globalization will connect you to more talent but always act locally to be effective

December 2, 2016 Louisa Wilson

One thing I’ve learned over the years is that despite all the talk about the world coming together as one global market, there are still significant regional differences in how talent is viewed and acquired. This was readily apparent in the findings revealed in our 2014 Q4 Talent Intelligence Outlook Report.

First, some background: our global report and survey was a pulse check of more than 400 human capital leaders in 10 countries: Australia, Belgium, Canada, China, the Netherlands, Poland, Singapore, Sweden, the U.K. and the U.S. Those surveyed included leadership in HR, procurement and the C-Suite. These countries represent a spectrum of practice maturity, ranging from the most mature to emerging markets. By surveying such a diverse group, we learned volumes about the differing values held by human capital leaders across the world.

There were also many commonalities. For instance, most were optimistic following very strong business outcomes in the past 12 months. The majority of respondents in all countries reported business growth being either at or above expectations. They were optimistic about the future, with most anticipating positive growth and hiring ahead. Also, they identified many of the same issues to be paramount for their organizations: the rise of integrated talent management, digitalization of HR, the threat of talent scarcity and the shift from fixed workforces to flexible talent.

I think human capital leaders share many concerns, no matter where they are located or the nature of their business. They all want to stay ahead in delivering great talent to their business leaders. Where they diverge is around the tactics of their goals.

So what were the big differentiators? Notably, the impact of robotics and automation is being felt differently across the globe. In China, the world’s biggest manufacturer, a large majority of survey respondents (78%) viewed robotics as having a positive impact on their business. It’s understandable since more Chinese manufacturers are investing in automated assembly, reducing their reliance on low-cost labor. On the other hand, fewer than half of Swedish human capital leaders viewed this technology favorably. It was the only country surveyed in which a minority held a positive view of robotics.

Despite a clear trend of organizations using more contingent talent, there wasn’t unanimous agreement that a role could be filled by any type of talent. Nearly 90% of Swedish human capital leaders strongly believed the right talent for any particular role could be a permanent or contingent worker located anywhere in the world. However, just 58% of Polish counterparts held that belief, reflecting perhaps an ingrained view of talent utilization.

There was also a disparity in how respondents viewed the pace of digital transformation. The majority of leaders in most countries believed the rate of change is too fast, and their organization is struggling to keep up. This was not the case among the Chinese, with only 22% reporting digital transformation being a challenge. Again, with its burgeoning middle class and recently found wealth (China became the world’s second-largest economy in 2010), the country is investing in infrastructure and technology. Surprisingly, Canadians reported the highest difficulty adapting, with 56% citing the struggle to keep up.

 

Is integrated talent the way forward?

I am a big proponent of an integrated approach to talent management. It’s a model that calls for HR and procurement to collaborate and undertake holistic workforce planning and talent acquisition, resulting in optimized resourcing. There are many reasons why companies should take a closer look at such a model (you can learn what they are here).

Mature buyers of RPO and MSP solutions recently have taken a closer look at how they can adopt an integrated approach. It’s encouraging because this is the way forward for HR, but not everyone shares my enthusiasm. When we surveyed human capital leaders, the overwhelming majority say they are familiar with the concept. However, when asked whether they plan to invest in such a model, the answers were highly disparate.

Of all the markets we surveyed, the U.S. is one of the most mature for RPO and MSP solutions, yet American talent leaders were among the least likely to invest in integrated talent, with only 46% saying they will definitely or likely implement it in the next 12 months. By contrast, 79% of U.K. and 82% of Singaporean respondents plan to do so.

I’m not overly surprised. Even though the U.S. is a leader in talent practices, many companies based here tend to be more conservative. An integrated talent model is challenging to implement, and it requires significant resources and cultural change. But when you weigh the requirements against all the potential benefits, it’s a no-brainer. However, for many companies, there are lots of issues to address and silos to knock down.

Ironically, because very mature RPO and MSP markets, U.S. companies may have developed more entrenched talent silos, clearly separating the roles of HR vs. procurement. Even so, I believe a shift is coming, driven by the pioneers in this space who will demonstrate the clear advantages of an integrated program.

On the other hand, the U.K. market has seen a number of outsourced talent programs evolve into integrated talent programs in recent years. One of our clients, Societe Generale, has operated a tremendously successful program for years (read more here). Like the U.S., the U.K. is a highly mature RPO and MSP market, but there appears to be a greater appetite for integrating contingent workforce management with the permanent employee base. Singapore is also a highly evolved market, and talent leaders here are often pushing the envelope in their organizations an increase in the use of flexible talent and may want to incorporate it into their overall strategy.

As globalization connects talent beyond traditional boundaries and with many organizations considering how to best organize their talent strategies to deliver on global to local approaches, understanding what’s common and what’s unique to each market brings powerful insights to deliver on business mandates and goals.

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