Background and Context
ProfessionalCo (an assumed name) operates within the professional services industry and delivers knowledge- based services and is structured as a member firm of a larger private listed company, headquartered in the United Kingdom, and operating in over 150 countries. ProfessionalCo is responsible for the Asia-Pacific region with this part of the multinational business self-described as one of the largest management consultancy firms operating within the region. Clients engage ProfessionalCo’s services via a distinct Business Unit (BU) which offer deep expertise in various areas of speciality including consulting, accounting, finance, taxation, digital transformation and strategy. While able to operate independently, the firm maintains partnership ownership with two levels of seniority - equity partner and non-equity partner – creating a situation whereby equity partners are simultaneous “employers” and “employees” as revenue and equity are distributed amongst these stakeholders. The senior executive team comprising of the Chief Executive officer (CEO), Chief Strategy Officer (CSO), Chief Operating Officer (COO) and Chief Financial Officer (CFO), are responsible for setting the firm’s strategic direction.
Boasting over 44,000 staff, its workforce is separated into either a Corporate-based role which focuses on the provision of services delivered subsidiary-wide, or within a specific part of the business. That is employees either work for the organisation in the subsidiary headquarters (referred to as Corporate Executives) or in a distinct Business Unit (referred to as a Business Unit Executive). Each Business Unit (BU) differs in relation to the services and knowledge provided to clients, workforce size, number of partners, and the skills and capabilities desired in “talent”. The firm’s Human Resource function is also separated into three teams: recruitment; policies and practices to be implemented organisation-wide; or the management of talent within a specific BU.
In stark contrast to many of their competitors, ProfessionalCo did not seek to dramatically downsize during the organisation during 2007-2009’s period of economic uncertainty (otherwise referred to as the Global Financial Crisis on other parts of the world). Instead of making a large part of the workforce redundant, ProfessionalCo implemented a new remuneration policy severely restricting pay increases, bonus and equity distributions. The CEO was particularly proud of the ability to “keep its workforce in tack” during the wider Global Financial Crisis and frequently referred to this action (or lack of action) as the firms' unbridled commitment to talent management.
References to the importance of talent and talent management feature prominently in both internal and external talk and texts. The firm publicly declares that talent and talent management is imperative to its operational and strategic ambitions. The importance of talent management stems not only from the inherent connection between the quality of its internal workforce and organisational success but also the desire to compete in and win the widely heralded “War for Talent”. Asserting the presence of a talent shortage, ProfessionalCo deliberately invested in enhancing the firm’s external reputation in order to “win its unfair share of talent”. Recognised as an Employer of Choice operated as a further mechanism to pull potential talent towards the organisation and to widen the external talent pool.
Operating within a knowledge-based industry presents a unique set of challenges for talent management because, without talent, there would be no ProfessionalCo. The fixed relationship between talent management and the firm’s operations further compounds the imperative need to manage “talent” effectively. Professional services are different to production or manufacturing organisations which provide stakeholders with physical goods and/or services as the value proposition and “talents” of its workforce represent the sole source of competitive advantage. That is, knowledge-based firms such as ProfessionalCo sell services to clients. These services are founded on the skills, capabilities, and knowledge of the people within. While many organisations adopt the adage that “Our people are our most important asset”, this sentiment is factually correct for ProfessionalCo as the people-based assets underpin all assets within the organisation.
Driven by a formalised talent management strategy to “grow” concerning size and revenue, the subsidiary, proactively invested in talent management policies and practices to enhance the organisations competitive positioning domestically. Employing discourse by strategy approaches which recognise the power of words and talk in shaping actions, the firm’s senior executive team explicitly encourage everyone to “take action and invest in their talent” to achieve the subsidiaries strategic ambitions and goals. The charismatic CEO acted as a salient stakeholder in all talent management and strategy interactions and was frequently observed conversing with employees about their experiences working at ProfessionalCo, instigating opportunities to garner real-time data about the organisation’s progress and the ability to balance client and workforce needs.
