Ibraiz Tarique Pace University Randall Schuler



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Global Talent Management Literature Review

September 15th 2012

Prepared by

Ibraiz Tarique

Pace University


Randall Schuler

Rutgers University

Lorange Institute of Business Zurich

Table of Contents





Executive Summary ---------------------------------------------------------------------------------


3

Introduction -------------------------------------------------------------------------------------------


4

Conceptualization of Global Talent Management: What is Global Talent Management?


7

Drivers of Global Talent Management -----------------------------------------------------------


12

Impact of Drivers on Attracting, Developing, Retaining, and Mobilizing Talent ----------

20

Directions in Global Talent Management for Academics and Human Resource Practitioners ------------------------------------------------------------------------------------------

Managerial Implications for Human Resource Practitioners-----------------------------------





34

42


Summary and Conclusion --------------------------------------------------------------------------


46

References ----------------------------------------------------------------------------------------------


47




Executive Summary

One of the most significant developments in people management over the past fifteen years has been the focus on effectively managing the individuals who are most important to the strategic success of companies, both domestic and international. This focus has taken the general labels of “talent management” or more popularly, “global talent management.” This report is about the broader and more encompassing label global talent management (GTM). Because of its importance, there have been many academic and HR practitioner papers and reports published on global talent management, but because of its recency, there are many viewpoints as to what it really is, what it covers and what things remain to be explored and developed in the years ahead. So in this white paper we would like to do several things: 1) define the field of global talent management by reviewing the major academic and practitioner work; 2) describe the drivers of the field of global talent management; 3) review the work done on the policies and practices of GTM, including the attraction, development, retention, and mobilization of global talent; 4) offer some thoughts on the future directions of global talent management for human resource academics and human resource practitioners. An extensive set of references utilized in the preparation of this review is found at the end.



Introduction

In today’s complex and dynamic global environment multinational organizations have to manage a global workforce to achieve sustainable growth. Managing a global workforce is challenging -- it is mobile, diverse, and not bound by geographic and cultural boundaries (Schuler, Jackson, & Tarique, 2011; Scullion, Collings, & Caligiuri, 2010; Stahl et al., 2012). As a result of these challenges many human resource practitioners (HR leaders and HR consultants), and academics are focusing on the important area referred to as ‘‘global talent management’’(Collings & Mellahi, 2009; Garavan, Carbery, & Rock, 2012; Schuler, et al., 2011; Scullion, et al., 2010; Stahl, et al., 2012; Vaiman, Scullion, & Collings, 2012).


One of the major topics of research in global talent management has been around the notion of talent shortages (Manpower Group Talent Shortage Survey 2011), and the implications of talent shortages on the practice of human resource management in multinational organizations(Collings & Mellahi, 2009; Farndale, Scullion, & Sparrow, 2010; Scullion, et al., 2010; Stahl, et al., 2012; Vaiman, et al., 2012). Ironically the topic of global talent management is prevalent in times of economic prosperity as well as in times of economic uncertainty and economic and financial recession (Tarique & Schuler, 2010). There is considerable evidence that shows even in recent poor economic conditions organizations worldwide are having difficulty managing talent across a wide range of positions (McCauley & Wakefield, 2006). The recent Manpower Talent Shortage Survey (2011, p 2) notes
“Despite the continuing caution exercised by many companies amid ongoing economic uncertainty, a substantial portion of employers in the U.S. and worldwide identify a lack of available skilled talent as a continuing drag on business performance…..”
According to the Manpower Talent Shortage Survey, the top three most difficult positions to fill in the Americas (e.g., Argentina, Brazil, Canada, Colombia, Costa Rica, Guatemala, Mexico, Panama and Peru, and United States) include technicians, sales representatives, and skilled trades workers, in Asia-Pacific (e.g., Australia, China, Hong Kong, India, Japan, New Zealand, Singapore and Taiwan) include sales representatives, technicians and laborers, in Europe, Middle East and Africa (e.g., Austria, Belgium, Bulgaria, Czech Republic, France, Germany, Greece, Hungary, Ireland, Italy, Netherlands, Norway, Poland, Romania, Slovenia, South Africa, Spain, Sweden, Switzerland, Turkey and the United Kingdom) include skilled trades workers, technicians, and engineers (For more information see the Manpower Talent Shortage Survey, 2011).

The importance of global talent management is evidenced by academics and HR practitioners alike. Similar to the results from the Manpower Talent Shortage Survey (2011), the general consensus is that organizations face intense competition for talent worldwide and confront major challenges in attracting, retaining, and developing people they need in many positions.

