A Deep-Dive Conversation on Talent Management

Earlier this winter, I was invited to do a filmed conversation on the state of talent management, hosted by HR consultancy firm Assessio‘s fenomenal general manager Christian Walén. The video is part of the new series Assessio Insights, which focuses on research- and data-driven approaches to people management and HRM.

Sitting down with Christian Walén, himself a brilliant psychologist and thought leader in the field of I/O psychology, to discuss my favorite topic was a lot of fun. For those of you who speak Swedish, you can find the whole conversation here. For English-speaking readers, you will find a translated, somewhat edited, excerpt below.

The State of Talent Management and the Talent Concept

Christian Walén (CW): Kajsa, I think we can agree that few concepts within strategic HRM have been so much in focus in recent years as talent management. What’s the state of talent management today?

Kajsa Asplund (KA): I would say that most companies have realized the importance of the issues, and most have also implemented a number of talent management practices, such as an annual talent review. Maybe, however, we are starting to see an increased questioning some of the basic assumptions of the “war for talent” perspective.

CW: So the hype is over? We’re approaching a new phase for talent management?

KA: I think so. We’re approaching a somewhat more mature stage, I would say.

CW: Very interesting. When talking about talent management it’s very easy to just toss the concept around. But if I understand your research correctly, there’s rather a number of different approaches and talent philosophies out there in different types of organizations?

KA: Yes. Pretty early on, we noticed that companies approach these issues in quite diverse ways. There is, of course, some kind of consensus on the notion that talent management entails the chain of attracting, identifying, developing, and retaining talented people. But the definitions of talent differ substantially between organizations, and seem to be very much related to organizational culture.

CW: You have shown that in some organizations, the view is that everyone is a talent, and should be granted the right conditions and the right leadership in order to grow. Whereas in other organizations, there is a more competitive perspective saying that only a few should really be invested in. Is that the most common dividing line, or are there others?

KA: I would say that is probably the most fundamental dimension – how common is talent? And a related issue is of course; can talent be cultivated, or is it rather fixed to begin with? An additional dimension where companies differ quite a lot is the relative focus that they put on hard-numbers performance, relative to what you could call input variables: Motivation, ambition, drive, etc. Basically, what people call potential.

Performance vs. Potential

CW: Speaking of potential – does performance at one level automatically lead to performance at the next one?

KA: Definitely not. A pretty large proportion of those that are promoted run into problems. Of course, if you haven’t performed at the lower level it is pretty unlikely that you will succeed at the next one, but that should rather be viewed as a hygiene factor. There are a number of additional factors that could cause you trouble once promoted. For instance, the new work is often of a completely different nature – the classical example being the move from an operational to a strategic role.

CW: Or going from a specialist role to managerial responsibilities.

KA: Definitely. In addition, the weaknesses that you may have been able to live with at lower levels tend to become more visible the more complex the role.

CW: What’s really interesting about what you’re describing is that even though we have come quite far in terms of structures and processes, we now need a larger focus on the individual – to analyze and support his or her growth even more. Is that in line with your findings?

KA: Absolutely. I think many companies have hit one or another fork in the road by implementing the standard version of talent management, and then realized that we need to look more at what research is saying – what we know about how people actually grow and develop, what constitutes high potential, and so on.

Developing Talents and the Risk of Talents Leaving

CW: My impression is that a lot of talent management happens at very junior levels. Then it fades out further up. Is that in line with your findings?

KA: Absolutely. Over the last decade, companies have become increasingly focused on their employer brands. Related to this, they have invested heavily in finding these young high-performers to be put in junior talent programs, which are supposed to work as catapults towards higher positions. But when it comes to building the complex competencies that will be necessary in order to take on more senior roles, investments have not been as large.

CW: So what does talent development usually look like in practice?

KA: The most common version is to put these individuals in either a talent program or a passive talent pool, which basically equals a list of people that should be considered first when new career opportunities open up.

CW: So it’s the VIP lane kind of idea?

