Issue 7 – September 2007
MFB-Report – www.mfbresultants.com
Topics
Talent Management:
How to Succeed in the
“War For Talent”
Talent Management as
Strategic Executive Function
Employer Branding
MFB Case Studies
TOPIC:
Talent Management:
How to Succeed in the
“War For Talent”
Across almost every industry and sector, the most
challenging problem employers are facing is a shortage of skilled people. Globalization and the booming
world economy play in the hands of a global mobile
elite of high potentials. For them, job markets are no
longer limited to national borders. As a consequence,
companies that lack the instruments and strategies to
capture talent will be forced to reconsider their plans
for expansion and innovation. To succeed in the ‘war
for talent’, nothing is more important for a company
than the quality and the talent of its people.
Talent Management: A Strategic Executive
Function
Most managers know how important bright and creative people are for their organization. For a growing
number of companies, competitive advantage lies in
the ability to create an economy driven not by cost
efficiencies but by ideas and intellectual know-how.
Ideas, however, can only thrive where people are
confronted with a stimulating and challenging environment. Otherwise, low productivity, dissatisfaction,
absenteeism and low morale will be the consequence.
Management needs to realize the potentials of modern
talent management. Just like reliability is becoming a
more recognized and appreciated component to gaining a competitive advantage in manufacturing, best–
practice organizations have identified talent management as the key component of their business strategy
to differentiate themselves from the competition and
achieve desired goals. To produce the best products
and services, there is nothing more crucial than fitting the right employee in the right position. When
people do jobs that just do not suit their liking, inclination or temperament, the results, or rather the lack
of them, will be disastrously obvious. Strategic talent
management implies recognizing a person’s inherent
skills, traits, personality and offering him a matching
job. A wrong fit will result in firing and further hiring,
re-training and other wasteful activities.
EDITORIAL
Welcome and Guten Tag,
In the knowledge economy of the twenty-first century, talent will always be the scarcest resource. It
is what companies compete for, depend on, and succeed because of. But despite all that is known
about the importance of attracting and developing talent, an astonishing number of companies still
struggle to fill key positions – which puts a considerable constraint on their potential to grow.
Talent Management: How to
Monika Frick-Becker
Any company aiming to grow has little hope of achieving its goals without having the right people
on the ground. Companies invest heavily in capital, IT, and world-class processes. But in the end,
it is the people who make the difference. While there is no magic formula to manage talent, the
trick is to locate it and to encourage it.
High-potential employees do know very well of their
worth. As a consequence, senior management should
free its most talented people from bureaucratic red tape.
Take steps to streamline rules and to promote a culture
that values simplicity. Clever people respond better to a
benevolent superior than to a traditional boss. They need
you to protect them, defer to their expertise, recognize
their worth, and give them interesting people to talk to.
Offer your brightest people an environment where they
are invited to experiment with new ideas and interesting
challenges; and quietly demonstrate your expertise and
authority all the while. Talented people are important to
your company. But you are not utterly at their mercy. Even
the brightest talents need resources, systems and a challenging environment to function effectively.
Employer Branding: Make Your Company a Brand
and a Talent Factory
In Germany, for medium and small-size companies a
shortage of skilled people is by far the biggest challenge,
well ahead of cost cutting and innovation. Some businesses are forced to reconsider just how quickly they will
be able to grow, because they cannot find enough people
with the skills they need.
To capture the best and the brightest, the successful
‘hidden champions’ in the province have to be fast and
imaginative. These mostly family-run companies face one
particular problem: the big players like BMW, Porsche,
and SAP with their big pockets and international flair are
aggressively fishing out the pool of available talent.
However, smaller companies also have advantages on
their side. Their hierarchies are comparatively flat and
transparent and their business approaches more open
and flexible. Contrary to the global titans, small and
medium-size companies are long-term oriented and the
relationship between their senior management and their
employees is much more personal. Since their survival
depends on innovation and cutting-edge technology, they
are more willing to leave their talented people enough
room to test their entrepreneurial skills.
