Corporate Profile 47Billion Information Technology
Managing Talent At The Speed Of Business
1. Fidelity Perspectives: Talent Management Fall 2008
Managing talent
at the speed of business
From the iPhone and the Roomba to hybrid cars
and HDTV, the constant introduction of new products,
new services and new technology is a fact of life for
consumers—and for the businesses that have to constantly
deliver those innovations. In this world, the traditional
approach to talent is no longer enough. Companies need
to find ways to create an “accelerated workforce” that can
adapt quickly in an era of change—or find themselves being
left far behind in the race to compete.
Published by:
Fidelity HR Services
2. POInT OF vIew
Managing talent
at the speed of business
Consumers today expect new products and services to arrive with a
speed and frequency never seen before—from iPhones and e-books to
improved household robots, powerful disease-fighting drugs, and social
networking sites that provide new ways to connect. The expectations of
customers—be they individual consumers or Fortune 500 businesses—
are always rising, but recently they have been met with a steady flow of
enticing innovations.
ity of talent management. And the
like selling one unit, buying another,
For the companies delivering those
resulting gap poses a real and sig-
reorganizing yet another, getting out
products and services, however,
nificant danger. As a recent Bersin
of this business and into that busi-
keeping that flow going is no small
& Associates survey found, only
ness. All of these activities have tre-
challenge. Today, the change that
17% of HR executives believe that
mendous talent implications,” says
businesses have long faced is not
their company’s workforce is “highly
Josh Bersin, the firm’s president.
only accelerating but becoming
ready” to implement the change
more unpredictable. Fast-moving
they know is coming. Companies
But the ability to manage talent has
technologies and shorter product
need to change that equation—or
not always kept up. Over the years,
lifecycles are requiring that corpo-
run the risk of being stalled in a
companies have worked to increase
rations make constant shifts and
fast-moving and unforgiving busi-
the speed of business primarily by
adjustments in the organization.
ness landscape.
retooling processes and implement-
Indeed, a company may find the
ing new technologies to increase
very nature of its business has
To put the workforce in step with
corporate agility—without making
changed in a relatively short time—
today’s rapidly changing tools and
similar fundamental changes in the
and, perhaps more than ever, talent
technologies, HR and business
way they manage talent and shape
is critical factor in the company’s
executives will have to look beyond
the workforce. At the same time,
attempt to adapt and compete.
the traditional approaches to man-
a number of workforce trends are
aging talent. This means they will
making talent management more
A flexible, responsive workforce is
need to create a more nimble,
complex and more challenging, from
critical if a company is to be able
“accelerated” workforce. They
the rise of global talent wars to a
to change direction, exploit emerg-
will need to make human capi-
growing lack of employee loyalty,
ing opportunities and thrive in the
tal processes more dynamic and
demographic shifts that are leading
midst of constant change. Proof of
responsive. They will need to be
to shortages of people and, perhaps
that was clear in a recent survey by
able to plan ahead more effectively
most importantly, critical skills.
Bersin & Associates, a research firm
and refocus the workforce on new
focused on talent management,
challenges as they arise. And they
In essence, companies face two
which found that more than a quar-
will need to manage the workforce
troubling and divergent trends: the
ter of responding companies said
so it is ready to meet the needs
accelerating pace of technological
their top organizational initiative is
of tomorrow and remains closely
change, and the growing complex-
restructuring. “They’re doing things
2
3. Talent Management: Tough
tage of this most critical of busi-
aligned with overall business strat-
and getting tougher
ness assets—and fall behind those
egy, even as it evolves.
that do. “It’s a huge challenge for
HR to set up and be the facilitator
Rethinking these strategies and Today, there are a variety of funda-
for this type of change,” says Phil
processes will not be easy—but mental forces that are reshaping
Fersht, research director, Global
it will be vital, and a competitive the talent landscape. In developed
Services and Outsourcing, at AMR
necessity. Simply put, companies countries, the workforce is aging
Research. “It is undoubtedly the
that fail to forge a workforce that and workers are retiring in larger
biggest challenge HR has faced
can succeed in an era of acceler- numbers. not unexpectedly, there
in the last 20 to 30 years. This is a
ating technological and business simply aren’t enough younger
crunch time.”
change will fail to take full advan- people to take their place. In the
Beyond the technology: the organization
Today’s solutions are helping companies integrate and automate a range of talent management processes.
