Talent Man

Recruitment strategies

CEO verdict

Global leadership

Career incentives

Opportunity knocks

Shooting stars

New faces

Generation game

The competitive challenge | Page 4

Eight out of 10 for UK skills | Page 5

Making a mark abroad | Page 11

What under-30s really expect | Page 13

September 2011

Distributed within The Sunday Telegraph, produced and published by Lyonsdown which takes sole responsibility for the contents

Has Britain got talent?

Getting and keeping the best people

Business Reporter · September 2011

AN an iNDepeNDeNT independent RepoRT report fRoM from LyoNSDowN, lyonsdown, DiSTRiBUTeD distributed wiTH with THe the SUNDAy sunday TeLegRApH telegraph

Talent management – in this issue

Foreword

3

World-stage test for budding stars Action call to find – and direct – the brightest in business

By Stephanie Sparrow If It’s it’s accepted that Britain surely has talent, the question then is how businesses can find, develop and keep the people with flair, innovation or people-management skills to help them survive – and eventually prosper in – economic turbulence. figures Figures from the confederation Confederation of British Industry (cBI) (CBI) indicate a nervousness about how prepared the nation is to be competitive. the The cBI’s CBI’s recent Building for Growth survey showed that, while 58 per cent of employers expect to increase their demand for higher-skilled employees, 52 per cent are not confident of meeting this need. Many of the reasons behind the shortfall are complex and encompass welldocumented anxieties about the employability of young people and graduates or about the skills gaps among managers and leaders.

Often, however, the problem is not caused by employees lacking skills but by employers lacking the imagination to consider the diverse talent available, or the know-how to make their

organisations attractive to the more sought-after candidates. Many other factors also come into play, as this supplement will illustrate and, it is hoped, help to resolve. experts Experts in HR management talk about the need for talent pipelines: a steady flow of highly-regarded people who can sustain and boost competitiveness. this This pipeline starts with a recruitment strategy. the The pressure is on employers to ensure they are equipped to identify and seek out those with potential (whether this means using technology or headhunters), and provide them with a reason to come to work for their organisation. How to plan and oversee this strategy is explored in our feature on page 4. employers Employers need this talent to progress along the metaphorical pipeline, taking in appropriate development opportunities along the way. they They also need to accommodate what the chairman of the Institute of Leadership and Management, peter Peter cheese, Cheese, calls the “changing context” of their business. these These changes can be caused by the economy, or, increasingly, a need to be globally competitive. developing Developing global talent is arguably the

greatest challenge of all, particularly as hitherto unknown players, such as Brazil, have joined the international stage. Organisations need talented leaders for these new environments who can handle overlapping political and economic factors, as well as logistical ones. On page 11, we explore how multinational organisations are growing this talent.

But what if, as talent moves along the pipeline, it gets stuck or frustrated? No one wants the talent they have invested in to bail out – such attrition already costs UK plc around £42 billion a year – and on page 9 and page 13 we look at how to reward and keep talent. fair Fair financial remuneration is crucial but the good news for employers is that cash is not the only king. employees Employees who are receiving a market-relevant salary will often regard an interesting career path, supportive managers, regular appraisals and imaginative benefits (such as subsidised bikes for cycle-to-work schemes) as incentives to stay. Yes, Britain has talent, but it needs a receptive audience – one that knows when to listen and when to applaud – in order for it to perform well on a world stage.

Class warfare

4

Peak demand demand

9

World at their feet feat

11

Handle with care

13

The growing competition for recruits Keeping the company’s climbers international International managers in the making Spas and other alternative rewards

Special contributors Publisher Bradley Scheffer brad@lyonsdown.co.uk

Journal Assistant Natalie Luketic natalie@lyonsdown.co.uk

Managing Editor Lucie Carrington lucie@lyonsdown.co.uk

Project Manager Tom Turnbull tom@lyonsdown.co.uk

Editor Stephanie Sparrow

For more information on any of our supplements please contact us:

Creative Director Martin Nolan studio@lyonsdown.co.uk

Telephone 020 8349 4363 Email info@lyonsdown.co.uk Online www.lyonsdown.co.uk

Sub Editor Amy Dickson amy@lyonsdown.co.uk

Stephanie Sparrow has more than two decades of experience in business journalism. She edited Training and Employers’ Law magazines and contributes to a number of titles on HR subjects.

