TALENT MANAGEMENT: A Conceptual Framework For The Construction Industry


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“Winning the Race for Talent in the Construction Industry. How to keep the correct players to the correct positions? Anticipating or Designing Tomorrow?”

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TALENT MANAGEMENT: A Conceptual Framework For The Construction Industry

  1. 1. End-Assignment Enschede (29-01-2013)“Winning the Race for Talent in the Construction Industry. How to keep the correct playersto the correct positions? Anticipating or Designing Tomorrow?”AbstractThe construction market constantly struggles to find the ideal balance between theexploration and exploitation forces which affect directly the innovation capabilities of theindustry. The aforementioned issue is like trying to solve the so called Competition Policydilemma in a dynamic environment where construction firms collaborate andsimultaneously compete to charter, acquire and retain their brilliant minds. In particular,graduate programs, several cycles of pre-hiring training and interviews hamper the initialenthusiasm of candidates. If construction firms do not articulate clearly the spirit of pre-occupation with what is the match wanted from both sides; the employer and theemployee, this demand and supply gap in all levels; industry (macro), organization (meso),and individual (micro), will not be bridged. The purpose of this article is to provide a practicalframework linking the work abilities (Human Resources) with the insight of the constructionwork environment and make interconnections with all the talent-analytics around thepipeline. The framework selects specific change drivers and will aid to develop acomprehensive end-to-end process illustrating the transition from poor practices to best,and latter on to implementation challenges. Hopefully, this framework will induce academicresearch on exploring applications of Complex Production Systems and High ReliabilityOrganizations in the work of HR professionals.Key-words: Talent management, Construction industry, Talent analytics
  2. 2. Managing Human Resource Flows (194120090) UT. / M-BA DIMITRIOS KORDAS (M-CME/s1231901)Contents “Winning the Race for Talent in the Construction Industry. How to keep the correct players to the correct positions? Anticipating or Designing Tomorrow?” ............................ 1 1. Introduction .................................................................................................................. 4 2. Background ................................................................................................................... 5 2.1 Denmark-case ................................................................................................................... 5 2.2 France-case ...................................................................................................................... 5 2.3 Netherlands-case ............................................................................................................. 6 2.4 Germany-case .................................................................................................................. 6 2.4 Portugal-case ................................................................................................................... 6 3. Situation analysis .......................................................................................................... 7 4. Scenario planning ......................................................................................................... 8 5. Naming the pain ......................................................................................................... 11 6. Problem statement ..................................................................................................... 12 7. The relevance triangle ................................................................................................ 12 7.1 Strategy to create competitive advantages................................................................ 14 7.2 Strategic implications for talent ................................................................................. 15 7.3 Talent pool strategy .................................................................................................... 15 7.4 Talent Management systems ..................................................................................... 16 7.5 Talent practices .......................................................................................................... 17 8. A tool for thinking (TM Framework) ........................................................................... 19 9. Managerial implications ............................................................................................. 20 10. Further discussion ...................................................................................................... 22 [2]