But technology is just one aspect of effective talent management; companies need to consider changes in
the organization itself, as well.
One fundamental need: Build closer relationships between HR and the business, so that one area can
inform the other, especially in areas such as workforce planning, performance planning and development.
Training can benefit from a collaborative approach in which business functions determine specific business
content, while HR handles centralized administration and corporatewide content—an approach that
balances targeted local learning with enterprisewide consistency and efficiency and the ability to quickly
disseminate new content. Such close working relationships can help HR play a more strategic role in
keeping talent aligned with the business.
HR should also look at its organizational structure and how it can be recast to increase responsiveness to
change and better tap into a global workforce. For example, companies should be open to having an HR
team where the head of compensation is located in, say, Portugal and the head of staffing and recrutiing is
in Brazil or Canada, if that’s where the best HR talent is. Companies can also consider outsourcing HR pro-
cesses in order to tap into third-party expertise and keep pace with changing best practices. Overall, HR
organizations sell themselves short if they are not flexible around their organization designs, their use
of partners and their physical placement of people globally.
Finally, companies need to manage the changes they make in processes, technologies and organization
structure. They have to explain what is happening—and why—and what people need to do to succeed in
this environment. Companies should also understand that change management is no longer a one-time
event—it is an ongoing activity. Keeping talent up to speed takes the good use of good technology, It also
takes a willingness to think about the HR organization in new and different ways.
3
4. POInT OF vIew
talent can be found around the
knowledge from the workforce. And
coming years, for every two expe-
world—and the global competition
at a time when changing technol-
rienced workers who leave the U.S.
for workers is only growing. “CeOs
ogy has become a fundamental and
labor force, only one will be avail-
are recognizing the need to be
vital part of the business landscape,
able to take their place, according
more competitive at a global level,
the number of engineering and sci-
to the Society for Human Resource
and to have the ability to change
ence college graduates is relatively
Management. The result, reports
their operations and infrastructure
low in many developed countries.
the IDC research firm, will be a
to do that,” says Fersht. “They not
shortfall in the U.S. alone of some
only go out and hire people—they
with an eye to labor and skill short-
3 million workers by 2016.
also have to retrain and reskill the
ages, U.S. companies are already
people they have in order to make
extending their search for talent to
The problem is not just the shrink-
their companies more nimble. And
the global arena, just as they earlier
ing workforce per se. This shift
they’d better be able to access
sought global markets for products
will also see the exodus of huge
global talent.”
and services. Today, high-quality
amounts of skill, experience and
Knowing what it takes
Over the years, companies and HR professionals have explored the use of competencies—essentially,
descriptions of the “ideal employee” for a given job. But efforts to employ competencies have often fallen
short: For example, only about one-third of companies with performance management systems use compe-
tencies well in those programs, according to Bersin & Associates.
The interest in competencies is well-founded, says Arthur Mazor, senior VP, Offering Management &
Marketing, Fidelity HR Services. “You need to ground attraction, development and retention programs in
a well-documented, well-defined understanding of what it takes to be successful in the organization; that
is what competencies do,” he says. Up-to-date, accurate competency models are vital to bringing greater
speed and precision to talent management and ensuring the company has the skills needed to address the
ongoing challenges of rapid technological change and align the workforce with the business plan.
Today, software applications are available to help companies make effective use of competencies. The
problem lies in the non-technical challenges of coming up with definitions. Competency models should
look at various kinds of abilities, from hard technical skills to leadership—and it is not always easy for man-
agers to pin down and document all the qualities that are required for a given job.
But that doesn’t mean managers shouldn’t try. Mazor says that rather than attempting to cover all roles at
once, companies should focus on coming up with competency models for critical positions. “It might be a
challenge to completely define competencies for every job family across the organization,” he says. “But
companies can start by creating models for jobs where it is hardest to find good talent or where the roles
have a high impact on revenues or customer service—where talent has the greatest impact on the busi-
ness.” By doing so, companies can gain experience building competency models and gradually deploy
them more widely.
