Employee Motivation: Top 5 Myths

While motivating employees is a key factor in an economic recovery, many companies are failing to keep their workers fully engaged in their jobs because they share some common myths and beliefs, according to Suzanne Bates, author of "Motivate Like a CEO: Communicate Your Strategic Vision and Inspire People to Act!" (McGraw-Hill 2009).

Employers must re-examine their beliefs about employee engagement if they hope to accelerate their business recovery and retain their top talent, said Bates, president and CEO of Bates Communications (http://www.bates-communications.com/).

In a typical workplace, only 29 percent of employees are actively motivated and engaged in their jobs, while 71 percent are unmotivated and disengaged - either not engaged at all (54 percent) or are actively disengaged (17 percent) - according to the Gallup Management Journal’s Employee Engagement Index.

"While there has been a slight uptick in employee motivation in recent surveys, this may be only temporary because it's based on survival. As the pendulum swings back, employers should watch out - because employees will look at their jobs and their companies differently," said Bates.

"The Top 5 Myths about Motivating Employees" are at work even during an economic boom. However, in a serious recession, everything changes, and employers' misperceptions can be damaging. "If employers don't re-examine their human resource practices and beliefs about motivation," said Bates, "they risk damaging morale, losing top talent, and lengthening their recovery time."

The Top 5 myths about motivating employees, according to Bates and "Motivate Like a CEO," are:

Myth #1: Money is the number one way to motivate employees. "Salaries and bonuses have been the staple of motivation. Most companies relied primarily, even completely, on monetary rewards," said Bates. "Money is only one of many factors in motivation. Yet companies have become lazy about motivating people instead of giving them what they really crave, which is recognition, praise, and the opportunity to learn."

Myth #2: If you want to motivate people, don’t let them in on the bad news. "This is a particularly damaging myth. Bad news always gets out to employees. They hate it when you hide bad news; they consider themselves partners in the company, and they long for a chance to contribute and make a difference, especially in tough times," said Bates. "The surest way to motivate people is to empower them even with terrible news, so they can come to terms with reality, think their way through the crisis, and contribute to creative solutions going forward," said Bates.

Myth #3: Most employees know what motivates them. "Many people are searching for a larger purpose, and they are not finding it in their work," said Bates. "In challenging times, employers can become a powerful source of motivation and pride among talented people. In a downturn, leaders must talk to employees and help them discover who they are and what motivates them. Spend time with them; ask them why they enjoy the work, what they enjoy most, how they want to contribute, and where they see themselves in the future," said Bates.

Myth #4: You simply cannot motivate everyone. "This was true in boom times, when organizations were bloated and some people you hired were marginal. Those days are over," said Bates. "Now that companies have downsized and are arguably leaner and meaner with the best talent, this is a damaging assumption. It is a leader’s responsibility to motivate employees. It’s time to stop blaming employees, and start looking to leaders to ignite the spark," said Bates.

Myth #5: People are just grateful to have a job, and this attitude will survive the downturn. "Top talent will always have a place to go, and while they may have had less mobility during the recession, your competitors are already looking around to see who is unhappy and ready to leave," said Bates. "Employers who keep believing their people are just grateful to have a job will be blindsided when their top talent walks out the door because they don’t have leaders who are engaging them, praising them, recognizing them, and giving them opportunities to grow."

Ref: Suzanne Bates

Restructuring recruitment

Cost cutting measures, massive layoffs, and reduction in jobs have left organisations with fewer talented employees. Organisations are being compelled to recruit from the best available rather than those best suited for the job. This is resulting in bad hires. Ultimately it is the organisation's performance that is affected.

Though organisations are implementing innovative strategies to attract the right talent, they are finding it difficult to retain them for long. This demands a restructuring of the recruiting process.
Structuring the recruitment process by automating it has helped organisations. They can invest in systems, which give recruiters sufficient time to assess soft skills. Recruiters will also have the opportunity to evaluate people for factors such as motivation, aspiration and potential, and not just the skills for the job.

How does it help?

Automating recruitment process can help HR:

• Bring in objectivity and rule out bias in assessing potential employees
• Track an individual's data
• Provide information to set standards for performance
• Understand personal interests
• Match future organisational needs with individual development plans
• Use resources effectively
  

While online recruiting saves the organisation both time and resources, it should be ensured that the time saved is spent on the key issues of the recruitment process. The recruitment stage should thus include:

• Identifying the motivating factors of the employees to help them perform better
• Understanding their long-term goals and aspirations to draw their career plans with the organisation
• Tracing their lifestyle and family needs to make them feel cared for, to help retain employees for a longer time.