She has contributed to The Guardian and is a careers agony aunt for Personnel Today.

Julie Nightingale specialises in information communications technology and education. She writes mainly for The Guardian, education press and for the magazines and web publications of several education bodies.

Widget Finn has been established for 20 years as a widely-published business journalist specialising in management topics. She writes for The Times, The Daily Telegraph, The Guardian and The Independent and has contributed to all the leading UK management publications.

Sue Weekes has been a journalist for more than 20 years and specialises in recruitment, HR, leadership and management, in which she also writes about the application of technology. She is a regular contributor to Recruiter magazine.

Tim Smedley is a freelance writer, specialising in work and social issues. His articles have appeared in The Guardian, Sunday Times, Financial Times and Management Today among other publications.

Sponsors

Cover illustration: Rebecca Hendin

More from Lyonsdown 20.09.2011

Risk management – The Daily Telegraph

30.10.2011

Global supply chain – The Sunday Telegraph

economic and political turmoil around the world have forced companies to take risk management more seriously than ever. How can companies balance risk and profit in today’s volatile world?

Companies are coming under pressure to make their supply chains leaner and meaner. But do they run the risk of relying on too few suppliers, and how can businesses best manage their supply chains?

06.11.2011

Precious metals – The Sunday Telegraph

As stock markets nosedive and government debt rockets, investors are crying out for a safe haven for their assets. The price of precious metals has reached stratospheric heights in recent months but are they still worth the investment?

Defence systems 04.09.2011 for copies of this report email info@lyonsdown.co.uk

Business Reporter · September 2011

4

an independent report from lyonsdown, distributed with the sunday telegraph

Effective recruitment

A ticket to ride on the starlight express The right recruiting strategy can give companies a competitive edge – but how do they get gifted employees aboard?

In these testing financial times, companies have their work cut out – filling the important jobs that are crucial in sharpening their performance in the marketplace.

It’s not that Britain doesn’t have business talent, but as the number of top positions decrease under economic pressure, the demand to get the right people to fill them grows. The challenge is to identify and get those people aboard.

Despite high levels of unemployment, more than half of employers (52 per cent) report that the competition for talent is even greater this year than last, according to the Chartered Institute of Personnel and Development’s (CIPD’s) Resourcing and Talent Planning survey for 2011.

Other recruitment firms back this up. Manpower’s 2011 Global Talent Shortage Survey reports that UK employers have more difficulty filling vacant positions than at any time since 2007, while the study Rising to the Recruitment Challenges by Alexander Mann Solutions found that 55 per cent of companies have had problems recruiting in the past six months, and the majority attribute this to skills shortages in the candidate pool.

At the Confederation of British Industry, James Fothergill, head of education and skills policy, says employer demand for people to fill leading roles will grow in the future, but more than half of CBI members are not confident of meeting these needs. “This lack of confidence may in part reflect the scale and pace of expansion expected in demand for higher-skilled employees and signals that the war for talent will continue to be waged,” he says.

However, there are big differences between sectors. Fothergill reports that employers in banking, finance, insurance and professional services are more confident of filling all their high-skill jobs in the next few years than those in science, engineering, IT and manufacturing.

Manpower’s survey similarly found engineering one of the most affected areas, along with management and executive roles, sales representatives, teachers, accountants and IT professionals.

