The War for Talent
Andrexa Peluso
thewarfortalentduejune3rd.zip6.3 - The War for Talent.pdf
6.3 - The War for Talent
L E A R N I N G O B J E C T I V E S
1. Define talent management.
2. Attract the right workers to your organization.
3. Understand how to keep your stars.
4. Understand the benefits of good talent management.
You have likely heard the term, the war for talent, which reflects competition among
organizations to attract and retain the most able employees. Agencies that track
demographic trends have been warning for years that the U.S. workforce will shrink in
the second and third decades of the 21st century as the baby boom generation (born
1945–1961) reaches retirement age. According to one source, there will be 11.5 million
more jobs than workers in the United States by 2010.Extreme talent shortage makes
competition fierce for key jobs and highlights needs for leadership development. (2007,
November 26). Business Wire, 27. Even though many boomers say they want to (or have
to) continue working past the traditional age of retirement, those who do retire or who
leave decades-long careers to pursue “something I’ve always wanted to do” will leave
employers scrambling to replace well-trained, experienced workers. As workers compete
for the most desirable jobs, employers will have to compete even more fiercely to find
the right talent.
What Talent Management Means
Peter Cappelli of the Wharton SchoolCappelli, P. (2008, March). Talent management
for the 21st century, Boston. Harvard Business Review, 17–36. defines talent
management as anticipating the need for human capital and setting a plan to meet it. It
goes hand in hand with succession planning, the process whereby an organization
ensures that employees are recruited and developed to fill each key role within the
company. Most companies, unfortunately, do not plan ahead for the talent they need,
which means that they face shortages of critical skills at some times and surpluses at
other times. Other companies use outdated methods of succession planning that don’t
accurately forecast the skills they’ll need in the future.
Interestingly, however, techniques that were developed to achieve productivity
breakthroughs in manufacturing can be applied to talent management. For example, it
is expensive to develop all talent internally; training people takes a long time and
requires accurate predictions about which skill will be needed. Such predictions are
increasingly difficult to make in our uncertain world. Therefore, rather than developing
everyone internally, companies can hire from the outside when they need to tap specific
skills. In manufacturing, this principle is known as “make or buy.” In HR, the solution is
to make and buy; that is, to train some people and to hire others from the external
marketplace. In this case, “making” an employee means hiring a person who doesn’t yet
have all the needed skills to fulfill the role, but who can be trained (“made”) to develop
them. The key to a successful “make” decision is to distinguish between the high-
potential employees who don’t yet have the skills but who can learn them from the
mediocre employees who merely lack the skills. The “buy” decision means hiring an
employee who has all the necessary skills and experience to fulfill the role from day one.
The “buy” decision is useful when it’s too difficult to predict exactly which skills will be
needed in the future. Buhler, Patricia M. (2008, March). Managing in the new millennium; succession planning: Not just
for the c suite. Supervision, 69(3), 19-23.
Another principle from manufacturing that works well in talent management is to run
smaller batch sizes. That is, rather than sending employees to 3-year-long training
programs, send them to shorter programs more frequently. With this approach,
managers don’t have to make the training decision so far in advance. They can wait to
decide exactly which skills employees will learn closer to the time the skill is needed,
thus ensuring that employees are trained on the skills they’ll actually use.
Attracting the Right Workers to the Organization
Winning the war for talent means more than simply attracting workers to your
company. It means attracting the right workers—the ones who will be enthusiastic about
their work. Enthusiasm for the job requires more than having a good attitude about
receiving good pay and benefits—it means that an employee’s goals and aspirations also
match those of the company. Therefore, it’s important to identify employees’
preferences and mutually assess how well they align with the company’s strategy. To do
this, the organization must first be clear about the type of employee it wants. Companies
already do this with customers: marketing executives identify specific segments of the
universe of buyers to target for selling products. Red Bull, for example, targets college-
age consumers, whereas SlimFast goes for adults of all ages who are overweight. Both
companies are selling beverages but to completely different consumer segments.