Reference: TheManageMentor

Where Employers Find Top Talent

Where can small businesses find good employees? Despite the recent flood of corporate layoffs, entrepreneurs often gripe that the best candidates don’t even know their firm exists, and finding them can be like looking for a needle in a haystack.

Traditional recruiting methods usually fail small companies. Broadcasting openings on job boards sometimes yields a flood of applicants who don’t qualify, and the number of responses can overwhelm small firms, says Dennis J. Ceru, a Babson College professor of entrepreneurship and a consultant to small and midsize companies. Paid recruiters can find good candidates, but at a high cost—typical fees are 20% or more of the position’s yearly salary. Ceru says the price may be worth it to fill a top position such as a chief financial officer but not for ordinary hires.

Instead, most small companies prefer to find candidates through referrals and networks of people they trust. To do this effectively, entrepreneurs need to articulate what they want in job applicants, says networking expert Diane Darling. “People don’t know what you need. They just can’t read your mind,” she says. She also suggests small business owners keep an open mind about who might refer good candidates. Sometimes unlikely social connections can refer good employees, although Darling cautions business owners always to check professional references, even when a trusted friend recommends someone.

Beyond reaching out to existing contacts, entrepreneurs can meet potential hires at networking events. Ceru says a casual meeting is a smart way to gauge whether the person is a good fit before starting the conventional application process. “Nothing beats eyeballing the candidate,” he says. “Rather than have 500 résumés and 10 appointments, why not go to two networking nights and have a beer, get to know them in social environment?” To cast a wider net, companies can look for job candidates at conferences and trade shows as well.

“A Better Pool”

Small businesses should enlist their current employees as recruiters, essentially selling friends and contacts on the benefits of working at their company, says Chris Collins, associate professor of human resource management at Cornell University’s school of Industrial & Labor Relations. “Take the price of that ad you were going to run and give it to the person who identifies the candidate who eventually gets hired,” he says. “You’ll probably get a better pool.”

One startup betting that companies will benefit from turning employees into recruiters is Jobvite. The two-year-old San Francisco Company offers Web-based software that allows hiring managers to give information about job openings to employees, who in turn can push it out to potential candidates in their professional and social networks. Hiring through employee referrals is more effective and less expensive than placing ads or using recruiters, according to Jobvite CEO Dan Finnigan, a former executive with Yahoo! (YHOO) Hot Jobs. “Everyone now has a Rolodex, and it’s all online and they’re all interconnected,” he says. Companies pay for the service based on the number of employees they have, with the price starting at about $500 a month for small firms. Even without paying for software, small businesses and their employees can use online networks to expand the reach of their hiring. LinkedIn reports that 45% of jobs posted on the network in the U.S. come from small and midsize companies, with an average of 22 responses per posting in November, up from 12 in January.

Small businesses can also find good candidates through universities. Owners and managers can show up at career fairs, ask campus career centers to refer candidates, and post to job boards and lists that go out to students, recent graduates, and alumni. Companies need to raise their profile on local campuses to get students’ attention, says Lindsey Pollak, an author and career expert who works with students and young professionals. “The students would love to work for you, they just don’t where to find you,” she says. Firms can get involved on campuses even before they need to hire by working with classes on consulting projects and hiring interns, says Erik Medina, director of graduate career services at Indiana University’s Kelley School of Business. “You’d be surprised, a little bit of good marketing, a little bit of good outreach can go a long way to distinguish yourself from the very large well-known firms that most students focus on,” he says. This year in particular is a good time to recruit on campuses, Pollak says, because many large firms won’t be hiring.

Wherever entrepreneurs look for new employees, they shouldn’t wait until they have to fill an opening. By constantly networking with an eye open for potential hires, owners and managers can keep a pool of candidates in mind for when they do want to bring someone on board.

Continually identifying good candidates is particularly important for small companies because the time and money they invest in filling each position compounds the cost of a mistake. Says Pollak: “It is so much more dangerous for them to make a bad hire because 1 out of 50 employees is so much more damaging than 1 out of 50,000.”

Ref: John Tozzi

Is the Talent War Over?

Even in lean times, that elusive top 10 percent is not so easy to come by

By Elliot Clark

Is the war for talent over? Let me help all the doomsayers, naysayers, and soothsayers: No! The war for talent is not over. I have seen this sneaking into the press and economic conversation of late. We have seen more than 10 recessions and one depression in the last century, and during this time the “war” has been building.

Until McKinsey published its seminal study, “The War for Talent,” we had no catchy name for this phenomenon. Throughout the industrialization and the later shift to a service-based economy, specialized skills have been sought after. However, as we face the next recession, rising unemployment levels lead to another round of prediction about a truce in the ongoing battle for the best and the brightest.

