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Turning the Downside Upside: Why Talent Management is Now a Top Priority for CEOs

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When we consider that a company’s ability to innovate and develop leaders is largely dependent upon its ability to attract, retain—but most importantly to engage—talent, the shift in CEO priorities to …

When we consider that a company’s ability to innovate and develop leaders is largely dependent upon its ability to attract, retain—but most importantly to engage—talent, the shift in CEO priorities to talent management makes sense. Here, we look at some of the ways they plan on doing this.

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  • 1. turning thedownside upsideWhy talent managementis now the toppriority of CEOsTeresa Carroll
  • 2. 2 | turning the downside upsideFear turns to motivation. In 2010talent management was third on the list of CEO priorities.A year later it’s number one. What’s changed?Global markets remain uneven and expanding in emerging markets, where the When asked about their top businessunreliable, but the CEO mood is shifting. economic recovery is most promising. concerns for 2011, CEOs returned this list:Rather than waiting for the next piece ofnews out of Europe, the US or China, the It seems that fear and trepidation has turned 1. Talent Managementworld’s C-suite executives are stepping off to motivation and CEOs are now looking for 2. Navigating riskthe roller coaster to chart their own course. sound strategies to move forward through 3. Innovation rather than ‘waiting’ for the clouds to clear. 4. Leadership developmentAfter three years of market volatility,CEOs have come to one grand, unified This newfound motivation and When we consider that a company’sconclusion: they are confident that with the confidence will mean fresh approaches ability to innovate and develop leadersright inputs, they can continue to grow. to some old problems. Above all, talent is largely dependent upon its ability to management issues are rising to the attract, retain—but most importantly toIn fact, 30% of public company CEOs surface and CEOs are looking at these engage—talent, this shift in CEO prioritiesand 45% of emerging-company CEOs with increased intensity and rigor. makes sense. Here, we look at someanticipate significant growth through of the ways they plan on doing this.2012—regardless of the volatile investment In fact, it’s talent issues that dominate theclimate. For many, this growth means CEOs’ list of top challenges for 2011.
  • 3. 3 | turning the downside upsideTalent is required to address risk.Adapting to the persistence of volatility is now a key issue fororganizations, and they need the right people to help them do it.To achieve growth within the currenteconomic and political climate, executives “We pay much moreare taking a more proactive approach to risk. attention now to making sure we understandCEOs are asking their teams to be and pressure-test the 67% 72%more aware of the risk-reward tradeoff. upside/downside ofVolatility is no longer a reason to sit still, various decisions.”so companies must adapt. Yet, in the John V. Faraci, Chairman andface of continued volatility and uncertain CEO, International Paperpublic investment, organizations mustincrease the veracity of the investmentanalysis and apply more stringent stresstests to ensure the risks are worth it. Two-thirds of CEOs (67%) say Almost three-quarters (72%) they will formally incorporate say they will devote more risk scenarios into their senior management time to strategic planning. addressing risk.
  • 4. 4 | turning the downside upsideTalent is required to innovate. The appetitefor change is strong and CEOs are looking to reorganize andrealign their workforces to put innovation at their center.Innovative companies have our attention.The world moves fast and peoplewant to know what’s coming next.As such, CEOs are focused on innovation 78% 79% 84%as a key element of success in a climate ofongoing volatility, and they’re confidenttheir innovations will succeed.It’s clear, however, that CEOs already findaccess to the right talent to execute ontransformative plans restrictive. Some 39%of CEOs this year expect the majority of 78% expect their 79% believe innovation will 84% of CEOs have changedtheir innovations to be co-developed. development efforts to drive efficiencies and lead to strategies in the past twoInstead of direct hiring and working generate ‘significant’ new competitive advantage. years, effectively changingthrough all elements of product or service revenue opportunities over their talent needs.development internally, organizations see the next three years.the speed to market as equally criticalto success as the innovation itself.
  • 5. 5 | turning the downside upsideTalent is required for good leadership.As job tenure continues to fall the outlook for companies looking todevelop leadership ability over the long term faces serious setbacks.CEOs worldwide recognize the need to • More than half of employers (57%) say the Difficulty filling jobs by countrygrow talent internally, but only 23% of talent shortage impacts key stakeholders. 90%business leaders say their firms are “strongat developing future leaders”. Already, Organizations are struggling with how to 80%companies are facing an acute internal talent develop agile leaders that possess the 70%supply problem: business acumen and cultural savvy to 60% operate in a global market. In fact, 66% 50%• Should the need arise, 51% of companies of CEOs believe there is a limited supply 40% state they could not name a CEO of candidates with the right skills, while 30% immediately and 39% report having no another study shows 75% of companies 20% internal candidates whatsoever. are experiencing a deficiency in candidate 10% qualifications. n zil n .S. d o ny ma ly bia n d• Of those enjoying strong internal talent, pa U key an ic nce de eru an Ja Bra taiwa l lgariaex rma na rica ita om ngary swe africa p irel tur zea m e pa l austria hu fra 64% are highly concerned about losing bu g costa co new south those future leaders through voluntary turnover.
