 4 talent programmes: generate 26% more revenue per employees than their peers have 40% lower voluntary turnover amongst high performers than peers Were 28% less likely to downsize during the 2008 recession than peers Bersin & Associates 2010 Investing in 16 talent management practices, as opposed to not, leads to: 27% higher fulfillment of psychological contract 34% less violation of psychological contract 13% more commitment 19% less turnover Tilburg University in cooperation with Accenture, October 2009

Why is Talent Management important? Tilburg University in cooperation with Accenture, October 2009

Why is Talent Management important? Talent Management Psychological contract fulfillment Commitment Turnover intention +3.35 +5.71 +4.67 0.156 sig at 5% level 0.191 sig at 5% level Tilburg University in cooperation with Accenture, October 2009

Why is Talent Management important? Talent management is not an end in itself. Its not about developing employees or creating succession plans, nor is it about achieving specific turnover or any other tactical outcome. It exists to support the organisations overall objective (which in business essentially amounts to making money). Capelli 2008a, as cited in Thunnissen, Boeslie & Frutyier (2013). A Review of Talent Management: Infancy or Adolescence. International Journal of Human Resource Management, 27 (9), 1744-1761. Organisations should strive for societal goal of sustainability (diversity, social responsibility, human and employee rights, protecting the environment and contribution to the economy). Boudreau & Ramistad (2005) as cited in Thunnissen, Boeslie & Frutyier (2013). A Review of Talent Management: Infancy or Adolescence. International Journal of Human Resource Management, 27 (9), 1744-1761. To enhance organisational performance, organisations should focus on individual performance by means of increasing motivation, commitment and extra-role behaviour. Work and organisational engagement and alignment are indirect objectives of talent management. Thunnissen, Boeslie & Frutyier (2013). A Review of Talent Management: Infancy or Adolescence. International Journal of Human Resource Management, 27 (9), 1744-1761.

Future of work and implications for Talent Management

PwC Megatrends CEOs (1)General (2) Demographic and social change By 2050 the population of 15-64 year olds will have decreased by 150m in China, increased by 317m in India, and will be larger in Nigeria than in the US. 60%33% Shift in global economic power By 2020 China will overtake US as the largest economy. By 2030 E7 will replace G7 in terms of size and purchasing power. 59%36% Rapid urbanisation By 2050 75% of the worlds population will live in urban areas. 40%26% Climate change and resource scarcity Global food demand predicted to increase by 35% by 2030. Proven oil supplies will last 50 years at current demand levels. 46%39% Technological breakthrough 90% of data that exists less than 2 years old, only 0.5% analysed. In 2001 it cost $96m to sequence a genome, in 2013 $6000. of jobs in US are in danger of being replaced by a computer in next 20 years. 81%53% (1) % of CEOs (1314 surveyed Sept-Dec 2013) that listed megatrend as transforming their business in next 5 years. (2) % of 10,000 people surveyed in China, India, Germany, UK and US. What will transform way people work over next 5-10 years?

PwC Megatrends CEOs 63% are concerned about availability of key skills (c.f. 61% 2008, and 46% 2009) 58% are concerned about rising labour costs in high growth markets 93% recognise the need to change their talent strategy, but 61% havent started. Only 34% think HR are well prepared to capitalise on these trends (c.f. 56% finance to 28% R&D) General population Most important thing in a job for 44% is job security, for 29% take control of their career and do what they want when they want 65% of people want to work for an organisation with a social conscience 40% of people believe that traditional employment wont be around in the future 46% of HR professionals expect at least 20% of their workforce to be temporary contractors by 2022

Demographic - PwC Millennials at Work Born between 1980 and 2000 (?) By 2020 will be of global workforce, although in short supply in countries with low birth rates 54% expect to have 2-5 employers (2008 75%), 25% expect to have 6+ (2008 10%) 72% feel they have made a compromise to get into work, with only 18% expecting to stay with their current employer long term First choice benefit = personal learning and development, second choice = flexible hours, third choice = cash. But 28% feel work-life balance worse than what they expected, and over 50% feel talk about equal opportunities is not delivered on 41% prefer to communicate electronically (rather than F2F or phone), 75% believe technology makes them more efficient. Many feel held back by outdated working practices Just over 50% attracted to employer because of their CSR position (2008 88%), 56% would consider leaving if their values did not align (2008 86%). 30% of Swiss respondents would not work in B&CM sector 4364 graduate responders in 75 countries to online survey 2011. All younger than 31, and graduated 2008-2011.

Millennial and Work-Related Attitudes Meta-analysis of 20 studies (1995-2009) giving pair-wise comparisons across Traditionals, Baby Boomers, Generation Xers, Millennial. Nearly 20,000 subjects. Costanza et al (2012). Generationall differences in work related attitudes: A meta-analysis. Journal of Business and Psychology, 27 (4), 375-394. Positive score older generation higher, negative score older generation lower. Mean differences 0.02 - 0.25 for job satisfaction, -0.22 0.46 for organizational commitment, -0.62 0.05 for intent to turnover. Moderate to small differences, older generations may be slightly more satisfied, less likely to leave and may be more/less/no different in commitment. But 1.Age and tenure are positively correlated with job satisfaction (0.18, 0.12 after controlling for tenure). 2.Age negatively correlated with actual turnover (-0.08 to - 0.14) 3.Results for organizational commitment are mixed. 4.Social dominance, conscientiousness and emotional stability tend to increase with age, and these traits are positively associated with job satisfaction. Findings suggest that meaningful differences among generations probably do not exist on the work-related variables we examined and that the differences that appear to exist are likely attributable to factors other than generational membership.

Millennials and Leadership Centre for Creative Leadership (CCL) World Leadership Survey (2014): how much of each of the following characteristics helps make a leader effective?

Millennials and Leadership Millennial Generations Xers Baby Boomers Contrary to popular belief, younger and older employees have very similar ideas about what makes a leader effective.

Millennials and TM practices Tilburg University in cooperation with Accenture, October 2009

Technology Like Curly Fries on Facebook. Then youre clever Daily Telegraph 12.3.13 Kosinski, Stillwell & Graepel (2013). Private traits and attributes are predictable from digital records of human behaviour. Proceedings of National Academy of Sciences of USA, 110 (15), 5802-5 Analysed data from 58466 US volunteers of Facebook likes (median 68) and personality tests. From relatively basic data estimate wide range of attributes that you assume are private: African v Caucasian American 95% Homosexual v Heterosexual male 88% Democrat v Republican 85% Christian v Muslim 82% Use of addictive substances 65%-73% Parental separation

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Talent Management in the 2020s TDN 5 th September 2014 Catherine Shepherd