Employers are offering creative perks to attract and retain today’s workers.
Plus all the HR resources you need to be more efficient and effective this fall!
Prepare for your exam with the guidance of a SHRM-certified instructor in Boston, Oct. 24-26.
Learn how to make the business case for diversity, October 25-27.
Multinational companies seeking to drive higher revenues and seize a sustainable competitive advantage are investing enormous resources into new and emerging markets. But the competition is not just for the wallets of the rising ranks of middle-class consumers—it’s also for the highly skilled workers and professionals who will form the backbone of a sustainable local workforce in those nations.
Just as there’s no one-size-fits-all approach to gaining market share in these markets, the same is true for acquiring, retaining and developing the right talent. Human resource professionals will need to tailor their approaches to each market, understanding and finding the right mix of strategies to build, buy and/or deploy resources that will sustain a local high-performing team that can execute the business strategy and win.
But HR teams are also facing a critical inflection point. The strategies for finding, hiring and developing talent that worked in the past don’t translate as readily in these new and possibly more competitive environments. For example, in one market, companies may need to put a renewed emphasis on engaging employees with higher pay, while in another they may need to focus on career advancement opportunities. Moreover, most employees increasingly expect to work in an organization that continues to invest time and resources in developing people. This trend will continue as more Millennials enter the workforce. Companies that gain a reputation for focusing exclusively on driving revenue growth and cutting costs without investing in their people may find it harder to attract the right kind of talent.
Second, the vast amounts of data now available through workforce analytics software and cloud-based storage offer HR leaders deep insights into what types of skill sets, competencies and resources are needed and when to compete in a specific marketplace. Any company that does not leverage workforce analytics within its business strategies to assess the competencies, skill sets and potential gaps of their planned workforce in new and/or emerging markets—or even their home market, for that matter—will be missing out on significant opportunities.
To turn insights from data into action, and to help their companies win the global competition for talent in emerging markets, HR leaders will need to do a better job of balancing what we call the “Build, Buy and/or Deploy” model for workforce planning and execution.
As a result, talent analytics should consider a wide range of areas that support decision making, addressing growth, profitability, costs, risks, ease of entry and immigration issues, as well as the quality and availability of talent. By understanding these issues, organizations can begin to determine the right balance of plans to build (develop an internal pipeline of talent), buy (acquire talent through targeted recruiting and/or acquisitions) or deploy (managing global mobility more strategically and effectively).
Integrating Talent into Strategy
Companies must start integrating talent analytics, modeling and talent management into strategic decision making to effectively develop and sustain tomorrow’s local and global workforces:
Organizations that can address these questions and devise a balanced approach will be ready to adopt a more holistic approach to managing talent globally, from developing individuals so they reach their full potential to integrating talent within the overall business strategy.
HR leaders can’t drive this type of strategy without the full buy-in of senior leadership. Fortunately, C-level executives are increasingly aware of how important talent management is to their company’s long-term success, with CEOs in a recent survey ranking managing global talent as one of the three most important business issues they face.
Partnering for Performance, an EY survey of CFOs and CHROs, revealed that high-performing companies regularly achieve tight integration between finance and HR functions, particularly by sharing data that enables them to measure productivity and return on investment in key talent management programs. High-performing companies also tend to tightly align their people strategy with the overall business.
This integration can have a tremendous impact on helping HR leaders better staff for further needs in a specific market. If a company targets Brazil for 20 percent growth over the next five years, for example, HR planners who have a strong grasp of the corporate goals in the country will have a clearer picture of the workforce needed to execute that strategy. By analyzing available data and studying the skill sets of their existing workforce, local education rates and other factors, planners can identify existing gaps now, and in five years that will enable them to make intelligent decisions on whether to build their own team, bring in outside talent or deploy resources from other geographies.
Moving forward, most organizations will undoubtedly consider a combination of all strategies to build and retain a sustainable workforce in new and emerging markets.
Building talent is an organization’s capability to develop a sustainable internal pipeline for talent. Developing internal talent is not as easy in many emerging markets where a company may have a limited presence or footprint. Still, any organization that plans to operate in a market over the long term needs to create a plan for developing and promoting people locally.
To that end, companies need to keep their pulse on talent levels within any given country, from assessing new hires to making sure there are adequate plans in place to develop, nurture and retain talent. As employees develop their skills and experiences they will become more attractive to competitors, requiring HR planners to pay close attention to retention.
As with the other levers, skillful application of workforce analytics can also give organizations the ability to inventory workers and skill sets, determine where the best fit is for specific groups, and track their development, as well as use predictive analysis to spot early-warning signs that could help to combat attrition.
