tm fact book 2010

Talent Management Factbook 2010

Best Practices and Benchmarks in U.S. Talent Management

BERSIN & ASSOCIATES FACTBOOK REPORT | V.1.0

Karen OLeonard,

Principal Analyst

Stacey Harris,

Principal Analyst

September 2010


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TABLE OF CONTENTSIntroduction 5

Executive Summary 7

1. Restructuring Consolidates Talent Processes 7

2. More Companies Are Developing a Talent 7

Management Strategy

3. Integration Is Still in the Early Stages 8

4. Competencies Are the Foundation of 9

Talent Management

5. The Challenge of System Integration 10

6. Integration Pays off 10

What Is Talent Management? 1

Talent Strategy 13

Workforce Planning 14

Capability and Competency Management 14

Talent Acquisition 15

Leadership Development 15

Succession Management 15

Career Management 16

Performance Management 16

Total Rewards 16

Learning and Capability Development 17

Organization and Governance 18

Business Metrics and Analytics 19

Talent Infrastructure 19

Talent Strategy and Planning 1

Who Is Considered Talent? 26



Organization and Governance 8

The Right Mix of Skills 38

Business Ownership of Talent Management 39

Talent Management Maturity 1

The Path to Integration 48

Fostering Integration 59

Measuring Success 6

What Metrics to Use? 62

Metrics from Our Study 67

Impact of Mature Talent Management 76

Impact on Turnover and Promotion Rates 80

Impact on Employee Productivity 82

What Maturity Level Is Right for Your Organization? 83

Talent Systems 85

System Integration 87

Impact of Talent Systems 90

Keys to a System Integration Strategy 94

Appendix I: Study Methodology 98

Appendix II: Key Talent Integration Points 10 across Talent Processes

Appendix III: Table of Figures 108

About Us 111

About This Research 111

Talent Management Factbook 2010 5


IntroductionAs the economic recovery unfolds, organizations are taking stock of their talent. For many companies, the last two years have meant restructuring, layoffs and salary freezes, creating an environment of low morale. Now that the economy is starting to improve, disengaged employees are beginning to look elsewhere. The Bureau of Labor Statistics reported in February that the number of employees voluntarily quitting their jobs surpassed involuntary terminations (through layoffs or discharges) for the first time since October 2008.1 This is a signal to companies to look at their career planning, development and rewards programs to make sure that their employees are engaged and working toward long-term goals.

Another factor shaping corporate talent strategies is projected job growth. As companies start to hire again, many are being cautious, often initially turning to outside contractors or part-time workers. Therefore, with only modest job growth expected in the near term, companies must find ways to recruit, motivate and retain employees in an environment of limited career advancement.

But perhaps the biggest influence on talent strategies has been companies redefining their business strategies and goals in light of the new economy, with resulting shifts in the talent needed to achieve these goals. This, in turn, impacts all talent initiatives within the company, from workforce planning and recruiting to retention and compensation strategies.

Smart companies realize that these talent activities are inextricably linked. The success of an organizations talent strategy depends on the integration of its talent processes.

This report summarizes our annual study conducted in partnership with Human Resource Executive. The research was conducted during March and April 2010, with 725 HR managers and executives from a large cross-section of U.S.-based organizations. In addition, in-depth interviews were conducted with HR executives from a range of company sizes and industries. Based on these qualitative and quantitative inputs, this report provides benchmarks and best practices in talent management. Specifically, the study addresses the following key questions.

1 Source: More Workers Start to Quit, Wall Street Journal / Joe Light, May 26, 2010.

Disengaged employees

are beginning to look

elsewhere a signal that

companies need to get

their talent strategies

in order.

K E Y P O I N T



How are companies organizing their talent management functions?

What is an effective roadmap to integrating and improving talent initiatives?

What is the state of organizations talent systems and infrastructures?

What are the current rates of retention and promotions among U.S. companies, and what other metrics are being used for evaluating talent initiatives?

What is the impact of talent management on business and talent metrics?

After reading this report, if you see areas that you would like to further explore for your organization, please contact us at [email protected] or at (510) 654-8500.

Karen OLeonard

Principal Analyst

Companies must find

ways to recruit, motivate

and retain employees in

an environment of limited

career advancement.

K E Y P O I N T



Executive SummaryThe following are key findings from the research, which are explored in more detail in this report. In addition, throughout this report data is broken out by company size and industry.

1. Restructuring Consolidates Talent Processes

Many companies have consolidated their operations over the past few years in an effort to improve efficiency. This restructuring has generally been beneficial to talent management by bringing centralized ownership of talent initiatives.

Today, 30 percent of U.S. companies have a dedicated talent management executive, a role that is responsible for some or all of the talent functions across the enterprise. This figure is up from 21 percent in 2008.

The responsibilities of talent management executives vary widely. In most companies, this role is responsible for the talent strategy, leadership development, succession management, performance management, and learning and development (L&D). Just more than one-half of the talent management executives are responsible for career management, competency management and talent acquisition.

The talent management executive does not typically own the compensation / total rewards function, which often reports up through a different chain of command into the central HR organization. In most cases, workforce planning is also under the charge of a separate person or group.

. More Companies Are Developing a Talent Management Strategy

A dedicated talent management executive can help to define and implement a cohesive talent strategy by aligning resources and improving the level of coordination across processes. Today, nearly one-half of U.S. companies say they have a well-defined talent strategy and

Today, 30 percent of

U.S. companies have

a dedicated talent

management executive.

K E Y P O I N T



are working on implementing that strategy. Two years ago, this figure was just 37 percent. So, while there is still a lot of room for growth, companies are making progress.

. Integration Is Still in the Early Stages

Mature talent management calls for an effective governance structure, a business-driven talent strategy and highly evolved, integrated talent processes. It also requires business leaders and managers to take ownership of talent initiatives and to be held accountable for talent outcomes.

This Level of Maturity does not happen overnight. Organizations typically evolve to this Level over a number of years, progressing through a series of stages, as depicted in Figure 1.

Level 4: Strategic Talent ManagementFully integrated processes and systems used to make

business decisions; talent mgmt. is business-driven

Level 3: Integrated Talent ManagementHeavy focus on connecting systems and processes; single person / team

responsible for talent initiatives

Level 2: Standardized Talent ProcessesTalent processes are consistent and tailorable, with some integration;

several systems connected through manual processes

Level 1: Siloed HR ProcessesIndividual HR processes or silos;

may have systems in place but not connected28%

45%

20%

7%

Figure 1: Bersin & Associates Talent Management Maturity Model

Source: Bersin & Associates, 2010.



Today, approximately one-quarter of organizations are at Level 1, in which talent processes are developed and managed individually. The processes and systems are silos, meaning that there is little or no coordination across processes. The organization may have automated talent systems in place (such as an LMS or an applicant tracking system), but these systems do not share data.