The ability to enact an integrated approach to talent management – whereby all Business Units and Senior stakeholders were “doing the same thing” - and realise formalised strategic ambitions, however, is encased in complexity for the following reasons:
Talent management practices were not founded upon a pre-established definition of talent. There is no single agreed upon understanding of “who” (individuals or everyone) and “what” (skills and capabilities or pivotal roles and positions) is talent across the organisation. Senior partners and HR managers within each BU can define talent in a way that they see fit, without intervention from the Firm’s Asia-Pacific or global headquarters. This creates a situation whereby understandings of the defining characteristics of a “talented” employee may be vastly different within the firm. The potential for diversity in talent conceptualisations results in ambiguity and confusion within the workforce as employees are unaware of specific promotion requirements beyond the ability to present a convincing business case and demonstrate the ability to contribute to the firm through revenue generation.
Although talk about talent permeates throughout the organisation with the term “talent” used frequently to describe certain policies and practices, Corporate HR executives acknowledge that there are vastly different perceptions of what “talent” looks like in an idealised sense. While there was the widespread agreement of the crucial importance of “talent” to the organisation (for the reasons noted above), Senior HR and non-HR executives held different opinions about whether there should be “one” talent conceptualisation. Questions about whether there was one-way or a best-way to define the defining characteristics required in order for a certain individual to be classified as “talent” was frequently debated.
Assertions about the value of a consistent and one-size-fits-all approach resulted in a few of the BU’s establishing set talent parameters about the defining characteristics of talent. Via a formalised “talent definition”, these BU’s articulated the specific criteria used to evaluate an individual’s “performance” and their “potential”. This also created a situation where individuals are privy to the same evaluation methods within the context of these BU’s. Other BU’s however, elected not to instigate one specific idea about what the composition and defining attributes of a talented individual and elected to enact talent management founded upon fluid and agile conceptualisations, whereby the definition of talent could change if and when needed.
Another challenge arises from the absence of a talent management “system”. The firm does not utilise technologically-enabled processes to guide talent evaluations and subsequent talent identification. The firm uses a software-as-a-service vendor created technology to evaluate individual and team performance as part of the organisation-wide performance management process. However, the use of HR technology stops at performance management, and although data captured during this process informs remuneration allocation, there is no mandate to use, nor guidelines of how to use, this information to quantify an individual’s value and distinguish between higher and lower performing employees. As a result of this, BU’s and senior partners within each separate division can self-determine how the criteria for and processes of talent identification without any input from Corporate executives.
The absence of a talent management system and talent definition resulted in divergent perceptions about how talented individuals are best identified. While debate rages about the value of either intuitive (unstructured and informal processes based on gut feel), individualised (informal processes that focus on a single individual) or strategic (integrated, and proactive processes applied consistently) talent identification processes within industry and academia, ProfessionalCo executives debated whether talent was best identified by “measuring” or “observing”. BU’s adopting the measuring perspective believed that talent is a construct that is quantifiable and that stakeholders can capture and represent employee value via statistical measures and “scores”. This talent identification process relied heavily on Business Unit Line managers. Line managers were tasked with evaluating the performance and potential of team employees annually via the organisation-wide performance management practice. Line managers, during this process, would allocate scores (out of five) to each following defined criteria and then would input these numerical scores into the relevant HR technology module. These processes relied heavily on HR technology to capture line manager determinations and used the embedded algorithms to force-rank employees from highest to lowest performing employees. Line managers could also use HR technology to rank employees with the highest levels of potential and generate a list of individuals with the highest evaluations of both performance and potential. Individuals included in this latter list were subsequently classified as “talent”.
The alternative observational based approaches sought not to measure an employee’s value quantitatively but instead emphasised subjective evaluations and observations. While individuals were subject to the organisation-wide performance management and allocated scores for performance and potential, senior stakeholders in these Business Unit’s didn’t want to rely on these scores, nor technology-based algorithms, to decide which individuals were indicative of “talent”. Line managers, in combination with senior HR managers, would meet face-to-face to share opinions and then debate and discuss which individuals were indicative of future leaders of the specific Business Unit and/or the wider organisation. From this perspective, humans, rather than technology, were responsible for making talent decisions.