4
5. Meanwhile, the generational shift
Over the years, companies have worked to increase the speed
from retiring Baby Boomers to Gen of business primarily by retooling processes and implementing
Y workers—those just now enter-
new technologies to increase corporate agility—without making
ing the workforce—is bringing its
own set of talent management similar fundamental changes in the way they manage talent and
challenges. Companies are find- shape the workforce.
ing that Gen Y employees bring a
number of distinct qualities to the
workforce, such as an emphasis
at once—thus they will need to change their sourcing strategies to
on work-life balance and a strong
find differentiated approaches to recruit younger workers, according
interest in development and work
motivating, training and holding to Fidelity research.
experiences, as opposed to climb-
onto these four groups with their
ing the traditional corporate lad-
varying values and expectations. 62% of global CeOs believe that
der. They are also expected to •
companies need new methods
have a reduced sense of corporate
HR Under Pressure of recruiting, motivating and
loyalty and devotion to life-long
developing people, but only
careers; indeed, today’s college
43% say that their HR functions
For the most part, companies have
graduate is likely to have up to
are equipped to meet the chal-
their hands full with these issues,
14 jobs by age 38, according to
lenge, according to a recent
and statistics suggest that they are
the U.S. Department of Labor.
PricewaterhouseCoopers survey.
often struggling to keep up with
change. For example:
These qualities will require com-
• 59% of HR executives cite gaps in
panies to rethink many talent man-
while 93% of HR directors say the leadership pipeline as a key
agement processes. Perhaps more •
Gen Y is important to their suc- challenge; roughly a third point to
important, the emergence of Gen
cess, less than half say they hiring and retaining people for key
Y means that companies will have
are currently able to effectively positions and to filling skill gaps
four generations in the workforce
Exhibit 1: Getting Ready for the Gen Y Workforce
How important will Gen Y talent How prepared is your HR team to If you have already implemented
be to the success of your attract and retain the emerging Gen Y strategies and plans, how
company over the Gen Y workforce? successful have your efforts been
next 5-10 years? in attracting and retaining the Gen
Y workforce?
Not at all Extremely
2% successful
Not 3%
Somewhat We have Very
successful
We have
important implemented successful
at all
no immediate
Extremely
5%
Important strategies 12%
12%
plans
important
13% and plans
25%
31% 23%
Somewhat
successful
Successful
36%
We are They are being
36%
Very researching considered in
important options future planning
49% 23% 30%
Source: Fidelity HR Services (Totals may not equal 100% due to rounding.)
5
6. POInT OF vIew
talent management approaches on
companies are already extending their search for talent to the
U.S.
a strategic view of what the com-
global arena, just as they sought global markets for products and
pany’s offerings will be several years
services. Today, high-quality talent can be found around the world— in the future—and then design pro-
grams to deliver the type of talent
and the global competition for workers is growing.
that can create and support those
future offerings.
That does not mean that compa-
Targeting the High Impact
in critical positions, according to nies need to take an abrupt, “big
Opportunities
Bersin Associates research. bang” approach to integrated tal-
ent management. Instead, they can
“The demands on the work- focus on areas of opportunity and
More than ever, managing and
force, and on HR to support that then work incrementally to develop
delivering talent needs to be
workforce, are clearly growing,” a fully integrated approach. In the
approached in a holistic, strategic
says Arthur H. Mazor, senior vice effort to accelerate the workforce,
manner. For speed and efficiency,
president, Offering Management there are three areas in particular
processes such as recruiting,
Marketing, Fidelity HR Services. where advancing technology and
development, retention and
“Faced with the rapid pace of new practices are bringing greater
succession, and workforce planning
change in technology and busi- sophistication to the field, and
need to be linked—and today, the
ness, companies need to focus their where improvements and innova-
right processes and advanced talent
talent management strategies on tions can have a significant impact
management systems are making it
those processes that enable the on how a company approaches tal-
feasible to integrate and automate
workforce and that can also inno- ent and talent management: devel-
many talent management activities.
vate, respond and change direction opment, workforce planning and
In taking advantage of these tools,
with both speed and accuracy.” performance management.
companies also need to base their
Exhibit 2: Changing Times Companies are contending with a wide range of changes that affect their
approach to talent management
What are your organization's major organizational changes?