  3. 3. Managing Human Resource Flows (194120090) UT. / M-BA DIMITRIOS KORDAS (M-CME/s1231901)Executive SummaryMany critics have been written the last decade for the limited productivity and the lowadoption rate of innovation in the construction industry. Several conceptual models arealready developed to explain the ‘inside’ and ‘outside’ character of the construction sectorand to visualize the need for looking in and looking out in order to gain a common sharedvision amongst stakeholders (Barrett, 2005). National and European reports are structuredto evaluate the present productivity capacities and innovation capabilities of largeconstruction firms in order to design guidelines for the future transformation of theindustry. Today’s construction recipe must be urgently modernized to deliver the highestcustomer-value by improving the construction performance, improving client and supplierperformance and procuring and managing Construction. Modernizing construction (NAO,2001) however entails not only technical and engineering approaches to the central themesof the industry; it leads to the need for re-designing the Human Resource departments’working philosophy. Nowadays more than ever construction industry increases its pace tokeep up with other industries and become more competitive moving towards the targets forimprovements illustrated in the following picture. Figure 1: Drivers for Change in Rethinking Construction (Egan, 2002)For many years now the construction industry has lost out to other sectors in attracting thevery best people. This has been partly because of economic circumstances - boom and bustcycles have denied the industry the opportunity to train and provide long term careers for itsworkforce. The consequence is that we now have an aging workforce and too few peopleentering the industry (Egan, 2002, p. 29).This reality calls for sketching an holistic framework concerning all the Talent Managementcomponents; as they are identified by (Lewis & Heckman, 2006), which are; strategy tocreate sustainable competitive advantages, strategy implications for talent, talent poolstrategy, talent management systems, and talent practices.The restructuring of the talent hierarchy creates new views on the need for specialist skills,for multi-skilling, or for de-skilling. In practice the term de-skilling is probably moreaccurately re-skilling. In some scenarios there may be a narrowing of the existing skill base ofsome trades, but all trades are likely to need training and re-training to cope with the newmethods and materials that may emerge in the innovative scenarios, even if their use isapparently simpler. On balance the most probable outcome appears likely to be a blend ofspecialist skill, multi-skilling and re-skilling, but in any given scenario there will be a differentblend (Consulting, 2008). [3]
  4. 4. Managing Human Resource Flows (194120090) UT. / M-BA DIMITRIOS KORDAS (M-CME/s1231901) 1. IntroductionThe Construction Industry is attached on three market categories; the residential market,the non-residential market and the infrastructure market. Overall, for all the three marketsegments, it appears that innovation will have to respond to an increasingly differentiatedownership and usage of premises and facility services, as well as to sustainability issues andlife-cycle considerations which will become important decision-making criteria (COM, 2007).Creating a sustainable construction industry was and will be the constant driver of changeand performance improvement shaping the shareholders’ values and affectingBuyer/Supplier relationships. In the building industry, designing, constructing, and supplyingparties work together in constantly changing coalitions on different building projects(OBrien, Fischer, & Jucker, 1995). Contractors, architects, suppliers negotiate throughbilateral contracts when following the traditional building recipe.However, the inherent complexity of the industry reflects on a high market share in the EU-27 family as the next table presents (Table 1). The construction industry in general, plays akey role in the EU economy (10.4% of EU GDP in 2008), in employment (7.6% of total EUemployment) and in climate change policies (buildings are currently responsible for 42% ofEU final energy consumption and produce about 35% of all greenhouse gas emissions).Table 1. Key figures | Activity 2011 CONSTRUCTION IN EUROPE (EU-27) Total Construction Output 9.6% of GDP 51.5% of Gross Fixed Capital Formation Jobs in Construction 7% of Employment 30.7% of Industrial EmploymentTotal Number of Enterprises 95% of <20 workers 3.1 million enterprises (source: European Construction Industry Federation, June 2012 Edition)In the pursue of designing with the optimal way strategies for maximizing the performanceof the three construction submarkets several problems emerge fragmenting the flowproduction process of the end-products; facilities management and maintenance ofinfrastructural projects. Regulatory framework, including safety standards, design rules,sensitive operations, and high-risk working practices constrain the adoption of innovationand the rise of productivity.The construction sector recently (in 2006) was recognized as a Lead Market by the EuropeanCommission which set an agenda of transforming the construction industry in a knowledge-based innovation platform. Lead markets aim to leverage innovation in with a high growthpotential in Europe and globally. EU industry should have the potential to developcompetitive advantage in these areas to lead global markets, while the public sector shouldhave the potential to significantly impact market development, whether as regulator,customer or facilitator. Finally, lead markets should provide solutions to economic andsocietal challenges in areas such as health, energy, environment or transport (COM, 2007, p.3). Under this scope the Egan Report (2002) formulated the target group for improvement(fig. 1) which constitutes the central concept behind the Talent Management frameworkthat will be constructed in the following sections. [4]
