Talent mgmnt trends and BPs

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March 2010
Global Best Practices®
Talent management trends and best practices
Workforce quality takes center stage in competitive marketplace
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Among the challenges companies face today is a current and looming talent shortage. Workforce
quality and stability are especially significant in the complex, fast-paced, and competitive global
marketplace, which demands ever-higher levels of productivity and innovation to achieve business
success. As a result, attracting, developing, and retaining top talent is a critical priority, perhaps more
than ever before. Human resources is becoming a greater partner in ensuring organizations can
achieve their goals and objectives. The function is addressing issues of strategic talent management
and developing ways to staff companies with first-rate professionals who can serve as a competitive
differentiator. This Global Best Practices report presents current trends in managing talent as a
strategic imperative, identifies best practices, and highlights companies that have found creative and
rewarding ways to build a superior workforce.
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HR is assuming a more strategic role by aligning
talent management with strategic business goals.
Having a strategic HR function is a primary goal of
leading companies today. Strategic HR understands the
company's business and is aligned with executive
leadership to provide insights on the skills essential to
the company’s success. The function is responsible for
creating a detailed plan for building the enabling
workforce and for staying abreast of issues that would
require new skills and competencies or alter access to
the required talent. Those include everything from
expanding global markets, to shifting worker
demographics, to changes in regulatory requirements,
and to changes in competitive factors that may
complicate the quest for the best talent, such as
employee compensation and benefit plans.
Companies are identifying pivotal talent as a top
priority and competitive differentiator.
Leading companies are focused on the current and
projected availability of people who possess the critical
skills necessary to meet business objectives. Those
include professionals with advanced technological,
analytical, interpersonal, and cross-cultural skills who
keep pace as market conditions evolve and
organizations rethink their business objectives. To
ensure they have the pivotal talent necessary to pursue
changing objectives, the companies identify and conduct
regular skills assessments. They monitor and assess the
external talent that would fit--and be available for--open
positions. Leading companies actively pursue top talent
even during an economic downturn, seeing the layoffs of
other organizations as an opportunity to recruit high-
quality candidates who are in the job market.
Companies are developing comprehensive talent
management plans to capture, retain pivotal talent.
Companies are in stiff competition for talented
employees, regardless of the economic environment.
Top performers are always in high demand and will
accept the right offer if a job presents new challenges
and growth opportunities. So to ensure a steady supply
of high-performing professionals, leading organizations
develop talent strategies that differentiate themselves
from the competition. They regularly conduct talent
audits to assess their “as-is” state and ensure they have
processes in place to identify and develop the skills and
competencies essential to ongoing business success.
They are also focusing on that are essential to building a
talent pipeline, such as recruiting, training, retention,
compensation, and succession planning.
Trends

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2March 2010
Companies are realizing that compensation is just
one piece of the talent puzzle.
The best employees in any organization can typically
demand the highest salaries, yet companies still lose
pivotal talent. The departing employees typically leave
for jobs that promise more than monetary reward--they
present opportunities for higher levels of job satisfaction
overall. As a result, leading organizations are using
nonmonetary rewards to inspire employees to exceed
performance expectations and realize new levels of
success and satisfaction. Those include more
achievable advancement opportunities, intellectually
stimulating projects, advanced training support, and
flexible work arrangements.
Companies are ramping up efforts to retain older
talent and essential organizational knowledge.
The U.S. Department of Labor reports that between
2011 and 2029, large numbers of older workers--the
generation known as baby boomers--will reach the
traditional retirement age of 65. Labor shortages are
predicted to accompany that exodus because the birth
rate dropped sharply at the end of the baby-boom
generation and fewer younger workers are entering the
job market. In anticipation of even greater competition
for talent, companies are devising ways to retain older
workers while also adopting strategies to mitigate the
loss of the organizational knowledge that would
otherwise take place when these workers retire. The
companies know that a loss of certain tacit knowledge
could damage their ability to execute on strategic goals.
In greater numbers, companies are embracing
diversity and cultural sensitivity as a way to harness
the collective power of employees across the
broadest spectrum.