Level 2 is the largest category, with nearly one-half of organizations at this stage. Here, the organization develops a set of consistent talent processes that can be tailored as needed to meet business-unit and regional needs. In addition, the organization begins to identify connection points across its talent processes and to manually link talent systems. In these organizations, HR owns talent management initiatives and seeks input from business leaders.

Only about one in four companies has progressed to Levels 3 and 4, in which talent processes and systems become more tightly integrated, and business leaders and managers assume greater responsibility for talent initiatives. We expect the number of organizations in these top two categories to increase as companies emerge from the recession and refocus on long-term talent initiatives.

. Competencies Are the Foundation of Talent Management

Organizations may take many different paths to integrate their talent initiatives (all of which can be successful) but, for many, there is one common starting point competencies. These are used across nearly all talent processes and, therefore, serve as the foundation for process integration. Often, companies define competencies for use in performance reviews, then extend these for use in recruiting, L&D, leadership development and succession planning efforts.

From here, many companies focus on linking their performance management processes with learning and development, since these activities have a natural synergy. Or, they may look at linking performance management with compensation initiatives. Whatever path an organization chooses, it should be laid out as part of the overall strategy. A good way to plan for integration is to create a map of talent processes, including current state and desired future state, along with a roadmap for achieving these goals.

Today, nearly one-half

of U.S. companies are at

the stage in which they

are beginning to connect

their talent processes and

systems.

K E Y P O I N T

Competencies are a

common starting point

for integrating talent

processes.

K E Y P O I N T



5. The Challenge of System Integration

Integrating talent processes requires sharing data across systems. For example, competencies should be stored and accessible in the recruiting, performance management and learning management systems. Today, 60 percent of companies have two or more separate talent systems, in addition to an HRIS or employee data warehouse. Most of these companies report that the sharing of data between these systems is poor or nonexistent. Without this integration between systems, talent management cannot be wholly effective.

Talent systems should reinforce the processes, not drive the processes. Companies should first make sure that they have the right people in talent management positions, then design the right processes, and then choose the right systems to make the processes more efficient.

Furthermore, our research found that talent systems do not guarantee an organizations success in meeting talent and business goals. Installing a complicated system or using multiple point solutions that do not share data can be less productive than using simple paper-and-pencil processes. A well-integrated system infrastructure can help the organization make better decisions about its talent but, as mentioned above, the organization must first have the right people and processes in place.

6. Integration Pays off

Building a mature talent management organization takes time and resources, but it does pay off. This study shows that, as companies move up the Maturity Ladder (see Figure 1), their rates of employee turnover decline, their promotion rates increase, and they score better on employee engagement, development and talent planning.

As an example, companies in Level 4 (with strategic, business-driven talent management) had one-half the rate of turnover among high performers, as compared with companies in Level 2 (with standardized talent processes).

2 A high performer is an employee who is a key contributor, demonstrates

high performance, is capable of a lateral move, may be qualified for a broader role

within the same profession; and, has reached the potential to move upward in a

management capacity.

As companies move up

the maturity ladder, they

have lower turnover,

greater employee

engagement and greater

success in nearly every

talent area.

K E Y P O I N T



In addition, Level 4 companies performed better in the following areas:

Twenty-nine percent higher scores on employee engagement;

Thirty-six percent higher ratings on leadership development; and,

Forty-one percent higher ratings on creating a pipeline of ready successors.

The data clearly shows that moving up to higher Levels of Maturity has a significant impact on talent initiatives and metrics. These findings should serve as motivation for companies to improve their talent management efforts.



What Is Talent Management?If you ask 10 HR leaders, What is talent management? you are likely to get 10 different answers. The phrase talent management was coined many years ago and initially referred to the programs used to manage the top talent in an organization. More recently, organizations have extended the definition to include a broader employee population.

Organizations also vary in the processes which they consider to be part of talent management. Talent acquisition and compensation have traditionally been silos or separate functions within the organization. Although these functions still remain separated in many companies, an increasing number are integrating these from an organizational and process perspective with other talent functions.

We have a fairly broad view of talent management that includes all elements affecting the flow of talent, which encompasses attracting, developing, motivating, moving and retaining talent. From an organizational perspective, it encompasses the governance structure, measurement approach and systems infrastructure.

Our Talent Management Framework depicts how these different elements come together (see Figure 2) to support that goal. Let us briefly discuss these areas, which are described in more detail in our report, The Talent Management Framework: A Modern Approach for Developing and Mobilizing Talent.

3 For more information, The Talent Management Framework: A Modern Approach

for Developing and Mobilizing Talent, Bersin & Associates / Josh Bersin, Stacey Harris,

Kim Lamoureux, Madeline Laurano and David Mallon, May 2010. Available to research

members at www.bersin.com/library.

Talent management

initially referred to the

programs used to manage

the top talent in an

organization.

K E Y P O I N T



Talent Strategy

Talent management begins with a business-driven talent strategy, which is how the organization plans to meet its talent challenges and enable its critical talent to support the organization in fulfilling its business goals. For some companies, talent includes everyone in the organization; for other companies, talent is limited to senior leaders, high potentials or critical roles that create the most impact on business goals.

The talent strategy encompasses a number of different components. One of the fundamental elements is the talent planning process, which is used

4 A high-potential employee is an employee who has been identified as having the

potential, ability and aspiration for successive leadership positions within the company.

Often, these employees are provided with focused development as part of a succession

plan and are referred to as HiPos.

Copyright 2008 Bersin & Associates. All rights reserved. Page 1

High-Impact Talent Management Framework

Talent Strategy & Business Alignment

Workforce Planning

Learning & Capability Development

Capability & Competency Management

Talent Infrastructure

Career Management

Performance Management

Succession Management

Leadership Development

Business M

etrics & A

nalytics

TotalRewards

Talent Acquisition

Org

aniz

atio

n &

Gov

erna

nce

Figure 2: Bersin & Associates Talent Management Framework




to identify talent challenges and solutions at the enterprise and business-unit levels.

A second key element is the integration strategy, which addresses how the organization will integrate its talent processes. Together with this is the change management strategy, which is the plan for transitioning from the current state to a desired, future talent approach. Another key component is defining the talent measurement approach which will be used to evaluate the talent strategy and expected outcomes.

Workforce Planning

Alignment to the business strategy is also critical for the next area, workforce planning. More than a headcount analysis, it is here that organizations will identify critical roles, define their talent segments and analyze organizational skill gaps both current and future. This discipline helps organizations understand the current state of talent, forecast talent gaps and take the actions necessary to close these gaps - typically in the form of succession, recruitment, and development initiatives.

An effective workforce planning process will consistently help business leaders make informed decisions regarding their talent. Although best-practice companies use workforce planning as an integral part of their business and financial planning, the majority of companies still conduct workforce planning as a simple headcount analysis for budgeting purposes or on an as needed basis, such as during a reorganization.

Capability and Competency Management

After talent strategy and workforce planning, a company enters the solutions phase of talent management. Capability and competency management was placed in its current location of the Framework for a very specific reason. It is this information skills, competencies and experiences that provide the foundational data to support the other talent processes, including development, talent acquisition, career and succession management; and, performance management.