There are also divergent opinions about whether the subsidiary should adopt and enact an inclusive or exclusive approach to talent management. Corporate HR executives tasked with providing talent development activities across the organisation would like the organisation to adopt an exclusive approach whereby only some individuals are invited to participate in the organisation-wide talent development program. While some Units within ProfessionalCo agree with their Corporate HR counterparts, others including the Taxation-based Unit assert that all employees are valuable, therefore advocating for an inclusive understanding of “who” is “talent” and arguing that all employees should have equal access to talent development opportunities.
Overall, while there is an unbridled acceptance of the inherent importance of talent to both the wider organisation and its Asia-Pacific subsidiary, the ability to manage talent effectively in an integrated and consistent manner is complex. Business Unit’s, via the senior stakeholders within these Units, have differing opinions about whether there should be a pre-determined definition of what talent is (or is not). There are also different ideas about whether the organisation should identify talented individuals consistently and systematically. These differing perceptions have implications for the role of HR technology in
BUSINESS/ CONSULTANCY REPORT
This report primarily focuses on the importance of talent management and the role it plays in the eventual success of an organisation. This study chiefly focuses on ProfessionalCo, which operates in more than 150 countries and is headquartered in the UK. The report discusses the significance of retention of the 44,000 staff employed by the organisation as a strategy for the prioritisation of talent management within the company. However, the focus and measure of the ‘talent’ had been a debatable issue, for which suggestions and recommendations are provided in this report in order to address the identified issue. It is strongly advised for ProfessionalCo to maintain a talent management "system", which effectively utilises the available technological resources in the firm.
Furthermore, it is encouraged to use HR technology in various other departments or BU (Business Unit), apart from the conventional performance management scope. ‘Talent' for ProfessionalCo is fundamentally a quantifiable concept, which is measured or determined through awarding ‘scores' and analysing statistical data derived from the same. Though this is a logical approach, it may be mentioned that ‘talent' is an unquantifiable measure which is determined through evaluation and can further be retained through training. Hence, this report would discuss various recommendations and justifications for the same, in terms of establishing one definition of ‘talent' within ProfessionalCo.
Considering the case of ProfessionalCo, it may be stated that the company operates in more than 150 countries across the globe. Hence, interference from the global or the Asia-Pacific headquarters in terms of implementation of talent management strategies may be taken into account. Regardless, it may be noted that there is no interference in terms of defining ‘talent' from the aforementioned domains of the business, but the net gain through talent management is a concern for the global headquarters. Furthermore, there is a mention of the Global Financial Crisis of 2007-2009, in the case study. Hence, one of the major macro-contextual factors may be attributed to the external economy of the country and the world, which plays a crucial role in the development of the talent management strategies of ProfessionalCo.
In addition to that, it is to be taken into account that workforce demographics is also another macro-contextual factor which significantly influences the aspects of talent management within a firm (Daubner-Siva, Vinkenburg & Jansen, 2017). With the retirement of an older generation at the company, it is imperative to draw out new ‘talent’ to fulfil the gaps left by the former generation. The recruitment of the external candidates into the workforce requires extensive knowledge of the talent that they are capable of bringing into the organisation for their benefit. Technology also plays a critical role in the evaluation of the talent within the organisation. The choices of the technology to be implemented in this case have been ascertained as SaaS. However, there are a number of options for using other technological components for determining and evaluating performance and talent.
According to Collings (2014), talent management is the anticipation of the task force or the human capital that is essential for an organisation to meet the requirements or needs of the company. It has been further established that the key elements in talent management involve aspects of strategic planning, including strategic planning of employees. As per Gallardo-Gallardo, Thunnissen & Scullion (2017), it has been evident that the role of strategic talent management is chiefly dependent on the identification of key skills as well as the key positions within the organisation that may eventually and gradually contribute to the overall profitability and growth of the organisation through talent pool development. Furthermore, it is to be noted that performance management has been found been found to have a critical role in the talent management process.