Diversity is typically addressed along the traditional lines
of race, gender, sexual orientation, and cultural and
educational background. While important in their own
right, these dimensions can, in a business setting, help
create “cognitive diversity,” which is the ability to
approach an issue from different perspectives and in
different ways. Being culturally diverse gives companies
greater creativity and agility to manage change or
survive crises. The principles of diversity, inclusion, and
cultural dexterity touch practically every area of the
business and can help companies improve recruitment
and retention efforts, obtain better market insights, forge
stronger customer and community relationships, and
foster innovation. By leveraging diversity, companies are
often better equipped to expand into new markets by
drawing on the background, expertise, and opinions of
culturally diverse employees for greater market insights.
Companies are focusing on ways to develop future
leaders to fill the talent gap.
Strong, effective leaders are one of the most competitive
weapons in an organization. They possess the requisite
strategic intelligence as well as the ability to inspire
people to perform. They are also a company’s standard
bearers, setting its moral tone and direction. Yet despite
the vital importance of this position, leadership shortages
exist worldwide and those capable of driving the
execution of strategy are confronting increasingly
complex job requirements. Issues such as globalization,
diversity and multiculturalism in the workplace, market
shifts, and constant change are now the norm. So to
position their organizations for future success,
companies are monitoring both their internal and
external environments to understand the leadership
skills and competencies they will need to find in job
candidates or develop themselves to sustain the
business.
Leading organizations increasingly
use nonmonetary rewards to inspire
employees to exceed performance
expectations and realize new levels
of success and satisfaction.

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3March 2010
Transform HR into a strategic, value-added function.
Leading companies position HR as a strategic business
partner because the function has the resources and
skills necessary to identify the best talent for achieving
business goals and objectives. An effective HR
operation aligns processes such as recruiting, hiring,
and training with business plans, revising them as
necessary to keep pace with evolving workforce
requirements. Technology tools are essential to connect
and streamline process activities, while also ensuring
access to consistent data and workforce analytics to
support decision making. Skillful use of technology can
also deliver self-service support, freeing HR
professionals to focus more on strategic activities that
will more directly advance the business.
Embrace a global approach to HR.
Globalization is transforming how companies view their
talent-management strategies. As they expand a
presence in markets abroad, they are defining a more
global role for HR that will enable management of talent
across international borders. This is especially important
in industries where a shortage of skilled professionals
requires companies to look offshore to staff operations.
To support long-distance people management, these
companies invest in technology that supports virtual
activities, including hiring, training, and performance
review. They also require HR to develop learning
programs that address cultural sensitivity and the unique
challenges of managing people long-distance, such as
how to manage to achieve outcomes, monitor progress,
and provide regular performance feedback. HR is also
charged with an ongoing responsibility to recruit, hire,
and develop culturally diverse employees who are
receptive to cross-cultural opportunities.
Develop recruiting methods that attract desirable
employees.
As the workforces in the U.S. and other countries
undergo profound changes with the impending exodus of
the baby-boom generation through retirement,
companies are confronting a smaller talent pool of
younger workers. This scenario is ushering in a tight job
market and intensified demand for more highly skilled
workers, especially in growth industries such as
healthcare, IT, and engineering. It is also making strong
recruiting and hiring programs essential for companies in
need of new talent. Leading organizations are
responding with more creative methods for attracting the
best job candidates such as: building an employment
brand, identifying channels for reaching more passive
job seekers, forging strong relationships with alumni of
the company, forging strong relationships with colleges
and universities as potential sources of new talent, and
revamping benefits programs to elevate their competitive
advantage.
Build a business case for diversity.
Leading companies consider workforce diversity an
essential component of talent-management strategies as
well as a factor in achieving long-term profitability.
Employees from traditionally underrepresented groups
have insight into the product and service preferences of
their culturally distinct communities, which can help
organizations sell to a more diverse consumer base. To
ensure greater success in achieving diversity, leading
companies first establish a business case for diversity
and their overall objectives, including short- and long-
term goals for building a workforce that is more
representative of the populations they serve. They also
capture demographic information to better understand
opportunities for engaging underrepresented
communities, and identify new channels for recruiting
talent. Many companies capture demographic
information regularly so they keep pace with population
shifts. And to ensure objectives are met, the
organizations establish benchmarks and periodically
measure their success in meeting them.