To be fair, MBA salary growth has slowed, hiring is soft, and layoff reports mount, but hiring managers, CEOs and CHROs all know that even in an economic downturn, all companies are seeking the top 10 percent of the talent market in any specific job family. Arguably, productivity per employee is more important when the labor force reduces in a company.

The labor market is a cruel example of the march of time and the force of change. Twenty-five years ago, the most advertised job in the U.S. was keypunch operator. As computers shifted away from paper cards, this skill set vanished. Was this an end of the war for talent? No, it was merely a shift into other technology-driven careers.

In this article, we examine the world of pre-employment screening. Are these companies facing hard times as hiring goes soft? Yes, the transaction level will diminish, but their clients will still need to hire and will insist on pre-employment screening as a way to sift through the greater throngs of job seekers and identify the very best. For service-based companies, compensation is the largest line item in the budget, and this is true for some manufacturing companies as well. Pre-employment screening protects your human capital and production capital from the bad actors you may have hired.

Once again, the RPO industry will be affected by the clients’ uncertainty in predicting hiring volumes, but there is no probability that clients will suddenly drop their hiring standards. In fact, those of us who have lived through a recession have learned that hiring managers become pickier in lean times.

In every recession in the past 40 years, large companies shed employees in layoffs. A percentage of these disgorged employees start small businesses that begin to hire available talent. This process, in essence, allows small business to rescue the economy in a way that large companies cannot. The best and the brightest tend to be the business founders and do not reenter the big company labor pool after the recession. It becomes critical for companies to use good performance management and retention techniques to attempt to preserve this layer of talent rather than let it leave. It also becomes imperative following the recession to get as many back into the company as you can afford, identify, and recruit. The boom after a slowdown is always a scramble for that elusive top 10 percent. So, no, the war is still ongoing.

So while the next few quarters may be soft for screening and RPO companies, selectivity never goes away and the competition for the best players will be unabated. The War for Talent, regardless of what you may be hearing, is not ending and it probably never will.

Get your networking right!

"It’s not what you know but who you know that makes the difference.” Any job seeker would know that! Networking remains the most effective job-search and self-marketing tool. The US Department of Labour states that only 5 percent of people find jobs through the open job market, while 48 percent, nearly half of all job seekers obtain jobs through referrals. Yet, many approach networking ineptly ruining their chances of being recruited.

“Networking is making links from people we know to people they know, in an organised way, for a specific purpose.” says Donna Fisher. Networking involves making connections, establishing relationships, obtaining referrals and building a support structure for personal and professional success.

Establishing a support network however can be a daunting task and most job seekers falter here. Of late, the process of networking is being packaged as an impersonal and manipulative technique leaving a bad taste with professional recruiters. Consequently, most them have stopped entertaining job seekers.

The problem begins

“Interpersonal relationships are today’s business currency.” Most jobs seekers fail to respond to the opportunity of building relationships. From then on begins the journey downhill! The basic principle of networking is respecting people you would like to network with. Understanding and appreciating the subtle nuances of relationships with regard to different people and the level of familiarity with them comes next.

Such an understanding can be got if the networker observes and understands a few basic networking rules. Networking isn’t a sales transaction, it is a way of building trust in individuals, gaining better visibility about the job market through interactions, gathering information about job vacancies and creating a favourable impression in the mind’s of potential recruiters.

While networking, a jobseeker should make the ‘contacts’ feel they are being heard and respected and that interacting with them is a value addition. Cavette Roberts, founder of the National Speakers Association rightly says, “People don’t care how much you know until they know how much you care.”

In the process of networking, communication should be open and informal. Job seekers often commit the mistake of not giving others an opportunity to share their inputs. Talking too much or too little could be disadvantageous. A networker needs to remember that the networking meeting is a favour and he must make the most of it using the best of his interpersonal skills.

What not to do—The great agenda switch approach

Notice how a networker makes a sudden switch in his agenda.

Mehta, a networker requests for a low-stakes meeting over the phone stating that all he wants to do is exchange a few ideas. Once face-to-face with the contact, Mehta throws him off guard by badgering him for employment. Not only does Mehta lose face with the contact but the contact defames him, ruining further employment opportunities.

What to do--The direct approach

When a job seeker disguises the purpose of a meeting, the contact feels manipulated and avoids associating with such jobseekers. Asking a potential employer about a job directly either in writing or verbally is the most appropriate job-search tactic.

A savvy networker uses this approach while dealing with a contact:

“Mr.Tata, several people mention that the start-up of your new division might create a need for someone who can manage a full set of financial and accounting controls. If that’s true, I’d like to express my interest. If my friends have got it wrong and there is no employment prospect, we could informally network to talk about the market for controllers and CFO’s in your region.”

