Successful talent strategies

TEAMFLY

Team-Fly®

SUCCESSFUL

TALENT

STRATEGIES

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SUCCESSFUL

TALENT

STRATEGIES

ACHIEVING SUPERIOR BUSINESS RESULTS

THROUGH MARKET-FOCUSED STAFFING

DAVID SEARS

American Management Association

New York • Atlanta • Brussels • Buenos Aires • Chicago • London • Mexico City

San Francisco • Shanghai • Tokyo • Toronto • Washington, D.C.

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Library of Congress Cataloging-in-Publication Data

Sears, David, 1947–

Successful talent strategies : achieving superior business results

through market-focused staffing / David Sears.

p. cm.

Includes index.

ISBN 0-8144-0746-3 (hardcover)

1. Employees—Recruiting. 2. Employee selection. 3. Employee

retention. 4. Strategic planning. 5. Personnel management. I. Title.

HF5549.5.R44 S43 2003

658.3
11—dc21 2002007239

2003 David Sears

All rights reserved.

Printed in the United States of America.

This publication may not be reproduced,

stored in a retrieval system,

or transmitted in whole or in part,

in any form or by any means, electronic,

mechanical, photocopying, recording, or otherwise,

without the prior written permission of AMACOM,

a division of American Management Association,

1601 Broadway, New York, NY 10019.

Printing number

10 9 8 7 6 5 4 3 2 1

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For Mary and Jennie

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CONTENTS

PART I TALENT STRATEGIES ARE BUSINESS

STRATEGIES

1: INTRODUCTION: THE CHANGING MARKET FOR TALENT 3

When Talent Was King

HR’s Strategic Opportunities

Opportunities Ahead

Plan of the Book

Why Talent?

2: ‘‘GETTING’’ BUSINESS STRATEGY 27

Business Strategy Barriers

The Role and Scope of Business Strategies

Business Strategy Models

New Business Strategy Landscape

3: VALUING TALENT 58

Working For/Belonging To

The History of Talent

Valuing Talent: Four Realities

PART II BUILDING, DELIVERING, AND MEASURING

TALENT STRATEGIES

4: TALENT STRATEGIES: SCANNING 87

Talent Strategies Management Cycle

Business Strategies

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viii C ONTENTS

5: TALENT STRATEGY BUILDING 114

Talent Strategy Components

6: TALENT FLOW STRATEGIES 142

Signature Talent Strategy Successes

Talent Flow

7: TALENT ENGAGEMENT STRATEGIES 182

More Than ‘‘Being There’’

Talent Engagement Processes

8: MEASURING AND IMPROVING TALENT STRATEGIES 208

Measuring Value Creation

Measurement Perspectives: Types, Stages, and Balanced Measures

Talent Process Measures

E pilogue: Who Owns Talent Strategies? 233

The Case for HR

I ndex 241

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PART I

Talent Strategies Are

Business Strategies

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TEAMFLY

Team-Fly®

C HAPTER 1

INTRODUCTION: THE CHANGING

MARKET FOR TALENT

WHEN SPEAKING TO AN ANNUAL conference of human resources

professionals in 2000, Gary Hamel—consultant, academic, and

author of Competing for the Future—disparaged the cliche´d claims of

most if not all companies that ‘‘people are our most important asset.’’

Instead, Hamel asserted unequivocally to his audience, ‘‘People are all

there is to an organization.’’ Although Hamel may have been preaching

to the choir considering the setting, few business leaders or human re￾sources (HR) practitioners—and especially recruiting professionals—

would have challenged this claim during the past five years. Or rather,

they wouldn’t have done so until the NASDAQ and dot-com busts of

mid-2000; the technology, telecommunications, and overall employment

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4 T ALENT S TRATEGIES A R E B USINESS S TRATEGIES

swoons that soon followed; and the economy-wide disruption touched

off by the September 11, 2001, terrorist attacks on the United States.

When talent was king

From the mid- to late 1990s talent was king. In 1999, for example, when

the Information Technology Association of America (ITAA), an Arling￾ton, Virginia–based industry association, polled its eleven thousand in￾formation technology (IT) member companies to get a sense of their

hiring needs for 2000, some astounding numbers came back. For a na￾tional IT workforce base of 10.4 million, ITAA member companies pro￾jected needs for an additional 1.6 million workers. And, apprehensively,

they expected that nine hundred thousand of these positions would go

begging because of a lack of sufficiently skilled applicants.

In other words, in one year the IT workforce—or at least a big ap￾proximation of it—could swell an additional 15 percent, yet end up

nearly a million workers shy of its collective employment plans.1 And

these were not McJobs—poorly paid positions with no career future.