In addition to defining competencies, job profiles should be developed (at a minimum) for all critical roles, which should have been defined in the previous area of workforce planning.

In workforce planning,

organizations identify

critical roles, define their

talent segments and

analyze organizational

skill gaps both current

and future.

K E Y P O I N T



Talent Acquisition

Talent acquisition encompasses identifying, attracting and onboarding talent to fufill the workforce plan and to meet dynamic business needs. Whether filling positions with internal or external candidates, it is at this stage that a new cycle begins for an employee.

The main elements of talent acquisition include sourcing, assessments, selection, and onboarding.


Leadership development prepares talent for future leadership positions. Without it, the bench strength of an organization becomes weak and leadership pipelines are truncated putting the company at significant risk.

Through our ongoing research and experiences, we have developed a definition of leadership development that is broad but necessarily so, because of the complexity that leadership development brings.

The key elements of leadership development include executive education, assessment and evaluation, coaching and mentoring, job rotations, and a well-designed leadership curriculum that addresses all levels of management, utilizing multiple learning modalities, and targeting the development of key leadership competencies, knowledge and experiences.


Succession management refers to an organizations processes for selecting and managing talent in order to build organizational bench strength. These processes ensure the readiness of talent to move into key positions when necessary, such as when a position becomes vacant as a result of a resignation or dismissal, or when a position is newly created to meet a business need. Succession management is one of the primary ways that a company meets its workforce plan requirements.

Key elements of a succession management program include talent profiles, HiPo identification, talent calibration, and talent review meetings.

Without leadership

development, the

bench strength of an

organization becomes

weak and leadership

pipelines are truncated

putting the company at

significant risk.

K E Y P O I N T



Career Management

Career management is an employees progression through a logical sequence of jobs, resulting in greater experience or responsibility. The progression can be upward (in the form of promotions) and / or lateral. Characteristics of a modern career management strategy include promoting job flexibility and fostering talent mobility.

Today, businesses need to partner with employees and foster a collaborative approach to career development that meets the needs of the business, while fulfilling employees career aspirations.

A key element here is the career plans that employees put in place (with the support of their managers and HR) to develop the skills and capabilities for moving through a desired career path. Another component is talent mobility, which is a companys ability to make talent decisions based on an alignment of employee capabilities and aspirations, as well as what is best for the business as a whole.


Performance management represents all of the processes that managers use to effectively lead, manage, assess and develop people. In reality, performance management is management.

Effective performance management is not an isolated annual event focused on an appraisal or review meeting. It is best described as an ongoing process or cycle that takes place throughout the year. When done well, performance management becomes the anchor of an organizations integrated talent management strategy. It gives people clear direction building clarity, alignment, engagement and morale.

These key elements of employee performance management include goal setting and alignment, performance evaluations, skills gap analysis, and development planning.

Total Rewards

Total rewards is an organizations approach to incenting and rewarding its talent. This is much broader than just compensation elements it

When done well,

performance

management becomes

the anchor of an

organizations integrated

talent management

strategy.

K E Y P O I N T



focuses on a total package that is tailored to the needs of different talent segments. Flexible total-reward approaches allow organizations to incent critical talent to join the organization, make decisions to move and develop within the organization, and stay with the organization.

A comprehensive approach to total rewards allows organizations to show the benefits of development, work assignments, flexible working environments and other talent-based benefits in employees total packages.

Typical components include rewards and recognition, pay for performance approaches, benefits packages, and compensation modeling and risk benefit analysis.

Learning and Capability Development

Learning and capability development, or what is most commonly referred to as learning and development (L&D), was placed toward the bottom of our Talent Management Framework, across the entire employee lifecycle, because it is truly an enabler for talent management strategies. (See Figure 2, repeated in this section.) Without learning, a company and its talent become stagnant. It is essential that talent continues to learn and develop as the business evolves and grows, and as the workforce needs change.

Fundamental elements of learning and capability development include the defining a learning strategy, designing formal programs and informal approaches to create skills and capabilities within a specific audience, and knowledge management, which encompasses a range of practices used to create, represent, and distribute insights and experiences.

Learning and capability

development is truly

an enabler for talent

management strategies.

K E Y P O I N T



Organization and Governance

Considerable thought should be placed into deciding the optimal structures and supporting governance models for an organizations talent strategy and processes.5 These supporting efforts allow the organization to clearly define roles and responsibilities, and keep critical lines of communication flowing from the business to supporting HR functions.

The appropriate governance structure allows an organization to make timely decisions concerning critical talent, communicate plans and needs (both up, down, and within an organization), as well as build engagement in the process as a whole.

5 For more information, The High-Impact Learning Organization: WhatWorks in

the Management, Governance and Operations of Modern Corporate Training, Bersin &

Associates / Josh Bersin, May 2008. Available to research members at www.bersin.com/

library or for purchase at www.bersin.com/highimpact.


High-Impact Talent Management Framework

Talent Strategy & Business Alignment

Workforce Planning

Learning & Capability Development

Capability & Competency Management


Career Management




Business M

etrics & A

nalytics

TotalRewards

Talent Acquisition

Org

aniz

atio

n &

Gov

erna

nce

Figure 2: Bersin & Associates Talent Management Framework




Business Metrics and Analytics

The second bookend in our Talent Management Framework includes business metrics and analytics. Every area of our Talent Management Framework has its own individual measurement requirements, but a critical final step includes pulling together all the various talent management measurements. Once compiled, analyzed and eventually trended, the data can be monitored for the overall health of critical talent pools and to ascertain whether the talent strategy is meeting its goals.

This area is the ultimate culmination of an organizations integrated talent management efforts, allowing leaders to make data-driven decisions on the people aspects of the business.


Talent infrastructure refers to the processes, systems, and network that must be in place in order for disparate parts to function both individually and collaboratively as one.

One of the elements is process design and mapping, which includes identifying and implementing the critical inputs and outputs between talent processes and tools. This process mapping effort is the center of an organizations strategy. (See Figure 3.)

The other key element is the talent systems or software that support the talent processes. Organizations can implement a talent management suite on one platform or integrate separate point solutions to achieve this goal. Integrated talent systems share data across processes and provide reporting and analytics tools to improve alignment, planning, and decision-making on key talent issues.

Process design and

mapping includes

identifying the critical

inputs and outputs

between talent processes

and tools.

K E Y P O I N T




Talent Acquisition

Career Management


LeadershipDevelopment

Learning & CapabilityDevelopment


Total Rewards

CompetencyManagement


Figure 3: Integrated Talent Management




Talent Strategy and PlanningAs mentioned in the preceding section, talent management begins by defining a talent strategy, which can be articulated in different ways. For example, a forestry products company describes its talent strategy as having the right people with the right skills in the right jobs at the right cost. The HR executive at the Manchester Airport in the U.K. says its talent strategy revolves around both attracting and retaining great people, and developing a performance culture.