Clarity of purpose

A contact is naturally concerned about why the networker called, how he heard of him, the agenda of the meeting, and whether there are any associated risks. Failing to give contacts a frame of reference that explicitly defines his role is another common mistake networkers make. Networkers should remember to follow up on the contact.

A college student initiated contact with a guest speaker (a professional in the pharmaceutical industry). They kept in touch through the final semester. Even before she graduated she had a high paying job lined up.

Since networking is about people, it is but obvious that the best networking leads will come from people on the field. Networkers though have to be careful about providing authentic referrals and checking the referral’s accuracy. Often networkers use the clout of referrals (“Your friend

Mr. Tata asked me to give you a call.”) to fix meetings. The contact may oblige as a favour to the friend only to realise that the referral provided wrong or inaccurate information.

A networker can shape his presentation by testing a contact’s level of knowledge before or during a meeting. He must provide a clear profile and his objectives.

Clarity of message

What a networker says is as important as how he says it. Hard and soft self-sell techniques that sales personnel use to overcome defenses and objections should be avoided. Over-rehearsing a presentation robs it of its spontaneity giving the impression of made up conversation. A good networker formats his presentation on the three C’s-concise, casual and conversational.

A contact should be allotted ‘talk time’. It is important to be both interested and interesting. Actively listening to the contact gives the networker an insight into his calibre. Body language is vital here. A good networker demonstrates enthusiasm and professionalism at all times.

Networking niceties

A networker should pay attention to the amount of time he requests for the meeting. The meeting should be scheduled to allow sufficient time for covering the agenda without appearing to be rushed or lengthy. A good networker is discreet about his referrals. He doesn’t attribute information to a contact incase disclosure affects the person.

By conveying appreciation and gratitude, a networker leaves a lasting impression with contacts. Thoughtful and considerate networkers gain by creating inexhaustive sources of information, friendly ties and support that help them secure more than just employment.

With communication growing globally, a person’s career network can include people across geographical areas. Also the Internet offers tremendous opportunity for networking. Observing these niceties while networking will help a savvy job seeker.

Ref: TheManageMentor

Four Key Questions Candidates Should Ask Potential Employers

Employer-employee compatibility must be a two-way street for an appointment to be successful over the long-term. To gauge compatibility, candidates should ask potential employers four critical questions during a selection process.

A significantly shrinking talent pool worldwide means that competition is often stiff for organizations trying to identify and retain peak performers. Organizations often invest in testing and assessment programs to ensure that new hires and internal promotions have the right "fit" with the company culture. However, candidates do not always think about whether a company culture is compatible with their own values and professional needs. Employer-employee compatibility must be a two-way street for an appointment to be successful over the long term.

As such, during the selection process candidates should ask potential employers, managers, and peers the following four critical questions:

1. How does this organization listen to employee feedback?Unfortunately many organizations treat employees as nothing more than numbers -- and subservient numbers at that. Consequently, the answer to this question will reveal whether the organization values the wisdom and contributions of its talent pool, engages the employees, and/or instills a sense of company ownership.

2. How does your employee performance evaluation process work?It may surprise you to learn that many companies do not have a `systematic employee appraisal process in place. Therefore, the answer to this question will reveal whether the organization is structured and consistent in its performance expectations. By understanding how your work will be appraised helps to identify clear expectations, which directly feeds the notion of job security, which is a crucial factor to all employees.

3. What opportunities are there for development?Human resource is a concept that does not always have a succinct definition of renewable. By asking this question you are delving into the culture to understand if employees are viewed as investments or merely as replaceable resources. The answer to this question will help you determine if this company will provide you with the necessary tools to progress along your desired career path.

4. How does this organization reward talent?Believe it or not, some companies reward employees who simply maintain the status quo and penalize employees who show initiative and talent. For example, we know of an episode whereby an employee took much time to provide unsolicited but constructive feedback on a piece of marketing material that was full of factual and grammatical errors. Instead of appreciating the employee's efforts in trying to spare the company considerable embarrassment and potential business, the organization largely reacted defensively and stopped including this employee in key interactions. Therefore, this is a potentially challenging question to an interviewer who is also a manager at the hiring company. You will also be able to ascertain how prevalent recognition is within the organization's culture, for example does recognition occur on a weekly, monthly or annual basis. The answer will reveal whether the organization is organized and committed about employee retention and professional development, as well as how it goes about it.

It is also important to note a fifth question for possible consideration: Can employees be themselves at this organization? Sometimes organizations demand that employees conform to management's skewed - or even downright counterproductive - definition of an "ideal employee." With this in mind, the answer to this pointed question will help to reveal management's expectations for employee behavior - that is, whether employees are encouraged to act as company "drones" versus act as individuals with unique personalities and perspectives to be shared and strategically leveraged.

