turning the downside upside: why talent management is now a top priority for ceos

turning the downside upsidewhy talent management is now the top priority of Ceos

teresa Carroll

Global markets remain uneven and

unreliable, but the CEO mood is shifting.

Rather than waiting for the next piece of

news out of Europe, the US or China, the

world’s C-suite executives are stepping off

the roller coaster to chart their own course.

After three years of market volatility,

CEOs have come to one grand, unified

conclusion: they are confident that with the

right inputs, they can continue to grow.

In fact, 30% of public company CEOs

and 45% of emerging-company CEOs

anticipate significant growth through

2012—regardless of the volatile investment

climate. For many, this growth means

2 | turning the downside upside

Fear turns to motivation. In 2010 talent management was third on the list of CEO priorities. A year later it’s number one. What’s changed?

expanding in emerging markets, where the

economic recovery is most promising.

It seems that fear and trepidation has turned

to motivation and CEOs are now looking for

sound strategies to move forward through

rather than ‘waiting’ for the clouds to clear.

This newfound motivation and

confidence will mean fresh approaches

to some old problems. Above all, talent

management issues are rising to the

surface and CEOs are looking at these

with increased intensity and rigor.

In fact, it’s talent issues that dominate the

CEOs’ list of top challenges for 2011.

When asked about their top business

concerns for 2011, CEOs returned this list:

1. talent management

2. navigating risk

3. innovation

4. leadership development

When we consider that a company’s

ability to innovate and develop leaders

is largely dependent upon its ability to

attract, retain—but most importantly to

engage—talent, this shift in CEO priorities

makes sense. Here, we look at some

of the ways they plan on doing this.

“We pay much more attention now to making sure we understand and pressure-test the upside/downside of various decisions.” John v. FaraCi, Chairman and Ceo, international paper

To achieve growth within the current

economic and political climate, executives

are taking a more proactive approach to risk.

CEOs are asking their teams to be

more aware of the risk-reward tradeoff.

Volatility is no longer a reason to sit still,

so companies must adapt. Yet, in the

face of continued volatility and uncertain

public investment, organizations must

increase the veracity of the investment

analysis and apply more stringent stress

tests to ensure the risks are worth it.


talent is required to address risk.

Adapting to the persistence of volatility is now a key issue for organizations, and they need the right people to help them do it.

Two-thirds of CEOs (67%) say

they will formally incorporate

risk scenarios into their

strategic planning.

Almost three-quarters (72%)

say they will devote more

senior management time to

addressing risk.

72%67%


Innovative companies have our attention.

The world moves fast and people

want to know what’s coming next.

As such, CEOs are focused on innovation

as a key element of success in a climate of

ongoing volatility, and they’re confident

their innovations will succeed.

It’s clear, however, that CEOs already find

access to the right talent to execute on

transformative plans restrictive. Some 39%

of CEOs this year expect the majority of

their innovations to be co-developed.

Instead of direct hiring and working

through all elements of product or service

development internally, organizations see

the speed to market as equally critical

to success as the innovation itself.

talent is required to innovate. The appetite for change is strong and CEOs are looking to reorganize and realign their workforces to put innovation at their center.

78% expect their

development efforts to

generate ‘significant’ new

revenue opportunities over

the next three years.

79% believe innovation will

drive efficiencies and lead to

competitive advantage.

84% of CEOs have changed

strategies in the past two

years, effectively changing

their talent needs.

84%79%78%


talent is required For good leadership. As job tenure continues to fall the outlook for companies looking to develop leadership ability over the long term faces serious setbacks.

CEOs worldwide recognize the need to

grow talent internally, but only 23% of

business leaders say their firms are “strong

at developing future leaders”. Already,

companies are facing an acute internal talent

supply problem:

• Shouldtheneedarise,51%ofcompanies

state they could not name a CEO

immediately and 39% report having no

internal candidates whatsoever.

• Ofthoseenjoyingstronginternaltalent,

64% are highly concerned about losing

those future leaders through voluntary

turnover.

• Morethanhalfofemployers(57%)saythe

talent shortage impacts key stakeholders.

Organizations are struggling with how to

develop agile leaders that possess the

business acumen and cultural savvy to

operate in a global market. In fact, 66%

of CEOs believe there is a limited supply

of candidates with the right skills, while

another study shows 75% of companies

are experiencing a deficiency in candidate

qualifications.

diFFiCulty Filling Jobs by Country

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COSTA RICA

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how will they meet these Challenges? CEOs know what they’re up against, now they must find the right adaptive strategies and lead their organizations through the change.

In this new reality, CEOs are looking to be proactive and adapt their organizations for success. As a result, three key talent trends have emerged for 2012:

1. Talent development: ensuring a strong supply or ‘talent pipeline’ and looking to diversify the talent pool are essential to filling growing vacancies in specialist and high-skill roles.

2. Talent retention and engagement: improving the critical measures of loyalty, commitment, and motivation is key to overcoming the list of CEO priorities for 2011.

3. Talent mobilization: talent is more mobile than ever and there is strong growth in repatriation as well as medium-term contracts for foreign workers to assist local talent learning to run new ventures/outsourcing projects.