The purpose of this report is to review the relevant academic and practitioner literature on global talent management from the last five to seven years to identify important themes that can provide academics and HR practitioners with an understanding of what is generally accepted and known and unknown about the topic, highlighting research directions where appropriate. The resources included in this review comprise of relevant global talent management research findings and commentaries from seasoned HR practitioners on the topic that includes books, domestic and international academic journals and white papers. A resource was selected if its primary focus was on global talent management.

The remainder of the report is organized in the following way. First, we begin with the conceptualization of global talent management and discuss the evolution of the field in terms of the current debates surrounding the definition and boundaries of talent management. Second, we identify and discuss the drivers of factors that are shaping the field of global talent management. Third, we discuss the global talent management issues related to attracting, developing, retaining, and mobilizing talent. Fourth, we conclude with a discussion of future directions for academics and HR practitioners for global talent management.



Conceptualization of Global Talent Management:

What is Global Talent Management?

In this section we discuss the evolution of global talent management in terms of the current debates surrounding the definition and boundaries of global talent management.

Although the origins of talent management can be traced back to 1865 (Simonton, 2011) and to the fields of arts/entertainment management, sports management literatures, and early education, interest in talent management in the business context came in the 1990s with the ground breaking study entitled “The War for Talent,” by McKinsey (Michaels, Handfield-Jones, & Axelrod, 2001). This study, reflecting the high tech boom times of the late 1990s, suggested that demand for talented employees exceeded the available supply, thus leading to the problem of talent shortage. Several HR practitioners and consultants recognized the importance of this trend, and as a result, several excellent studies were done in subsequent years by human resource practitioners and consultants to examine talent shortages (Tarique & Schuler, 2010). As a consequence of this, the phrases ‘‘talent acquisition, retention and management’’ and “attracting, retaining, and developing talent” become popular among human resource management community.

Global talent management was widely accepted by human resource practitioners, consulting firms and professional associations (e.g., Boston Consulting Group, McKinsey & Company, Hay Group, Watson Wyatt Worldwide, Heidrick and Struggles, Korn/Ferry, Lominger International, Society for Human Resource Management, World Federation of People Management Associations, Manpower Inc., Economist Intelligence Unit, The Chartered Institute of Personnel and Development, the American Council on International Personnel). Building on this excellent work, academics recently started to examine the talent management phenomena more closely in the last few years. Several special issues of academic journals such at the Journal of World Business (Scullion, Collings, & Caliguri, 2010) and the Asia Pacific Journal of Human Resource Management (McDonnell, Collings, & Burgess, 2012) and books such as Global Talent Management by Scullion and Collings (2011), Strategy-Driven Talent Management (Silzer & Dowell, 2010) and Talent Management of Knowledge Employees (Vaiman, 2010) have been published (Tarique & Schuler, 2010). Universities have also been paying attention to global talent management: The graduate business programs at Pace University (New York, USA) and Reykjavik University (Iceland) are examples of academic programs that specifically focus on global talent management.


Although there is a growing consensus that global talent management is an emerging area, there is no consensus regarding the exact definition or boundaries of global talent management. Rather there is considerable debate around the definition of the term. There are several interpretations of global talent management (Collings & Mellahi, 2009; Lewis & Heckman, 2006; Tarique & Schuler, Forthcoming). Here we list a few definitions that appear most often:


  • Global talent management is the standard human resource department practices and functions; and in the international context the term global talent management is used interchangeably with international human resource management;




  • Global talent management is more future oriented and is defined in terms of human resource planning and projecting employee/staffing needs. Here the focus is on the types of individual level capabilities needed in the future;




  • Global talent management focuses on high performing individuals also known as high potentials;




  • Global talent management focuses on strategic jobs. These jobs also refer to core jobs and are critical to the organization in terms of creating competitive advantage; and,




  • Global talent management is a capability based approach to strategic human resource management. Here talent management is treated as a subset of strategic human resource management.

Regardless of which definition is used, there is a common theme across them. It seems that global talent management focuses on two important dimensions (Tarique & Schuler, Forthcoming):




  • Individuals with high and/or critical levels of talent (e.g., knowledge, skills, and abilities) that add value to the organization; and,




  • Complementary international human resource management policies and practices that are used to manage employees with high and/or critical levels of talent. Because they are implemented systematically, these international human resource management policies and practices refer to global talent management systems.