Again, issues with skill set and lack of fit with the company culture are among the top reasons organizations disqualify candidates. Likewise, lack of recognition, advancement and fit with a candidate's value system are among the top reasons why candidates disqualify employers. For this reason, we encourage candidates to conduct due diligence on companies just like employers do with applicants during the recruitment phase.Come to think of it, all organizations should contemplate the four questions above if increasing morale, productivity and profitability are top priorities. A shrinking talent pool means that the onus is now often on companies to convince talented individuals why their time, devotion and energies should be invested in their organization versus their competitors.

Ref: Jim Houran and Whitney Harper

The Current State of HR

Year-end 2008 is quickly approaching and all across the globe the news is dominated by negative stories about the dismal economy. We have all experienced irrational thinking and are guilty of doing it from time to time, but as we prepare to move into the New Year there is no greater threat facing global companies than irrational thinking in the HR function. Looking back, one thing was glaringly obvious more companies than ever before realized just how ill-prepared they are for the emerging labor climate. All throughout 2008 stories emerged from iconic organizations detailing just how out of touch they had become.

Moving Forward, No Reprieve
Despite night after night of negative economic news around the world, the vast majority of global companies (70% according to the most recent Gallup research) were actively trying to maintain or grow their workforce in December. Despite burgeoning unemployment, demand for top talent in skilled and professional roles is as tough as ever. Global growth combined with profound labor force demographic changes impacting more than 85% of the developed world are keeping competition for top talent fierce. While recruiters understand the challenge of recruiting today, and senior leaders understand the demand for continued investment, the vast majority of HR leaders appear to be doing business as usual.

Are You Prepared?
The near future requires robust and prescriptive action that cannot be influenced by irrational thinking. Do your measures reflect reality, or rather the perception you want others to have regarding your efforts? Are you comfortable standing up and saying the ship is already taking on water and a change in course is needed? These are the kind of questions VPs need to be asking right now. For every major strategic initiative, as well as all core deliverables, you should have objective evaluation processes in place that prove beyond a shadow of a doubt that your efforts are effective.

Three Most Important Things

While every organization has different strategic priorities and will undoubtedly work to achieve them in differing ways, there are three things that every world-class HR organization should be doing, including:
1. Prioritizing mission critical and key jobs. For far too long HR professionals have equated the terms equitable and equal. All jobs do not impact the organization the same when performed well, below average, or left vacant. While politically difficult, organizations must find a practical and accepted way to define mission critical and key jobs, and then to prioritize HR deliverables towards those roles and the talent that occupy them. Once identified, its a lot easier to deliver world-class service and demonstrate a profound impact on the business.
2. Macro level workforce planning. Too many organizations that have tried to implement workforce planning programs have gotten bogged down in the complexities that arise when the focus is too granular, i.e. every role, every employee. Granular workforce planning produces too much data and makes it easy to get lost in the statistics. Workforce planning programs should be actionable in nature, they should help answer several high level questions that establish whether or not the workforce in moving in the right direction to support the future needs of the organization and at the right pace.
3. Leveraging robust analytics and process yield modeling approaches to prove impact. With mission critical and key roles identified and macro level workforce planning initiatives in place, the next practice firms must focus on is yield modeling transformative processes such as development efforts and staffing programs. HR professionals should be able to respond with precise plans that include cost, timeline, and resources needed.

Final Thoughts
A perfect storm of environmental factors is lining up to make the next ten years very difficult with regards to recruiting and retention of top talent.

Ref: HR Funda

Planning for Success!

Succession planning assumes a strategic role as recession hits talent supply...

Tough economic times are not about financial meltdown alone. There is also the collateral damage that comes with it. Economic downturn brings different challenges for different functions. For the human resources function, the challenge lies in the ability of the organisation to maintain a healthy and competent bench strength without digging into the corporate wallet. HR leaders have to try and prevent holes from forming in the talent bench.

Succession planning gains a whole new meaning in recessionary times. Experts say that organisations need to have a robust succession planning strategy so that they are prepared adequately to combat recessionary blues. Succession planning should ideally begin in the hay days when the economy is booming and things are looking good. It is in such times that HR leaders, along with functional heads, can pursue their succession ideas since both the risks and gains are limited. What's more, recruitment managers have the luxury of 'buying' talent when the going is good, while in a downturn it is more about 'growing' talent. A strong succession pipeline makes all the difference here.

Toning talent muscle

Why should organisations focus on succession planning in a downturn? The reasons are many. The most evident and convincing of them is that in a downturn organisations have little to spare and turning inwards for help will be the only option. This, however, would help only if succession planning was tended to as a critical strategic function in good times.