  5. 5. Managing Human Resource Flows (194120090) UT. / M-BA DIMITRIOS KORDAS (M-CME/s1231901)The end-product of this research approach is to show what has to be changed in this modernWar for Talent in order to accomplish the selected targets after a scenario planning for theconstruction firm assigned. The Supply Chain Management will be the main point of viewwhen analyzing the case. For doing so we have to assess how the construction employmentwas developed in some baseline countries, looking them as guide examples. 2. BackgroundAround the 1990s a new approach was adopted towards explaining the inside structure ofthe industry; and that was a shift from dealing with the Construction Industry as being aunified Sector System. Given that the fictitious company of this article is a multinationallarge construction firm with over 50,000 employees and operating several Europeancountries, it is wise to present the general past picture in some example constructionindustries.For this reason the following national cases are used to present how the employment ratesfluctuated during the previous decade as it is seen important in making assumptions in theproposed framework.2.1 Denmark-caseIn the 1990s, the Danish economy has moved from an initial period of stagnation and fallingemployment to a period of economic boom and a return to the previous employment levels.The lean years in the early 1990s showed an average annual economic growth of less than0.6 percent. This development was turned around at the end of 1993 when a strongeconomic recovery began. The average annual growth in GDP was 3.4 percent from 1994 to2000 (CIB, 2004, p. 58)What became clear through these years is that the construction employment followed theproductivity of the sector. In the 1990s, the lowest construction employment level occurredin 1993, after which it increased slowly during the second part of the decade and made sixpercent of the total workforce in 2000 (CIB, 2004).Table 2. Danish construction employment in the 1990s (× 1000) 1990 1992 1994 1996 1998 2000 2002 National 2794 1792 2808 2773 2778 2786 2803 Employment Construction 171 162 140 154 161 168 173 Employment Construction/Total 6.1 5.8 5.0 5.7 5.8 6.0 6.2 (%)(source: Statistics Denmark, 2003)2.2 France-caseIn France, the share of repair and maintenance is nearly a half of all construction worksbecause of the importance of the stock built after a Second World War. The constructionsector system is made up of four very big firms, SMEs and self-employed. The fragmentationof the sector system allows a high flexibility in cyclical situations. The sector system is soheterogeneous that several construction sub-systems can be analyzed. The influence ofcentral government on the institutional regulations remains high. [5]
  6. 6. Managing Human Resource Flows (194120090) UT. / M-BA DIMITRIOS KORDAS (M-CME/s1231901) Figure 2: Employment in the French construction sector in 2001 (CIB, 2004)2.3 Netherlands-caseThe Dutch construction industry’s capability to deliver difficult and innovative projects isequal to that of any national construction industry worldwide. The production of theconstruction industry in the Netherlands represents 11 % of the GNP. Also in terms ofemployment, construction is important for the Dutch economy. Including all constructionrelated employment, the employment in the construction industry amounts to 9.5 % of thetotal employment in the Netherlands (PSIB, 2004).2.4 Germany-caseIn 2000, the German construction industry had about 2.76 million employees, whichcorresponds to 6.6 percent of the total workforce (CIB, 2004, p. 96). The constructionemployment rate in 2000 was the lowest since the reunification in 1990 (see Table 2).Table 3. Construction Employment in Total Work Force (× 1000) 1991 1994 1995 1996 1999 2000 Total workforce 40689 40583 40524 40692 41431 41769 Total unemployment 2190 3304 3194 3482 3416 3133 Total Construction 2796 3165 3227 3126 2851 2761 Employees 2536 2849 2887 2757 2453 2356 Self-employed 260 316 340 369 398 405 Construction in Total 6.9 7.8 8.0 7.7 6.9 6.6 Workforce (%)2.4 Portugal-caseThe growth in construction activity is also visible in employment. Table 4 shows data onconstruction employment, total employment and the contribution of construction to totalemployment. The share of construction employment in total employment reached 12.2% in2002, one of the highest levels in the European Economic Area. [6]
  7. 7. Managing Human Resource Flows (194120090) UT. / M-BA DIMITRIOS KORDAS (M-CME/s1231901)Table 4. Portuguese construction employment in 1990s (× 1000) 1990 1992 1994 1996 1998 2000 2002 National 4466.3 4340.7 4251.1 4250.5 4863.3 5028.9 5106.5 Employment Construction 352.6 346.2 330.8 340 3 343 1 596.4 622.3 Employment Construction/Total 7.9 7.9 7.8 8.1 10.9 12.1 12.2 (%) 3. Situation analysisIs it easy now however to foresee what is the hot-potato emerging in the built environmentin correlation to which is the ideal proactive talent management strategy to copy with thepotential threats? To answer somebody this question he needs to pre-think on the basis ofwhat happens inside the construction world.Firstly what became prevalent, after 2008 where the crisis brought a new cadre oftransactions, negotiations, employment relations, and labor rules; is the everyday trade-offbetween recession and recovery, something that both employees and employers are aware.This new picture created a parallel thinking in HR-managers mindset, calling them to balancethe unemployment rates with the changes in labor income (Fig. 3). Figure 3: The change in unemployment and labor income (OECD, 2012) [7]