These statements describe how each organization looks at its talent strategy at a high level. Behind these strategy statements are a number of talent goals and initiatives.

Our research shows that the most effective talent strategies are aligned with the organizations business strategy, with talent initiatives focused on meeting business goals. For example, if cost-containment is a key part of the business strategy, then this should be addressed in the organizations talent goals for example, by creating new (non-monetary) rewards and recognition programs. Similarly, if increasing customer satisfaction is a key business objective, then new development programs may be needed for customer-facing roles.

The following case in point shows how one organization aligns its talent initiatives with its strategic business plan.

Case in Point: Right Managements Talent Strategy and Planning Model

Right Management (the talent and career management consulting arm of Manpower) uses a model to facilitate the organizations talent strategy and planning process. This model is used by the entire Manpower group of companies to ensure alignment and consistency around the corporate vision. (See Figure 4.)

The process starts in July with a review of the companys strategic execution framework, which lists the goals and initiatives outlined in its three-year strategic plan. These business objectives are divided into five main sections:

When determining how

to implement the talent

strategy, an organization

must ensure that its talent

goals and initiatives are

aligned to the business

strategy.

K E Y P O I N T



1. Revenue;

2. Business development;

3. Profitability;

4. Thought leadership; and ,

5. Organization and culture.

From this strategic execution framework, the HR team can then discuss the implications on talent strategy and planning, which are organized into four categories:

1. Mindsets;

2. Leadership;

3. Organization; and,

4. Skills.

Once the team members understand how the business objectives will impact the organizations talent, they can then define specific talent goals and initiatives that will become their talent commitments for the year. These may include initiatives such as communicating and engaging employees in the companys new strategy, deploying a new model for high potentials, expanding succession planning to the next level down in the organization, and creating an action plan for improving diversity.

Once the talent commitments have been determined, the model is used to communicate the objectives and commitments throughout the organization. This way, the HR staff understands what goals and deliverables are expected, and how these support the business strategy.

The model has been extremely successful in ensuring that talent initiatives are aligned with business objectives. The model has also proven to be an effective communications tool in helping staff members understand and work toward their objectives. e

Case in Point: Right Managements Talent Strategy and Planning Model (contd)

Based on its three-year

strategic plan, the HR

team can discuss the

implications of the

business objectives on the

organizations talent.

K E Y P O I N T



Right Management is a great example of a company with a mature process for talent strategy and planning. Not every company has such a process in fact, very few do.

In our study, 16 percent of companies reported that they have not yet developed a talent strategy. Another 38 percent of companies are still in the novice stage in which they have just started to define their talent strategies. These numbers, while substantial, have declined over the past two years, as companies have matured their strategies. (See Figure 5.)

Example: Talent Planning Framework

Talent CommitmentsRight Management

Mindset LeadershipMindset Leadership Organization Skills

Key TYSP /Local SEFObjectives

Key Talent /OrganizationImplications

Key Talent /OrganizationActions and

Commitments

Revenue BusinessDevelopment ProfitabilityThought

LeadershipOrganization &

Culture

TYSP = Three-Year Strategic PlanSEF = Strategic Execution Framework

Figure 4: Right Managements Talent Planning Framework

Source: Right Management, 2010.



Today, nearly 40 percent of companies say they are in the intermediate stage, in which they are implementing their strategies and have some integrated talent processes in place. Seven percent of organizations have now reached the advanced stage, with mature strategies and well-integrated talent processes in place. The number of companies in these two stages has grown over the past two years. So, while there is still a lot of room for growth, companies are making progress.

Company size makes a difference generally speaking, the larger the company, the more mature the strategy and its implementation. One in 10 large enterprises describes its talent strategy as advanced and fully one-half say they are in the intermediate stage. We find large companies that have survived many business cycles have learned how to evolve and adapt their talent management initiatives along the way.

Comparing industries, the banking / finance and technology sectors are generally more advanced than other industries. (See Figure 6.) Conversely, government and healthcare organizations have the least mature talent strategies. These two latter sectors have traditionally

7%

5%

5%

39%

38%

32%

38%

40%

37%

16%

17%

25%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2010

2009

2008

Advanced Intermediate Novice No Talent Management strategy

*Numbers may not total 100% due to rounding.

Figure 5: Talent Management Strategy U.S. 2008 to 2010*


Government and

healthcare organizations

have the least mature

talent strategies, but that

is starting to change.

K E Y P O I N T

U.S. companies are

making progress in

implementing their talent

strategies.

K E Y P O I N T



lacked sophistication regarding HR and talent issues but that is changing. For example, an increasing number of hospitals are following the model of the Mayo Clinic, in which doctors are hospital employees rather than independent contractors. This trend is elevating the need for more mature talent management practices in this sector.

Talent management is also changing in the government sector. The new leadership at the Office of Personnel Management (OPM) has brought significant changes to federal personnel policies and practices, and the work has just begun. The OPMs future plans promise to revolutionize the way government agencies hire, develop and manage their workforces.6

6 Source: http://www.opm.gov/strategicplan/StrategicPlan_20100310.pdf.

11%

6%

6%

50%

43%

33%

30%

40%

40%

9%

11%

22%

0% 20% 40% 60% 80% 100%

Large (10,000+ employees)

Midsize (1,000 - 9,999 employees)

Small (100 - 999 employees)

Advanced Intermediate Novice No Talent Management Strategy

Figure 6: Talent Management Strategy by Company Size U.S. 2010*





Who Is Considered Talent?

An important piece of talent management is defining talent a definition that will determine which employees or talent segments to include in certain talent initiatives. For some companies, talent includes everyone. For example, an HR executive at a small Southeastern insurance company noted that every one of its 170 employees is included in talent initiatives from L&D to succession planning. This includes the companys receptionist, a critical role in the company that touches every client and internal employee.

For other companies, talent initiatives are targeted to certain job levels, critical roles or talent segments. Many companies target their leadership teams for specific development programs and succession planning efforts. Technology companies may identify critical engineering roles for career development, and special compensation and rewards programs.

Technology companies,

for example, may identify

critical engineering roles

for career development

and special rewards

programs.

K E Y P O I N T

Figure 7: Talent Management Strategy by Industry U.S. 2010*


9%

11%

8%

8%

7%

7%

3%

4%

52%

50%

42%

41%

41%

38%

38%

21%

31%

31%

38%

41%

54%

55%

46%

48%

9%

8%

13%

9%

13%

27%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Banking

Technology

Manufacturing

Business Services / Consulting

Insurance

Retail

Healthcare / Medical

Government

Advanced Intermediate Novice No Talent Management Strategy

5%

7%

*Numbers may not total 100% due to rounding.*Numbers may not total 100% due to rounding.



These talent segments are determined during the workforce planning process and are used to tailor many talent initiatives.7

As an example, a large U.S. bank collects information on skills, experience and assessments for the top three management tiers as part of its enterprise talent review process. In addition, the company tailors its recruiting efforts for high-volume, retail banking positions and has also created special development programs for different ethnic groups, since diversity is a key initiative within the company. In this way, talent initiatives are tailored to specific segments.