Financial crisis always pushes employees to do a bit more than what they could. Hence, having a competent bench strength can help organisations produce more without pulling purse strings. Despite awareness about the importance of succession planning and its role in a downturn most organisations have a weak succession plan. Organisations pay little attention to their succession strategy and only prepare a vacancy chart to show how one moves up the ladder. Such apathy towards the critical function can spell disaster for organisations in times of recession. .

Organisations, therefore, should analyse closely the need, purpose, objective, process and the desired output encompassing a succession planning programme. The best way to begin working on a function like succession planning is to work backwards from the outcome to the purpose. This is because only when HR leaders are clear about what they expect from their succession planning will they be able to chart out a plan to achieve it. Without a clear understanding about the outcome leaders may fail to do the right things and therefore may not produce the desired results.

A clearly defined purpose will help leaders define parameters to measure their success and will also help in letting others know about the validity and reliability of the exercise.


Defining points

The success of a succession planning programme can be measured by using a scale that assesses the programme on a number of parameters ranging from usage and design to output. To begin the succession planning drive, it is important that the programme has maximum reach and easy accessibility. For this, the succession plan has to be written down and distributed among the people covered by the programme, and also those sitting on the decision making bench. In addition, the plan must have the following attributes:

The succession plan should be more of a 'progression plan', where the emphasis is on an individual's growth and career progression, and not promotion

• Every succession plan should have an individualised career graph that would help employees keep a track of their progress
• Leaders and managers should be open about people who are included in the plan. Clarifying about individual status will help employees get a better perspective to the entire exercise
• The plan should include appropriate rewards for managers following the plan. Managers who help their subordinates make smooth transitions that are in line with the chalked out plan should be rewarded suitably
• Succession planning should be articulate and must ensure that the right job moves are made

Succession planning should not lead to crisis. It should be integral to corporate management and save organisations caught in a downward spiral. However, this is possible only if organisations invest adequately in succession planning and build a robust talent pipeline that can be relied upon in times of need.

Reference:TheManageMentor

The State of Talent Management- Today’s Challenges, Tomorrow’s Opportunities

Talent Challenges of Today- Research Highlights

Companies today face formidable talent challenges. The ability to sustain a steady supply of critical talent is a challenge facing all organizations — worldwide. Among the issues impacting the “next generation” workforce are impending skill shortages, an increasingly cross-generational and diverse workforce, the need for knowledge transfer from retiring baby boomers, and significant leadership gaps. Intense cost pressure from both traditional and emerging competitors, new markets, and more demanding customers are additional elements that give a new sense of urgency to the concept of talent management. At a time when organizations need to optimize their workforces, most agree that talent management is of strategic importance. To evaluate the extent to which companies act on that belief, Hewitt Associates and the Human Capital Institute undertook a comprehensive study seeking to assess the state of talent management practices in companies today.

About the Study

The research provides results from both a quantitative survey and qualitative interviews. The survey was designed to gauge the maturity level of a comprehensive set of talent practices; that is, the extent to which an organization’s practices are sophisticated, progressive, practical and well executed. This enabled us to identify strength and challenges in talent management and key areas of focus for the future. Nearly 700 senior-level talent leaders (both HR and non-HR) participated in the study. Through supplemental in-depth interviews, we captured innovative practices at select companies with more developed talent management practices. This combination of quantitative survey data and qualitative interview results helped shape a better understanding of the complex issues surrounding talent management today.

The growing recognition that the quality talent is a sustainable competitive advantage, coupled with a realistic view of the complexity and scope of changes in the global workforce, has led to a renewed focus and urgency around talent management. Based on nearly 700 responses, human resources (HR) and business leaders overwhelmingly identified “attracting and retaining skilled and professional workers” as the workforce challenge most impacting their organizational strategy. ”Developing manager capability,” ”retaining high performers,”“developing succession pool depth,” and “addressing shortages of management or leadership talent” closely followed.

In today’s uncertain economic environment, it’s important that organizations address talent issues promptly, but it’s equally important that they get them right — the first time. There’s little room for trial and error, as all initiatives are expected to produce solid financial results. Unfortunately, most companies are still struggling to institutionalize effective talent management practices and programs.

Positive Results

Based on the results of this research, our collective experience, and prior research findings, we believe that organizations are indeed improving their talent management capabilities. The skills, performance, engagement, adaptability, and continuity of an organization’s workforce are indisputably a core competitive advantage and prerequisite for sustained financial success. Increasingly, organization leaders, starting with top officers, understand the business payback of focusing on getting these things right. As a result, the advances being made in talent management can be attributed to the following:

Senior Leaders Recognize Superior Talent as a Business Advantage: Senior leaders do “get it.” In nine out of ten organizations, they believe superior talent provides a vital competitive advantage. They increasingly recognize the critical linkage between effective talent management and business success.