  8. 8. Managing Human Resource Flows (194120090) UT. / M-BA DIMITRIOS KORDAS (M-CME/s1231901)The aforementioned analysis showed till now how much turbulent is the market formationnot only for the construction sector but in general the employment situation in theconstruction field is too fluid to be predicted with a degree of safety.Given now the situation inside the construction market, the main hypothesis before thinkinghow to produce a holistic framework concerning the talent management strategies followedby the large scale company is the lack of skills is the timeless problem inside theconstruction world. The following graphic illustrates how current projections are perceivedin the entire EU family and it is considered to align lack of skills to age, education andcontract type.Figure 4: The change in employment and average hours worked by age, education and typecontract (OECD, 2012) 4. Scenario planningScenarios are claimed to support strategic decision makers. They are especially effective indealing with uncertainties (Postma & Liebl, 2005). The traditional uses of scenarios andscenario development are evaluation and selection of strategies, integration of various kindsof future-oriented data, exploration of the future and identification of future possibilities.More recently, scenarios aim at making managers aware of environmental uncertainties,stretching managers’ mental models, and triggering and accelerating processes oforganizational learning (Postma & Liebl, 2005, p. 2).In order to visualize the location of the hidden uncertainties and their impact on theorganization we need to reply or quantify the next questions. After replying them a picture(Fig. 5) can be sketched to illustrate predictability and impact lead to the final selection ofthe most high-risk case.  How big could be a change in the construction employment in the upcoming years (Fig. 5)? [8]
  9. 9. Managing Human Resource Flows (194120090) UT. / M-BA DIMITRIOS KORDAS (M-CME/s1231901)  Is there any possibility to predict the amount and the type of skills needed in the future in specific operations (Fig. 7)?  Would be wise to narrow down our effort of restructuring talent management policies focusing on specific performance improvements (Fig. 8)? Figure 5: Scenario construction, adapted from (Heijden, Bradfield, & Burt, 2002)Figure 6: Past and forecast employment changes by economic sector (CEDEFOP, 2012, p. 23) [9]
  10. 10. Managing Human Resource Flows (194120090) UT. / M-BA DIMITRIOS KORDAS (M-CME/s1231901) Figure 7: Future job opportunities by occupation (CEDEFOP, 2012, p. 24) Figure 8: Future job opportunities by broad level of qualifications (CEDEFOP, 2012, p. 25)After translating the managerial meaning of Kvetan et al. (2012) research paper entitled“Cedefop’s skills supply and demand forecast: 2011 update and reflections on the approach”(CEDEFOP, 2012) a table with potential scenarios was constructed. The following tableillustrates the projections of figures 6 & 7 in terms of Risk Priority Numbers (RPN).The RPN is not a measure of risk, but of risk priority (eq. 1). Thus we will apply the worst-case scenario to the talent management framework. The RPN gives generally a model toallocate these resources.Equation (1): RPN = S × P × DS: Severity (1-10 scale) = Replacement Demand (Fig. 7)P: Probability score (1-10 scale) = Replacement Demand (Fig. 6)D: Detectability score (1-10 scale) = Subjective determinationThe values of S, D taken from the two pictures are divided by 40; the max. Value of the X-axis.PC = 0.80 × 0.40 × 0.04 = 0.013 [10]
  11. 11. Managing Human Resource Flows (194120090) UT. / M-BA DIMITRIOS KORDAS (M-CME/s1231901)PC+ = 0.45 × 0.40 × 0.80 = 0.144TC = 0.80 × 0.20 × 0.60 = 0.096TC+ = 0.45 × 0.20 × 0.80 = 0.072Table 5. Selecting scenarios Change (C) in ConstructionProfessionals (P) PC: RPN=0.013 PC+: RPN=0.144Technicians (T) TC: RPN=0.096 TC+: RPN=0.072Summarizing this preparatory section of the article the main proposition is that the followingmanagerial approach will be focused on how HR-mangers have to reconsider their workingphilosophy when they design organizational routines to attract, develop, retain and mobilizethe recruited highly-qualified professionals who are potentially ranked as the most crucialhuman resources. PC+ High Low High TC+ TC Low PC Figure 9: Scenario construction and selection of PC+ 5. Naming the painWhen trying to interpret what is the missing link between an effective talent managementpolicy and the actual acting strategy of the firm a main question was borne; in a highlyfragmented industry as the construction one, where employment data are changingcontinuously which segment and why has to be selected as the most critical one?Lack of skills was assumed as the main problem precursor. Highly skilled professionals suchas architects, contractors, supply chain specialist, procurement officers and purchasingmanagers do play a vital role in the evolution and growth of construction activities.Traditionally, however the construction sector has been dependent on the government,which acts in various roles: client, regulator, or business-cycle manager (Voordijk, Haan, &Joosten, 2000).Having now defined the target group (highly qualified professionals) and the route-cause ofthe problem (lack of skills), what’s remaining is to specify the firm’s operation-relateddepartment for which the framework will be designed.Manufacturers, contractors and architects are becoming dominant parties in the buildingprocess. Different supply chains have to be managed as recently it is observed a significant [11]
