Magazine Winter 2012 Research Feature

Six Principles of Effective Global Talent Management

Following talent management best practices can only take you so far. Top-performing companies subscribe to a set of principles that are consistent with their strategy and culture.

Günter K. Stahl, Ingmar Björkman, Elaine Farndale, Shad S. Morris, Jaap Paauwe, Philip Stiles, Jonathan Trevor, and Patrick Wright Reading Time: 23 min 

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Internal consistency in talent management practices — in other words, the way a company’s talent management practices fit with each other — is key, as companies such as Siemens recognize.

Image courtesy of Siemens.

One of the biggest challenges facing companies all over the world is building and sustaining a strong talent pipeline. Not only do businesses need to adjust to shifting demographics and work force preferences, but they must also build new capabilities and revitalize their organizations — all while investing in new technologies, globalizing their operations and contending with new competitors. What do companies operating in numerous markets need to do to attract and develop the very best employees so they can be competitive globally? To learn how leading multinational companies are facing up to the talent test, we examined both qualitative and quantitative data at leading companies from a wide range of industries all over the world.

About the Research »

The range of talent management issues facing multinational companies today is extremely broad.

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About the Authors

Günter K. Stahl is a professor of international management at WU Vienna and adjunct professor of organizational behavior at INSEAD. Ingmar Björkman is a professor at Aalto University School of Economics and Hanken School of Economics in Finland. Elaine Farndale is an assistant professor of labor studies and employment relations at Pennsylvania State University and an assistant professor at Tilburg University in the Netherlands. Shad S. Morris is an assistant professor of management and human resources at the Fisher College of Business at Ohio State University. Jaap Paauwe is a professor of human resources at Tilburg University and Erasmus University Rotterdam in the Netherlands. Philip Stiles is a senior lecturer at Judge Business School at the University of Cambridge in the United Kingdom. Jonathan Trevor is a lecturer in human resources and organizations at the University of Cambridge. Patrick Wright is the William J. Conaty GE Professor of Strategic HR at Cornell University.

References

1. See R.E. Lewis and R.J. Heckman, “Talent Management: A Critical Review,” Human Resource Management Review 16 (2006): 139-154.

2. E.G. Chambers, M. Foulon, H. Handfield-Jones, S.M. Hankin and E.G. Michaels, “The War for Talent,” McKinsey Quarterly 3 (1998): 44-57.

3. E.E. Lawler III, “The Folly of Forced Ranking,” Strategy & Business 28 (2002): 28-32; and J. Pfeffer and R.I. Sutton, “Hard Facts, Dangerous Half-Truths and Total Nonsense: Profiting from Evidence-Based Management” (Boston: Harvard Business Press, 2006).

4. Chambers, “The War for Talent.”

5. M.A. Huselid, R.W. Beatty and B. Becker, “The Differentiated Workforce” (Boston: Harvard Business Press, 2009).

6. R.S. Schuler, S.E. Jackson and I. Tarique, “International HRM: A North America Perspective, a Thematic Update and Suggestions for Future Research,” International Journal of Human Resource Management (May 2007): 15-43.

7. C.A. Bartlett and A.N. McLean, “GE’s Talent Machine: The Making of a CEO,” Harvard Business School Case no. 9-304-049 (Boston: Harvard Business School Publishing, 2006).

8. P. Wright and M. Stewart, “From Bunker to Building: Results of the 2010 Cornell/CAHRS Chief Human Resource Officer Survey,” www.ilr.cornell.edu/cahrs.

9. J.A. Chatman and S.E. Cha, “Leading by Leveraging Culture,” California Management Review 45 (2003): 20-34.

10. J. Pfeffer and J.F. Veiga, “Putting People First for Organizational Success,” Academy of Management Executive 13 (1999): 37-49.

11. S. Palmisano, “Leading Change When Business Is Good,” Harvard Business Review (December 2004): 60-70.

12. T.J. Erickson, “Gen Y in the Workforce,” Harvard Business Review (February 2009): 43-49.

13. G.K. Stahl and I. Björkman, “Winning the War for Talent: Accenture’s Great Place to Work for Women Strategy,” unpublished INSEAD case study.

14. W.J. Holstein, “Best Companies for Leaders: P&G’s A.G. Lafley Is No. 1 for 2005,” Chief Executive (November 2005): 16-20.