Focus on Talent Management: The pressure to attract and retain key talent has led organizations to expend increased energy and resources on talent-related initiatives over the past half-decade. Significant progress has been made on a variety of talent management fronts — from getting foundational programs in place to creating and deploying new programs, such as high potential development, leadership development, and succession planning. However, most of the progress has been made in the executive ranks, with less focus beyond the highest management levels.

Leadership Involvement: The need for more leadership involvement in talent management is driven by the criticality of talent strategy development, articulation, and execution. Some business leaders are starting to play an increasingly visible and active role in talent management, understanding that their practices must be aligned with these talent strategies in order to have a direct impact on workforce engagement and performance.

Opportunities for Improvement

Although organizations have made significant progress raising awareness and attention to talent management and implementing foundational programs, these efforts have not led to well- executed talent management programs that are aligned with business priorities. Organizations still lag in their ability to integrate talent management programs and evaluate the return on their talent investments. The reasons are many, including:

Human Capital is Not Sufficiently Aligned With Business Strategy: While senior leaders clearly recognize the importance of human capital, a number of companies struggle to connect their people practices with their business imperatives. Only 17% of respondents say their workforce strategy is consistently aligned with their business strategy across the organization, while even fewer (7%) report consistently utilizing a specific quantitative framework in which investments in talent management are aligned with business results.

Lack of Accountability and Capability for Talent Development: While most organizations hold their executives and managers accountable for achieving business results, they are not being held accountable for talent development. Few organizations consistently hold managers (7%) or senior executives (10%) accountable for developing their direct reports. Furthermore, most managers lack the basic capability to develop talent effectively. Just 5% of organizations say their managers have the skills to grow people in their jobs or to provide the constructive feedback that supports and encourages employee development consistently across the organization.

Inconsistent Execution and Integration of Talent Programs: The majority of companies report having fundamental processes for talent management in place, such as basic workforce planning, development programs for high potential employees, and succession planning. However, few consistently execute these programs across the entire organization. While slightly more than two-thirds (69%) of companies say they conduct workforce planning across all divisions and business units, fewer than one-fifth (15%) do so consistently. Furthermore, only 21% of companies consistently integrate talent practices across the organization (e.g., rewards are tied to performance; performance is tied to development).

Limited Use of Meaningful Talent Analytics: Data and analysis have long played a role in driving business decisions; yet when it comes to talent analytics, most organizations have a long way to go. Mired in tracking traditional workforce measures, such as headcount, turnover, and cost-based metrics, few have graduated to tracking the metrics that matter. Fewer than 10% of responding companies measure the effectiveness of talent management programs, track the quality of talent, or use specific quantitative frameworks to align human capital investments with their business strategy.

Select Companies are Leading the Way

There are exceptions, of course. Despite the monumental challenges facing organizations, a few select companies have made significant strides in managing talent. What sets them apart is their dedication and commitment to talent management and the creative, comprehensive approach they take to developing their people in the following ways:

Depth and Consistency of Practices: Talent management is given top priority at these companies — and it shows. Specific programs, such as talent reviews and succession planning, are institutionalized throughout the organization, ensuring they are implemented and integrated consistently across businesses, geographies, and employee segments. Managers are taught how to develop employees, and talent programs are pushed deeper into the organization to reach a broader group of employees.

Higher Commitment and Accountability for Talent Development: Abandoning the belief that talent management is solely HR’s domain, these organizations consider it a shared business and HR responsibility requiring active engagement, commitment, and accountability from leaders and managers. From the CEO down, these business leaders not only emphasize the importance of talent management, but are also actively engaged in the processes. Additionally, they hold themselves responsible and accountable in tangible ways for developing the next generation of talent across the entire organization — not just at the leadership level.

Progressive and Innovative Practices: Never satisfied with the status quo, these organizations are consistently investing in new ways to manage talent. Approaches vary widely, but examples include progressive approaches to workforce planning, innovative employer branding strategies, and more comprehensive efforts related to onboarding and development of high potential employees. Some leading organizations are using sophisticated predictive analytics to help drive strategic human capital decisions and ensure that those decisions are aligned with the business strategy.

While most organizations still struggle to manage their talent effectively, select employers are leading the way. They serve as role models to those who are struggling to build core talent management capability by holding leaders and managers accountable for talent initiatives, driving greater consistency in talent programs globally, and continually seeking new and progressive ways to manage talent. The increased adoption of these approaches to talent management point to an evolutionary trend toward better practices overall. This report identifies the talent challenges that exist today, summarizes key findings from the research, and draws examples of innovative talent practices from select companies. Recommendations based on the research provide a foundation upon which companies can build and strengthen their talent management capability to meet the business challenges of the future.