Similarly, companies need to develop a profile of the type of workers they want to
attract. Do you want entrepreneurial types who seek autonomy and continual learning,
or do you want team players who enjoy collaboration, stability, and structure? Neither
employee type is inherently “better” than another, but an employee who craves
autonomy may feel constrained within the very same structure in which a team player
would thrive.
Earlier, we said that it was important to “mutually assess” how well employees’
preferences aligned with the company’s strategy. One-half of “mutual” refers to the
company, but the other half refers to the job candidates. They also need to know
whether they’ll fit well into the company. One way to help prospective hires make this
determination is to describe to them the “signature experience” that sets your company
apart. As Tamara Erickson and Lynda Gratton define it, your company’s signature
experience is the distinctive practice that shows what it’s really like to work at your
company. Erickson, T., & Gratton, L. (2007, March). What it means to work here. Harvard Business Review, 23–29.
For example, here are the signature experiences of two companies, Whole Foods and
Goldman Sachs: At Whole Foods, team-based hiring is a signature experience—
employees in each department vote on whether a new employee will be retained after a
4-week trial period. This demonstrates to potential hires that Whole Foods is all about
collaboration. In contrast, Goldman Sachs’s signature experience is multiple one-on-one
interviews. The story often told to prospective hires is of the MBA student who went
through 60 interviews before being hired. This story signals to new hires that they need
to be comfortable meeting endless new people and building networks across the
company. Those who enjoy meeting and being interviewed by so many diverse people
are exactly the ones who will fit into Goldman’s culture.
The added benefit of hiring workers who match your organizational culture and are
engaged in their work is that they will be less likely to leave your company just to get a
higher salary.
Keeping Star Employees
The war for talent stems from the approaching shortage of workers. As we mentioned
earlier in this chapter, the millions of baby boomers reaching retirement age are leaving
a gaping hole in the U.S. workforce. What’s more, workers are job-hopping more
frequently than in the past. According to the U.S. Bureau of Labor Statistics, the average
job tenure has dropped from 15 years in 1980 to 4 years in 2007. As a manager,
therefore, you need to give your employees reasons to stay with your company. One way
to do that is to spend time talking with employees about their career goals. Listen to
their likes and dislikes so that you can help them use the skills they like using or develop
new ones they wish to acquire. Kaye, B. (2008). Love ’em or lose ’em. San Francisco: Barrett-Koehler.
Don’t be afraid to “grow” your employees. Some managers want to keep their employees
in their department. They fear that helping employees grow on the job will mean that
employees will outgrow their job and leave it. Field, A. (2008, June). Do your stars see a reason
to stay? Harvard Management Update,. But, keeping your employees down is a sure
way to lose them. What’s more, if you help your employees advance, it’ll be easier for
you to move up because your employees will be better able to take on the role you leave
behind.
In some cases, your employees may not be sure what career path they want. As a
manager, you can help them identify their goals by asking questions such as:
• What assignments have you found most engaging?
• Which of your accomplishments in the last six months made you proudest?
• What makes for a great day at work? Butler, T. (2007). Getting unstuck. Boston: Harvard Business
School Press.
What Employees Want
Employees want to grow and develop, stretching their capabilities. They want projects
that engage their heads as well as their hearts, and they want to connect with the people
and things that will help them achieve their professional goals. Deloitte Research. (2007). Do you
know where your talent is? why acquisition and retention strategies don’t work. Geneva, Switzerland: Deloitte-Touch Research
Report. Here are two ways to provide this to your employees: First, connect people with
mentors and help them build their networks. Research suggests that successful
managers dedicate 70% more time to networking activities and 10% more time to
communication than their less successful counterparts. Luthans, F., Yodgetts, R., & Rosenkrantz, S.
(1988). Real managers. Cambridge: Ballinger. What makes networks special? Through networks, people energize
one another, learn, create, and find new opportunities for growth. Second, help connect
people with a sense of purpose. Focusing on the need for purpose is especially important
for younger workers, who rank meaningful work and challenging experiences at the top
of their job search lists. Sheahan, P. (2006). Generation Y: Thriving (and surviving) with generation Y at work.
Victoria, Australia: Hardie Grant Books.
