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

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