Development and launch
of new products and services
Major restructuring
New top management team or CEO
Major change in business strategy
Merger or acquisition
Rapid decline in demand
Rapid growth in revenue or demand
Major regulatory change
0% 5% 10% 15% 20% 25% 30% 35% 40%
Source: Bersin Associates
6
7. Planning to lead
precision” in training, says Bob
Leadership is always important, but in an era of rapid technological change,
Lucido, senior vice president of
it becomes critical. Effective leaders are needed to motivate people, man-
HR Strategy Consulting Services at
age change and leverage talent in order to fend off emerging challenges and
Fidelity. Traditionally, he explains,
exploit new opportunities. However, says Bob Lucido, senior vice president
the rule of thumb was to mass-
of HR Strategy Consulting Services at Fidelity, a great many companies have design training to be useful to 70%
not put the effort behind succession management that this new era demands. of employees. But it’s increasingly
clear that now, “you want to figure
Companies need to take a more systematic approach, he says. That means
out what the individual employee
making a forward-looking assessment of leadership roles; identifying people
needs to learn to be successful, and
who may be well suited for those positions; and helping them prepare for and
be quite precise in providing it.”
grow into those jobs. In creating such programs, companies should:
Companies can use technologies
M
ake succession planning a business responsibility. “With the rapid pace of such as learning systems, the web
change,” says Lucido, “succession planning decisions should be in the hands and podcasts to provide targeted
learning to segments of employees
of the managers. They know what’s needed to execute on new technologies,
or even individuals, address their
ideas and intellectual property.”
specific development needs, and
provide a well-defined learning
Integrate succession planning and development. Companies need to under-
plan. Today, learning programs
stand and fill potential leaders’ skill gaps and shape personalized develop-
can be tailored to the individual’s
ment programs for each individual. This can be done not only through training preferred learning style, work role,
and coaching, but also through work assignments that help bolster weak competency model and access
to learning delivery technologies.
areas.
People can know what training to
take, when to take it, how to get
Push
succession planning deeper. “Companies can benefit from pushing the
it—and companies can tailor the
process down into the organization, to virtually all levels,” says Lucido. Doing
learning with just the solutions that
so has gotten easier with the advent of automated tools that streamline what
they need to be successful, in a
was once a paper-driven process. way that’s meaningful to them.
Such individualized approaches
not only let employees get up to
Development: “What the opportunity,” says Mazor. “They feel speed more quickly, it also helps
employee needs…” they can be successful where they ensure that learning is effective
are because they see lateral or up- across cultural and age boundaries,
ward movement that will help them builds employee engagement and
effective development should
grow.” Such development strategies buy-in, and enhances retention.
involve everything from classes and
are especially useful in attracting
e-learning to coaching and mentor-
younger employees, who tend to Lucido also sees the learning func-
ing. Accomplished successfully, it
see stretch assignments and varied tion as having a potential role in a
can help employees pick up new
experiences as more important than company’s approach to knowledge
concepts and skills more quickly, so
traditional promotions. management. with multimedia,
that individuals—and the work-
YouTube-type applications, for
force as a whole—stay in step with
Today’s tools and techniques make example, companies can capture
change. Solid development efforts
it possible to provide highly indi- and share seminars conducted
can also play an important role in
vidualized, on-demand, on-the-job by experienced, about-to-retire
retention. “with a clear develop-
learning—and companies should employees, essentially retaining and
ment path, people are less likely
take advantage of the “power of institutionalizing their knowledge.
to feel they have to leave to find
7
8. POInT OF vIew
Exhibit 3: Growing Shortages and Complexity Challenges on a number of fronts are making it difficult to
keep talent management in step with accelerating techno-
logical change
What are your organization’s top talent challenges?
Gaps in the leadership pipeline
Creating a performance-driven culture
Difficulty filling key positions
Retention in key positions
Skills gap in critical positions
Retirement of key workers
Rapid hiring due to growth
Source: AMR Research younger workers
Development needs of
0% 10% 20% 30% 40% 50% 60%
Companies also need to base their talent management approaches
Workforce Planning: “Over
the horizon…” on a strategic view of what the company’s offerings will be several
years in the future—and design programs to deliver the type of talent
“workforce planning can be the
that can create and support those future offerings.
key to making sure talent plans are
aligned with business plans and
overall business objectives,” says
Fidelity’s Mazor. “It’s a very critical
piece of talent management, but
analytics systems, companies can
“Only 4 to 5 percent of the compa-
very few companies have a good
better determine what skills they
nies we’ve talked to have a skills-
grasp of it.” Indeed, while compa-
have where, forecast what they will
based view of their current workforce
nies typically consider a multiyear
need and take steps to fill the gaps.