Best practices
Leading companies position HR as
a strategic business partner.

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4March 2010
Embed new hires more firmly in the company
through onboarding.
To help new hires acclimate more quickly and increase
their chances of success, leading companies establish
comprehensive onboarding programs. The programs are
not job training; they focus on educating new hires about
a company’s culture and unique aspects of the business.
The programs help employees understand the overall
organizational structure, operations, and competitive
landscape. And while similar to orientation programs,
onboarding is a process rather than a singular event.
When managed well with support from all levels of the
organization, the process provides new hires the support
they need to feel comfortable in the workplace and
manage their responsibilities more effectively from the
start, which leads to higher productivity, job satisfaction,
and stronger retention rates.
Align training and development with the company's
long-term goals.
The right talent is essential to achieving a company’s
strategic goals, which is why leading companies provide
training that narrows any gaps between employees’
current competencies and those needed to gain or
maintain competitive advantage. These organizations
see training initiatives as much more than isolated HR
activities. They integrate training within business units
and functional areas, positioning it as a key component
of strategic business plans. In such environments, HR
plays a strategic role and works with functional
managers to identify and support training and
development needs deemed critically important to a
company’s success. Through this partnering, companies
can quickly address new demands for certain skills and
competencies as the business environment evolves and
deliver the necessary training to ensure they can
achieve their strategic goals.
Create environments where employees love to work.
Pay and bonuses can motivate employees. But what is
becoming a top priority for many are the more intangible
aspects of a job, including simply enjoying the work they
do, being given new responsibilities, and feeling
appreciated. Research confirms what common sense
suggests--when people are enthusiastic about their
work, they are more productive. So leading
organizations create a culture that embraces what
employees value most, such as work-life balance,
challenging projects, learning opportunities, decision-
making authority, and recognition of success. Many
companies find that a more relaxed workplace
environment--one that allows a degree of fun during the
day--can boost enthusiasm more than anything else.
But as part of creating an employee-responsive culture,
they also establish a playing field where employees
know exactly what is expected of them.
Boost employee commitment by embedding social
responsibility into company values.
Leading companies recognize social responsibility as
good for business, but also that it impacts employee
loyalty. So as part of corporate responsibility programs,
they identify opportunities for employees to get involved
and in a way that will leave them feeling good about
where they work. Many have established volunteer
programs, which allow employees to donate time during
work hours for community service. Volunteerism can
heighten a company’s profile and strengthen its brand,
especially if the beneficiaries are organizations that align
with the company’s mission and culture. Some
companies use volunteerism as an opportunity for
employees to leverage or even build their business
skills, while others position them as purely altruistic
endeavors. In either case, the overriding goal is to create
a workplace atmosphere of community support.
.
Research confirms what common
sense suggests--when people are
enthusiastic about their work, they
are more productive. So leading
organizations invest in creating a
culture that embraces what
employees value most…

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5March 2010
Engender a corporate culture that embraces work-
life programs.
Regardless of how enlightened a company's work-life
policies are, opinions and mind-sets are often the most
difficult hurdles to overcome. Preconceived notions
about the effectiveness of flexible work arrangements,
such as telecommuting or compressed work weeks, can
hinder program success. So for many organizations the
most challenging task may be to gain management
acceptance as managers can doom work-life programs
by sending even subtle messages that contradict the
company’s intent. The overriding concern is typically
productivity, so leading organizations continuously
monitor and measure the effectiveness of flexible work
programs. They also communicate regularly with
employees about the initiatives, their advantages, and
how to participate in them and remain productive.
Ensure continuity of leadership.
By establishing an orderly plan to address vacancies
brought on by the departure of key employees,
companies can better control their future. A strong
succession plan ensures an organization has a stable
and ample supply of talent in place--individuals who can
assume critical leadership roles at the point of need.