Many companies take a hybrid approach, in which some talent activities are offered enterprisewide and others are targeted to specific talent segments. At Qualcomm, for example, L&D programs cover the entire global workforce. At the same time, the company has identified critical talent pools8, including top leaders and high-potential engineers, which are the focus of targeted talent management activities, such as succession planning, talent reviews and specific leadership development initiatives.

Most organizations we interviewed said that they identify high potentials as a talent segment requiring tailored programs, such as development, career management, succession planning and compensation. Beyond that, talent segments vary widely, with some companies segmenting employees by job level, gender, tenure, ethnicity, union membership or exemption status.

7 For more information, Talent Segmentation within Your Companys Talent Strategy,

Bersin & Associates / Stacey Harris, March 23, 2010. Available to research members at

www.bersin.com/library.8 Talent pools are groups of employees identified for a specific leadership level or

type of role for example, identifying individual contributors who have the potential to

become a first-level manager or identifying junior engineers who have the potential to

become senior engineers.

Talent segments may

be based on job level,

potential, criticality of

role, ethnicity, tenure and

many other factors.

K E Y P O I N T



Organization and GovernanceThe choice of an organizational structure and governance model for talent management is important to the success of talent initiatives. These supporting structures allow the organization to clearly define roles and responsibilities, and keep lines of communication flowing. An effective governance model allows the organization to make timely decisions concerning critical talent, and communicate plans and goals up, down and across an organization. An ineffective structure causes talent initiatives to be disjointed and disconnected.

For these reasons, more companies are appointing a dedicated talent management executive to manage some or all of their talent functions. Today, 30 percent of U.S. companies have a dedicated talent management role; this figure is up from 21 percent in 2008. (See Figure 8.) This executive can help by aligning priorities and focusing resources toward talent goals. Although titles of director of talent management and vice president of talent management are becoming more common, particularly in the U.S., these positions do not always have the words talent management in their titles. For example, it may be a vice president or director of HR who is the dedicated talent management role within the organization.

Large organizations are far more likely to have a dedicated talent management role than small and midsize companies. In fact, more than one-half of large enterprises have a dedicated talent management role. But more small and midsize companies are also putting in place talent management executives.

Among industries, retail, technology and financial services firms are more likely to have a dedicated talent management executive. (The high figure for retail may be due, in part, to the over-weighting of large retailers in our sample. See section, Appendix I: Study Methodology, for more information.) Government, healthcare and manufacturing firms are least likely to have this role.

Today, 30 percent of

U.S. companies have

a dedicated talent

management role, up

from 21 percent in 2008.

K E Y P O I N T



21%

28%

30%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2008

2009

2010

58%

38%

17%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%




23%

27%

31%

33%

41%

41%

42%

59%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%


Government (Federal / State / Local)

Manufacturing


Insurance

Banking

Technology

Retail

Figure 8: Percent of Organizations with a Dedicated Talent Management Executive U.S. Total 2008 to 2010


Figure 9: Presence of Dedicated Talent Management Executive by Company Size U.S. 2010


Figure 10: Percent of Organizations with a Dedicated Talent Management Executive by Industry U.S. 2010




The responsibilities of talent management executives vary widely. In most companies, this role is responsible for the talent strategy, leadership development, succession management, performance management, and learning and development. (See Figure 11.)

Just more than one-half of the talent management executives are responsible for career management and competency management initiatives. Recruiting also is split in just more than one-half of the cases, recruiting is under the purview of the talent management executive; the other half of the time, recruiting is a separate function, often reporting into the business units, and driven by local managers or departments.

The talent management executive does not typically own the compensation / total rewards function, which often reports up through a different chain of command into the central HR organization, or into the regional structures within global enterprises. Workforce planning is also typically under the charge of a separate person or group. In some cases, workforce planning is partnered with recruiting, since many companies think of workforce planning solely in terms of headcount needs. Other times, this activity is owned by business leaders and finance, as part of the annual budgeting cycle, or under the direction of a strategic HR staff person.

Today, talent

management executives

do not typically own

the compensation /

rewards function, nor

the workforce planning

process.

K E Y P O I N T

21%

39%

54%

54%

56%

62%

62%

72%

73%

78%

0% 10% 30% 50% 70% 90%20% 40% 60% 80% 100%

Compensation

Workforce planning

Recruiting

Competency management

Career management

Performance management

Learning & development

Succession management

Leadership development

Talent strategy

Figure 11: Functions for Which the Talent Management Executive Is Responsible (among companies that have a dedicated executive) U.S. 2010




To be fully effective, the talent management executive needs to be actively engaged in all talent management activities. If the talent functions are not under one central authority, then they must at least work cooperatively to bring an integrated and systematic approach to talent management across the organization.

The following cases in point describe a few examples of organizational structures for talent management. Each is different in terms of the reporting structure and responsibilities of the talent management executive. They are all effective, however, because the talent functions work collaboratively with each other and with the business-unit leaders to bring a cohesive, business-driven approach to talent management.

Case in Point: Business Development Bank of Canada

At the Business Development Bank of Canada (BDC), the director of talent management is responsible for talent acquisition, performance management, succession planning, career management, employee engagement and employer branding. At the same organizational level is a director of learning strategy who is responsible for leadership development, soft skills and technical skills training, as well as a director of total rewards who is responsible for compensation and rewards. All three directors report into the assistant vice president of HR, a senior-level position two levels down from the companys president and CEO. (See Figure 12.)

The organizational

structure at BDC promotes

communication and

coordination across the

talent processes, since all

talent functions are under

one organization.

K E Y P O I N T



President / CEO

AVP of HR 5 Regional HR Business

Partners + HeadOffice

Dir of OrgDesign

1 DirectReport

SVP of HR

Dir of TotalRewards

Dir of LearningStrategy

Dir of TalentMgmt

Sr. Advisor, Talent

Retention

Mgr, TalentAttraction

Advisor, WorkforceInitiatives

Advisor, Technical Skills

Coordinator

Advisor, Soft Skills &

Leadership Dev.

Coordinator

Sr. Advisor,Organ.

Effectiveness

9 DirectReports

Figure 12: 5 Regional HR Business Partners + Head Office

Source: Business Development Bank of Canada, 2010.

Case in Point: Business Development Bank of Canada (contd)



A peer to the assistant vice president of HR is the director of organizational design. This role provides strategic organization design and job evaluation advice to senior management in support of the companys business needs. The regional HR business partners work closely with the teams of total rewards, learning strategy and talent management in the design and implementation of processes and solutions in the regions. For example, in a recent review of the organizations competency models, the director of talent management conducted focus groups in collaboration with the HR business partners to validate the right behaviors associated with the competencies.

The regional HR business partners also work closely with the regional leadership teams. For example, regional performance management committees meet annually, led by the regional HR business partner and senior business leader. The committee reviews and calibrates employee assessments for fairness and consistency. A similar process is followed for succession planning, wherein the business leader and HR business partner in each region meet to identify and discuss pools of succession candidates.

