War for talent

The battle to attract the top talent is on, with big corporations offering ever bigger carrots to attract those candidates with a certain something extra to offer. But finding the elite few who have the X factor is no easy task. This report, including exclusive new research, asks what is talent, how do you identify it and can it be measured? Sally O'Reilly investigates

Talent is a modern obsession. TV shows such as Pop Idol put the emphasis on the search for a mystery 'X' factor that will enable ordinary mortals to turn into manufactured pop gods.

In business, the war for talent is on, with firms seeking the elite few who can help them beat the competition. But is this the best way to foster high performance levels? And what does 'talent' actually mean? While it is obvious UK firms are not looking for an ability to sing, dance and pose for the cameras, it is not always clear what they are searching for.

According to talent research company Kenexa, which specialises in helping companies hire and retain highly-talented staff, talent is the component of someone's ability that cannot be explained by training or experience. It is the elusive X factor - part of an individual's personality.

Ellen O'Mahoney, consultant psychologist at Kenexa, stresses that the required X factor will vary depending on the employee's role. There are jobs that have a very clear personality profile - particularly those that involve dealing with people. "In the case of sales people, managers and supervisors, you can see how they function in the job," she says. "For instance, you couldn't be a high-potential salesperson if you weren't competitive, nor a brilliant manager if you never talked to your team."

Assessing such personality traits is not easy and organisations seem to lack the conviction that they can identify talent among the ranks of their own staff.

Traditionally, when searching for high-talent performers, internal staff at junior levels have been overlooked. The 'talent pool' is still seen to be bright young graduates destined for great things, MBA super-heroes, or star performers with impressive CVs.

This is partly the result of a woolly attitude among employers. "Many firms confuse talent with leadership," says Richard Finn, a director of performance consultancy group Penna Change Consulting. "You have to look at what your organisation needs, which depends on your core competencies.

"And you shouldn't assume that recruitment is the answer. Many companies say they have a talent problem when they haven't looked at the skills of their own people."

Another myth is that intellectual prowess is an essential attribute of star performers. But Steve Newhall, head of business development for DDI, a consultancy specialising in selection and leadership, says firms should be looking for a mix of skills.

"You need different levels of cognitive ability in someone who is going to be a leader, and someone who is fulfilling a research scientist role," he says. "People have to know when to apply their intelligence and make judgements, not just have the ability to find a solution."

Some firms are getting it right and are clear about what they need and where to find it, but they are the exceptions. For example, supermarket chain Tesco has a policy of grooming shopfloor workers who show management potential - several of its main board members have worked their way up the company, and David Potts, its head of strategic operations, started as a Saturday boy.

Kim Birney, group learning director at Tesco, says - in theory at least - all staff have access to the high-flyer programme. "Tesco doesn't have a traditional fast-track group, there are different routes in," she says. "Every manager is a trained talent-spotter, so everyone in the firm has the option of moving on to bigger and better things."

Motivation is highly rated - staff can put themselves forward as prospective management material, without waiting for someone else to spot their potential.

Rather than widen the net, most companies are hoping to compete in the traditional graduate recruitment pool by developing an appealing employer brand and using this to lure potential recruits such as valued customers.

For instance, IBM UK is keen to emphasise that it has changed its image through its recruitment adverts, and now deals with new recruits much more quickly.

"Over the past 12 months we have started selling ourselves as a total solutions company, sending out the message that we are different - we are flexible and we are very responsive to our client base - which in this case is applicants to IBM," says HR director Paul Rodgers.

IBM also recruits non-IT graduates from all academic disciplines, which it claims is unusual in the IT sector, and has introduced an online application system across Europe for potential graduate hires.

Ford Europe has gone down a similar path. Although it claims to have 'revolutionised' its recruitment process in the past year, its most dramatic innovation is an online application process that has cut the application/interview/job offer process from six months to as many weeks.

These are typical examples - most firms are not looking beyond traditional elites when seeking top performers. One honourable exception is the BBC, now launching the third year of its 'BBC Talent' campaign, which scours the country for new writers, performers, musicians and comedians.

This is not in itself going to change the face of broadcasting: in 2002 there are just 46 short-term contracts and commissions available under this scheme, and no-one is guaranteed a permanent staff contract. However, the BBC is carrying this philosophy through to its more conventional recruitment programmes.

According to Jo Gardiner, head of training and development team SkillXchange at the BBC, the organisation no longer runs a graduate recruitment programme per se. Degree entry is only necessary for specific technical roles, such as engineering. Instead, the organisation pulls in between 270 and 300 recruits each year from a range of backgrounds.