KA: Yes. The problem is, when talent programs finish, that usually becomes a pretty abrupt interruption for the talent. And there you really have a critical turning point.

CW: What happens with these individuals at that moment?

KA: Well, in research we talk a lot about the psychological contract, which is basically the employee’s perception of what am I supposed to do and what can I expect in return from the organization. What happens after a talent nomination is that the organization has effectively re-negotiated the psychological contract. Quite simply, the employee now has higher expectations on what he or she will get in return from the organization. You have gotten this talent label and were granted access to a prestigious talent program. If then nothing happens within perhaps a year upon program completion, there is a big risk that you decide to leave.

CW: Is that what you’re seeing? That these high-achievers have a higher propensity to leave if there are not enough development opportunities?

KA: Absolutely. And then we’re back to: Identifying and developing junior talent – yes, quite a lot is being done there. But the question is; what is going to happen then? What is the journey supposed to look like after the first two years?

Criticisms and New Developments in Talent Management

CW: This is super interesting. What you’re doing here is to pinpoint a somewhat more sober and critical view on talent, which seems really wise. What other critique is being directed towards talent management and the way we work with these issues?

KA: One is the very basic question of whether we should at all use the term “talent”. I see increasingly more actors questioning this, because the word talent has a number of connotations. First of all, it is associated with fixed characteristics, which could lead appointed talents to start seeing themselves as crown princes or crown princesses that can passively expect rewards from the organization.

CW: You often refer to some very interesting studies showing that when real star performers switch jobs, they don’t necessarily keep on performing. What kind of fallacy does this reflect?

KA: It’s the fallacy of thinking that talent is completely independent of context. This emanates from the very individualistic American view on talent management. Now we are beginning to understand that there really is a very intricate interaction going on between the individual, the team, and the organization, where the fit might be better or worse. You may perform better together with a certain type of colleagues, within a certain type of culture, and so on. In short, a more nuanced picture is emerging.

CW: This really underlines the importance of working with teams and culture as part of your talent management.

KA: Absolutely. So far, talent management has been extremely focused on individuals – not necessarily in the sense of really understanding how individual engagement works, but in the sense that organizations have been focusing on finding certain individuals to lift up and put in new positions. Now, there is an increasing appreciation of the importance of integrating this with work on teams and culture.

A Guest Blog Post on Satisfaction vs. Engagement

Last week, I did a guest appearance on the startup company Clanbeat‘s blog, telling the rather fascinating story of how organizational psychologists turned their focus from employee satisfaction to employee engagement. This shift has turned out to be pivotal to our understanding of what actually drives performance and motivation at work. You can regard it as the background explanation of why engagement has become the talk of the day in management and HR.

You will find the blog post here!

 

 

Why Talent Pools Are Never Enough

How good are companies today at talent management? Well, most are rather good at talent identification. A majority of large companies now have rigorous processes aimed at finding high-potential employees. Many also have specific talent pools where these identified employees are listed.

Fewer companies, however, seem to have made the same investments when it comes to talent development. Arguably, this is quite problematic if you want ROI from your talent management. Imagine an FC Barcelona junior soccer scout vacuuming the youth academy for promising kids, and then doing nothing else than listing them as part of a talent pool. Identification without consecutive training is, plainly, quite a waste of resources.

Further, when companies do offer talent development, it tends to be in the shape of talent programs. That is; a time-limited, structured initiative, where chosen talents are gathered as a group to do various developmental activities. Common elements include trainings, rotations, mentoring, and project work (Stahl et al., 2012).

These programs, when well-thought through, can work really well (see e.g. Khoreva & van Zalk, 2016; Björkman et al., 2013). Nonetheless, there are two important points to be made: First, these initiatives only target a fraction of a company’s talents. Talent programs seldom have more than 30-50 spots, even in the largest corporations. Imagine a company with 10,000 employees. That’s 0,5 percent who get to enjoy a program. Second, these programs usually last about a year. In order to grow high-potential people into complex roles, development will have to continue well beyond that time frame.