Overall, the organizational structure at BDC promotes communication and coordination across the talent processes, since all talent functions are under one organization. The structure also promotes a healthy relationship between the centralized talent functions and the regional HR business partners. As a result, there is a high degree of consistency of talent processes across regions, with some flexibility for tailoring to individual business needs.

Finally, there is a partnership between HR as the facilitators and business leaders as the owners of talent management. Whenever there is a communication to employees, the HR staff encourages business leaders to deliver the message. This underscores the notion that talent management belongs to the organization it is not just an HR issue. e

Case in Point: Business Development Bank of Canada (contd)

In communications to

employees, the HR staff

encourages business

leaders to deliver the

message underscoring

the notion that talent

management belongs to

the organization.

K E Y P O I N T



Case in Point: Talent Management Structure at a Financial Services Company

A U.S.-based financial services company has 1,400 employees, with primary operations in North America and Latin America. The company segments its talent management activities for executives and non-executives. For executives, a global HR function handles performance management and succession planning. A separate organization (see Figure 13) manages talent activities for non-executives.

SeniorManager,

Compensation

VP of HR

Manager,Talent

Management

Supervisor,Performance

Supervisor,Talent

Acquisition

SeniorManager, HROperations

SeniorManager,

Latin America

Manager, HROperations

Supervisor,Skills

Development

Supervisor,Leadership

Development

1 DirectReport

6 DirectReports

2 DirectReports

Figure 13: Talent Management Structure at Financial Services Company

Source: Financial Services Company, 2010.



This organizational structure is very fluid. Although people are assigned to specific talent management roles (such as talent acquisition and skills development), in reality staff members work on many projects cross-functionally. For example, the organization recently launched a new skills development program for credit analysts and discounters. Two staff members worked together to design and deliver the program one from skills development and the other from the talent acquisition function. Both of these individuals were uniquely qualified to contribute to the project the skills development supervisor for her knowledge of instructional design and learning principles, and the talent acquisition supervisor for her knowledge of participant skills and profiles from the screening and recruiting process. This type of cross-functional collaboration brings a broader perspective to the project, underscoring the point that every talent process affects and supports the other processes.

Figure 14 shows the organizations perspective on the interrelationships of talent processes and how these ultimately impact performance. The process starts with acquiring talent, then developing skills and leadership qualities. The eNeRGy initiative (which stands for Network, Rotate and Grow) is a special leadership program for recent MBA graduates. The two-year program includes strategic, high-profile projects designed to develop participants for management roles within the company.

Employees and managers at all levels are encouraged to pursue coaching, cross-functional projects and other development opportunities. The result is a high-performance organization. e

Case in Point: Talent Management Structure at a Financial Services Company (contd)

A special leadership

program for recent MBA

graduates, the eNeRGy

initiative is a two-year

program designed to

develop participants for

management roles within

the company.

K E Y P O I N T

TalentAcquisition

SkillDevelopment

Ldr / MgrDevelopment

eNeRGy(Network-

Rotate-Grow)Performance

Figure 14: Relationships between Talent Processes

Source: Financial Services Company.



Case in Point: McDonalds

Like the preceding example, McDonalds segments its talent management activities by job level. For restaurant managers and employees, talent processes (such as recruiting and performance management) are handled at the local level. For directors and above, a corporate organization drives talent initiatives, with implementation of these initiatives conducted by regional teams.

The corporate team is led by an executive vice president of HR (see Figure 15). Reporting into this role are a senior vice president of international and corporate HR, a vice president of benefits and compensation, and the vice president of McDonalds global talent management and Leadership Institute, the crux of the companys talent management efforts. The Leadership Institute designs global development and transition programs for directors and above. The work of the Leadership Institute is closely integrated with that of global talent management, which has responsibility for creating frameworks, processes and practices for the following areas:

Strategic workforce planning;

Performance and competency management;

Succession planning;

Career management; and,

Assessment and selection for senior leaders.

Two other talent processes, recruiting and compensation, are outside the purview of the global talent management team. Recruiting is driven primarily at the country and local levels with restaurant employees recruited externally through local sources, and mid-level and more senior positions filled through succession and targeted external executive search efforts. Compensation and benefits are managed at two levels. The corporate group creates the global compensation philosophy, strategy and frameworks for mid-level managers through executives. The regional (area of the world) and local HR teams benchmark and complete compensation analyses, and then tailor compensation packages for their organizations.



In addition, the global group sponsors a talent management advisory board, comprised of HR and talent management leaders from each area of the world. The advisory board helps forecast officer-level openings and discusses the potential movement of talent across areas of the world.

This governance structure has proven to be effective at McDonalds, a company with decentralized decision-making. The global talent management organization operates as a center of excellence, keeping abreast of trends, best practices and benchmarks. The team collaborates with the areas of the world to create frameworks and processes, pilot these for effectiveness, and then consult on the implementation. The processes must be flexible enough to be tailored by each area of the world or country to meet their needs. The phrase freedom within a framework is often used at McDonalds to describe how the corporate team works with the areas of the world to drive the right balance between a centralized strategy and decentralized execution. Although it can take considerable time to roll out a process globally, the result is a more business-driven solution that is embraced at the local level. e

Case in Point: McDonalds (contd)

SVP (or VP) of HR AOW

AOW President

Corporate Structure Area of World (AOW) Structure

Sr Dir (or Dir) of Talent Mgmt

HR Business Partner(s) or Field

ImplementationLeader(s)

Sr Dir (or Dir) ofBenefits &

Compensation

Exec VP of HR

Sr Dir, Leadership Institute

Sr Dir, GlobalTalent Mgmt

5 Direct Reports 4 Direct Reports

VP, Benefits & Compensation

VP, Global Talent Mgmt

& Leadership Institute

Sr VP, International & Corporate HR

Figure 15: McDonalds Talent Management Structure

Source: McDonalds, 2010.



The Right Mix of Skills

Finding the right people to lead and implement an organizations talent management efforts is essential. A talent management executive can act as a tremendous change agent for the organization and, with a strong team in place, can drive the strategy and processes forward.

Increasingly, companies are looking for business-savvy talent management professionals, since an understanding of business issues and challenges is critical. These skills go beyond the typical profile of an HR generalist or specialist. For example, the majority of HR executives at Right Management come from a business background. The executive vice president global HR was formerly the firms general manager in France. Its HR leader in Asia formerly held a post in marketing. Similarly, its head of HR in Europe has a consulting background. This is one of the keys to connecting HR with the businesses. If there is a disconnect between HR and the business, the company believes it is because HR people do not understand the business.

Other companies stressed the need to find a talent management executive who is influential. The person needs to be someone who, as one company put it, When he or she talks, people listen. Good communication and leadership skills are key ingredients here.