15. Wright, “From Bunker to Building.”

16. E. Farndale, H. Scullion and P. Sparrow, “The Role of the Corporate HR Function in Global Talent Management,” Journal of World Business 45, no. 2 (2010): 161-168.

17. M. Guthridge, A.B. Komm and E. Lawson, “The People Problem in Talent Management,” McKinsey Quarterly 2 (2006): 6-8.

18. P.M. Rosenzweig and N. Nohria, “Influences on Human Resource Management Practices in Multinational Corporations,” Journal of International Business Studies 25 (1994): 229-251.

19. C. Bartlett and S. Ghoshal, “Managing Across Borders: The Transnational Solution” (London: Hutchinson Business Books, 1989).

20. P. Evans, V. Pucik and I. Björkman, “The Global Challenge: International Human Resource Management,” 2nd ed. (New York: McGraw-Hill, 2011).

21. Evans,“The Global Challenge.”

22. F. Brown, “Head-to-Head: Interview with Jean-Pierre Garnier,” World Business (September 2006): 20-23.

23. S. Palmisano, “The Globally Integrated Enterprise,” Foreign Affairs 85, no. 3 (May-June 2006): 127-136.

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Comments (6)
Six Principles of Effective Global Talent Manag...
[…] What do companies operating in numerous markets need to do to attract and develop the very best employees so they can be competitive globally? To learn how leading multinational companies are facing up to the talent test, we examined both qualitative and quantitative data at leading companies from a wide range of industries all over the world.  […]
Six Principles of Effective Global Talent Manag...
[…] Companies that are successful at global talent management subscribe to six key principles.  […]
Talent Management Magazine |
[…] Six Principles of Effective Global … – Companies that are successful at global talent management subscribe to six key principles. […]
abigail scott
Below you can find the top 5 global trends in talent management

1) Next generation leadership; The majority of organizations (84 percent) say that developing future leaders is relevant now and in the next three years, but organizations must seek a new leadership model for the age of agility. "Although there is clear focus on developing the next generation of leaders globally, HR executives still need to develop a different approach around development. These strategies must be specific to the business. It's pervasive and organizations must commit to getting the best results." 

2) Accelerating organizational change; Eighty-seven percent of respondents see the way in which organizations view change as a top trend. "In today's fast-paced environment, organizations need to adopt a new way of looking at change and become more results-orientated." 

3) The war to develop talent; Eighty-six percent of respondents reported the shift to development and upgrading skills as a critical trend. "As businesses struggle to fill critical positions at many levels, companies are putting renewed focus on building capabilities, not just finding them." 

4) Boards are changing the HR game Eighty-two percent of respondents say a growing number of boards are focusing on the role and impact of talent on business performance and risk. This is a step away from the previous focus of boards which was centered on CEO succession and setting compensation for the most senior executives. "Today, organizations know that developing a strategy without considering the talent dimensions creates risks. Boards are recognizing that a business strategy often is a talent strategy." 

5) Transforming HR to meet new business priorities Eighty-five percent of respondents indicated that organizations are developing HR capabilities that will not only support the business, but enable business strategy. "To fulfill its new role in accelerating business growth, organizations are using HR transformation to design HR and talent systems that can work across geographic boundaries, creating a framework that is flexible enough to support different business models."
nikki.newman
Thanks for publishing this insightful piece. I was particularly interested in Principle 5 (Balance of Global and Local Needs). A critical and sometimes under-emphasized consideration for talent management systems– particularly in global or multi-region deployments -- is the extent to which they allow organizations to pursue the optimal mix of local operating preferences and nuances along with established global standards. From a non-technology perspective, multinationals should consider diversity issues that range from factors related to their industry, operating geographies, culture, pace of growth and growth strategy, other elements of their business strategy (including all talent management aspects), sophistication of talent management practices, how people work and manage other people, workforce demographics and composition (e.g., salaried, hourly, contingent), etc.
-- Nikki Newman, Lumesse
kpk2005
These principles indeed reflect the additional responsibility that the business community could introspect while going for the best practices. Very useful reference for the HR leads to carry out Talent alignment effectively to organizational road map. Many organizations strive to get an insight into these successful companies' approach to General HR (Best)practices.   
Often though what is not visible is the impact that business dynamics that happen at the next two levels of operational and tactical progress which majorly impact the Strategic direction that the organization decides upon.
for example, impact on compensation on Retention and Talent Management would have differing impact from geography to geography, similarly the Economic turbulence may need more than a few selected orgs.