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Staffing Management: UpFront

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Vol. 3, No. 1




‘Talent’ Takes on New Meaning

Often used as a term for a company’s entire workforce, “talent” is now being defined more narrowly as a core group of leaders, technical experts and key contributors who can drive their businesses forward, according to a Towers Perrin survey.

According to those surveyed, groups considered to be “talent” include:

  • Senior leadership (according to 86 percent of respondents).
  • Mid-level employees with leadership potential (82 percent).
  • Key contributors or technical experts (76 percent).
  • Entry-level employees with leadership potential (48 percent).

These defined talent pools make up, on average, no more than 15 percent of the total workforce.

The survey of senior HR executives at more than 250 U.S. and Canadian organizations also finds that although they view talent retention and development as one of their most critical objectives, few believe their HR departments have the skills needed to manage this emerging talent pool.

While the survey shows that companies are distinguishing between talent management as a set of practices and programs for a small, critical segment, and workforce management as a set of practices and programs covering the entire workforce, no more than half of the respondents believe that HR has the skills across a wide range of managerial support activities to effectively deliver on the talent management role.

More than two-thirds of respondents say their HR departments do not have the skills necessary to measure employee engagement on an ongoing basis or to evaluate the return on workforce-related investments. The inability to capture and disseminate relevant data to managers is problematic since companies have no quantitative foundation from which to develop a talent management strategy and build and deploy meaningful processes.

Currently, 73 percent of the respondent companies do not have a formal position in place to manage talent. But 16 percent have instituted such a position and another 11 percent intend to do so within the next year.

“Many of the larger and more forward- thinking organizations are creating special senior talent management positions to focus specifically on their talent strategy,” says Max Caldwell, a Towers Perrin principal and one of the leaders of the firm’s HR Services Business Workforce Effectiveness practice. “The titles may differ, but these roles seek to integrate things such as strategic workforce planning, recruitment, leadership development and career management, which had previously operated in silos.

“These companies may well be a step ahead of the others, since Towers Perrin’s data show that those organizations that establish a formal talent management position are also far more likely to follow through with more structured processes and deploy current best practices to the greatest effect,” according to Caldwell.

While there is a wide range of talent management processes and practices, “there is a lot of room for HR to raise its game,” he adds. “One opportunity is better integration of talent strategies to enhance impact. Another is empowering a senior talent management executive to ensure better execution and establish clear accountability. And a third opportunity is more actively engaging senior line leaders as full partners in the company’s talent agenda.”

Workers Question Validity Of Personality Tests

U.S. workers have mixed feelings about the use and value of personality tests in the hiring process. Thirty-two percent say that personality tests can help determine whether a prospective employee will fit in at a company or organization, but 44 percent say personality tests are not fair assessments of actual personality, according to a Spherion Workplace Snapshot survey conducted by Harris Interactive.

When asked to think about all factors in the hiring decision-making process— such as work experience and background checks—35 percent of workers say personality tests should be considered of moderate to high importance.

Other results from the survey:

  • In the past two years, only 16 percent have taken a personality test to be considered for a job. Males (18 percent) are more likely than females (13 percent) to have taken tests recently to be considered for a job.
  • Younger workers are most likely to have taken a personality test recently to be considered for a job. Twenty-nine percent of adults aged 18 to 24 say they have taken a personality test in the past two years to be considered for a job.
  • Adults age 50 to 64 are least likely to have taken a personality test recently to be considered for a job (10 percent).

The survey was based on a sample of 1,572 employed adults 18 years and older.

Signing Bonuses Not a Sure Thing For New Graduates This Year

Employers expect to face more competition in hiring new college graduates from the class of 2007, but fewer than half plan to use signing bonuses to lure new graduates to their workplaces, says the National Association of Colleges and Employers (NACE).

Results of NACE’s Job Outlook 2007 survey finds that 46.4 percent of responding employers expect to use signing bonuses to woo class of 2007 graduates— roughly the same percentage that used them with the class of 2006.

“We’re not seeing any significant move toward using signing bonuses this year,” says Marilyn Mackes, NACE executive director. “In fact, more than three-quarters of those who plan to use signing bonuses reported that they will use them selectively. They won’t be offering them to all candidates.”