It appears that, within many companies, HR staff do not understand the business and nor do they have good persuasive skills. One of our recent studies found that 42 percent of U.S. organizations rated their HR staff as just fair or poor on basic business acumen, and 31 percent rated the HR staff as fair or poor on presentation and communications skills.9 (See Figure 16.) These organizations will need to hire for these positions or develop their current HR staff in order to move their talent management strategies forward.

Some organizations may need to redefine their existing HR roles in terms of the necessary skills sets and job descriptions. A FORTUNE 500 manufacturing company set about this task by taking an inventory of the work being done by its HR generalists. Based on this analysis, the company eliminated the administrative tasks from these roles, outsourcing some of these functions, such as payroll and benefits, to

9 For more information on our upcoming research, High-Impact HR Organization, due

to be published H22010, please visit www.bersin.com/hihr.

When selecting a talent

management executive,

look for someone who

when he or she talks,

people listen.

K E Y P O I N T



third parties. The HR generalist roles were redefined solely as business partners, so that these personnel could provide more strategic consulting and solutions to the businesses.

Business Ownership of Talent Management

Our research shows that the most effective talent strategies are owned and driven by business leaders and managers.11 The HR or talent management executive plays the important role of steward for the talent strategy efforts by:

Ensuring foundational structures are in place;

Assigning appropriate supporting resources; and,

Implementing tools, processes and systems that enable the business to manage talent effectively, based on business goals.

10 For more information on our upcoming research, High-Impact HR Organization, due

to be published in H22010, please visit www.bersin.com/hihr.11 For more information, please see these two reports: (1) The High-Impact Learning

Organization: WhatWorks in the Management, Governance and Operations of Modern

Corporate Training, Bersin & Associates / Josh Bersin, May 2008. Available to research

members at www.bersin.com/library or for purchase at www.bersin.com/highimpact; and,

(2) High-Impact HR Organization, due to be published H22010, please visit www.bersin.

com/hihr.

8%

13%

48%

55%

33%

27%

9%

4%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Basic business acumen

Presentations, speaking, communications

World class Good Fair Poor

Figure 16: HR Proficiency Ratings U.S. 2010*10


For talent management

to be successful, a top

business executive needs

to be actively engaged in

the strategy.

K E Y P O I N T




Business leaders and managers must take ownership of talent initiatives, including attracting, developing, engaging and retaining people. Success ultimately depends on the extent to which business leaders adopt talent management processes and accept responsibility for the results.

Therefore, in order for talent management to be successful, a top business executive needs to be actively engaged in the strategy. The good news is that 70 percent of companies have a business executive actively participating in their talent strategy. (See Figure 17.) Without the active support and participation by a top business executive, companies will likely struggle in their talent management initiatives.

65%

67%

73%

70%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Large (10,000+ Employees)

Midsize (1,000-9,999 Employees)

Small (100-999 Employees)

U.S. Total

32%

61%

62%

67%

71%

72%

74%

82%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Government (federal, state, local)

Technology

Business Services/ Consulting

Banking

Insurance


Retail

Manufacturing

100%

Figure 17: Top Business Executive Drives or Actively Participates in Talent Management Strategy by Total and by Company Size (among companies that have a strategy) U.S. 2010


Figure 18: Top Business Executive Drives or Actively Participates in Talent Management Strategy by Industry (among companies that have a strategy) U.S. 2010




Talent Management MaturityMature talent management calls for an effective governance structure, a business-driven talent strategy and highly evolved, integrated talent processes. It also requires business leaders and managers to take ownership of talent initiatives and to be held accountable for talent outcomes.

This Level of Maturity does not happen overnight. Organizations typically evolve to this Level over a number of years, progressing through a series of stages, as depicted in Figure 1 (repeated in this section). We briefly describe these stages in the following sections1.

12 For a more detailed description of this Maturity Model, please see Bersin & Associates

Talent Management Maturity Model, Bersin & Associates / Karen OLeonard and Stacey

Harris, August, 2010. Available to research members at www.bersin.com/library.

Figure 1: Bersin & Associates Talent Management Maturity Model


Level 4: Strategic Talent ManagementFully integrated processes and systems used to make

business decisions; talent mgmt. is business-driven

Level 3: Integrated Talent ManagementHeavy focus on connecting systems and processes; single person / team

responsible for talent initiatives

Level 2: Standardized Talent ProcessesTalent processes are consistent and tailorable, with some integration;

several systems connected through manual processes

Level 1: Siloed HR ProcessesIndividual HR processes or silos;

may have systems in place but not connected28%

45%

20%

7%



Level 1 describes a traditional HR organization in which talent processes are developed and managed individually across business units or functions. The processes are silos, meaning that there is little or no coordination across processes. The organization may have automated talent systems in place, such as an LMS (learning management system) or an applicant tracking system but these systems do not share data.

In Level 2, the organization develops a set of consistent talent processes that can be tailored as needed to meet business-unit and regional needs. In addition, the organization begins to identify connection points across its talent processes and to manually link its talent systems (i.e., taking data by hand from one system and entering it into another system). In these organizations, HR owns the talent management initiatives and seeks input from business leaders. This is the largest category today, with nearly one-half of all organizations at this stage of maturity.

In the next stage, Level 3, organizations are heavily focused on integrating talent processes and systems. Individual talent processes are highly evolved and priorities are set based on talent planning outcomes. A talent management executive or team is responsible for talent initiatives, but business leaders share equal responsibility for achieving talent goals.

At the most sophisticated stage (Level 4), organizations have fully integrated systems and processes. A talent management executive serves as the steward of the strategy and processes, but talent management is owned by business leaders and line managers, who are held accountable and rewarded for talent outcomes. Talent management is part of the annual business planning process, so that talent initiatives are aligned with business objectives. Strategic workforce planning is used to set priorities and talent data helps to drive business decisions.

As mentioned above, advancing through these stages takes time, as well as resources. That is one reason why large companies, in general, are more mature. Just more than one-third of large companies have advanced to Level 3 or 4. A far greater number of small companies, by contrast, are in the early stages of maturity, with 35 percent still at Level 1. (See Figure 19.)

Maturity also varies by industry. The government sector is the least mature, with 43 percent of organizations still in Level 1, in which most processes are silos and systems are not connected. Banking / financial services firms have the most mature, integrated talent

Today, nearly one-half

of U.S. companies are

at Level 2, with a set of

consistent talent processes

that are in the early

stages of integration.

K E Y P O I N T

Advancing through

the maturity stages

takes time, as well as

resources one reason

why large companies

generally are more

mature.

K E Y P O I N T



management initiatives. Many retailers in our study also had mature practices, but since the retailers in our study were predominantly large firms, the sector may look more sophisticated than it is in the real marketplace. (See section, Appendix I: Study Methodology for more details.)

We expect organizations to continue to evolve their talent management practices as they emerge from the recession and refocus on long-term planning. Nearly one in five companies reported that integrating its talent processes is a high priority. (See Figure 21.) In particular, companies in the technology, banking / financial services and retail sector are focused on integrating their processes. The one exception is the government sector, in which very few organizations said that integration was a high priority. The reason is that organizations in this sector are still focused on creating a talent strategy, which is a precursor to integrating processes. Once the strategy is defined, then these organizations can look at the integration piece.

