Global talent management: How do you build an international talent pipeline?
David Woods, June 23, 2011
Every Saturday night, as children recite poetry holding boa constrictors, and dance troops shimmy like their sister Kate, we are told 'Britain's got talent'. But for HR directors, the irony is painfully evident.
As McKinsey's now infamous 'war for talent' rages on, it is increasingly difficult for UK employers to source the right people to build a talent pipeline.
And the problem is not confined to these shores. PwC's 2011 Annual Global CEO Survey found while 48% of CEOs are confident about growing their business over the next year, 40% report difficulty forecasting talent availability in emerging markets.
Regionally, the report finds 90% of CEOs said they expect their operations to grow in Asia in the next 12 months, followed by: Latin America, 84%; Africa, 75%; the Middle East, 72%; and Eastern Europe, 70% (see map). But just a third of respondents said the country in which they are based offers high growth potential.
This points to businesses attempting further growth abroad, most likely in emerging markets.
Phillip Rourke, director at talent technology provider Insala, explains: "Time zones have posed a problem for global companies. India, for example, is too far away from Europe with regards to time zones, so employers are looking to develop their businesses in South America and Africa."
CEOs identified the major challenges over the next three years as: a limited supply of candidates with the right skills (66%); losing top people to competitors (52%); and providing attractive career paths (50%). One of the top strategies they identified to meet those challenges was deploying more staff on international assignments (59%).
But if HR directors based in the UK are to create robust global pipelines in new markets, they need to devise a plan much more sustainable than mobilising ex-pats.
Bill Byham, CEO of talent management consultancy Development Dimensions International (DDI), explains: "Putting ex-pats in place is expensive - I don't know of any organisation that doesn't want to convert to local staff."
For an HR director based in the UK, recruiting employees in countries far afield is a challenge enough in itself; but managing the long-term talent capabilities is a whole different ball game.
Chantal Free, head of rewards, talent and communication services at consultants Towers Watson, explains: "All my clients have the issue of talent in emerging markets… Do I know of anyone who has cracked it? I don't think so."
But why has talent management become such an issue globally? Matthew Parker, CEO of global talent management adviser Lumesse (formerly Stepstone Solutions), compares talent management to the 'emperor's new clothes' - a situation where people are afraid to criticise something because they believe it to be important.
He says: "The term 'talent management' is driving entire industries. Although it has been around since 2000, it is now a global vernacular. In many cases, for employers, it is a fear of the unknown."
But Jane Sunley, CEO of talent management consultancy Learn Purple, explains: "I am surprised only 40% of CEOs are worried about global talent management - but where there's a will, there's a way. The first thing to do is get your organisation's values straight in the mind of the CEO.
"Each organisation, just like each country, has a distinct culture and values and it is important that both are respected when building talent abroad, especially if the company is growing through mergers and acquisitions overseas."
In April, Learn Purple opened an office in Dubai. Sunley appointed an ex-pat who had lived in the United Arab Emirates for 19 years to head the operation.
She adds: "We recruited a leader from within the country, because otherwise it wouldn't have worked. They have to understand the culture of the workforce, but if you recruit the right leader, then you can trust them to make the right decisions.
"Some COOs are put in place after a conversation over lunch. Give your potential leaders psychometric tests to make sure they understand the culture of your business and then trust them to get on with it."
Simon Hayward, managing partner at leadership training firm Cirrus, agrees. "Employers need to spend time with their people in their locations [abroad] to develop global emotional intelligence. It is important to make talent management a collaborative project - not a parent/child relationship. Top talent, for example, will want to be part of global mentoring across the world," he says.
Free echoes the importance of a cultural marriage between country and organisation before talent can emerge, adding: "With trading restrictions in some countries, political differences, individual market requirements and ethical sensitivities, employers moving abroad need to put a local HR director in place sooner rather than later."
Byham, on the other hand, believes the best course of action is to send a senior manager from the UK to the emerging market where the business is growing to set the talent pipeline in place. While he advises to "get them out quickly", he admits the employers might need ex-pat leaders in place for between three and five years. He adds: "When the large Japanese companies expanded into the west, they sent one [ex-pat] advisor for every newly appointed local manager, to explain the company culture to them quickly.
"For example, in China, the recruitment culture is different, as graduates look to their lecturers to place them in the right career. It is important here for business leaders to understand the Chinese talent culture from locals. In some countries, there is no culture of sacking staff - they just keep training them to be better. This is important to understand."