Benefits of Good Talent Management
Global consulting firm McKinsey & Company conducted a study to identify a possible
link between a company’s financial performance and its success in managing talent. The
survey results, reported in May 2008, show that there was indeed a relationship
between a firm’s financial performance and its global talent management practices.
Three talent management practices in particular correlated highly with exceptional
financial performance:
• Creating globally consistent talent evaluation processes.
• Achieving cultural diversity in a global setting.
• Developing and managing global leaders. McKinsey global-talent-management survey of over 450
executives. (2007, December). Retrieved January 30, 2009,
from http://www.mckinseyquarterly.com/article_print.aspx?L2=18&L3=31&ar=2140.
The McKinsey survey found that companies achieving scores in the top third in any of
these three areas had a 70% chance of achieving financial performance in the top third
of all companies. Guthridge, M., & Komm, A. B. (1988, May). Why multinationals struggle to manage talent. McKinsey
Quarterly, 19–25.
Let’s take a closer look at what each of these three best practices entail. First, having
consistent talent evaluation means that employees around the world are evaluated on
the same standards. This is important because it means that if an employee from one
country transfers to another, his or her manager can be assured that the employee has
been held to the same level of skills and standards. Second, having cultural diversity
means having employees who learn something about the culture of different countries,
not just acquire language skills. This helps bring about open-mindedness across
cultures. Finally, developing global leaders means rotating employees across different
cultures and giving them international experience. Companies who do this best also
have policies of giving managers incentives to share their employees with other units.
K E Y T A K E A W A Y
The coming shortage of workers makes it imperative for managers to find, hire, retain,
and develop their employees. Managers first need to define the skills that the company
will need for the future. Then, they can “make or buy”—that is, train or hire—employees
with the needed skills. Retaining these employees requires engaging them on the job.
Good talent management practices translate to improved financial performance for the
company as a whole.
R E F L E C T I O N S
1. How might a manager go about identifying the skills that the company will need in the
future?
2. Describe the “make or buy” option and how it can be applied to HR.
3. How would you go about attracting and recruiting talented workers to your
organization? Suggest ideas you would use to retain stars and keep them happy working
for you.
4. What skills might an organization like a bank need from its employees?
Licensing Information: This text, “Principles of Management,” was adapted by Saylor Academy under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 License without attribution as requested by the work's original creator or licensor. Some header and font editing has been done by BC Online. Saylor Academy would like to thank Andy Schmitz for his work in maintaining and improving the HTML versions of these textbooks. This textbook is adapted from his HTML version, and his project can be found here.
- 6.3 - The War for Talent
- LEARNING OBJECTIVES
- What Talent Management Means
- Attracting the Right Workers to the Organization
- Keeping Star Employees
- What Employees Want
- Benefits of Good Talent Management
- KEY TAKEAWAY
- Reflections
- Licensing Information: This text, “Principles of Management,” was adapted by Saylor Academy under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 License without attribution as requested by the work's original creator or licensor. Some hea...
6.4 - Effective Selection and Placement Strategies.pdf
6.4 - Effective Selection and Placement Strategies
L E A R N I N G O B J E C T I V E S
1. Explain why a good job description benefits the employer and the applicant.
2. Describe how company culture can be used in selecting new employees.
3. Discuss the advantages and disadvantages of personnel testing.
4. Describe some considerations in international staffing and placement
Selecting the right employees and placing them in the right positions within the
company is a key HR function and is vital to a company’s success. Companies should
devote as much care and attention to this “soft” issue as they do to financial planning
because errors will have financial impact and adverse effects on a company’s strategy.
Job-Description Best Practices
Walt has a problem. He works as a manager in a medium-sized company and considers
himself fortunate that the organizational chart allows him a full-time administrative
assistant (AA). However, in the two years Walt has been in his job, five people have held
this AA job. The most recent AA, who resigned after four weeks, told Walt that she had
not known what the job would involve. “I don’t do numbers, I’m not an accountant,” she
said. “If you want someone to add up figures and do calculations all day, you should say
so in the job description. Besides, I didn’t realize how long and stressful my commute
would be—the traffic between here and my house is murder!”