  12. 12. Managing Human Resource Flows (194120090) UT. / M-BA DIMITRIOS KORDAS (M-CME/s1231901)turn from the traditional integrated design delivery system to a more product-specializedcontract approach.The main problems threatening the sustainability of construction are  The fragmented regulation  The focus of public procurement on the lowest-bid rather than on MEAT (Most Economically Advantageous Tender) criteria  The training gap for delivering employees of higher adding-value and higher organizational commitmentAligning these three construction-related threats a clear transition can be done through thefirst picture, where predictability is now selected as the main driver for our TalentManagement related framework.In other words, the required increase of 20% in the predictability is translated in thefollowing three core outcomes:  Predictability of legislation  Procurement innovation  Investment in training 6. Problem statementBased on the analysis already done the problem to address this framework is reflected bythe research question asking;“How the talent management system of a large multinational European construction firmcan become more adaptive, more proactive, and enhance predictability by increasing theinflow and retention rate of highly skilled professional in Supply Chain operations?” 7. The relevance triangleIs the research question relevant enough to the core Human Resources issues concerningthe arenas composing the construction industry? In other words, are the interests (stakes) ofsociety (individuals: employees/employers and public agencies), academy (science:institutions) and market (industry/organizations) sufficiently represented in the problemstatement?The construction sector is characterized by demand from different sources. Not only privatedemand for residential or office buildings also public infrastructure projects are of particularimportance for the market. The public sector is a major client of the construction industryand is expected to boost further development by targeted and criteria-orientedprocurement. Moreover, regulatory frameworks, e.g. in terms of quality and environmentalstandards, have substantial impact on technological direction and sector-specific R&Dactivities, may induce innovation in the construction sector and shift public and privatedemand to specific products and services (Loikkanen & Hyvönen, 2011, p. 88).The major levers for change of the construction sector are the industry / client forums,governments and procurers. The other, rather dependent focal area is the project team andat a more abstract level “society” groupings and education and training have the potential tomake longer terms impacts (Barrett, 2005). [12]
  13. 13. Managing Human Resource Flows (194120090) UT. / M-BA DIMITRIOS KORDAS (M-CME/s1231901)Macro-level Meso-level (Industry) (Firm) Micro-level (Individual) Figure 10: Summary disposition of stakeholders (Barrett, 2005, p. 62) The problem to be outlined is relevant to the industry/clients needs as clients nowadays more than ever know how to assess and maintain long term relationships with their suppliers. In that role the HR department of the assigned firm has to create a strategy through which maintaining Buyer/Supplier relationships will be one of the most innovative and fundamental competitive advantage of the internal human capital. This condition between the industry and the Talent Management (TM) structure brings into the light the need for designing specific skills packages and prioritizing them. If this approach is adopted, predicting the legislative changes will constitute a central strategic implication for talent. The government often participates in high market-share construction projects, knows as Public Private Partnerships (PPPs) which demand the employment of highly-educated personnel who will be enable to understand the market dynamics and the legal agreements among various parties formulating often Joint Ventures (JVs). Segmenting the talent pool to be designed is a solution for the firm to differentiate from their competitors. In the project arena, procurement is the black-box for the construction sector containing the bulk of the mainstream talent management tools, like talent analytics, mentoring, integrating newcomers, empowering older workers, etc. The final stage of this five-component procedure of Talent Management (Lewis & Heckman, 2006) leads to the creation and implementation of talent practices. [13]
  14. 14. Managing Human Resource Flows (194120090) UT. / M-BA DIMITRIOS KORDAS (M-CME/s1231901)Table 6. Aligning TM stages to working (to be tested) assumptionsTalent Management (TM) Assumptions / Mediating Skills requiredComponent variablesStrategy to create competitive Identify firm’s mission Locus of control &advantages Maintaining Buyer/Supplier Perception of future relationships growthStrategic implications for Managing firm’s positions Market dynamicstalent understanding (PPPs / JVs)Talent pool strategy Manage workforce portfolio Fit & FlexibilityTM Systems Enhance creativity, trust, Talent analytics motivation, productivity, commitmentTalent practices If the framework applied, Retaining critical predictability targets will be knowledge (create a achieved (+20% increase) knowledge infrastructure) & Solving the Age/Employment paradox 7.1 Strategy to create competitive advantagesDealing in a context of multilateral relations and ongoing transactions, the constructionprofessionals will be quickly confronted with the dynamic 4Cs character of the industry (Fig.10). Most construction companies operate in a decentralized network of suppliers andcustomers in which they acquire production capacity from external suppliers. Constructionprojects can be viewed as temporary organizations among firms. The development andmanagement of long term Buyer/Supplier relationships at the cross-project level is thereforedifficult, as project teams and product designs change from project to project (Bemelmans,Voordijk, Vos, & Buter, 2012).This fact leads to consider constantly the maturity level of Buyer/Supplier relationships as itconstitutes the core integration factor between operational processes and value creationones. The management of Buyer / Supplier relationship embodies five aspects:  Optimize the supply base  Manage the supplier relationships  Integrate suppliers into the operational processes  Integrate suppliers into the value-creation processes  Develop suppliersOnce all the five key-areas are combined into one employee’s competencies package thenhe will be able to relocate the locus of control related to his decisions and reconsider towhich extent he acts towards the accomplishment of the strategic vision of the firm; 20%predictability increase in logistical defects. [14]