8%

7%

8%

7%

14%

23%

28%

20%

43%

48%

47%

45%

35%

23%

17%

28%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Small

Midsize

Large

U.S. 2010

Level 4: Strategic Talent Management

Level 3: Integrated Talent Management

Level 2: Standardized Talent Processes

Level 1: Siloed HR Processes

Figure 19: Talent Management Maturity by Company Size U.S. 2010*





Figure 20: Talent Management Maturity by Industry U.S. 2010*


8%

8%

14%

10%

7%

6%

5%

0%

30%

24%

9%

21%

19%

19%

14%

16%

43%

48%

51%

43%

48%

48%

53%

41%

22%

20%

26%

26%

28%

28%

28%

43%

0% 20% 40% 60% 80% 100%

Banking

Retail

Technology

Manufacturing

Insurance




Level 4: Strategic Talent ManagementLevel 3: Integrated Talent ManagementLevel 2: Standardized Talent ProcessesLevel 1: Siloed HR Processes

28%

21%

14%

19%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%




U.S. Total

Figure 21: Priority to Integrate Your Talent Processes by Total and by Company Size U.S. 2010



Percent saying a high priority



The Business Development Bank of Canada is one company that has made talent management a high priority over the past several years. As a result, the company has well-integrated and effective talent processes, as described in the following case in point.

Case in Point: Talent Management Integration at BDC

At the Business Development Bank of Canada (BDC), talent initiatives are closely interwoven. The linchpin is the companys career management process, which is formally conducted in the fall of each year. During this time, employees discuss their career aspirations with their managers and then create a development plan based on these goals. Employees are responsible and accountable for development plan creation, follow-through and managing their own career aspirations. Managers provide feedback, support and advice via ongoing discussions throughout the year.

2%

14%

19%

21%

21%

28%

30%

32%

0% 20%10% 30% 50% 70% 90%40% 60% 80% 100%




Manufacturing

Insurance

Retail

Banking

Technology

Percent saying "a high priority"

Figure 22: Priority to Integrate Your Talent Processes by Industry U.S. 2010




During the career management process, managers have special conversations with employees who are eligible to retire within next three years. These discussions focus on employee interests and plans going forward, and how his / her knowledge can be transferred. If the employee is a high performer, the manager explores options for retention.

Another key component of the career management process is identifying high potentials. These individuals will become part of the discussion during the succession management process, at which time the regional business lead and HR business partner review candidates for potential promotion to first-line manager roles. The names of the targeted employees are then provided to L&D to schedule these individuals for the Transitional Leadership course.

The succession management process also targets higher-level positions. A group of senior business and HR leaders identify successors for critical positions, which include all positions at the vice president-level and above, plus some targeted functional positions. The succession plan is reviewed annually and presented to BDCs board of directors.

Development plans are put in place for all succession candidates and are linked to L&D opportunities. These plans (along with the development plans created by employees as part of the career management discussions) are reviewed formally at midyear and year-end as part of the performance management process. All employees are evaluated on a defined set of competencies, as well as in three key responsibilities areas:

Client;

Leadership; and

Results (based on qualitative or quantitative objectives).

At BDC, the career

management process

includes special

conversations with

employees who are

eligible to retire in the

next three years.

K E Y P O I N T

Case in Point: Talent Management Integration at BDC (contd)



The evaluation on the third piece, results, is used to calculate variable pay. The employees overall rating is used to calculate his / her merit increase.

All of these activities are part of BDCs talent management cycle and are closely integrated. These processes work together to ensure that talent is engaged, high performing, and mobile upwardly and laterally throughout the organization. (See Figure 23.) e

Case in Point: Talent Management Integration at BDC (contd)

Career Management


Learning and Development


Compensation

Career planningRetirement planningHIPO identification

HIPO selectedSuccessors IDedBoard approval

HIPO enrolledSkills gaps targeted

Mid-year reviewAnnual appraisal

Merit increaseBonuses

Development Plans

Plan for knowledge transfer

Names of HIPOs

Development Plans

Transitional Leadership program

Formal and informal programs

Rating on Results vs. Objectives

Weighted average of ratings

Figure 23: Business Development Bank of Canadas Integrated Talent Processes

Source: Business Development Bank of Canada, 2010.



The Path to Integration

When trying to advance their talent management initiatives, companies often ask, Where should we focus our efforts? Although our research found that organizations may take many different paths to integrate their processes (all of which can be successful), there appears to be one common starting point competencies.

When developing a talent management strategy, organizations quickly realize that many of their design decisions are dependent on a set of defined competencies. Competencies are used in many ways, to:

Codify the job requirements used to recruit the right candidates;

Establish the criteria for evaluating performance and identifying high potentials; and,

Assess the skills needed to build L&D programs.

Therefore, competencies serve as the foundation for other talent processes.

Our research found that competencies were the most common integration point across processes. For example, nearly two-thirds of companies reported that they use standard competency models to recruit candidates and to assess employees in performance evaluations. (See Figure 24.) These same competency models can then be leveraged for learning and development, leadership development, and career and succession management initiatives.

The next step for many companies is to integrate their performance management and L&D processes. These functions have a natural synergy. For example, employee development plans, created in the performance management process, can be linked to recommended L&D programs. From a higher-level perspective, L&D leaders should regularly review skills gaps across the employee base and create new development programs to fill these gaps. Just more than 40 percent of organizations reported that their performance management and L&D processes are consistently linked in these ways.

Competencies are the

foundation for talent

processes.

K E Y P O I N T



Another area of natural synergy is between performance management and compensation. Many companies tie bonuses or annual merit increases to employee performance evaluations. Beyond that, the connection is spotty. For example, just 40 percent of organizations provide special rewards and incentives for employees identified as high potentials. These high potentials should be targeted for tailored compensation packages, which can include short- or long-term monetary and non-monetary rewards (e.g., recognition, time off and special projects).

High potentials are one of the talent segments typically identified during the workforce or talent planning process, but there are other critical segments, as well. For high tech companies, critical talent segments may include senior engineers; for healthcare organizations, they may include nurses and clinical staff. Only 36 percent of organizations, however, identify critical talent segments based on their business goals. As mentioned earlier (see section, Who is Considered Talent?), talent segmentation is a vital part of the workforce planning process, since many initiatives (such as development, compensation / rewards and succession planning) should be tailored for these segments.

34%

36%

40%

42%

45%

62%

0% 10% 30% 90%70%50%20% 40% 60% 80% 100%

Succession planning used to prioritize leadershipprogram participants

Talent planning identifies critical talent based onbusiness goals

Compensation / rewards differentiated for HiPos

Employee development plans tied to recommendedL&D programs

L&a

tm fact book 2010

Documents

talent management factbook

talent management maturity

talent strategy

talent acquisition

talent infrastructure

talent processes

talent management5

performance management