For example, a global organization effectively created an internal pipeline of management talent by simultaneously using three African countries that were in different stages of development (emerging, developing and mature) to help future leaders gain a broader range of leadership skills and work experiences. In the emerging market, for example, relatively new managers expanded their skill sets by taking on generalist roles. In the developing market, future leaders assumed more management responsibilities and led teams of employees. In the mature market, future leaders were given profit and loss responsibilities and groomed to run business units. By using this strategy to incubate leadership talent, the company accelerated its development of future leaders, building a more balanced global workforce.
Buying talent is a strategy that can target individuals, groups and/or entire companies to acquire for the express purpose of adding new talent. Organizations often seek to meet short-term as well as long-term strategic objectives by hiring new employees or using an acquisition to gain employees with specific skill sets and expertise. However, bringing in outside talent in a new or emerging market also carries the inherent risk that the new hires won’t fit in culturally or that they may upset the equity of the existing internal talent. In addition, they may also encounter a steep learning curve before they understand the business and overall strategies and share the same commitment to meeting the goals of the organization.
Organizations must rely on the external-market workforce analytics to understand the actual skills available in specific markets, the quality of that talent, how much it will cost, the risks associated with “buying” talent, and the organization’s capability and effectiveness to recruit externally.
Many examples of this strategy exist today in the business world. For example, several companies based in China have recently entered more mature markets such as the U.S. by buying a business that gives them access to both the technology and the talent to execute and deliver in that market. Companies within mature markets also pursue a similar strategy—for example, when a larger company acquires another firm for the professional talent and expertise needed to compete in a new business segment.
Deploying talent, the last of the integrated strategies, ranges from deploying internally across functions and business units to moving talent globally for specific purposes. The key here is that deploying talent is expensive and can disrupt the individual’s career as well as the business. As a result, a mobility strategy needs to be carefully thought through and then executed in a way that adds value to both the business and individual and also has a measured return.
Mobility will continue to play an important role for companies in new and emerging markets, where the pressure to ramp up rapidly often requires organizations to turn to international assignees or business travelers. Nearly half (47 percent) of the respondents to EY’s 2013 Global Mobility Effectiveness Survey said they expected to increase their presence in emerging markets over the next 12 months by deploying more resources.
The survey also revealed that most companies could do a better job of managing the deployment of international assignees, particularly with respect to confronting compliance issues, developing an individual’s career and measuring the program’s return on investment. Some 40 percent reported that they don’t have a program to manage risk, for example, while another 73 percent reported that the global mobility team was not responsible for tracking business travelers. Failure to track and report on business travelers could put the organization at risk of not complying with local tax compliance issues that may arise.
Companies are just beginning to apply workforce analytics to mobility programs to get a better handle on how efficiently they are deploying their talent in emerging markets. For example, are they taking into account the most cost-effective considerations of people and policies that will enable them to control costs and minimize tax obligations? Did they send the right people on assignment to gain experience for future leadership roles? What was the financial cost of assignees’ attrition, and what were the key reasons? Having this depth of analytical information at their fingertips also gives organizations more tools to measure return on investment and address whether they are putting the right person in the right place at the right time.
International assignees will continue to play an important role as companies expand their presence in new and emerging markets, but without an integrated, holistic view of what the organization needs, many companies will continue to overpay and run the risk of not building a sustainable workforce in those markets.
As the Partnering in Performance survey revealed, high-performing companies share one key feature: collaboration across business functions. We firmly believe that companies that take full advantage of the opportunity now to integrate data from HR, finance, operations and other areas to support strategic decision making will enjoy a significant competitive edge in the global marketplace.
Companies that can nimbly execute the build, buy and deploy strategies for decision making will be ready to keep pace with the rapid globalization of today’s workforce by developing and executing the right talent programs. These companies will also be poised to build toward the future with an eye on developing the necessary skills and competencies for the next generation of leaders, fully integrating talent development with business strategy.
George Brooks, Leslie Fiorentino and Jeff Akin are human capital partners and Tim Stansel is human capital technology leader at EY. The views expressed in this article are those of the authors and do not necessarily represent the views of Ernst & Young LLP.
SHRM Online Global HR page
You have successfully saved this page as a bookmark.
Please confirm that you want to proceed with deleting bookmark.
You have successfully removed bookmark.
Please log in as a SHRM member before saving bookmarks.
Your session has expired. Please log in again before saving bookmarks.
Please purchase a SHRM membership before saving bookmarks.
An error has occurred
Recommended for you
The application deadline is October 21
SHRM’s HR Vendor Directory contains over 3,200 companies