Last year more than one-third of its new programme makers were from ethnic minorities. Techniques include a funky, non-traditional ad campaign, and running careers events and roadshows throughout the country. "There is a new feel to the way we are selling ourselves - we're not the traditional, comfortable, Radio Four organisation any more," says Gardiner.

So why aren't more companies taking this approach? Ken Rowe, joint managing director at YSC Consulting, which specialises in talent spotting and succession planning, says it is because high-prestige institutions are thought to guarantee high-talent recruits.

"Organisations decide to upgrade their talent by bringing in people perceived to be high status - they go to Oxbridge for really good graduates, for instance, or a small manufacturing firm will go to multinational Mars. They believe these recruits will have high talent and transferable skills. But what they need is the ability to thrive in a new environment."

Steve Newhall at DDI is more dismissive: "If someone has a good CV, it's easier to tick the right boxes," he says. "But there are obviously many people who are very talented who don't have excellent qualifications."

Indeed, a study that looked at a range of recruitment methods, carried out by Professor Ivan Robertson of UMIST, found that qualifications alone are not a reliable predictor of future performance. "They will show if someone has intelligence, the capability to persevere and focus, but employers need to use other methods to assess candidates," says Robertson.

Trying to predict future performance clearly goes to the nub of the issue and many firms spend a huge amount of time and money in the attempt. For external candidates, it is the familiar roll call: interviews, assessment centres and psychometrics, with some firms also bringing in occupational psychologists to do separate interviews. The aim is to tease out what motivates staff - why they have been successful in the past, for instance.

Talent-spotting assessment centres are available from companies such as DDI and new psychometric tests are on the market to measure emotional intelligence and creativity - both important characteristics of talented performers.

New tools that aim to assist HR staff in the talent search include SHL's transference leadership questionnaire, which looks at how applicants will deal with specific situations to cast light on their personal qualities. "Psychometrics will pick up the qualities talented people need," says Roy Davis, head of communications at SHL. "For instance, if you were to break down Tony Blair's job description, you would look for someone with resilience, persuasiveness, confidence, and high levels of energy and numeracy."

DDI runs assessment centres in real time, with simulations that put candidates in very realistic situations. Making someone think on their feet is one way of assessing how they will perform in an unfamiliar job, Newhall believes. "We have a fictitious company, with a five-year plan and people working in it," he says.

"The candidate takes on a senior role and has to respond to information they receive by e-mail, voice-mail and so on. It shows more about their way of working than an interview, which focuses on past performance."

There's a long way to go, and YSC Consulting's Rowe says no sector can rest on its laurels, although some have fared better than others. Often, paradoxically, the best performers in talent development are those with the fewest graduate recruits.

"Traditionally, graduates didn't go into retailing, and they do have a good record of finding talent democratically," Rowe says. "Banks have made the mistake of giving people too little variety and knowledge about different parts of the business. And manufacturing firms have been good at getting talent in, but have tended to squash it out by having overly-rigid procedures in place."

For Penna Change Consultancy's Finn the message for companies across all sectors is: know yourself and know your staff. "Fast-tracking can co-exist with other methods of developing staff," he says. "But the question is 'are you fast-tracking the right people?'"

Weapons in the war for talent

Psychometric tests: Based on research into the personal qualities and preferences displayed by highly talented people, these claim to pinpoint similar qualities in job candidates. Newcomers include SHL's transference leadership questionnaire.

Tests which measure EI and creativity include OPP's innovation potential indicator, or IPI

Behavioural assessment centres: Real-time simulations, in which candidates have to think on their feet, and react to information flooding in from TV monitors, e-mail and telephone. DDI runs day in life acceleration centres

Interview training: Organisations such as YSC Consulting run training courses for line managers showing them how to conduct systematic but robust interviews. The aim is to "train people to know what they are trying to find out"

Psychologists' interviews: Occupational psychologists will conduct separate interviews and feed them into the assessment process

Career pathing: The new 'portfolio career'. Instead of leaving high-flyers to get on with it, firms are guiding them through the process - even when they might be leaving to join another firm.