Bonuses range from $1,000 to $10,000; the average offer is $3,568. However, more than 60 percent of those who are offering bonuses say they’ll offer less than that average.

Although most respondents don’t plan to use signing bonuses to beat out their competitors for new college hires, most do expect to increase their starting salary offers.

“On average, employers reported plans to increase their starting salary offers by 4.6 percent over last year,” says Mackes. “That’s nearly a full percentage point higher than the increases they reported for the class of 2006 and the class of 2005.”

Tech Execs Find Room for Improvement In Their Talent Management Capability

Although executives at technology companies understand that human capital management should be their top priority, most say their companies’ capabilities in this area are lacking, according to a PricewaterhouseCoopers report.

To find new sources of talent, technology companies have been forced to look offshore to gain access to larger pools of talent. However, even this resource is not secure, with European and Asian executives anticipating a severe shortage of talent within the next three years.

Nor is the talent shortage limited to developed markets, with 41 percent of all technology companies indicating difficulty in finding technical talent in emerging markets and 48 percent reporting difficulty keeping this talent, according to the report.

In addition, emerging markets have experienced a rise in tech salaries—a direct result of the intensifying need for talent. Compensation levels are also increasing to a point where China and India are no longer viewed as cost-effective, the report finds.

The report, Technology Executive Connections—Successful Strategies for Talent Management, also highlights weaknesses in areas such as training for senior executives, capabilities for the recruiting and development of talented people, and career development.

The report does find some evidence that organizations are implementing ways to improve their human capital strategies. Some companies are currently working with schools to enhance aspects of curriculum and encourage students to study mathematics and sciences to combat the diminishing talent pools with these qualifications.

Others are looking in-house to better manage their best assets. Those companies realizing the benefits of managing their in-house talent are using tools such as talent maps, which assess their present and future talent needs, and worker engagement surveys and are implementing human capital metrics at all levels of the organization.

Companies in China Wrestling With Short-Term Staffing Challenges

Companies in Hong Kong and mainland China say their key career management priorities include the retention of staff in key positions, enhancing high-potential employees’ satisfaction with career development and recruiting external talent, according to a Mercer Human Resource Consulting survey.

But the survey finds that the companies tend to focus more on the shortterm priority of attracting and retaining talent than on developing employee capabilities for the future.

Only 10 percent of companies surveyed in mainland China and 11 percent in Hong Kong are fully satisfied that they have clearly identified the careers that are critical to business success. And only 6 percent of companies in mainland China and 2 percent in Hong Kong say they have developed the internal talent pipeline to meet growing business demand.

“Particularly in mainland China, as organizations continue to expand operations, their need for specialized skills is leading to a shortage of qualified staff,” says Brenda Wilson, senior director, Mercer Human Resource Consulting, Greater China. Wilson notes that “the business imperative to develop talent thus becomes paramount.”

But, she adds, “because of this tight labor market, employers have also had to place greater emphasis on providing a compelling place to work. Successful companies will align business needs with employees’ appetite for continuous growth and development and satisfy both objectives.

“Organizations in Greater China need to place greater emphasis on building a sustainable human-capital infrastructure if they want to have a sufficient talent pipeline to keep up with business growth,” says Wilson. “This means establishing a more formal career-management process, including the definition of technical and behavioral competencies by function, clarity around roles and responsibilities, mapping of experiences and career moves, and agreement on promotion and progression criteria.”

Many companies, facing the risk of losing employees, resort to title inflation and over-promoting of individuals, only to find that such employees are not capable of performing at the next level, according to Wilson. “The introduction of a careers infrastructure would address these HR issues by defining and clarifying what it takes to be successful in current and future roles. More importantly, this approach helps to build technically competent employees.”

The survey finds that building worldclass capability in business-critical disciplines is reported as a key priority for only 47 percent of all Hong Kong participants and only 22 percent of mainland Chinese organizations.

Only 45 percent of organizations in China and 50 percent in Hong Kong reported equipping their managers with the skills to support a robust career-management system. And only 24 percent of organizations in mainland China and 28 percent in Hong Kong facilitate discussions between employees and managers to address career opportunities and development.

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