These were high-paying, skill-rich, benefit-wielding career opportuni￾ties.2

These numbers got a lot of press and the ITAA members’ cumula￾tive workforce plight became a sort of recruiting poster for what had

come to be termed the War for Talent:3 the struggles of employers to

land ‘‘up skill’’ employees in a cutthroat free-agent employment market.

Suddenly and pervasively, tremendous business and revenue opportu￾nities seemed to be hostage to a huge talent gap.

Of course, although the business information technology industry

most visibly quantified the dilemma of recruitment and employment in

the late 1990s, its story was hardly the only one told. Publications and

news sources as varied as Fortune,4 Law Practice Management,5 Investor’s

Business Daily,6 The North Carolina State Government News Service,7

and the Colorado Springs Independent8 headlined stories about crises in

recruiting, paying, and keeping MBA graduates, college professors, law-

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I NTRODUCTION : T H E C HANGING M ARKET FOR T ALENT 5

yers, business consultants, drug research scientists, public school teach￾ers, and even landscaping professionals.

Across a wide swath of industries and professions talent seemed to

have all the cards. The unifying theme in all these different circum￾stances seemed to be the direct link between getting (and keeping) peo￾ple and business success—and conversely, the threat to business if the

right people could not be landed (or left the company). Trying to find,

hire, and keep key talent was everybody’s business, especially for HR.

It was at least temporarily self-evident that talent was primarily an asset,

not a cost.

But then, late in 2000, business conditions changed, and as quickly

and dramatically as the IT talent shortage came, it seemed to evaporate.

The Y2K crisis had come and gone. The lights went out for good at

many dot-coms. In this technology employment-rich business segment,

139,643 employees at 927 companies were pink-slipped by summer’s

end in 2001.9 In the broader technology business sector, legions of for￾merly successful high-tech companies watched their value-added prod￾ucts and services become margin-busting market commodities. And

with this cumulative change in economic climate came radical down￾ward adjustments to IT employment demand. The 2000 ITAA study,

which was not released until April 2001, showed demand plunging 44

percent to 900,000 workers. Projected hiring shortfalls plunged even

faster, down 53 percent to 425,000. All this occurred, of course, before

the steamroller effects of 2001’s economy-wide disruptions and layoffs.

And these effects, once they came were enough to make your head

spin. It was as if the help-wanted pages—and the business pages—had

turned into the obituary pages. In the first half of 2001, U.S. companies

outlined plans to eliminate some 777,362 jobs, compared with 613,960 in

all of 2000.10 And it proved to be only the opening act to the cuts and

threats of cuts that followed. Since the tragedies of September 11, 2001,

companies—predominantly in telecommunications, but also in comput￾ers, electronics, industrial goods, and transportation—made a total of

624,411 additional job cuts. This roughly three-month total exceeded the

twelve-month totals from each year from 1993 through 1997.11 Novem-

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6 T ALENT S TRATEGIES A R E B USINESS S TRATEGIES

ber jobs cuts were 181,412, more than quadrupling the 44,152 cuts of

November 2000. Even though, as it turns out, simultaneous waves of

hiring and layoffs have been coexisting for years—in good economic

times and bad—these were nevertheless sobering workforce reversals.

Did they signal that all the importance attached to talent in U.S. industry

had been a mirage all along?

In the rubble of many workplaces, where hiring had been replaced

by layoffs and signing bonuses by severance packages, business leaders

responsible for human capital issues understandably scrambled to get

their bearings. Having experienced a frenetic upward market where

they often could not keep pace, they were suddenly just as apt to be

in as deep a downward cycle—and probably with some of their own

employment concerns—trying to make sense. Talent issues imploded,

moving from the top of the agenda to the bottom. What is next?

HR’s strategic opportunities

The objective of Successful Talent Strategies is to make both a case and

a blueprint for developing talent strategies in a dynamic and market￾intensive economy where acquiring, deploying, and preserving human

capital—talent that matters—defines competitive advantage and success

for many enterprises. Although we believe that the logical advocates,

agents, and orchestrators for talent strategies are business HR leaders

and teams, we’ll strike an early note of caution: HR leaders have most

often come up short in positioning or preparing themselves to devise,

communicate, and execute market-responsive talent strategies aligned

in meaningful ways with business strategies. Although few may doubt

HR’s strategic aspirations, many—including many in HR—question

their strategic capabilities and stature.

For example, according to the results of a recent survey conducted

jointly by the Society for Human Resource Management (SHRM) and

The Ohio State University’s Fisher College of Business, HR profession￾als—by their own admission—fall well short of being fully integrated

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