However, another key aspect that has been found to be more effective in this context is the definition of talent management. For instance, talent management is regarded as a judgment-oriented process, which is strongly influenced by multiple contextual factors (McDonnell et al. 2017). In addition to that, it may be noted that HR practices have been taken into account in order to evaluate the talent management process in ProfessionalCo. According to Wolfe, Wright, and Smart (2006), a new vision of management as evident in baseball could be applied to various types of organisations could be acting as a framework for achieving competitive advantage and excellence such that it could contribute to the enhancement of the business performance of the employees. Regardless, it may be noted that the HR practices are implementing performance management activities like managing touch points of employees’ development by thinking about the moments of truth for them. Thus, it is strongly suggested to introduce one definition of talent management for the workforce in ProfessionalCo. Therefore, considering the definition by McDonnell et al. (2017), it may be stated that since ‘talent’ is governed by a judgemental process, which is thoroughly dependent on the Human Resource of the organisation. For instance, the identification of the drawbacks or shortcomings of the employees can be made through the performance management protocol already initiated (Taft, Mahmoudsalehi & Amiri, 2017). However, this may further be implemented for the development and training sessions for growing the talent pool within the organisation.
It is to be noted that the formulation and implementation of a concrete and feasible definition of ‘talent' is to be developed with the consent of all of the Business Units’ operating within the firm. Additionally, it is imperative to set down the desired criteria that would effectively and functionally describe the meaning and expectations regarding ‘talent' (Taylor, 2018).
Furthermore, the development of a definition is essential for ProfessionalCo as it ends the ongoing debate with respect to the activities to be undertaken for the measurement of ‘talent’ in the organisation. However, one of the major limitations may be identified in this regard, as per Daubner-Siva, Vinkenburg & Jansen (2017), that there can be multiple definitions of talent management as it can be effective in enhancing the productivity and the performance of each of the segments within an organisation, such that the organisation functions effectively as a whole.
The question of developing one definition for talent really would count for the organisation, ProfessionalCo. It is to be taken into account that the scope for numerous fields that the company operates in requires various ‘talents’ or departments. Some employee may have critical thinking skills, which is essential in the field of knowledge management as ProfessionalCo operates in the industry. On the other hand, there may be employees, gifted with time management skills, or technological skills, and may even prove beneficial for the development of new technology. Thus, defining talent may be made universal for all employees. In other words, it may be fruitful to have one definition of ‘talent’ such that it prohibits exploitation among the upper and lower levels of the company. Regardless, it is to be noted that having one definition for each of the departments may enhance the productivity and effectiveness of the various departments, thereby contributing to the overall organisational productivity.
The employees in most of the organisations are subjected to a judgemental procedure by the Line Managers responsible for them. They are judged and ranked as per their talent. This process may involve significant manual errors, and the manipulation of talent may be easily implemented (Morris, Snell & Bjorkman, 2016). For instance, considering that an employee has certain personal differences with the respective Line Manager, and the Line Manager taking advantage of their position in the organisation manipulates the performance of the employee negatively. This, in turn, has a negative impact on talent development as well as the impression of the employee on the Senior Management of ProfessionalCo. In addition to that, it may further be investigated and suggested that defining talent is a much better and reliable method for avoiding errors and manual manipulation (Morris, Snell & Bjorkman 2016).
According to Wiblen, Dery & Grant (2012), large professional service firms utilise technology liek latest software to evaluate and identify the talent across the range of their Business Units. According to the authors, talent based information could be acquired by using talent related technologies like e-HRM, HRIS, ERP and others. It has been noted in the case study, the use of SaaS or Software-as-a-Service for the company's activities related to performance management. The implementation of the same digital platform may further be extended for effective talent management outcomes (Krishnan and Scullion, 2017). Firstly, the evaluation of the desired criteria for each of the Business Unit is to be identified and fed into the system. This may further be supported through the assessment of the ‘potential' within an individual. Since several definitions of ‘talent' discuss the role of ‘potential’ to carry more value than performance within an organisation (Krishnan and Scullion, 2017). This is evident in the case of ProfessionalCo, wherein the ‘talent’ of the employees is often regarded to be a quantifiable sum, as is established through the rankings and ratings of the employees (out of 5). However, the use of a system may be considered which vaguely evaluates the desired criteria for each of the BU, without any manual interference for the development of the ‘talent pool’.