“If we don’t solve the education issue then the problem will eventually degrade the private sector’s ability to recruit a capable workforce.”

tan sri dato’ azman hJ. mokhtar, managing direCtor, khazanah nasional berhad, malaysia


1. talent development: improving pipeline and diversity. Recession has accentuated the shortage of required skills in the workforce. An ill-prepared talent pool is faced with skill requirements they simply cannot deliver.

CEOs are looking for immediate talent

pipeline improvement by expanding their

recruitmentstrategies.Manyareincreasing

their benefits packages, emphasizing

development opportunities, or broadening

their candidate search outside their country.

They are looking to develop a wider variety

of workers who will bring new talents,

skills, and ideas to the table—diversity and

pipeline are the key strategies for improving

the current rate of talent development.

MorethanhalfofceOssurveyedbypwc

(54%) say they are planning to work with

government and the education system to

improve the quality of the next generation

oftalent.Manyarealsooverhaulingtheir

internal programs and improving the

application of knowledge in the workplace.

Organizations are also shifting their talent

focus. They’re looking to underused

sources of talent and innovation—women,

older workers and outside contractors,

for instance—to feed the pipeline of skills

and ideas that will meet local demands.

There is also growth in the use of returning

expats.Manycompaniesenteringnew

markets are identifying local talent to send

abroad for training, or are repatriating

talent to their home regions.

MorethanhalfofceOssay

they are working to improve

the quality of the next

generation of talent.

54%


2. talent engagement & retention: leveraging what you have.

With the economic recovery and expansion of the job market, leaders fear an exodus of star talent.

employee engagement has significantly

decreased in the past five years.

and executives are starting to

worry—close to two-thirds (63%)

are concerned about employee

retention over the next 12 months.

• amongglobalemployeessurveyedthis

past spring, just 35% expect to remain

with their current employer compared

with 45% in 2009. And, nearly two out

of three global employees surveyed

(65%) report they are either passively

or actively testing the market.

• generationyworkersareconsidered

most likely to be on the move, with 63%

of executives predicting an increase or

a significant increase in turnover among

this group, followed by Generation

x(ages30-44)at46percent.

most executives (70%) identify employee

engagement as a critical component

to achieving their business objectives.

Forward-looking companies are:

• Usingengagementstudiestoanticipate

and address barriers to inclusion,

productivity, or flight risks within

particular groups of employees.

• refocusingeffortsandinvestments

on those employees who will be

most valuable to their businesses in

light of their growth ambitions.

• Usingmorenon-financialrewards,such

as training and mentoring programs,

with a focus on career trajectories,

particularly for Generation Y employees.

• expandinguseofmoreflexible

work arrangements (telecommuting,

job-sharing, part-time) and non-

linear career paths to meet growing

work-life balance needs.

• Spreadingemployeestock

ownership more widely.


3. talent mobility: moving the work and the worker. The near future will see a significant shift in talent mobility, as skilled employees from both emerging and mature markets increasingly operate across their home continent and beyond.

talent is more mobile than ever:

• This year, 59% of CEOs are planning

to send more staff on short- and long-

term international assignments.

• Manycompaniesareallowingemployees

to choose between international

assignments that are of interest, and that

will develop their leadership talent.

• Virtual assignments are on the rise, thanks

to technological tools such as instant

messaging, cloud computing and social

media, which facilitates collaboration.

in the long run, talent mobility has a

positive effect on the quality of workforces,

and on levels of innovation. talent

mobility manifests in a variety of ways.

• Expatriates are still widely used to

manage expansions, with organizations

in the Americas being the most

likely to have expat leaders.

• ‘Managementtrainers’arewidely

used for medium-term contracts so

that expansions/outsourced functions

can eventually be run by locals.

• repatriationisgrowing.Many

repatriated workers that are recruited to

return home are armed with skills and

business acumen developed abroad,

while retaining the valuable cultural

sensitivities of their home country.

ConClusion


Ongoing market volatility, skills shortages,

and the increased pressure to adapt

to this new business reality have made

CEOs reassess the importance of talent

management in their organizations.

One year ago, talent management

was third on CEOs’ list of priorities,

now it’s number one. Three key

challenges of have driven this shift:

1. the need to proactively manage risk;

2. the need to innovate more,

and more often; and

3. the need for strong leaders to manage

a more complex business environment.

To ensure they get the most of the

talent they have, and to maximize their

chances of engaging the right, new

talent, CEOs are focusing on these three

key areas: talent development, talent

engagement and talent mobility.

This change in c-suite priorities offers a

valuable—and somewhat hopeful—lesson:

waiting for conditions to improve is no longer

an option. Instead, proactive management

of talent is the key to overcoming the

challenges of the next year and beyond.


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European Commission. (2011). EU Monthly

Employment and Social Situation:

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European Commission.

(Autumn 2011 ). European Economic

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gartner.(2011,March25).Overview:

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globoforce.(2011,June23).SHrM/

Globoforce Survey finds 71 percent of

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through exit interviews.

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Leaders: Emphasizing the Competencies

That Pay Off.

ibM.(2010).Working beyond Borders:

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Intelligence.

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Shortage Survey.

Manpowergroup.(2011).Manufacturing

Talent for the Human Age.

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Workforce.

Mercer.(2011). Inside Employees Minds:

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As SVP, Centers of Excellence for Kelly Services, TERESA CARROLL is responsible for leading a team that manages the brand, develops solutions for clients, and supports Kelly’s vision of providing the world’s best workforce solutions.

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