Forward-thinking organizations identify key positions and
the competencies needed to fill them so they can, in
turn, identify candidates to groom for the roles. They
target prospects regardless of where the employees
reside in the organizational hierarchy, and provide them
with learning and growth opportunities, including
leadership skill training and more practical, hands-on
experience through job rotations and international
assignments. These companies are also big advocates
of coaching and mentoring and establish cultures of
knowledge sharing so that their growth and profitability
are not restricted by a lack of leadership talent.
Profit from flexible staffing plans.
Drastic staff cuts during challenging economic times can
reduce profitability in the long run, especially if they are
based on percentages alone, because companies could
find themselves without key resources. To avoid losing
pivotal talent, leading companies plan for workforce
fluctuations and look for alternatives to headcount
reductions. Those options include redeploying personnel
to more profitable areas, implementing shorter work
weeks, or instituting unpaid vacations and involuntary
furloughs or sabbaticals. By implementing strategies that
focus on retaining essential skills and knowledge,
companies protect themselves from over-reaching while
trying to meet short-term goals. By taking a more
strategic approach, companies demonstrate an ability to
confront uncertain times with decisiveness and agility, an
approach favored by shareholders and analysts.
Develop a plan to address the baby-boom exodus.
The baby-boomer exodus will affect companies
worldwide, especially in the U.S. and Europe where the
birth rate dropped sharply at the end of the baby-boom
generation. This leaves fewer younger workers to fill the
expected demand for talent, especially in industries
already hard hit by shortages of skilled workers, such as
aerospace and defense, health care, education, and
public administration. To compound the problem, baby
boomers take valuable knowledge with them when they
retire, so leading organizations are turning to HR for
help. They are identifying ways to capture and transfer
the knowledge of older employees for the benefit of
current and future generations of workers. They are also
examining their processes for recruiting, training, and
retaining employee, all of which present new challenges
as baby boomers retire. In addition, many companies
are revisiting employment benefits--everything from
healthcare and retirement to nonmonetary rewards such
as flexible work arrangements and training--to ensure
they are attractive to younger workers and will serve as a
competitive differentiator.
By capturing and sharing
employees’ knowledge before they
depart, companies can retain
valuable intellectual capital.

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6March 2010
Royal Dutch Shell plc treated HR as a strategic partner
when the oil company integrated its geographically
based, self-contained subsidiaries into a global
business. HR provided valuable insight into
organizational design and change management
decisions, based on the location of oil field activities and
the available talent in those areas. Specifically, HR
helped with decisions on:
 Where commonality was required
 Where country customization was needed
 What type of employee to place and develop in certain
countries
 How to link activities in diverse countries
 How services would be provided to remote operations
 How to implement management processes, such as
strategy setting and investment decisions
 How to measure and reward diverse units
A series of interactive, online courses covering different
aspects of project management helped SAP AG train its
managers to work more effectively with widely dispersed
teams. While most managers understood the basics of
project and people management, many did not know
how to work with culturally diverse, virtual teams, and a
survey showed they did not even realize special skills
were needed. SAP developed an e-learning program
about working with individuals from varied cultural
backgrounds, overcoming communication barriers, and
managing people working in multiple time zones. SAP
realized a nearly $2 million return on its investment and
team leaders' ratings improved by 26 percent, a result
consistent across company operations in the Americas,
India, and Germany.
The Washington Division of URS Corporation is
constantly looking for high-performing talent, but
competition for engineers, project managers, and piping
designers is so fierce, the company has had to rely on
more creative recruiting methods. One approach is
“open houses.” The Washington Division encourages its
current employees to invite professional colleagues to
the events; it also places strategic media ads on the
radio and in newspapers and trade journals, and sends
personal invitations to trade show attendees. The open
houses include an informal meet and greet with
refreshments, but company managers also divide guests
into groups based on their specialties so the managers
can present information about the company and job
opportunities. Anyone interested is invited to meet with
members of senior management. The open houses have
proven to be a successful recruiting tool in a highly
competitive industry. During one recent weekend, the
Washington Division hosted 220 people at open houses
and made 28 job offers--18 of which were accepted.