and know, for example, where their
business plan a basic necessity, they
They can take advantage of sophisti-
skills are strong and weak. without
usually don’t have a similar long-
cated tools for modeling and “what
such basic information, how can you
range workforce plan in place to
if” scenario planning, taking into
know whom to move where and
support it.
account future business needs. And
where you have critical skills gaps?”
they can segment their workforces
Similarly, companies typically fail to
By and large, workforce planning has
to provide differentiated programs
take time to factor expected shifts in
traditionally been a relatively simple,
for different types of employees.
products and services in the coming
and ultimately limited, process.
years—putting planning further out
“Often, executives have a consoli-
essentially, says Mazor, “they can
of sync with business realities.
dated view of the open headcount
improve their ability to envision the
of the company and maybe a view
workforce of tomorrow and see over
Companies need to take a deeper,
of what the coming head count will
the horizon in terms of workforce
more strategic approach to plan-
be in three to six months. But that’s
needs, and make sure that the talent
ning. with integrated databases and
about as far as they go,” says Bersin.
8
9. Collaborating on Change
Today, companies are using human resource outsourcing (HRO) to not only increase efficiency, but also help them
take a more strategic approach to talent management in a rapidly evolving world (see table below). “CEOs clearly
recognize the need to change their organizations, but in many cases, companies don’t have the skill sets needed to
effect change,” says Phil Fersht, research director, Global Services and Outsourcing, at AMR Research. “So there is a
growing reliance on third parties to help them do that.”
In the HR arena, Fersht explains, outsourcing providers can help companies implement new technologies and create
integrated, standard platforms to manage global workforce data. Just as important, they can draw on their busi-
ness experience and expertise to help companies rethink processes and the organization itself to make the most of
such systems, and keep the workforce aligned with the business. “It’s not just the technology that’s important,” says
Fersht. It’s also the service provider’s ability to pull all these things together.”
Traditional HRO Strategic HRO Potential Results
Driver to Cut costs, increase engage employees to drive 20%+ savings in total cost
operating efficiency business results of service; better focus on
Outsource
employee empowerment and
enablement
Transformation Implement “best Optimize processes to 50%+ faster implementation,
practices” and achieve business results and ability to focus on innovation
of HR Process
standardization support individual success
Governance Meet contract SLAs Transparency in relationship, Balanced approach to driving
collaboration on aligning both consistent, quality
strategies and resources service and employee
satisfaction
Role of HR Outsource HR empower the individual HR more focused on strategic
administration while delivering high quality workforce planning and
administrative services management
Managing the One size fits all—or a few Provide employees with Individualized employee
sizes fit most tailored programs and experience, more effective
Workforce
learning to support individual development, alignment
business and personal of personal and business
decision making objectives, and improved
retention.
Workforce examine historic reports Use analytics to develop Data-driven, fact-based
and data to assess results predictive view to guide decision-making; forward-
Intelligence
workforce-planning decisions looking, actionable insights
that enable adaptable
workforce
9
3
10. POInT OF vIew
create the “accelerated workforce,” companies need to begin
To
pipeline is focused on meeting their
by bringing together data covering everything from competencies
future requirements.”
and skills to performance feedback, payroll and benefits. The goal:
Performance Management:
Create a complete view of the employee.
“The golden thread…”
Companies have long seen the value
of performance management—that
with a fast-changing business envi- people—such as their locations,
is, making sure that employees’ goals
ronment. It brings greater flexibility to their current and past jobs, and
are aligned with the organization’s
the process, which can be very valu- their salaries. In target companies,
business goals. But reality has lagged
able in a multigenerational workplace such data could be scattered in six
behind the concept: Too often,
because companies can provide or seven different systems all over
performance management is seen as
the more timely feedback that Gen the world. So, it’s very hard to get
a necessary administrative evil tied
Y employees value as part of their a comprehensive view of where
to pay, rather than a positive tool
focus on continuous development. the workforce currently is, let alone
for helping drive employee growth
where it needs to go.”
