Meeting the Needs of Business through Talent Acquisition
Dr. Loo-See Beh, Associate Professor, University of Malaya
Who makes decisions about what resources to commit and to what investment? The human
resources (HR) component starts at the very beginning of the process of business portfolio.
With talent management acquisition, the strategic fit and up-front analysis which are heavily
financially and business strategy-driven, the planning and execution of business goals can be
accelerated and synergized. A critical factor is establishing a partnership between the business
development organization and HR talent in focusing on solutions, assess synergy opportunities
realistically and take responsibility for due diligence.
In recent years, there has been a significant increase in the outsourcing and off-shoring of
business services, in particular with the rise of information technology services mainly by
typically large global corporations which pursue outsourcing and off-shoring as part of broader
corporate restructuring. In turn, financial markets have come to place a premium on the value
of talents of HR. An example from HR is the distinction made between activities carried out by
so-called ‘strategic partners’ and those carried out by so-called ‘administrative experts’. The
former are seen to possess dynamic capabilities, directly adding value to the corporation and
business whilst the latter conduct support activities. Theories of the firm based on knowledge
and know-how explain the value of learning and talent acquisition and why firms retain more
knowledge than they need to maintain their existing in-house activities.
One common question we frequently ask is why do firms in the same industry differ in their
performance? There are several reasons. Business inputs that cover the performance of various
business processes or functions, such as labor recruitment and management, the maintenance
of plant and machinery, and sales and distribution are crucial. The degree of business inputs
differ across countries due to differences in the national institutional context and in corporate
capabilities, internalization and externalization of inputs, benefits of lean production and supply
of resources. Talent acquisition covers all aspects of the firms whether they are cultural values,
labor relations, compensation programs, employee benefits, employment practices, having
business acumen and so on. In practice, HR talent reflects the core values of the organization.
A case in point, in 2003, Procter and Gamble (P&G) began with the outsourcing of IT and
accounts payable to Hewlett-Packard, of facilities management to Jones Lang LaSalle, and then
of HR to IBM which had competed for the HR contract with Accenture and Convergys. In the
case of HR, the $400 million contract covers a period of 10 years and services over 100,000 P&G
employees in over 80 countries. IBM carious out the following broad range of functions:
employee data services; compensation and benefits; training systems administration;
expatriate and relocation services; and travel management. Those HR functions that remain
within P&G include: the management of senior managers; the development of strategy and
programs; recruitment; non-routine employee relations; and industrial relations issues. P&G
claims that these arrangements enabled them to reduce costs including wage costs; eliminate
duplication; and to bring about greater standardization of systems around the world.
Paralleling P&G, Unilever is larger, grew rather more by acquisition, and had more plants in
more countries and in terms of HRM, the company had certain similarities with P&G. In 2006, a
€700 million, 7-year contract was signed with Accenture to take over extensive HR functions.
This is to be implemented over a 3-year period and to cover all Unilever employees across the
world. Accenture is being given a significant role in the transformation, larger than the estimate
of P&G and IBM. Under the contract, Accenture takes over the following areas: recruitment,
workforce administration, payroll, pensions, transfers, exits, and training administration.
Unilever organizes its internal HR where HR ‘expert’ teams which are located throughout the
world handle matters such as management resourcing, development, and progression. It is still
early to assess the system as it is developing at Unilever and the attainment of stated
outcomes. As is the case in P&G, Unilever claims that there would be significant advantages:
cost savings, especially in labor and procurement; the elimination of duplication and greater
integration; better information for management; more sharing of best practice; and the release
of internal HR managers to focus on better adding value.
Let us take a look at a different example of talent acquisition in a Japanese production
company, Toyota. A concept called jishuken is good for developing and training people, both at
the suppliers and at Toyota. The strength of the Toyota Production System (TPS) lies in creating
the pool of human resource in the Operations Management Consulting Division (OMCD) as part
of Toyota’s production control function. Jishuken is a closely kit gathering of middle-level
production technologists from a stable group of companies, who jointly develop better
capabilities for applying TPS through mutual criticism and concrete application. The two modes
of delivery by the OMCD, namely the jishuken group activities and individual assistance, are
synergistic in that the former gives the suppliers the space to experiment and explore on their
own while the latter provides a top-down quick solution by Toyota experts. Jishuken also has
the benefit of developing Toyota’s own personnel in teaching tacit skills. This contributes to
maintaining Toyota’s core capability of engaging in target costing, and to the retention of
manufacturing know-how for components that Toyota does not produce in-house.
In essence, the HR milestones become part of the overall critical elements in delivering the
financial ROI that forms part of the targeted deal synergies that function effectively and
efficiently. Developing and acquiring resourceful talents in managing change creatively can help
firms focus and learn for current and future business actions, and in determining how strategies
are shaped and formulated and how the processes of business design, change and adaptation
take place in meeting the needs of business especially within these global corporations.