*Ref: Hewitt State of Talent Management Oct 08

How to Retain Talent in India

Over the years, researchers have proven that when it comes to retaining employees, money does not buy happiness. Most human resources professionals know that while workers welcome pay raises, the boost in satisfaction that comes with extra money typically does not last, nor do raises alone keep employees loyal. So it is too with recruitment: Competitors can lure employees away from other companies by offering better compensation, but the glow of more money wears off quickly without other rewards. Yet if research shows that attention to pay and benefits is necessary but not sufficient to retain talent, why do many corporate leaders continue to use compensation as their primary retention tool? And what should they really do to keep their best people?

This is a particularly urgent question in emerging markets such as India, where both local and global employers are clawing for talent. In 2007, a team of researchers from Villanova School of Business and from Right Management, a human resources consulting subsidiary of Manpower Inc. that is based in Philadelphia, Pennsylvania, embarked on a project to learn more about the nonpecuniary rewards that drive employees to stay with a company or to flee. They chose the booming Indian labor market and examined the talent management practices of 28 companies operating in India; the researchers surveyed 4,811 of those companies' employees about their attitudes toward their employers, including their intentions to stay or leave. Jonathan P. Doh, Stephen A. Stumpf and Walter Tymon of the Villanova School of Business, along with Michael Haid, a global center of excellence leader at Right Management, describe the team's findings in a July 2008 working paper, How to Manage Talent in Fast-Moving Labor Markets: Some Findings From India. At Villanova, Doh is the Herbert G. Rammrath Endowed Chair in International Business and an associate professor of management and operations, Stumpf is the Fred J. Springer Chair in Business Leadership and a professor of management and operations and Tymon is an associate professor of management and operations.

In India, despite salary increases averaging more than 15% annually in some industries, annual turnover rates among young professionals are averaging 15% to 30% and go as high as 50%. The explosive combination of ballooning salaries and rising attrition signals a tight market for talent that could constrain India's growth in the future. Many factors that affect turnover rates are beyond an employer's control — unfavorable demographics and the larger global economy, for instance. But of the factors that an employer can control, four emerged as most important: performance management practices, professional development practices, the quality of supervision and the company's socially responsible posture. In turn, the researchers discovered that these four factors drive two key employee attitudes — an employee's satisfaction with and pride in the organization. When satisfaction and pride are at high levels, employees are likely to stay.

The best companies drive employee satisfaction and pride by providing management support, training and professional opportunities early on, says Doh, who is director of the Center for Global Leadership at Villanova. Just how early? In the high-velocity Indian marketplace, the new employee honeymoon is so short that employers should start an employee's professional development plan on his or her first day, the authors advise. "Our findings suggest that even six months from the start date is probably too late," Doh says. "[At that point] the employee is already making decisions about whether to stay around or not.

"Those early years — from two to five — are the most difficult ones in which to keep employees and the most expensive in which to lose them. If employees don't get management support and professional opportunities during these early months, Doh says, "they begin looking around for other organizations that can provide [them]."

The study also showed that employers should target high-potential employees extremely early in their tenure and create accelerated development plans for them. "Our research suggests that … at an earlier point than people expect, it's too late," Stumpf adds.

Employee development plans alone are insufficient, however. Young, high-potential employees demand active management support. First-line managers are often not equipped to provide the kind of support that the research indicates is critical to employees' decisions to stay or go. The authors recommend that companies simultaneously invest in training front-line managers so that new employees get the kinds of managers who can help them thrive. Indeed, the research showed that management support is pivotal in an employee's decision to stay or not, Stumpf underscores.

Management support, performance management and professional development — each of which are targeted at an employee's personal contributions — contribute to both employee satisfaction and pride. A fourth variable — the company's socially responsible position and reputation — also shapes employee pride and satisfaction.

While the research is clearly pertinent for companies operating in India, Doh says managers in companies everywhere should apply the findings, regardless of whether they're operating in a high-turnover environment or not. "We're in a global war for talent," he says. "Any company interested in accessing the labor force in India or another developing country needs to pay attention to these findings." What's less obvious is that employers operating in slower markets, such as the current U.S. economy, should also heed the research. "No matter what the environment, employees care about nonpecuniary rewards — pride, satisfaction, the support of the management team," Doh says. "In slow times, it's a mistake to cut back on those aspects."

Ref: A brief synopsis of How to Manage Talent in Fast-Moving Labor Markets: Some Findings From India (working paper, July 2008) by Jonathan P. Doh, Stephen A. Stumpf, Walter Tymon and Michael Haid