  15. 15. Managing Human Resource Flows (194120090) UT. / M-BA DIMITRIOS KORDAS (M-CME/s1231901) Figure 11: Dynamic 4Cs model (Barrett, 2005, p. 60) 7.2 Strategic implications for talentPrime contractors spend up to 90% of a construction project’s turnover on buying goods andservices, and thus suppliers have a large impact on project performance. Therefore, thepurchasing function management of the prime contractor has a large influence on theoverall performance: the more developed (i.e. mature or professional) this function is thegreater its positive contribution (Bemelmans & Voordijk, 2012).The highly-skilled professionals required by the firm have to work on the basis of developingthe most profitable and sustainable coalitions with private or public partners. For this reasoncandidates must be characterized by a systemic thinking like the one in Figure 12.Figure 12: Research framework for a designing an effective purchasing management tool(Bemelmans & Voordijk,2012) 7.3 Talent pool strategyBefore an HR-manager thinks about the characteristics, the size, the depth and type of thetalent pool to create in this predictability-seeking organization he/she should initially definethe meaning of Strategic Human Resource Management (SHRM). Human resourcedeployments and organizational activities when combined with such way to achieve growthgoals reveal the strategic direction of formulating the talent pool. [15]
  16. 16. Managing Human Resource Flows (194120090) UT. / M-BA DIMITRIOS KORDAS (M-CME/s1231901)According to (Wright & Snell, 1997) speaking in terms of SHRM, two are the centraldimensions to be explored; the fit and the flexibility.Fit is all about the matching between the HR-practices and the strategy. First, vertical fitinvolves the alignment of human resource management (HRM) practices and the strategicmanagement process of the firm. Second, horizontal fit implies congruence among thevarious HRM practices. Achievement of horizontal fit is viewed as instrumental for efficientlyallocating human resources. Vertical fit, in turn, is viewed as directing those resourcestoward the primary initiatives of the organization.Flexibility provides organizations with the ability to modify current practices in response tonon-transient changes in the environment. Weick (1979) argues that flexibility requiresdetecting changes in the environment and retaining a sufficient pool of novel actions so thatthese changes can be accommodated.Resource flexibility: refers to the extent to which a resource can be applied to a larger rangeof alternative uses, the costs and difficulty of switching the use of a resource from onealternative use to another, and the time required to switch from one use to another.Coordination flexibility: consists of the extent to which the firm can "resynthesize" thestrategy, "reconfigure" the chain of resources, and "redeploy" the resources.In the construction firm case, the two dimensions of SHRM are translated as the followingtable shows;Table 7. Fit & Flexibility in the a construction firmFit Vertical Directing production/work towards the predictability target Horizontal Allocation of talents to appropriate positions (legislation, procurement, training)Flexibility Resources Tangible products easy to be reused (formal contracts, cost forms, time planning programs) Coordination Modular components of the supply chain (metrics, routines, production models) 7.4 Talent Management systemsCompeting in a world searching for novelty, the construction company needs to organize itsHR functions around the three strategic targets; predictability of legislation, procurementinnovation, and investment in training, having as guidelines not only on how to measure thetalent, but firstly how boost creativity, trust, motivation, productivity, and organizationalcommitment is seen much more important. So before going to the Talent Analytics, simpletopics such as the interrelation between passion for work (intrinsic motivation) affectingexternal motivation has to be chartered by the HR managers and thereafter to design thesocial interaction process for enhancing them.A new approach on how to design the social processes inside the firm is to align thequadrant in which each talent is classified correlated with his personal perception on hisbasic needs. Thus a prediction map of where (under which performance conditions) andwhen an employee could react through a future burnout or how strong is his/her self-esteem. [16]
  17. 17. Managing Human Resource Flows (194120090) UT. / M-BA DIMITRIOS KORDAS (M-CME/s1231901) Figure 13: Talent/Potential matrix in relation with Scharlow’s pyramidTalent AnalyticsUsing sophisticated and high-tech performance monitoring systems of analyzing employeedata to enhance their personal competitive advantages are always needed. The trueevaluation of the value of human capital assets and their value-contribution calls forcomplete accountability of employees. In the case of the construction firm, HR managersneed surely to calculate the optimal number o f staff member in the positions of legalconsultants (legislation predictability), procurement officers (procurement innovation) andinvestment in training (productivity of Learning & Development programs). Applying talentanalytics includes six steps (Davenport, Harris, & Shapiro, 2012); 1. Human capital facts: What are the key-indicators of my organization’s health?  Employee engagement and financial performance 2. Analytical Human Resource: Which units, departments, or employees need attention?  Real-time review, feedback channels, mentoring, coaching 3. Human capital investment analysis: Which actions have the greatest impact on my business?  