In a global business world marked by extraordinary diversity and interdependence, human capital is the main determinant for success. Yet many organizations are leaving the health and development of their talent to forces outside their immediate control. They’re seeing gaps in their talent portfolios as a result.
It’s an acute problem in the developing world, where managers are focused on recruiting for growth and not spending time on talent development and the longer-term benefit of bringing global diversity into the organization. Thus, for organizations to acquire, retain, motivate and develop healthy, productive workforces, they must commit to what Klaus Schwab, founder and executive chairman of the World Economic Forum, termed “talentism.”
Talentism is an economic concept calling for organizations to develop their human capital not only internally via creative talent practices but also through collaborative public, private and peer initiatives designed to enhance talent quality and availability.
Such insight prompted consulting firm Mercer and the World Economic Forum to conduct research in 2011 to better understand global good practices in talent mobility and development. (Editor’s note: The authors work for Mercer). From this research Mercer created its Talent Barometer Survey and the “Talent Rising: High-Impact Accelerators to Global Growth” report in 2013, to measure the degree to which organizations have a formal, strategic workforce plan that addresses critical talent. It also explored three accelerators for high performance — education, health and wellness, and career experience — and identified effective practices and opportunities in each.
The survey includes responses from talent management executives in 1,268 organizations representing 65 countries. The organizations surveyed vary in size from fewer than 1,000 employees to more than 10,000 and represent a variety of industries.
Invest in Talent
Survey data revealed the growing importance of driving success, and organizations around the world are making greater talent investments in response. Six in 10 companies reported increasing their investment in recent years, while only 1 in 10 reported decreasing their investment.
Mercer also asked respondents about the effectiveness of their organization’s workforce plans. More than three-quarters indicate they have plans that forecast their talent needs, but the scope varies. Twelve percent have plans that forecast talent needs during the next five years or more.
Data also revealed that while most organizations have workforce plans, respondents don’t find them to be particularly effective. Only one-quarter rated their plans as extremely or very effective in meeting the organization’s immediate and long-term human capital needs. The majority (62 percent) said their plan was only somewhat effective. The survey noted specific enabling policies that were more prevalent in companies with a perceived effective workforce plan, and were less prevalent in those companies where the workforce plan was perceived as ineffective (Figure 1).
Those with a perceived effective workforce plan also recognized the importance of planning for future talent needs by supporting HR (Figure 2) and enabling the aforementioned critical accelerators for high performance: education, health and wellness, and career experience.
Accelerator 1: Education
To deliver top value to the organization, talent must have the broader creative and critical-thinking skills to elevate organizational performance. Despite high unemployment in many regions of the world, organizations today face a shortfall of qualified talent to fill critical roles.
The Talent Barometer survey found that more than half of organizations (57 percent) said educational institutions are failing to generate the talent needed by their businesses today, and roughly the same percentage (59 percent) believe this still will be true three to five years out. Another third are uncertain as to how well schools are preparing talent to meet their needs.
Good talent management practices involve ensuring that individuals come to the organization with the education necessary to perform. This means taking charge of the quality and availability of the external labor pool by partnering with secondary schools, community colleges and universities. Most of the companies surveyed took part in various types of partnerships to achieve their talent goals (Figure 3).
For example, the Intel Learn Program is a 60-hour, after-school, project-based curriculum built around two core modules for learners from communities that have no access to technology. It taps into children’s interest in their own communities in India and nourishing their curiosity with creative, technology-driven projects. This project has been implemented through 100 community technology centers in the state of Kerala in India. It has been expanded to other states and has benefited 48,000 youths across 14 states and union territories in India.
Accelerator 2: Health and Wellness
Having a healthy, productive workforce involves not just investments in prevention, but it also requires a change in the employer and employee mindset about well-being, energy and resilience. For this reason, Mercer included health management questions in its research on critical accelerators for high-performing talent.
Significant regional variations emerged on access issues. For example, 79 percent of respondents globally said that employees and their dependents have access to a trained general clinician — such as a family physician or nurse — to provide continuity, treat minor conditions and oversee medical care. In Asia, the figure is 57 percent, while in the U.S. and Canada, it is 92 percent.
The Mercer Talent Barometer research revealed significant shortcomings and lost opportunities to develop and execute comprehensive health management strategies. The research showed among all respondents globally, only the most basic elements of a health management program are in place.
Only 31 percent of respondents said their organization was actively using a written, multi-year strategic plan for its employee health and wellness program. Almost half (49 percent) said their organization was making some effort, while 20 percent said no effort was being made. Canada shows a low level of strategic planning, with 18 percent of organizations reporting having a written plan.
IBM’s wellness efforts stretch around the globe and are tailored to the needs of each country or region. In 2009, the company launched a two-year Seven Habits of Highly Healthy People campaign in Latin America focused on balanced nutrition, physical activity and preventive health services, giving employees education and tools to make personal well-being improvements.
Retailer Lowe’s Cos. Inc. established a partnership with the Cleveland Clinic in Ohio to offer heart surgery procedures at no cost to full-time employees and dependents enrolled in its self-insured medical plan. Lowe’s covers all medical deductibles and co-insurance amounts, as well as travel and lodging expenses for the patient and a companion. The company also has two mobile health units crisscrossing the country to provide more than 70,000 employees with free basic health screenings.
Accelerator 3: Career Experience
Talent thrives only with access to progressive opportunities for growth, through experiences that accelerate ability and enhance productivity but are also essential to human satisfaction. Without thoughtful career development, employee engagement tends to flag and companies lose the momentum that stems from employees’ best work.
From a global perspective, the Talent Barometer Survey found organizations take career experience seriously, and the majority of firms surveyed map out their future talent needs via regular talent reviews. However, there are some regional variances.
For example, a vast majority of respondents (80 percent) said their leadership conducts a regular annual or biannual talent review process, with respondents in Asia, Canada, Europe, Latin America, the Caribbean, the Middle East and North Africa all above the 80 percent threshold. But among U.S. respondents, only 69 percent reported doing so.
Then there is the question of where an organization’s experienced talent comes from. Do organizations build talent from within, or do they tend to “buy” talent on the domestic or international market to fill critical roles? Globally, 66 percent of respondents indicated they fill critical roles from the outside, with only 34 percent building it from within. In this case, the regional variances seem meaningful, reflecting cultural and market realities.
It was also interesting to note that most organizations “go it alone” in career experience versus partnering with peer companies or the public sector. Only 15 percent of organizations participate to a large extent in public sector initiatives aimed at sharing information on labor supply and demand. The same low percentage of organizations partner with industry peers to identify and assess critical talent needs in their industries.
But the report cited strong case examples of career experience strategies. China-based Bosch Suzhou, manufacturer of advanced automotive systems, sends young, high-potential employees to Bosch headquarters in Germany to work on international assignments for three years. The goal of an international assignment is to expand the young person’s view and to develop future leaders. Overseas moves are planned into a Bosch career path two to three years in advance, so employees and their families can plan accordingly.
Ultimately, accelerating and enabling talentism in today’s global business landscape is an ambitious strategy that demands leaders invest in talent as the key competitive asset. They must build a culture that values talent and seeks to develop the best in every member of the team.
Leaders also need a collaborative mindset and the ability to communicate a nonstop effort to engage people’s hearts and minds inside and outside the workforce, affirming talent as the new currency for global business success and sustainable growth (Figure 4).
Orlando Ashford is the president of the talent business segment at consultancy Mercer. Amy Laverock is a partner in Mercer’s health and benefits business and the global health and benefits strategic solutions leader. They can be reached at email@example.com.