Challenges to Small and Mid-Size Companies
(Turnover: 2.5 - more than 100 m Euro/year)
Percentage of Approval of Surveyed Companies
Hostile Takeover
Growth through
M&A
New Markets
Raising of Capital
Attitudes of Clever People
They know their worth and they are savvy tacticians:
In our knowledge economy, clever people are a scarce resource. High
performers know of their importance and expect a company context
in which their interests will be most generously funded. If the funding dries up, they move on to a place with more plentiful resources.
They ignore corporate hierarchies and expect instant
access to the top management:
Titles and promotions do not really motivate them. More important
are attractive compensation packages, intellectual challenges and
entrepreneurial freedom.
They are well connected and extremely mobile:
Clever people usually belong to highly developed knowledge networks. These networks both increase their value to the company
and make them more of a flight risk.
Issue 7 – September 2007
Company
Succession
Product Line
Innovation
Cost Cutting
Capture Qualified
Talent
0
10
20
30
40
50
60
70
80
Source: TNS Inf ratest/Commerzbank
Being an attractive employer has nothing to do with
company size. It is all about active PR and HR marketing. Good companies create a strong brand identity
with their customers and then deliver on that promise.
Great employment brands do the same. As a result, the
right people choose to join the organization. Small and
medium-size companies have to invest permanently into
their image. Short-term or seasonal campaigns produce
MFB-Report – www.mfbresultants.com
Successful employer branding helps to differentiate your
company from your competitors. A prestigious brand can
be valuable in many ways: It helps to attract bright people and to lure promising customers. The independent
experts of MFB Resultants can help you to create a strong
company brand and communicate it in an attractive story
to promising talents and prospective customers. To be
convincing, a successful branding campaign always has
to be tailor-made and realistic. Exaggeration and insincerity will only cause distrust and antipathy.
With such a mismatch between supply and demand in
labor markets smaller companies have to become better
in hiring good staff and keeping them. One of the best
marketing tools to resort to is active campus PR. Do not
leave the campus to the big players. Be active and spark
interest in your company among students and university
teachers. Participate in college road shows and establish
a college intern program that offers the chance to assume
real responsibility by working on important projects. To
bolster ties with academic institutions your company may
also fund research, make technology gifts, participate in
the classroom and organize case study competitions.
Sometimes senior management should intervene personally in the recruitment process: A particularly promising
talent who needs a little additional persuasion might
receive a personal call from you. Very flattering - and
very successful.
Talent management is a strategic leadership function.
Passion must start at the top and infuse the corporate
culture. Otherwise the process of talent management
can easily deteriorate into bureaucratic routine. Executive
inattention will carry a tangible cost. Therefore, invest
in your talented people and offer them career planning,
training and coaching and a personal development road
map. In role plays and workshops seasoned external
experts can train your senior management to cope with
and to understand the attitudes that clever people display toward their organizations.
Seven Steps to Successful
Talent Management
1. Recognize talent
Discover the strengths and interests of your
employees. Encourage them to develop
their latent talents (training, coaching).
2. Create a strong
employment brand
Become attractive for talents. Invest in
your corporate identity.
3. Select and recruit
talents professionally
Implement proven objective talent
selection systems and tools to create
profiles of the right people. Tab networks
of external experts.
4. Retain talent
Hold onto your key employees. Offer them
career perspectives and invest in their
development and training.
5. Offer attractive
compensation and
benefits
Award your employees properly. Develop
performance-based compensation models.
6. Define clear
requirement profiles
Management sets clear and mutually
accepted rules for performance, compensation and career development.
7. Stay attractive for
older talent
Tap the experience, emotional skills and
loyalty of your baby-boom employees.
Invest in selective measures for both their
further training and physical fitness. Offer
flexible working hours.
Effective Approach to Strategic Talent
Management
For many years, leaders have said that the best business
strategy is to attract and retain clever people. Eventually,
the right talent creates the best systems and processes.
Unfortunately, many companies lack the resources and
capacities to implement a strategic talent management.
The experienced coaches of MFB Resultants can help your
company to take a holistic approach to talent management – from creating an employer brand and attracting
and selecting wisely, to retaining and developing leaders,
to helping employee’s transition out of the company. We
assist your management in planning and implementing a
talent management program that delivers results.