Taken aback, Walt contacted the company’s HR department to clarify the job
description for the AA position. What he learned was that the description made
available to applicants was, indeed, inadequate in a number of ways. Chances are that
frequent turnover in this AA position is draining Walt’s company of resources that could
be used for much more constructive purposes.
An accurate and complete job description is a powerful SHRM tool that costs little to
produce and can save a bundle in reduced turnover. While the realistic description may
discourage some applicants (for example, those who lack an affinity for calculations
might not bother to apply for Walt’s AA position), those who follow through with the
application process are much more likely to be satisfied with the job once hired. In
addition to summarizing what the worker will actually be doing all day, here are some
additional suggestions for writing an effective job description:
• List the job requirements in bullet form so that job seekers can scan the posting
quickly.
• Use common industry terms, which speak to knowledgeable job seekers.
• Avoid organization-specific terms and acronyms, which would confuse job
seekers.
• Use meaningful job titles (not the internal job codes of the organization).
• Use key words taken from the list of common search terms (to maximize the
chance that a job posting appears on a job seeker’s search).
• Include information about the organization, such as a short summary and links to
more detailed information.
• Highlight special intangibles and unusual benefits of the job and workplace (e.g.,
flextime, travel, etc.).
• Specify the job’s location (and nearest large city) and provide links to local
community pages (to entice job seekers with quality-of-life information).
Tailoring Recruitment to Match Company Culture
Managers who hire well don’t just hire for skills or academic background; they ask about
the potential employee’s philosophy on life or how the candidate likes to spend free
time. These questions help the manager assess whether the cultural fit is right. A
company in which all work is done in teams needs team players, not just “A” students.
Ask questions like, “Do you have a personal mission statement? If not, what would it be
if you wrote one today?” Pfeffer, J. (1998). The human equation. Boston: Harvard Business School Press. to identify
potential hires’ preferences.
At Google, for example, job candidates are asked questions like, “If you could change the
world using Google’s resources, what would you build?” Slater, C. (2008, March). The faces and
voices of Google. Fast Company, 37–45. Google wants employees who will think and act
on a grand scale, employees who will take on the challenges of their jobs, whatever their
job may be. Take Josef DeSimone, Google’s executive chef. DeSimone, who’s worked
everywhere from family-style restaurants to Michelin-caliber ones, was amazed to learn
that Google had 17 cafes for its employees. “Nobody changes the menu daily on this
scale,” he says. “It’s unheard of.” When he was hired, DeSimone realized, “Wow, you
hire a guy who’s an expert in food and let him run with it! You don’t get in his way or
micromanage.” Slater, C. (2008, March). Josef DeSimone—executive chef. Fast Company, 46–48. Google applies
this approach to all positions and lets employees run with the challenge.
Traditionally, companies have built a competitive advantage by focusing on what they
have—structural advantages such as economies of scale, a well-established brand, or
dominance in certain market segments. Companies such as Southwest Airlines, by
contrast, see its people as their advantage: “Our fares can be matched; our airplanes and
routes can be copied. But we pride ourselves on our customer service,” said Sherry
Phelps, director of corporate employment. That’s why Southwest looks for candidates
who generate enthusiasm and leans toward extraverted personalities. Bruce, A. (1997, March).
Southwest: Back to the FUNdamentals. HR Focus, 74(3), 11; Freiberg, K., & Freiberg, J. (2003). Nuts! Southwest Airlines’s crazy
recipe for business and personal success. Austin, TX: Bard; Hallowell, R. (1996, Winter). Southwest Airlines: A case study linking
employee needs satisfaction and organizational capabilities to competitive advantage. Human Resource Management, 35(4), 513–
529; Heskett J. L., & Hallowell, R. (1993). Southwest Airlines—1993 (A). Harvard Business School Case; Southwest Airlines’ Herb
Kelleher: Unorthodoxy at work. (1995, January). Management Review, 2–9; LaBarre, P. (1996, February 5). Lighten up! Blurring
the line between fun and work not only humanizes organizations but strengthens the bottom line. Industry Week, 245(3), 53–67;
Labich, K. (1994, May 2). Is Herb Kelleher America’s best CEO? Fortune, 44–45; and McNerney, D. J. (1996 August). Employee
motivation: creating a motivated workforce. HR Focus, 73(8), 1; Tomkins, R. (1996, November 11). HR: The seriously funny
airline. Financial Times (33137), 14, A1–A5.
