 Managing global talent
Dr Emma Parry
Managing
Principal Research Fellow
Global
Talent
T
alent management emerged
in the late 1990s when
McKinsey & Company coined
the term a ‘war for talent’ and reported
that “the market for talent is the most
competitive it’s been in decades”. The
late 1990s was a time when there was
a demand for talented employees that
far surpassed supply, thereby creating
a global talent shortage. The creation
of talent management as an approach
can therefore be related to a context of
economic buoyancy and a competitive
labour market.
Unfortunately the economic landscape of
the late 1990s bears little resemblance to
the current situation in the UK and across
much of the world. As the UK continues
to experience prolonged recession and
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Management Focus | Autumn 2012
relatively high unemployment, can we
really expect organisations’ needs for
talent management to be the same as they
were twenty years ago? In reality, the
recent financial crisis has led to increased
volatility and uncertainty. A CIPD
report in 2009 found that around 95% of
organisations had frozen or decreased
their HR budget and around a quarter
(26%) had been forced to change their
approach to talent management or cut
their talent management budget (24%).
The economy is not the only aspect of
the talent context which is changing.
Today’s context presents a number
of challenges for employers. Since the
1990s a new business context has
emerged characterised particularly by
macro-environmental changes such as
economic difficulties, increased global
linkages, information technology growth,
knowledge-based competition and political
uncertainty. There have been changes in
the way firms are organised including an
increase in agile and virtual organisational
structures; and demographic changes, such
as an ageing workforce.
Macro-economically, we see that the
global economic map is changing through
term trend is the general increase in
“Competition for talent
has moved from within
countries to across
countries.”
globalisation through the expansion of
world trade, giving the ability to reach
customers around the world and the
global labour market. In the UK alone,
net immigration in the year up to June
2011 was 250,000 people, including the
the rise of the BRIC countries and the
increased mobility from Eastern European
nature of work shifting to knowledge-
countries, up from 5,000 in 2009 to
intensive industries. Another long
40,000 in 2010.
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 Managing global talent
The increased need for companies to
operate across national borders means
that the role played by globally competent
managers is increasingly critical and
competition for talent has moved from
within countries to across countries. The
shortage of global managerial talent can
lead to constraints in the implementation
of global strategies for multinational
corporations; which means the adoption
of effective global talent management
approaches is increasingly important.
Changing workforce demographics have
become a particularly pressing problem
with regard to identifying, locating and
managing talent. In particular, the ageing
workforce means that employers are
being forced to consider how their talent
management practices address the needs
of different age groups, particularly those
who are among the oldest and youngest in
the workforce. In the UK alone there will
be around 19 million people over 65 by
2050 (around a quarter of the population).
The result of this and changing legislation,
such as increases to the state pension age
and removal of the default retirement
age, means that the average age at which
people leave the workforce is rising.
The forthcoming retirement of a large
segment of the workforce (the ‘Baby
Boomers’) means that organisations
will need to set up systems to address
the transfer of knowledge from these
older workers before their retirement.
The common strategy of relying on
recruitment to replace the knowledge lost
through turnover will become increasingly
ineffective so organisations need to
create systems whereby knowledge
can be transferred down through the
organisation.
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Management Focus | Autumn 2012
Advances in technology have brought
significant changes to the way that
people work, play and communicate.
Over the past 20 years, the internet has
revolutionised both the workplace and
home environment by providing easy
access to information and connections
between people regardless of where they
are in the world. The internet itself has
evolved from a platform that provides
information to users (Web1.0) to one
that promotes two-way communication,
collaboration and interaction (Web2.0)
through the use of social media tools such
as blogs, wikis and social networking sites.
The way that people access the internet
has also changed with the development
of wireless and more recently mobile
technology. It is essential for employers
to consider the growth of information
and communication technology, the
resulting changes in the ways that people
communicate, the expectations of
employees and the implications of these
for talent management.
The expectations of employees are also
changing. Fifty years ago, careers were
viewed as simple, linear structures with
an individual typically working their
way up the hierarchy within only one
or two organisations. This meant that
the psychological contract - the implicit
mutual obligations perceived between
an employee and employer - could be
conceived mainly as the employer’s
provision of a stable ‘job for life’ in return
for the employee’s loyalty and hard work.
Over the past twenty years, this situation
has changed to one where frequent
organisational restructuring has led to
a decline in job security. Workers have
been forced to move in and out of several
organisations during their careers so their
willingness to be loyal to an employer is
reduced. This in turn has led to changes
in the psychological contract to a shortterm ‘transactional’ contract that focuses
on economic rewards and low employee
commitment. This has a profound effect
on the nature of talent management
because systems that focus on lifelong
careers are now out of date. Despite
the fact that organisations are becoming
flatter and the opportunities for linear
career progression fewer, employees
still need to feel that they can develop
their careers within an organisation so
employers need to facilitate lateral as well
as vertical job moves and allow people to
shape their own career paths.
Considering the changes in the context of
managing global talent and the resulting
impact on organisations and employees,
we can indeed question the relevance of
talent management as it was conceived
in the late 1990s. Employers need to
consider the external environment and
develop agile talent management systems
that address this changing context.
Organisations that maintain the talent
management processes that were
appropriate 15 years ago will find that
these become increasingly ineffective
as they do not account for changes
in the nature and expectations of the
workforce or in the external environment
in which the organisation is operating.
Organisations therefore need to review
their talent management systems in light
of these changes in order to ensure that
they have the talent that they require and
maintain the competitive advantage that
this brings. MF
For further information please contact the
author at emma.parry@cranfield.ac.uk
Cranfield offers a 2 day course, ‘The
Management of Global Talent’, for individuals
responsible for strategic management of
global talent. More details are available at
www.som.cranfield.ac.uk
“Organisations that
maintain the talent
management processes
that were appropriate 15
years ago will find that
these become increasingly
ineffective.”
Management Focus | Autumn 2012
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