Both of the above points actually lead us up the same alley: No talent development strategy can function without a substantial focus on on-the-job training (OJT), both for ex-program participants and for all the other talents in the company. This concept was put into focus by the consultancy CCL already back in the 1990s, but all too often it has been misunderstood. OJT, importantly, does not equal “being at work”. It is not about passing time at the office.

What research shows is that in order for OJT to be effective, it needs to be fashioned to get you out of your comfort zone. In other words, the job must feed you challenges that demand something beyond your usual repertoire. And as we also know from research, this can be quite stressful if not coupled with an intensified supply of support. That is; an attentive manager or mentor is usually necessary for these stretch assignments to work properly.

There is also another argument for OJT: Skilled employees want it. A number of studies have shown that good OJT initiatives reduce turnover intentions, and that the mechanism for this is an increased sense of support from the organization (e.g. Paré & Tremblay, 2007; Pattie, Benson & Baruch, 2006). There is also a positive relationship between perceived training comprehensiveness and commitment (Benson, 2006; Ehrhardt et al., 2011; Georellis & Lange, 2007).

If OJT is both effective and desired by talents – why is it not used more? Research is rather silent on this issue, but a qualified guess is that the number one reason is time-pressured middle managers. Organizations could certainly consider taking part of the budget from exclusive talent programs to give these key actors a bit more time to plan and execute high-quality OJT. Chances are, their talent development and –retention will benefit highly from it.

 

Photo: https://www.flickr.com/photos/gabaus/

Nordic Countries Top New Global Talent Index

It is probably lost on no one  that talent – human knowledge, skills, abilities, and drive – has come to be viewed as a top competitive resource for organizations. The same however applies to the macro-level entities of society as well: The future prosperity of countries, regions, and cities will to a large extent hinge upon their ability to attract and retain talented people.

The top-ranked French business school INSEAD has realized this, and since 2013 they therefore publish an annual report called the Global Talent Competitiveness Index (GTCI). Apart from containing highly interesting analyses of various aspects of the talent issue, the report ranks both countries and cities according to their ability to attract, enable, grow, and retain talent. The 2017 edition was recently launched, and the reading is quite a delight for Nordic people. Not only do all of us rank in the top 15 (with Sweden coming in first as number 5); we also slay when it comes to top-ranking cities. Copenhagen actually tops the entire list, followed by Zurich, Helsinki, and San Francisco. Somewhat surprisingly, Gothenburg makes quite a jump and comes in as number 5.

You might wonder why the list is not completely dominated by the famous monster cities such as London, L.A., New York, and San Francisco. The reason, according to the authoring researchers, is that the report adopts a multifaceted view of talent competitiveness. The famous super hubs are very good at attracting talent, but less apt at the “enabling” and “retaining” parts. The European cities consistently come out as better at enabling talent, i.e., make it possible for them to deploy their skills and realize their potential. This has to do with aspects such as vast investments in ICT and R&D clusters. When it comes to retaining talents long-term, a bunch of smaller cities are the ones that come out as excellent. These cities have consistently worked on offering a great quality of life, including ambitious work with sustainability, safety, culture, and healthcare access. These, it turns out, may not be the number one factors that attract huge amounts of talent – but those that get there, tend to stay.

But in addition to this, why are the Nordic countries faring so well? According to the authors, a number of factors contribute. First of all, our societies were early adopters when it came to digitalization. Vast investments in ICT, coupled with our trust in institutions and far-reaching collaboration between the state and private stakeholders, paved the way. Further, we get credit for having kept our high focus on work-life balance and flexibility in working life; factors that are now increasingly sought after by talents. In addition, the report emphasizes the many benefits of free education and generous welfare systems.

So, can we then rest on our laurels? Not really, according to the report, which also identifies a couple of important areas where the Nordics need to speed up. Most notably, the authors lament the slow adoption of digital technology in our education systems, as well as the crazy housing market in our major cities. Lots to do still, in other words – but the report certainly represents a feather in our cap as a talent region.

The whole report can be found here.

 

Photo: https://www.flickr.com/photos/99385036@N06/