  • 6. 6 | turning the downside upsideHow will they meet these challenges?CEOs know what they’re up against, now they must find the rightadaptive strategies and lead their organizations through the change.In this new reality, CEOs are looking to be proactive and adapt their organizationsfor success. As a result, three key talent trends have emerged for 2012:1. Talent development: ensuring a strong supply or ‘talent pipeline’ and looking to diversify the talent pool are essential to filling growing vacancies in specialist and high-skill roles.2. Talent retention and engagement: improving the critical measures of loyalty, commitment, and motivation is key to overcoming the list of CEO priorities for 2011.3. Talent mobilization: talent is more mobile than ever and there is strong growth in repatriation as well as medium-term contracts for foreign workers to assist local talent learning to run new ventures/outsourcing projects.
  • 7. 7 | turning the downside upside1. Talent development:improving pipeline and diversity.Recession has accentuated the shortage of required skillsin the workforce. An ill-prepared talent pool is faced withskill requirements they simply cannot deliver.CEOs are looking for immediate talent of talent. Many are also overhauling theirpipeline improvement by expanding their internal programs and improving the “If we don’t solve therecruitment strategies. Many are increasing application of knowledge in the workplace. education issue then thetheir benefits packages, emphasizing problem will eventuallydevelopment opportunities, or broadening Organizations are also shifting their talent 54% degrade the privatetheir candidate search outside their country. focus. They’re looking to underused sector’s ability to recruit sources of talent and innovation—women,They are looking to develop a wider variety a capable workforce.”of workers who will bring new talents, older workers and outside contractors, Tan Sri Dato’ Azman Hj. Mokhtar,skills, and ideas to the table—diversity and for instance—to feed the pipeline of skills Managing Director, Khazanahpipeline are the key strategies for improving and ideas that will meet local demands. Nasional Berhad, Malaysiathe current rate of talent development. There is also growth in the use of returningMore than half of CEOs surveyed by PwC expats. Many companies entering new More than half of CEOs say(54%) say they are planning to work with markets are identifying local talent to send they are working to improvegovernment and the education system to abroad for training, or are repatriating the quality of the nextimprove the quality of the next generation talent to their home regions. generation of talent.
  • 8. 8 | turning the downside upside2. Talent engagement & retention:leveraging what you have.With the economic recovery and expansion of the jobmarket, leaders fear an exodus of star talent.Employee engagement has significantly a significant increase in turnover among • Using more non-financial rewards, suchdecreased in the past five years. this group, followed by Generation as training and mentoring programs,And executives are starting to X (ages 30-44) at 46 percent. with a focus on career trajectories,worry—close to two-thirds (63%) particularly for Generation Y employees.are concerned about employee Most executives (70%) identify employeeretention over the next 12 months. engagement as a critical component • Expanding use of more flexible to achieving their business objectives. work arrangements (telecommuting,• Among global employees surveyed this Forward-looking companies are: job-sharing, part-time) and non- past spring, just 35% expect to remain linear career paths to meet growing with their current employer compared • Using engagement studies to anticipate work-life balance needs. with 45% in 2009. And, nearly two out and address barriers to inclusion, of three global employees surveyed productivity, or flight risks within • Spreading employee stock (65%) report they are either passively particular groups of employees. ownership more widely. or actively testing the market. • Refocusing efforts and investments• Generation Y workers are considered on those employees who will be most likely to be on the move, with 63% most valuable to their businesses in of executives predicting an increase or light of their growth ambitions.