According to Deery and Jago (2015), the limitation of implementing one definition of talent can be managed through the use of the experience of talent retention through the proper assessment of the desired criteria for the same. However, it may be taken into account that considering a more subjective and evaluative approach makes humans or the Senior Management (and the Line managers) responsible for the talent management procedure. It has been formerly mentioned that there are numerous activities of determining the definition of talent can be categorised as the quantification of talent, which is manageable by the use of technology (Sparrow, Hird & Cooper, 2015). However, in the case of the subjective approach, the HR practices are found to have more value as compared to other developments. According to Wiblen, Grant & Dery (2010), a new HRIS (Human Resource Information System) approach in the management of talent is required in large scale projects or organisations that could be applicable for understanding the requirements of IT and HR functions in the organisation. Thus, in this case a new definition of HRIS is required that could be able to manage the talent in the workforce of the organisation efficiently. In this regard, it should be mentioned that ProfessionalCo being a large scale organisation could refer to defining one single definition of talent like the transition from HRIS to an integrated vendor system for managing the talent o the employees at the workplace.
It may be mentioned that the HR department may strongly undertake the role of determining suitable overall criteria for the determination of the implication of ‘talent’ within the organisation. It may further be stated upon a detailed investigation that ‘talent’ refers to the recruits gathered and shortlisted after undertaking the overall recruitment and screening procedure (Krishnan and Scullion, 2017). As noted in the case study, the BU of Taxation argues that all the employees are to be regarded as eligible for the training for ‘talent’ development sessions to be held at ProfessionalCo. It is to be mentioned in this context that several BUs had previously disagreed on the notion. For the Taxation department, ‘talent’ is determined when a candidate is recruited into the organisation following proper screening and evaluation processes. Therefore, discrimination on who is to be considered ‘talent’ primarily based on their ‘performance’ or their ‘potential’, is highly unfair, and may also deteriorate the reputation of organisations as the employer of choice in the market (Collings, Scullion & Caligiuri, 2019).
This suggestion may be strongly justified through the actions of ProfessionalCo during the Global Financial Crisis of 2007-2009. The company had retained all of the employees, as they were all regarded as ‘talent’ and not a few handfuls of them. It has been emphasised by the CEO that the company prides itself on being able to attract a strong ‘talent’ pool and regards each of the employees as talent. Though the companies could not promote further allowances and bonuses during that particular time period, it had essentially maintained that the loss of employees would indicate the loss of ‘talent' from the companies (Davis et al. 2016). Furthermore, being a knowledge-based firm, it had been imperative that the function equally effectively, if not better in the times of crisis (Davis et al. 2016). Therefore, the CEO had publicly justified the employee retention strategy as a part of talent management for the company.
In this regard, it would be unfair to segregate and differentiate the training and development programs by making it available to certain ‘talented' employees and depriving others of the same (Collings, Scullion & Caligiuri, 2019). The agreement on the definition of ‘talent’ therefore, is critical in this aspect, as it prefers some employees, while at the same time, disregarding others in the identified definition for ‘talent’ (Davis et al. 2016). Having one definition of ‘talent’ thereby limits the scope for preference, as the process becomes subject to manual flaws. Thus, having one definition for the employees creates a sense of equality among them and may enhance the productivity and effectiveness of the various departments, thereby contributing to the overall organisational productivity. The focus of talent management should thus be strongly driven by the interest in the implementation of the ‘potential’ of the employees in order to deliver productive and fruitful ‘performance’ for the better and enhanced profitability of ProfessionalCo (Collings, Scullion & Caligiuri, 2019). Collings (2014) mentions that it is the calibre of the employees that aid in the generation of fruitful or beneficial outcomes for the organisation. Thus, this may serve as an effective justification for seeking merit in the establishment of one definition of ‘talent’ in the particular organisation in question. The limitation of implementing one definition of talent can be managed through the use of the experience of talent retention through the proper assessment of the desired criteria for the same which could be helping the employees of ProfessionalCo in improving its business performance in the future.