Therefore, global talent management can be defined as:


A subset of IHRM activities (systematically linked IHRM policies and policies) to attract, develop, retain, and mobilize individuals with high levels of current and potential human capital consistent for the strategic directions of the multinational enterprise to serve the objectives of multiple stakeholders (Tarique & Schuler, 2010).
An important point here is which IHRM activities fall outside the working definition of global talent management. There are two perspectives here. The first perspective suggests all IHRM activities can be applied to the various employee groups but each activity has to be customized to suit the needs of a particular employee group. The second perspective suggests that particular IHRM activities are only provided to specific employee groups. An example here would be the use of cross cultural training. This type of training is mostly provided to individuals going on foreign assignments. Another example would be the use of executive development programs that are only available to individuals who are considered high potentials for senior management positions.

But regardless of how the field is defined, global talent management is emerging and creating new roles and jobs. A recent study by Heidrick & Struggles (Strategic Talent Management. The emergence of a new discipline, 2012) notes:

“The cumulative impact of global demographic trends, combined with on-going economic uncertainty and aggravated by a critical skills shortage creates a powerful talent triple whammy facing business. In response, forward-looking companies are bringing talent, particularly leadership talent, to the top of the agenda and are assigning responsibility for aligning business and talent imperatives to a senior talent executive. We are beginning to see the steady emergence of a new discipline of Strategic Talent Management, led by a Head of Talent or a similarly titled role.”

Helping to inform this new position is an understanding of the drivers that have shaped the

discipline of global talent management.

Drivers of Global Talent Management

This section identifies and discusses four drivers that have shaped and are shaping the field of global talent management. More specifically, these are the drivers that impact how organizations attract, develop, retain, and mobilize talent. Major drivers include:



  • Shortage of talented workers;

  • Changing demographics;

  • Changing attitude towards work and structure of work; and,

  • Country culture differences.

How these specifically impact global talent management is the focus of the section that follows this one on Drivers.

Shortage of Talented Workers

There is considerable evidence that shows organization worldwide are having difficulty finding the right talent (Jeff Schwartz, 2011; Kavanagh, 2010; Kazmin, Pearson, Robinson, & Weitzman, 2011; Meisinger, 2008; Michaels, et al., 2001; Payne, 2008; Sridharan, 2007) . The recent studies by the World Economic Forum and the Boston Consulting Group (2011) and the Manpower Group (2011) show that the shortage of talent problem is truly global: it affects a wide variety of positions in many regions and countries of the world. In the Manpower Group study (2011) it is reported that 34 percent of employers are having difficulty finding suitable talent to fill positions. Japan, India and Brazil are the top three countries in terms of having difficulty filling jobs. This study found that organizations are using several strategies to manage the talent shortages including employee training and development and aggressive recruiting strategies. The World Economic Forum and the Boston Consulting Group (2011) study recommends taking a systematic approach to managing global talent risk and suggest several responses by multinational firms (p.7):



  • Introduce strategic workforce planning (e.g., determine future talent gaps);

  • Ease migration (e.g., attract talent from a global labor pool);

  • Foster brain circulation (e.g., reduce brain drain by encouraging students and professionals to return home);

  • Increase employability (e.g., increase the skills levels of both the current

and future workforce);

  • Develop a talent “trellis” (e.g., offer multiple developmental and career pathways);

  • Encourage temporary and virtual mobility (e.g., access required skills from any location; and,

  • Extend the pool (e.g., attract skill sets of women, older professionals etc.).


Changing Demographics

Several studies show that there is little doubt that world demographics are changing. Current trends show that population in the developed economies is shrinking and becoming older while the size of population of much of the developing economies is expanding and getting younger (Strack, Baier, & Fahlander, 2008). One implication of these demographic changes is the creation of various generations of employees: generation X, baby boomers, generation Y or millennials. Simultaneously managing mature workers or an aging population and younger workers is a challenge for the talent management function (Calo, 2008; Tarique & Schuler, 2010). The mature workers are likely to live longer (increasing life expectancy), retire at later age (there are increasing pressures in most countries to raise the retirement age), and when they do retire, they likely will take their tacit knowledge with them . Hence knowledge transfer or extraction from this generation is a key issue facing human resource practitioners. In addition, developing policies and practices to manage stereotypical beliefs and negative biases towards mature workers is an important challenge facing human resource practitioners. It is important to point out that the categorical terms such as Baby Boomer, and Gen X and Y are predominantly influenced by ideology from the United States. Different countries have different generational classifications based on their historical and social events.