  • 9. 9 | turning the downside upside3. Talent mobility:moving the work and the worker.The near future will see a significant shift in talent mobility, asskilled employees from both emerging and mature marketsincreasingly operate across their home continent and beyond.Talent is more mobile than ever: In the long run, talent mobility has a • Repatriation is growing. Many positive effect on the quality of workforces, repatriated workers that are recruited to• This year, 59% of CEOs are planning and on levels of innovation. Talent return home are armed with skills and to send more staff on short- and long- mobility manifests in a variety of ways. business acumen developed abroad, term international assignments. while retaining the valuable cultural • Expatriates are still widely used to sensitivities of their home country.• Many companies are allowing employees manage expansions, with organizations to choose between international in the Americas being the most assignments that are of interest, and that likely to have expat leaders. will develop their leadership talent. • ‘Management trainers’ are widely• Virtual assignments are on the rise, thanks used for medium-term contracts so to technological tools such as instant that expansions/outsourced functions messaging, cloud computing and social can eventually be run by locals. media, which facilitates collaboration.
  • 10. 10 | turning the downside upsideconclusionOngoing market volatility, skills shortages, 1. The need to proactively manage risk; To ensure they get the most of theand the increased pressure to adapt talent they have, and to maximize theirto this new business reality have made 2. The need to innovate more, chances of engaging the right, newCEOs reassess the importance of talent and more often; and talent, CEOs are focusing on these threemanagement in their organizations. key areas: talent development, talent 3. The need for strong leaders to manage engagement and talent mobility.One year ago, talent management a more complex business environment.was third on CEOs’ list of priorities, This change in c-suite priorities offers anow it’s number one. Three key valuable—and somewhat hopeful—lesson:challenges of have driven this shift: waiting for conditions to improve is no longer an option. Instead, proactive management of talent is the key to overcoming the challenges of the next year and beyond.
  • 11. 11 | turning the downside upsidereferences1 in 2 U.S. Employees Looking to Leave or Employee Engagement: A top concern for Human Capital Institute. (March 2011). Is Your Mercer. (2011). Inside Employees Minds:Are Checked Out on the Job. (2011, June company leaders. (2011, July/August). www. Talent Pipeline at Risk? Navigating the new rules of engagement.20). www.worldatwork.com. ceridian.com. i4cp. (2011). The Critical Human Capital Miles, S. A. (2011, January). 10 KeyCorporate Leaders Forecast Business European Commission. (2011). EU Monthly Issues of 2011. Challenges for CEOs in 2011.Expansion and New Jobs in 2012 Despite Employment and Social Situation: www.directorsandboards.com. i4pc. (2011). Developing High-PerformingRising Concerns, According to New NYSE Quarterly Review: September 2011. Leaders: Emphasizing the Competencies PricewaterhouseCoopers. (2011). 14th AnnualEuronext CEO Report. (2011). The Street. European Commission. That Pay Off. Global CEO Survey.Deloitte. (2011). A Risk Intelligent View (Autumn 2011 ). European Economic IBM. (2010). Working beyond Borders: (2011). Talent Challenge 2011: Movingof Reputation. Forecast. Insights from 2010 IBM Global CHRO Study. Beyond Recession as Retention Strategy.Deloitte. (2009). Managing talent in a Gartner. (2011, March 25). Overview: IHS Global Insight. (2011). Country The Conference Board. (June 2011).turbulent economy. Gartner’s CEO and Board Survey Research, Intelligence. Answering the 2011 CEO Challenge: 2011.Deloitte. (2010). Risk Intelligent Enterprise Accelerating Growth through Quality. Manpower Group. (2011). 2011 TalentManagement: Running the Risk Intelligent Globoforce. (2011, June 23). SHRM/ Shortage Survey. World Economic Forum. (2010). StimulatingEnterprise. Globoforce Survey finds 71 percent of Economies Through Fostering Talent Mobility. companies track employee engagement Manpower Group. (2011). ManufacturingDeloitte. (2010). Talent Edge 2020: Blueprints through exit interviews. Talent for the Human Age.for the new normal. Manpower Group. (2011). The Borderless Workforce.
  • 12. About the authorAs SVP, Centers of Excellence for Kelly Services, Teresa Carrollis responsible for leading a team that manages the brand, developssolutions for clients, and supports Kelly’s vision of providing the world’sbest workforce solutions.About KellyKelly Services, Inc. (NASDAQ: KELYA, KELYB) is a leader in providing workforce solutions.Kelly® offers a comprehensive array of outsourcing and consulting services as well as world-classstaffing on a temporary, temporary-to-hire and direct-hire basis. Serving clients around the globe,Kelly provides employment to more than 550,000 employees annually. Revenue in 2011 was$5.6 billion. Visit www.kellyservices.com and connect with us on Facebook, LinkedIn, & Twitter.This information may not be published, broadcast, sold, or otherwise distributed without prior written permission from the authorized party.All trademarks are property of their respective owners. An Equal Opportunity Employer. © 2012 Kelly Services, Inc. EXIT

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