Monitoring of satisfaction levels, and maintain them 4. Workforce forecasts: How do I know when to staff up or cut back?  Scenario planning analysis, Demand & Supply analysis 5. Talent value model: Why do employees choose to stay or leave the company?  Re-placement of employees, evaluation of positions held by poor performers, fix out possible mismatches 6. Talent supply chain: How should the workforce needs to adapt to changes in the business environment?  Predict the education tends and the market demands, design job opportunities based on the power of the existing workforce and expand the orders’ experience into fresher’s motivation for learning and challenge. 7.5 Talent practicesProactive behavior in the organizationTo efficiently mobilize the talent selected and retained the company has to build up aProactive Personality Scale (PPS) in the HR department. The four attributes of proactivebehavior have to be realized in practice as (Crant, 2000) had identified them are; proactivepersonality, personal initiative, role breadth self-efficacy, and taking charge overlap [17]
  18. 18. Managing Human Resource Flows (194120090) UT. / M-BA DIMITRIOS KORDAS (M-CME/s1231901)conceptually. In particular, the constructs share a common behavioral domain. Eachconstruct considers the way in which an employee approaches and defines his or her workrole, focusing on efforts to improve things in the workplace. Thus, the conceptualunderpinnings of each construct incorporate employee changes to the work environment(Crant, 2000, p. 443).In the effort of developing and retaining the talented highly-skilled professional the firm hasto take also context-specific proactive measures like socialization (networking), proactivefeedback seeking, issue selling, promotion of (external) innovation to rise the champions,career management strategies for mapping the evolution of each employee separately.Coping with stress and burnoutsOver the past 30 years, interest in burnout, from academics and managers alike, hasincreased dramatically as we have begun to understand the significant negative impact it hason employees (Halbesleben & Buckley, 2004). Burnout was defined by Maslach (1982) as “asyndrome of emotional exhaustion, depersonalization, and reduced personalaccomplishment that can occur among individuals who do ‘people work’ of some kind.”The JD-R model of (Schaufeli, Bakker, & Rhenen, 2009) proved clearly that increase in JobDemands and decrease in Resources available predicts burnout and that increase in jobResources predicts job engagement.Apart from the structural model’s results what is very important to notify is the obligation ofHR-management to point out exactly the job context and boundaries in order to minimizeunrealistic expectations because this misfit between the organization and the employeeoften leads to burnout symptoms. In the end, the HR-managers of the construction companyis strongly recommended to use Realistic Job Interviews and Expectation LoweringProcedures to manage recruitment, increase organizational commitment, and reduceturnover (Halbesleben & Buckley, 2004, p. 873)Solving the Age/Employment paradoxSeveral strategies have been already analyzed by academics. The main issue that will bediscussed here is how far away the construction industry (in large scale) is from increasing ormaintaining the normative commitment of older employers? It is a fact that flexible workoptions, job design, mature employee training, manager training, compensation, etc aresome strategies to engage older employees on HR practices according to (Armstrong-Stassen, 2008). However given the situation that there is a serious lack of highly andspecialized professionals in the multi-faced departments and submarkets of the constructionsector, the dominant approach on attaching older employees better and with a social,creative way is the teaching method. I named this attitude of mentoring when an employee,close to the retirement age is assigned to develop a beginner and bring into the pool somenew, well-selected talents. The picture below endorses the previous statement (Fig. 14). [18]
  19. 19. Managing Human Resource Flows (194120090) UT. / M-BA DIMITRIOS KORDAS (M-CME/s1231901) (a) (b)Figure 14: (a) Iv-Oil & Gas: Structural designer (23 years) / Structural design coordinator (65years) (b) Iv-Infra: Constructor (28 years) / Chief design engineer (54 years) 8. A tool for thinking (TM Framework)In the construction of the Talent Management framework there are three components thattill now are not fully clarified. These are - The visibility line: It represents the critical moment where we decompose the problem after the scenario planning and based on the chosen less-advantageous one we move on the analysis of the case. The term “visibility line” is borrowed from the terminology of Project Management. It illustrates practically the start of the actual business process while all the IT resources are mobilized to optimize the portfolio management. - The High Reliability Organizations (HROs): type of organizations operating on the edge while being reliable is too critical for the societal benefits. HROs are governed by the five attributes of mindfulness or enriched awareness. - The Complex Production Systems (CoPS): an integrated approach of concentrating around key-roles (System Integrators) several stakeholders and interconnecting the system’s centre with the superstructure and infrastructure. [19]