Similar to the aging population, managing the millennial is also challenging for global talent management. According to a study by PricewaterhouseCoopers (2011), this generation of potential workers makeup 25% of the workforce in the Unites States and account for over half of the population in India. The report predicts that by 2020, millennials will form 50% of the global workforce. Hence it is important to understand the work related characteristics of this group which include:

  • Low loyalty (and engagement levels) towards employers;

  • Most likely to voluntary leave when economic conditions improve;

  • Consider learning and development as the most essential benefit from employers;

  • Look for a good work/life balance;

  • Prefer to communicate electronically at work than face to face;

  • Career progression is important;

  • Attracted to organizations that focus on corporate social responsibility;

  • Strong interest in working overseas; and,

  • Comfortable working with older generations;

The millennial generation of workers in the developing economies and countries in the southern hemisphere provide additional challenges to the talent management function. They seem to lack the necessary skills and competencies needed to meet the job requirements (Strack, Baier, Caye, Zimmermann, & Dyrchs, 2011) in today’s global organizations. There are several reasons why this generation is not able to develop the necessary skills and competencies including political instability, poor or uneven quality of formal educational systems, barriers to entry in certain careers, and lack of career development programs. An important challenge for global talent management in organizations, therefore, is to find ways to develop the skills and competencies of young people living in developing countries. As mentioned before, it is important to point out that the notion of millennials is U.S. based and issues important to millennials like corporate social responsibility are of far greater concern in the U.S. More research, however, is needed to examine if the characteristics of Millennials are truly global.



Changing Attitude toward Work and Structure of Work

Attitude towards work are changing dramatically in some countries (Erickson, 2008; Gratton, 2010, 2011a, 2011c). Traditionally employees rotated through a set of jobs or positions with an occupation or a company, lateral and/or horizontal movement (e.g., job mobility) was within the employer organization, and the employer invested considerable resources in training and developing employees. In return, the employees displayed loyalty to their employer and expected continued job security. The picture now is very different. Workers are frequently changing jobs or moving across employers and occupations, are taking major responsibility to manage their own careers, and assume little or no job security, regardless of performance. Employee loyalty seems to be very low, or as some would say employee loyalty seems to be dead (Korkki, 2011).

From a talent management perspective the general consensus is that the structure of work will continue to change creating more challenges for organizations to retain talent. Recent studies provide interesting trends with respect to the future of work (Gratton, 2010, 2011b; Levit, 2009). Some of the trends include virtual teams (e,g., employees will interact with each other using technology) social networks (e.g., employees will have access to several potential employers), flexible work hours (e.g., employees will have more control over their work schedules), remote workstations (e.g., employees will work for companies that are geographically distant), contingent workers (e.g., employees will work for multiple organizations), and more dependence on mobile technology (e.g., the increasing use of smart phones and tablets). These trends suggest the talent of the future will be working for multiple employers, will be well connected (socially and professionally) with a variety of organizations, and will be willing to move from one job to another and one career to another. In addition these characteristics are more likely to change the employee-employer relationship making it more difficult for organizations to manage the talent management process as attracting, retaining, developing, and mobilizing talent.

Country Culture Differences

Country culture an important role in international human resource management (Black, 2005; Gerhart & Fang, 2005; Rowley & Benson, 2002; Schneider, 1988). Country culture can have a direct or indirect effect on how human resource management policies and practices are designed, how they work together, and how they influence employee behavior and performance both at the individual and organizational levels (Gerhart & Fang, 2005; Hassi, 2012; Lertxundi & Landeta, 2011; Miah & Bird, 2007; Schneider, 1988). An important discussion in international human resource management is on the issue of convergence/divergence of human resource practices across cultures, regions, and countries (Brewster, Wood, & Brookes, 2008; Festing, 2012; Mayrhofer, Brewster, Morley, & Ledolter, 2011; Sparrow, Schuler, & Jackson, 1994; Stavrou, Brewster, & Charalambous, 2010). Convergence means that human resource management policies and practices are similar across countries and cultures and divergence means that human resource management practices are different across countries and cultures. Evidence thus far is mixed. Certain human management practices converge, some don’t, and it depends on the context. For instance, based on what we know from the international human resource literature, it could be argued that there is more convergence at the more general policy level (e.g., all employees need certain amount of development regardless of culture) and more divergence at the more specific practice or implementation level (e.g., the specific practice used to develop talented employees will vary with the culture).