The following chart shows how MFB Resultants systematically improved the leadership qualities in a unit of an
international manufacturer:
Realization and Implementation
Individual Coaching
PHASE I
Identification
of Participants
PHASE II
Inquiry and Definition
of Development
Potential
Level 1
· Communication
· Presentation
· Moderation
· Time Managemet
6 Days
Level 2
· Leadership
· HR Management
· Conflict Management
6 Days
Level 3
· Skill Assessment and
· Performance Review
Positioning of
· Leadership Skills
· the Manager as Coach Participants
5 Days
PHASE III
Implementation of HR Development Tools Together With
the Introduction of ERA Systems For Remuneration and Assessment
Kick off
Accompanying Project Report & Cooperative Supervision
Networking Experience of Participants
MFB-Report – www.mfbresultants.com
Issue 7 – September 2007
· Agreement on Further
Action/
Recommendations
Succeed in the “War For Talent”
nothing but flashes in the pan. After all, a strong image
not only attracts promising talent. It is an important and
indispensable prerequisite for any business success.
MFB Case Studies
Case Study: Retention Strategies
In every organization it is the people, i.e. their talent, creativity, intellectual capital and entrepreneurial drive who
decide about success or failure. The field experience of
the MFB experts shows that, independently from company
size and field of business, talent management strategies
of most companies remain rather ineffective because of
nine typical barriers:
Barriers to Successful Talent Management
The experts of MFB Resultants identified both, (1) a lack of
leadership skills and (2) limited emotional intelligence on
the part of the company’s management as key factors for
the high turnover. People joined the organization because
of the job and often left because of the manager.
1. Senior management views Talent Management not as strategic
executive function
2. Department managers stifle cooperation beyond their domains.
3. TM and overall business strategy are not in sync.
As a result MFB Resultants designed a pilot program for
departments that had consistently high turnover. The first
component of the program was a customized 360-degree
survey for the focus group of department managers. The
second part consisted of three mandatory classes with
a MFB instructor on emotional intelligence, managerial
styles, and reading and interpreting their 360-degree feedback. In addition to each leader’s personal improvement
plan, management teams from each department developed a plan on retention. In close cooperation with senior
management variable salary components were introduced
and linked to each manager’s personal performance. The
rest of the program was individualized coaching, which
took place over a three-month period.
4. Line managers are not protecting and sponsoring their people.
MFB Case Studies
A medium-size automotive supplier faced an extraordinary
high turnover of its skilled labor force. The permanent cycle
of resignation and hiring was costing the organization
many 100.000 Euros and was overstraining the capacities of the HR department. MFB Resultants was hired to
analyze the situation and create a custom solution. MFB
Resultants was challenged to reduce skilled labor turnover
by 20 % annualized in selected pilot departments.
5. Inefficient succession planning prevents fitting the right person
in the right position.
6. Weak employment brand fails to attract the best talents.
7. No coherent system of sanctions and incentives.
8. Low investment in employee development and improvement
(training, coaching).
9. No robust and objective performance management of Talent
Management strategy.
The results are:
· Limited talent pool, succession problems
· High potentials leave organization
· Leadership qualities lack professionalism
As a result, at the end of the six-month MFB Resultants
pilot program, turnover was reduced to 19.5 %, down
from 41 %. Qualitatively, the company’s staff is happier
and working more effectively as a team. Leadership skills
and emotional intelligence have been enhanced. Thrilled
by the results, the client plans to roll out this program
organizationally.
Literature
In 1997, McKinsey consultants E. Michaels, H. Handfield-Jones and B.
Axelrod coined the phrase “War For Talent” (2001, McGraw-Hill), when
their surveys revealed a diminishing talent pool. Their company examples
show that employers must adopt innovative recruitment and retention techniques to become a talent factory.
In their essay Leading Clever People, in: Harvard Business Review,
March 2007, pp. 72-79, R. Goffee and G. Jones show how to manage
clever people who do not want to be led and who might be smarter then
their superiors.
In Recruit or Die: How Any Business Can Beat the Big Guys in the
War for Young Talent, Portfolio 2007, C. Rest, I. Ybarra and R. Seth
discuss the special situation of small companies and their chances to capture
and retain talent.
An interesting introduction into the relatively new, yet important concept of
“employer branding” offers S. Chambers with his study How to Build and
Deliver an Employer Brand, Glower 2005.
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