The Dorchester played host to The Economist Talent Management Conference on Friday, where attendees heard debate and analysis about one of the leading issues for HR departments during the recession. Neil Davey outlines some of the key points covered by the speakers.
1. The ‘war on talent’ has changed
Ten years ago, McKinsey outlined what it described as the ‘war on talent’. It explained that A grade individuals deliver A grade performance. This shaped the whole mindset and talent agenda according to Norman Pickavance, group HR director at Wm Morrison Supermarkets.
"Talent provides a key competitive advantage; talent therefore can and should be singled out; talent can be bought; new top teams can be created; and therefore talent does command a premium," he explained to attendees. "A view has developed that if you can’t find the talent in your organisation and you can’t find it now then you find it outside."
Statistics have indicated that 40% of all senior executive appointments from the FTSE 100 over the last 10 years have been external – and as a result, businesses are paying increasingly large sums of money to capture that talent. But with the economic pressures, times are having to change.
"If you believe what is happening in the wider economies is correct, then we have witnessed the end of that era," emphasised Pickavance.
Peter Cheese, managing director, talent and organisation performance at Accenture, agreed. "What always amuses me about that McKinsey article is that the case study they used was Enron, and the person most quoted is now spending 28 years in a state penitentiary – which indicated to me, one of the challenges when you hire these A grade people and then let them loose to do what they need to do," he told an amused audience. "So the context for talent has changed over the last five or 10 years."
2. The economy is influencing talent management
Unsurprisingly, the economic woes are wielding influence on talent management. "You could argue that in a recession it is easier to keep talent because there are fewer opportunities for them to go elsewhere," said Deborah Baker, director for people at BSkyB. "But it is challenging in itself because you need to keep them motivated. You have to ask yourself how you keep them engaged in your company."
3. The talent itself is presenting challenges
"Some of the biggest challenges in managing talent come from the individuals themselves," explained Baker. "I can remember when you were recruiting someone and they were just happy to get the job. As the years have progressed, employees have become much more demanding of the employer. They are looking at a company and saying ‘what is your stance on corporate social responsibility? Can I trust you? What are your values? What is your leadership style? Why should I be led by you?’ As well as the more traditional ‘What learning are you going to give me and how are you going to develop me?’"
4. Talent management will be hugely influenced by globalisation
Accenture’s research has emphasised the fact that we now live in a globalised world, with the flow of business, capital and resources now globalised, and companies accessing customer markets around the world. "A big part of that is talent," said Cheese. "We have had a look at the demographics and there are some extraordinary statistics, whether it is population growth, or lack thereof – Japan is the first country in the developed world to see a population decline – or education statistics causing concern – the CBI has been observing for some time the increasing skills gap."
50% of science and engineering students in the UK are now from oversees, Cheese highlighted. China is producing three times the number of engineers as the US. And there are also aspirational shifts, with less than a quarter of young people in countries like the US and Germany holding aspirations to get a job in the c-suite compared with 84% of those surveyed in India.
"There are some very important trends around demographics in education triggerd by globalisation that has already forced, over the past 5-10 years, very rapidly different thinking about talent management.
"There is also an increased mobility of workforce, and it is going to accelerate very fast and we will get caught unawares if we have not recognised how we have got to change with our people and connect with them in a very different way. And we have got to do this in an environment where our business leadership is telling us to reduce costs, not spend time putting people on planes and finding new ways of connecting people. The good news is that we do have different ways of doing this and technology will have a profound impact."
5. Google is the best company to work for. Ever.
Liane Hornsey, people operations director, EMEA, Google, outlined why Google is one of – if not THE – most innovative companies in the world. She explained how it challenges its talent, and works to create an environment in which all its talent can be innovative – whilst also underlining that it categorically does not believe in high potentials.
It achieves its aims through several means, most famously its 70-20-10 model – where its engineering population spends 70% of their time on their core job, 20% of their time on projects loosely related to their job, and 10% of their time thinking about whatever they want to think about.
"No meetings, no emails, nothing. you spend a day a fortnight thinking big thoughts. and so when people ask me how it is that Google is innovative and how it is we have the best products in the world, that is the answer. We invest 10% of our people’s time to think big thoughts.
"So if you really want to be innovative and retain your talent, your talent needs to think and needs the space and the time to think. And your companies need to see that as an investment that needs making."
Its founders are also key to the innovative culture. Hornsey recollected a tale that has made its way into Google lore involving a senior female employee confessing to Larry Page that she had made a $40 million mistake.
"They talked about it and he said to her at the end of their chat, so what did you learn? And she told him what she learned. And as she went to walk out the door, he actually said to her ‘I’m glad you made that mistake’. And that one story permeates every hall of every office around the world at Google. Because that tells you that our founders don’t mind you taking risks and don’t mind even the financial downside if you really learn something that will be good for the business going forward."