Similar patterns exist with other global talent management practices (Tarique & Schuler, Forthcoming). Several studies have examined talent management in countries such as South Africa (Koketso & Rust, 2012), Thailand (Piansoongnern & Anurit, 2010), India (Anand, 2011; Tymon, Stumpf, & Doh, 2010), Italy (Guerci & Solari, 2012), and New Zealand (Jayne, 2004). In most countries, talent management is a relatively new topic such as in China (Preece, Iles, & Chuai, 2011) and Thailand (Piansoongnern & Anurit, 2010), and there is little consensus on the definition of the term. For example in China talent management is viewed in a variety of ways such as talent management is different from HRM (Chuai, Preece, & Iles, 2008), focuses on certain employee groups, and focuses on certain jobs (Iles, Chuai, & Preece, 2010). This pattern is similar to the debate over the definition of talent management in North America and Europe. So there is some convergence regarding the conceptualization of talent management. Similarly, with respect to global talent management practices, Stahl et al (2012, p 30) note: “many organizations are moving towards greater integration and global standards while simultaneously continuing to experience pressure to adapt and make decisions at local levels.” Stahl et al (2012) suggest that global corporations are similar in how they manage talent. They identify three reasons for the push towards convergence including:


  • Companies compete for the same talent pool;

  • Companies want to standardize how they recruit and develop talent; and,

  • Easier for companies to imitate because of available data and information from large companies.

The last reason listed has important implications for talent management in terms of the relationship between talent management and competitive advantage. An important assumption in the strategic human resource management literature is that human resource management practices can provide competitive advantage as long as the practices cannot be imitated or copied (Becker, Beatty, & Huselid, 2009; Colbert, 2004; Huselid & Becker, 2011; Progoulaki & Theotokas, 2010; Schuler, Dowling, & De Cieri, 1993; Wright & McMahan, 2011). The large amount of information available from academics and human resource consultant about best practices will create challenges for the talent management function in creating and sustaining a competitive advantage. In addition, as suggested by Stahl et al (2012), this abundance of information has the potential to create a convergence of talent management practices across regions and countries.

There is, however, also support for the divergence perspective, or stated differently, support for the need to localize global talent management practices. There is evidence that suggests successful transfer of talent management practices is context specific and contingent on a factors like stakeholder involvement and top level support, micro-political exchanges, and the integration of talent management with a global human resource information system (Burbach & Royle, 2010). Similarly in certain regions there are strong governmental pressures to have a better understanding of local markets (Eddy, Hall, & Robinson, 2006). The emerging markets in particular provide strong challenges to foreign multinationals and home-based talent management practices will need to be adjusted to the local conditions in the developing world (Ready, Hill, & Conger, 2008). There is also a strong push to focus on talent located in subsidiaries, in other words, to develop and promote local talent (Mellahi & Collings, 2010).

Since the field of global talent management is relatively new, and the majority of what we know is based on information and data from large multinationals (primarily from the U. S.) -- academics and practitioners do not have much data to come to a general consensus on the convergence/divergence topic and other related topics. Thus, they need to be careful to not overly generalize and apply what we know from large multinational organizations from developed economies in a global context. Similar to any other new field of enquiry, researchers in other regions and countries are beginning to explore this topic in more detail.

Impact of Drivers on Attracting, Developing, Retaining, and Mobilizing Talent

The above four drivers of factors (e.g., shortage of talented workers, changing demographics, changing attitude towards work and structure of work, and country culture differences) can strongly impact the need for and content of these global talent management practices and policies (Tarique & Schuler, 2010) :



  • Attracting (this includes policies and practices that recruit and select talented individuals);

  • Developing (this includes policies and practices that provide job and career related competencies to talented individuals);

  • Retaining (this includes practices that prevent talented individuals from leaving the organization); and

  • Mobilizing (this includes practices that facilitate the movement of talented individuals across regions or countries).

In turn, each of the four drivers can impact these four global talent management policies and practices in the following ways (Tarique & Schuler, forthcoming):

  • How each policy and practice is designed or configured (for example, the aging population will encourage organizations to use developing and retaining practices that facilitate the transfer of knowledge from the older employees to the rest of the organization.

  • How each policy and practice is utilized (for example, the shortage of skilled workers will force organizations to extensively use in-house learning activities such as corporate universities to develop raw talent that already exists in the organization)

  • How each policy and practice is evaluated (for example, the changing job structures will force organizations to evaluate the effectiveness of each global talent management practice more frequently as job tenure becomes shorter and increasingly uncertain)

The impact of the four drivers on the global talent management policies and practices is now discussed in detail.


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