Southwest hires for attitude. Flight attendants have been known to sing the safety
instructions, and pilots tell jokes over the public address system.
Southwest Airlines makes clear right from the start the kind of people it wants to hire.
For example, recruitment ads showed Southwest founder Herb Kelleher dressed as Elvis
and read: “Work in a Place Where Elvis Has Been Spotted…The qualifications? It helps
to be outgoing. Maybe even a bit off-center. And be prepared to stay awhile. After all, we
have the lowest employee turnover rate in the industry.” People may scoff or question
why Southwest indulges in such showy activities or wonder how an airline can treat its
jobs so lightly. Phelps answers, “We do take our work seriously. It’s ourselves that we
don’t.” People who don’t have a humane, can-do attitude are fired. Southwest has a
probationary period during which it determines the compatibility of new hires with the
culture. People may be excellent performers, but if they don’t match the culture, they are
let go. As Southwest’s founder Kelleher once said, “People will write me and complain,
‘Hey, I got terminated or put on probation for purely subjective reasons.’ And I’ll say,
‘Right! Those are the important reasons.’”
In many states, employees are covered under what is known as the at-will employment
doctrine. At-will employment is a doctrine of American law that defines an employment
relationship in which either party can break the relationship with no liability, provided
there was no express contract for a definite term governing the employment relationship
and that the employer does not belong to a collective bargaining unit (i.e., a
union).Rothstein, M. A., Knapp, Andria S., & Liebman, Lance. (1987). Cases and materials on employment law (p. 738). New
York: Foundation Press. However, there are legal restrictions on how purely subjective the
reasons for firing can be. For instance, if the organization has written hiring and firing
procedures and does not follow them in selective cases, then those cases might give rise
to claims of wrongful termination. Similarly, in situations where termination is clearly
systematic, for example, based on age, race, religion, and so on, wrongful termination
can be claimed.
Tools and Methods: Interviewing and Testing
To make good selection and placement decisions, you need information about the job
candidate. Two time-tested methods to get that information are testing and
interviewing.
A detailed interview begins by asking the candidate to describe his work history and
then getting as much background on his most recent position (or the position most
similar the open position). Ask about the candidate’s responsibilities and major
accomplishments. Then, ask in-depth questions about specific job situations.
Called situational interviews, these types of interviews can focus on past experience or
future situations. For example, experienced-based questions are “Tell me about a major
initiative you developed and the steps you used to get it adopted.” Or, “Describe a
problem you had with someone and how you handled it.” In contrast, future-oriented
situation interview questions ask candidates to describe how they would handle a future
hypothetical situation, such as: “Suppose you came up with a faster way to do a task, but
your team was reluctant to make the change. What would you do in that situation?”
In addition to what is asked, it is also important that interviewers understand what they
should not ask, largely because certain questions lead to answers that may be used to
discriminate. There are five particularly sensitive areas. First, the only times you can ask
about age are when it is a requirement of a job duty or you need to determine whether a
work permit is required. Second, it is rarely appropriate or legal to ask questions
regarding race, color, national origin, or gender. Third, although candidates may
volunteer religious or sexually-orientated information in an interview, you still need to
be careful not to discriminate. Ask questions that are relevant to work experience or
qualifications. Fourth, firms cannot discriminate for health or disabilities; you may not
ask about smoking, health-related questions, or disabilities in an interview. Finally, you
may not ask questions about marital status, children, personal life, pregnancy, or arrest
record. These kinds of questions could be tempting to ask if you are interviewing for a
position requiring travel; however, you can only explain the travel requirements and
confirm that the requirements are acceptable.
In addition to interviews, many employers use testing to select and place job applicants.