and alignment. For most companies,
More broadly, companies can use
then, performance management has
performance information in areas To create the “accelerated work-
been limited to an annual process
such as succession management force,” then, companies need to
of setting goals and holding perfor-
(see sidebar, “Planning to lead,” begin by bringing together data
mance reviews—which makes it dif-
page 7), compensation and work- covering everything from compe-
ficult to identify problems and make
force planning. As Bersin says: “we tencies and skills to performance
“midcourse” adjustments as business
see [performance management] as feedback, payroll and benefits. The
and technologies change.
core because so many decisions that goal: Create a complete view of
HR or management have to make the employee. That view opens the
That’s now changing, with the
are dependent upon employee- door to programs that focus on the
advent of systems that automate
related information, much of which individual employee. It also enables
much of the process. “The right
can be captured in the performance the effective use of analytics tech-
technology can help companies
management process.” nologies that can help companies
pull together that information at the
uncover trends, understand the cur-
individual, manager and business
First Steps: Developing solid rent state of the workforce in more
levels,” says Lucido. “Individuals
data—and a complete view depth and gain forward-looking
can see how their goals match up
insights into the shape of tomor-
and career paths align with their
row’s workforce.
pay so they understand exactly how These three areas offer significant
they are going to be measured and opportunities, but to get the most
Overall, companies need to use
what they need to do to succeed. out of new methods and tools, com-
employee data to support a fact-
And the company can get a clear panies need to address some under-
driven approach to decision making
view of how productive and effec- lying issues—not the least of which
in human capital processes. “People
tive people are. You create that is developing accurate, complete
usually have an intuitive feeling
golden thread through the organi- information about the workforce—
around the right thing to do, but
zation that helps ensure everyone which can be a daunting challenge.
when you’re trying to move employ-
pulls in the same direction.”
ees around, engage them, recruit
“effective talent management,”
and retain them, you’re just guess-
Automating and speeding up the says Bersin, “requires good data.
ing without solid data,” says Mazor.
process also makes it possible to Strategic HR activities, such as
“You need data if you want to act
review performance more frequently workforce planning, depend on up-
with accuracy and confidence.”
to keep workforce strategies aligned to-date accurate information about
10
11. Exhibit 4: Closing the Gap: what executives believe is important does not always correlate with their
organization’s performance
Importance vs. Performance
Human resource management
Employee performance management
Talent acquisition
Workforce management
Employee portals/self-service
Workforce development
Enterprise incentive management
Travel and expense
Workforce analytics
Professional services automation
Contingent workforce/services procurement
0% 10% 20% 30% 40% 50% 60% 70%
importance performance gap
Source: Bersin Associates
actually put to work by managers
problems, companies will need to
The use of technology and data in
and employees.
have access to skills and knowl-
support of the accelerated work-
edge—either internally or from
force is not simple and is likely
It’s not easy, and in many ways
third-party partners—to rationalize
to involve deeper technical skills
it requires breaking new ground
and link these various systems. And
in the near future. For example,
and moving outside the corporate
they will need to have the business
companies will need to be able
comfort zone. But pursuing these
and technical expertise that will
to manage systems and data on a
initiatives—and building a work-
enable them to take advantage
large scale to handle the widening
force that can succeed in an era of
of these evolving technologies to
scope of talent management pro-
relentless change—will be worth it.
support talent and business strate-
cesses. And as talent management
gies—and deliver results.
systems become more sophisti-
“Businesses need to be constantly
cated and robust and touch on
exploring new ways to support
Beyond the technical challenges,
more areas of the organization,
and enable the workforce, to
companies will need to consider
companies will have to find ways to
make it more nimble,” says Mazor.
a range of changes, from pro-
manage them in concert with other
“Success in managing the global
cess redesign to a more global
enterprise systems.
workforce more effectively, in tap-
organizational structure for HR.
ping into the potential of their
Companies will need to find ways
“Talent management software is
people, will be a key difference
to have HR and business execu-
now overlapping with other enter-
between winners and losers in the
tives work more closely together.
prise technologies, such as eRPs,
coming years. If you want to com-
And they will have to pay close
HRMS and payroll systems,” says
pete on a global stage, you don’t
attention to change management,
Bersin. “To further complicate
really have a choice but to manage
to make sure that the new tools
things, the systems are almost
and grow talent on a global basis.”
and processes they embrace are
always out of sync.” To avoid such
11