  20. 20. Managing Human Resource Flows (194120090) UT. / M-BA DIMITRIOS KORDAS (M-CME/s1231901)Figure 15: A thinking tool on designing Talent Management strategies for large constructionfirms 9. Managerial implicationsThe last picture depicts the line of reasoning of the whole approach. Said differently, if theHR-managers of the construction firm should put in practice the above framework theyshould follow the roadmap described (Fig. 16).Additional ideas from academics to be explored inside the Construction Industry; - “Organizations that move quickly to seize new opportunities compete through flexibility and do not develop employee competencies from within. (Cappelli & Crocker-Hefter, 2001)” - Think twice before outsourcing for your personnel, as (Cappelli & Crocker-Hefter, 2001) has stated: “Organizations that compete through their dominance in a market rely on organization-specific capabilities developed internally…” - Balance and map, the HR-departments’ competencies with the business strategies that flow from them. [20]
  21. 21. Managing Human Resource Flows (194120090) UT. / M-BA DIMITRIOS KORDAS (M-CME/s1231901) Attract Talent  Think about future staffing needs: design positions, instead of employees (e.g. procurement officers)  Be sure about who recruits for your company (hire industry related people)  Identify and communicate what the project will teach and why (open the agenda)  Adjust newcomers’ expectations and learning goals with firm’s experiences Develop Talent  Link employees: internal networking as collaboration-driven innovation  Mentor employees: reverse-traditional- anonymous-micro feedback  Make mentoring a reciprocal relationship  Don’t exclude inside-outsiders internal candidates  Give time and space for employees to react Retain Talent  Provide room to grow towards the strategic direction of predictability  Enrich the personal experiences continuously (role games, virtual cases, external training, create schools)  Express satisfaction, andA comprehensive end-to-end process reward wisely and transparently  Transform employee routine in a hunting for entrepreneurship  Challenge your top-performers Mobilize Talent  Share a proactive behavior vision  Make stars part of the planning process  Personalize as much as possible L&D programs  Reinforce the vision: by focusing on the right assessors, rather than on the assessmentFigure 16: End-to End process for TM technique (Fernadez-Araoz, Groysberg, & Nohria, 2009)  Manage the A positions, manage B&C positions  Inspire B or C performers to become A players  Conceptualize the future framework for attracting & retaining the Z-Generation [21]  Consider talent pools in BRIC economies
  22. 22. Managing Human Resource Flows (194120090) UT. / M-BA DIMITRIOS KORDAS (M-CME/s1231901) 10. Further discussion After designing this action plan and incorporating all the stages of talent management for a large European construction firm an ambition will be created to open the window for further research on HRM literature and Strategic Talent Management. The first relies on the theory of Complex Production Systems (CoPS), dealing with the question “How we can still create some focus on our internal processes and distinguish our self as a company by recognizing the role of HR managers like the one of Systems Integrators (Winch, 1998)?” Figure 17: Construction as a complex system industry (Winch, 1998, p. 270) Moving from the typical role of System Integrators (architect & contactor) it would be very interesting to conceptualize a modern role of the HR managers. This role could be the two faces of the same coin; the first would be the role of performance boosters and the other the reputation builders. Is it feasible to execute some research on the following figure? Sourcing Retention EngagementFunctionality Zone Development Assimilation Deployment Performance Management HR-managers as Performance Boosters Corporate Branding Builders Vitality Zone Talent Staff Talent Pool Executive Team Line Managers [22]
  23. 23. Managing Human Resource Flows (194120090) UT. / M-BA DIMITRIOS KORDAS (M-CME/s1231901)Secondly what will be outlined is the emerging importance of High Reliability Theory (HRT),which calls for exploring deeper the question “To which extent HRM and HRD processes aremindful in the construction industry? Is there enough systemic space and organizationalwillingness to apply the five attributes of enriched awareness as (Weick, Sutcliffe, &Obstfeld, 1999) have mapped them?” HRT, if applied, is expected to enlighten what we canlearn from B performers. A new game plan can be conceptualized for C Players as BethAxelrod, Helen Jones, and Ed Michaels have stated in their correspondent article in HarvardBusiness Review (2012).When people in HROs focus on failures, tendencies to simplify, current operations,capabilities for resilience, and temptations to over structure the system, these concernscover a broader range of unexpected events. As shown in Figure 17, these separate concernsare tied together by their joint capability to induce a rich awareness of discriminatory detailand a capacity for action. We label this capability mindfulness. It is this enriched awareness,induced by the distinctive concerns of HROs with potentials for catastrophe that facilitatesthe construction, discovery, and correction of unexpected events capable of escalation.The five processes of HRT can be the weapon against the appearance of organizational(human capital) silos. The role of each process could be the answer in the continuous effortfor improving Coordination and Communication efficiency among internal silos (e.g. finance,operations and quality assurance, administration). Figure 17: A mindful infrastructure for high reliability (Weick, Sutcliffe, & Obstfeld, 1999)The conclusion of this last paragraph is that both topics introduced in the field of HRM andHRD will create a quite radical scope, a more lean approach enabling companies to operatewithin smaller time frames, in a friendlier and more efficient HR-environment. [23]
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