The CEO of Edwards Lifesciences Corporation says
the difference between success and failure hinges more
on knowing which jobs are essential to the company
than on pioneering innovative technology. Approximately
75 of the company's 5,000 employees hold critical
positions, ranging from members of senior management
to program managers. Edwards identifies a minimum of
two successors for each critical job--so designated not
because of who holds the position, but because of its
role in achieving business goals. The company
establishes clear objectives for the positions, which are
evaluated by the CEO, along with a market value and
appropriate compensation level. The CEO credits the
company’s strong talent, which never wavers due to
diligent success planning, with Edwards’ leading
technologies, which consistently deliver profit growth.
When Roche Diagnostics Corporation was
experiencing high turnover, the company surveyed
employees on satisfaction issues, including their sense
of achievement, fairness at work, and company trust.
Management then measured the employees’
“commitment index” with a survey that presented loyalty-
related statements such as “I have a strong personal
attachment to Roche” and “When Roche has problems, I
think of them as my problems.” Responses were rated
on a 1-to-5 scale, with 5 indicating the highest level of
commitment. Before conducting the satisfaction survey,
the employee commitment index had been 3.6, but after
Roche showed an interest in whether employees were
Company examples

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7March 2010
satisfied, the index rose to 3.8 overall, and to 4.0 or
higher in some functional areas.
Sun Microsystems, Inc., replaced a half-day orientation
session with a multi-week onboarding program that
paces the delivery of necessary information to improve
retention and avoid overwhelming new hires. On their
first day with the company, employees learn about
benefits and security procedures. By the end of the first
week they have received training on systems basics,
including how to use the tools and where to go for
support. Within their first 30 days on the job, they learn
about Sun’s business strategy and how to navigate the
company’s culture to achieve success.
3M Company instituted a knowledge-retention program
called Maven, which shares job information captured
from technical-service engineers with employees
throughout the organization. The company believes
Maven gives it a significant business advantage,
especially considering that about 30 percent of 3M’s
U.S. engineers are nearing retirement. By capturing and
sharing their tacit knowledge before they depart, the
company can retain valuable intellectual capital.
The McDonald’s Corporation’s commitment to diversity
is seen at all levels of the organization, from cashiers to
the executive ranks. The fast food giant’s commitment to
employing a workforce that reflects its customers began
more than three decades ago with affirmative action, and
has culminated in a diversity initiatives department. The
department manages culturally-oriented education and
training program, including a career development
component to help minority employees advance.
McDonald’s efforts have helped employees achieve
success both internally and externally. Such was the
case with John C. Lopez, a former McDonald’s franchise
owner whose success with the company enabled him to
buy a business that has become the largest Hispanic-
owned meat processing facility in the U.S--and a major
supplier of McDonald’s hamburgers.
When nearly one-third of new hires in the U.S. were
leaving the company within a year, Wipro Technologies
was forced to rethink its talent management strategies.
The global organization identified improvement
measures by analyzing the results of employee
satisfaction and exit surveys. It learned that many of its
workers did not feel engaged--in particular, they felt
isolated from global team members. In response, Wipro
introduced a three-week-long training initiative around
global acclimation. Held in Bangalore, the program
instructs new U.S. hires on client-facing functions, such
as sales and consulting, and provides insight on the
company culture and offshore delivery model. Wipro also
began mandating cross-culture sensitivity training for
managers leading multi-country teams, and offered a
workshop on soft skills, cultural sensitization, and
working styles in different countries for all employee-
support functions, including finance, payroll, HR, and
operations. Since implementing the new training
programs, Wipro Technologies' new hire satisfaction
rates have increased almost 50 percent.
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refer to the network of member firms of PricewaterhouseCoopers International Limited
(PwCIL). Each member firm is a separate legal entity and does not act as agent of PwCIL or
any other member firm. Neither PwCIL nor any member firm is responsible or liable for the acts
or omissions of any other member firm, controls the exercise of another member firm's
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