Any tests given to candidates must be job related and follow guidelines set forth by the
Equal Opportunity Employment Commission to be legal. For the tests to be effective,
they should be developed by reputable psychologists and administered by professionally
qualified personnel who have had training in occupations testing in an industrial
setting. The rationale behind testing is to give the employer more information before
making the selection and placement decision—information vital to assessing how well a
candidate is suited to a particular job. Most preemployment assessment tests measure
thinking styles, behavioral traits, and occupational interests. The results are available
almost immediately after a candidate completes the roughly hour-long questionnaire.
Thinking styles tests can tell the potential employer how fast someone can learn new
things or how well he or she can verbally communicate. Behavioral traits assessments
measure energy level, assertiveness, sociability, manageability, and attitude. For
example, a high sociability score would be a desirable trait for salespeople. Mrosko, T. (2006,
August). The personnel puzzle: Preemployment testing can help your bottom line. Inside Business, 8(8), 60–73.
International Staffing and Placement
In our increasingly global economy, managers need to decide between using expatriates
or hiring locals when staffing international locations. On the surface, this seems a
simple choice between the firm-specific expertise of the expatriate and the cultural
knowledge of the local hire. In reality, companies often fail to consider the high
probability and high cost of expatriates failing to adapt and perform in their
international assignments.
For example, cultural issues can easily create misunderstandings between expatriate
managers and employees, suppliers, customers, and local government officials. At an
estimated cost of $200,000 per failed expatriate, international assignment decisions are
often made too lightly in many companies. The challenge is to overcome the natural
tendency to hire a well-known, corporate insider over an unknown local at the
international site. Here are some indications to use to determine whether an expatriate
or a local hire would be best.
Managers may want to choose an expatriate when:
• Company-specific technology or knowledge is important.
• Confidentiality in the staff position is an issue.
• There is a need for speed (assigning an expatriate is usually faster than hiring a
local).
• Work rules regarding local workers are restrictive.
• The corporate strategy is focused on global integration/
Managers may want to staff the position with a local hire when:
• The need to interact with local customers, suppliers, employees, or officials is
paramount.
• The corporate strategy is focused on multidomestic/market-oriented operations.
• Cost is an issue (expatriates often bring high relocation/travel costs).
• Immigration rules regarding foreign workers are restrictive.
• There are large cultural distances between the host country and candidate
expatriates. Weems, Rebecca E. (1998). Ethnocentric staffing and international assignments: a transaction cost
theory approach. Presentation at the Academy of Management Conference, August 9–12.
K E Y T A K E A W A Y
Effective selection and placement means finding and hiring the right employees for your
organization and then putting them into the jobs for which they are best suited.
Providing an accurate and complete job description is a key step in the selection process.
An important determination is whether the candidate’s personality is a good fit for the
company’s culture. Interviewing is a common selection method. Situational interviews
ask candidates to describe how they handled specific situations in the past (experience-
based situational interviews) and how they would handle hypothetical questions in the
future (future-oriented situational interviews.) Other selection tools include cognitive
tests, personality inventories, and behavioral traits assessments. Specific personalities
may be best suited for positions that require sales, teamwork, or entrepreneurship,
respectively. In our increasingly global economy, managers need to decide between
using expatriates or hiring locals when staffing international locations.
R E F L E C T I O N S
1. What kind of information would you include in a job description?
2. Do you think it is important to hire employees who fit into the company culture? Why or
why not?
3. List questions that you would ask in a future-oriented situational interview.
4. What requirements must personnel tests meet?
5. If you were hiring to fill a position overseas, how would you go about selecting the best
candidate?
Licensing Information: This text, “Principles of Management,” was adapted by Saylor Academy under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 License without attribution as requested by the work's original creator or licensor. Some header and font editing has been done by BC Online. Saylor Academy would like to thank Andy Schmitz for his work in maintaining and improving the HTML versions of these textbooks. This textbook is adapted from his HTML version, and his project can be found here.
- 6.4 - Effective Selection and Placement Strategies
- LEARNING OBJECTIVES
- Job-Description Best Practices
- Tailoring Recruitment to Match Company Culture
- Tools and Methods: Interviewing and Testing
- International Staffing and Placement
- KEY TAKEAWAY
- reflections
- Licensing Information: This text, “Principles of Management,” was adapted by Saylor Academy under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 License without attribution as requested by the work's original creator or licensor. Some hea...