It may be expensive to mobilise ex-pat staff abroad - even for a short period - but Rourke suggests there are options.
"Some organisations are being forced to make redundancies in the UK, while growing overseas," he says. "Employers know they don't want to send their best staff abroad. They need them in the UK, but an option could be to send those who might be at risk of redundancy to build the relations with local talent - it is about being creative."
Once the management function is established, the experts agree employers have to maximise on the local talent in the markets in which they are growing.
"In the case of acquisitions abroad, global companies wouldn't have bought a company that was failing, so maximise the talent of the staff already in place, says Byham. "Although it can take up to 10 years for cultural integration to be completed."
And when sourcing new talent, David Kelly, head of talent management (EMEA) at management consultancy Kenexa, explains: "There are three things employers can do: make use of existing staff; look to the external infrastructure - for example local suppliers - for talent; and don't be afraid to make use of social networking. In a competitive talent market, make your organisation visible to talent globally."
As technology develops, experts agree it will be easier for employers to use it for talent acquisition, psychometric testing, virtual appraisals and monitoring, leading to an easier talent management system. Howard, for instance, advocates virtual networking to grow talent abroad. "Employers are investigating the development of 'virtual teams'," he says. "Good communications infrastructure and the right systems and procedures in place, all help."
Clive Wilson, deputy chairman at organisational and people development consultancy Primeast, was selected by the CIPD to design and deliver its strategies for talent management, which have been delivered in Singapore, Nigeria, Ghana, Botswana, Zambia, Mozambique, Mauritius and Jordan. He is keen for organisations to be able to put a figure on the financial value of global talent.
Says Wilson: "My advice would be to make sure everyone in the organisation knows the direction of the business, all leaders know the philosophy on talent - then test this philosophy throughout your business.
"From this philosophy, you need to align this throughout the global business and communicate it with employees. The next phase is to develop your leaders to understand this, through a process of engagement with them."
While different organisations will adopt different strategies as they develop and grow in diverse locations, Wilson concludes one rule should be true for all. "Global talent management is not about a pool of 10% of the organisation being considered 'talent'," he says. "It is not about building databases and moving staff around like pawns - it is about cultural alignment, having stimulating conversation with managers [abroad] and empowering them to source the right talent for your organisation."
Centrica: are you local?
Traditionally, power supplier Centrica has been sophisticated in helping employees realise their skills are transferable across borders and has been successful in mobilising staff around the world. But it has also seen the corporate social responsibility benefits of using local talent as it grows globally.
Carol Frost, HR director for the power and business unit at Centrica Energy, explains: "Last year, we acquired an established business in Trinidad and our preference is to recruit locally. We want the local population to benefit from us being there - and get a new perspective from them and new skills. We are keen to get the most from their diversity. We did mobilise some staff from the UK out there, but we are taking the best local talent as well. Plus we are using an open recruitment system."
The company does not plan to appoint an HR director in Trinidad in the near future, but is committed to remain as informed as possible about the talent situation in the country.
"In our operation in Norway, we appointed a Norwegian HR manager," says Frost. "This will allow them to position local talent as the norm. We find local people co-operate more effectively in local businesses."
Orient Express: smile and invest
Hospitality chain Orient Express is global by its very nature. It employs 8,000 staff in Brazil, Russia, North America, Peru, the UK, Italy, Spain, France, Portugal, southeast Asia, South Africa, Botswana and Mexico.
So how does Sara Edwards, director of HR worldwide at the multinational, manage global talent from London?
"We source talent from within Orient Express to develop careers further by relocating," she tells HR magazine. "We do also work hard to bring in local talent thereafter.
"Local talent in some locations for the more senior or management roles is not available in the market or very scarce. This can push up salary levels. The key is knowing your current talent across all your businesses and their aspirations, languages and so on.
"Succession planning is crucial to helping this process and to manage costs. It is also very important our employees know there are opportunities to develop in other regions and to develop the skills required skills and knowledge so they are ready for the move when it arises.
"Recruits in countries abroad do not generally, in my experience, show different skills. There are differing cultural ways of doing things, as opposed to differing skills."
But she adds: "It is hard to say if there is a global talent shortage. For us, we are able to find those with the right attitude, service ethic and smile - and we will invest in training for skills.
"At a more senior level, it is crucial in any business, to know who your high value or high potential employees are, to make sure they know this themselves and what we are doing to help develop them further for continued growth within our organisation."