Portmanteau: term covering a range of measures to help staff, including coaching, mentoring and work placements. Also may include any of the initiatives below:

Executive resource boards: Set up to ensure that talent belongs to the organisation, not the line manager. Should involve CEO or board members. Their role is to monitor and oversee the development of high potential people, and remove barriers to their progress

Career action centres: Run by firms such as Sun Microsystems in the US, these set about developing specialist skills for an entire industry, not just for the individual company

Communities of practice: Major consultancies set these up to establish networks of highly talented people, to enable them to exchange information informally. These may be formal project groups, or less formal talking shops

Acceleration pools: Groups of highly talented individuals who are being groomed for non-specific leadership roles. Instead of expecting to take on a particular position, talented staff are helped to develop portable skills which could be used by the organisation or elsewhere

Talent segmentation: Each firm's analysis of what it means by talent in terms of its own business needs. A breakdown of the different talent groups within an organisation, and what they need

Case study: Civil Service selection boards
Innovative approach reaps rewards

Once a bastion of old school tie elitism, the Civil Service selection board has long since mended its ways. In fact, it is so cutting edge that in 1996 it outsourced most of its recruitment process to an private company, Capita, and has now brought most of that process back in-house to give more personal attention to prospective employees. And it's also dealing in big numbers - in 2000 there were 14,500 applicants for 560 vacancies.

Hardly surprising when you consider the range of jobs the board is recruiting for includes the diplomatic service, the Inland Revenue (thought it runs its own selection boards at the interview stage) and graduate management trainees for GCHQ, as well as economists and statisticians.

There are two stages to the interview process - qualifying tests that assess verbal and non-verbal reasoning, biodata (questions about personal preference) and objectively validated tests, and then a two-day selection board. Each one of these will see four or five candidates. These are run by a panel of three: a senior civil servant, an occupational psychologist and a more junior employee who has reached the level which new recruits can expect to reach after six or seven years.

The selection board consists of a number of exercises, including written work, one-to-one interviews and group exercises. Qualities the boards are looking for include awareness of others, intellectual skill, drive and resilience.

Two changes have been made recently. Applicants are now assessed in terms of competencies, and there is more emphasis on innovation and creative thinking. Michael Herron, head of Fast Stream, European and Recruitment division, says the aim is to make the process fairer.

"We used to assess written and verbal skills, looking at whether people expressed themselves eloquently," he says. "This inadvertently created a 'people like us' syndrome. And we used to have topic-based interviews, in which candidates would make the case for a particular point of view, and the young civil servant would make the case against it. This was too much like the tutorial system [which would have given Oxbridge students an unfair advantage]."

Other attempts to attract a wider cross-section of applicants include going to new universities to spread the word about the Civil Service and taking on 60 or more students every summer. On-line applications are also being developed, and the Civil Service website is being improved.

The whole focus is on being more user-friendly - and this is partly why the selection process has been brought back in-house. When the function was outsourced, there was less contact between applicants and civil service staff. "The best candidates are getting four or five job offers at this stage and we need to meet them and give them a flavour of what the civil service is like," says Herron. Capita will still be used for the earlier stages of the recruitment process.

Other areas the service is looking to include is the locations for stage one exercises and computerised qualifying tests.

Image is the final frontier. Like many traditional organisations, the civil service has strong brand recognition, but what people recognise may be its past, rather than its present reality. "In some groups, we are held in high esteem. In others, the attitude is ' I know about that, and it's not for me'. In some, recognition is very low - it's just not part of their world."

Once in positions, entrants who had visions of a stuffy Sir Humphrey time warp will be pleasantly surprised. They are expected to do a real job from the beginning. "People just don't leave for the first couple of years," says Herron. "What motivates people to stay is the early responsibility they are given.

"This is counter-intuitive to some extent, in that there is actually a lack of hierarchy. People are given a lot of scope early on, they are out there, flying to Brussels, doing it; which isn't necessarily true of their peers in commercial organisations. There are also diverse employment opportunities - they could move from working in employment policy to the environmental sector, or to working with a government agency."

Resources

Grow Your Own Leaders: Acceleration Pools: a new method of succession management (DDI press)

Winning the Talent Wars: How to manage and compete in the high-tech, high-speed knowledge-based super fluid economy Bruce Tulgan (Nicholas Brierly)

Managing Talent: Exploring the New Psychological Contract, Henley Management College

Retaining Talent: A benchmarking survey, DDI (Feb 2001)

Contacts

William M Mercer - 020-7423 5508

Kenexa - 020-7484 5056

SHL - 020-8335 8000

OPP - 01865 404 500

Chiumento - 01865 882 100

Robertson Cooper - 0870 3333 591

Henley Management College - 01491 571 454

DDI - 01753 616 000

Penna Consulting Group - 01753 784 000