Talent can make the difference between profit and loss, especially in a tough economic climate, where employees are routinely required to go the extra mile. With competition for good people

By Sue Weekes

52%

of employers report that competition for talent is greater than last year

55%

of compAnies have had problems recruiting in the past six months 60%

Percentage of employers having difficulty filling jobs due to lack of available talent Source: Manpower

40%

40%

41% 31%

30%

2006

2006

31%

34%

20%

0%

2006

2006

2006

2006

expected to increase, employers must ensure they have the right strategy to seek out and attract highfliers. Much is made these days of a company’s employer brand and employee-value proposition – what a company represents to candidates and what it is able to offer them. “Employers need to have a much more sophisticated view of what potential employees are looking for,” says Kevin Green, CEO of the Recruitment and Employment Confederation UK. “Choosing one employer over another is less about pay and package and more about the values of the organisation and what it’s like to work there. Resourcing needs to be managed more like a sophisticated marketing campaign than it has been historically.”

While recruitment remains a face-to-face process, technology has rewritten many of the rules. This revolution began with the advent of the job boards in the mid-1990s and continues apace, with extensive use of online channels such as the professional networking site LinkedIn and social media sites such as Facebook and Twitter.

Using the internet to mine for candidates is not new, but an ever more sophisticated approach now includes X-ray search techniques to find web pages and information that might otherwise seem unavailable or invisible.

Grant Weinberg, director of international talent at the global biopharmaceutical company Gilead Sciences, says: “There is a large debate around how best to connect with your passive/ active candidates. Headhunters and print media are now two of multiple channels.”

Weinberg says that while many CEOs still believe the only way to attract the best candidates is via a search firm, Gilead has moved on and its recruitment strategy is “multi-channel resourcing”. The company took this approach when it successfully recruited a general manager for the unfamiliar South Korea market: the resourcing department agreed with the senior vice-president to use a number of different channels, including LinkedIn, online groups and forums that focused on this specific area, as well as blogs, published lists of attendees for conferences and referrals.

“We built our own shortlist and at that point made the call as to whether we had the strongest talent for our business needs or whether we needed to retain our headhunter,” says Weinberg.

“We decided with all the references, market insights and data we had that the headhunter would only nominally improve on our shortlist and it was not worth the investment. This took a lot of selling to the senior vice-president, showing multi layers of data to support the business objective of using the direct channels to achieve our goal.”

The CIPD survey reports that little more than half of organisations have a formal resourcing strategy, which suggests a lot are taking an unstructured approach to finding talent that could cost them dear. “The cost of getting it wrong is hard to quantify, but if you parachute someone into a key role and they don’t succeed

Training signals: companies such as Network Rail that found it difficult to recruit top talent early now invest in planning ahead

then it has a direct impact on the success of the organisation, and the more senior and specialist the role the higher that potential cost,” says David Hopkins, head of strategic research services at Reed Consulting.

Resourcing strategies often fall down because they simply aren’t sufficiently linked to corporate objectives. “It must be formed from a comprehensive understanding of the business plan and corporate objectives to ensure it results in continually bringing the required capability into the organisation,” says Colin Minto, head of resourcing at the security group G4S. When Minto came into the role, he set about reshaping the strategy to better serve its business units. Working with a number of technology providers, he built an online Global Career Centre that helps hiring managers anywhere in the world to search for talent. Since it went live in November, Minto claims it has delivered £1m savings on UK recruitment. “We’ve reduced advertising and agency spend for global resourcing, plus improved candidate quality,” he says.

Emma Blaney, group HR director at Informa, a global publishing, events and training company, says there is often too much like-for-like recruiting “instead of thinking: What is the strategic direction we are all aiming at and is there an opportunity to recruit someone who has a skill-set that is going to take us forward in this direction?”

This includes looking at the internal talent, which Blaney stresses is integral to Informa’s resourcing strategy, especially at the more senior end.“In terms of business continuity, it’s much better if you’ve got people who already understand the culture of the company moving into these positions,” she says.

Internal mobility is also an important part of Informa’s sell to employees. Blaney says employers

Business Reporter · September 2011

an independent report from lyonsdown, distributed with the sunday telegraph

Viewpoint Network Rail

5

Fit for purpose Does Britain really have talent?

Leading lights of business give their verdict Peter Jones CBE Dragons’ Den TV personality and multi-business entrepreneur Yes, Britain has talent. We need to nurture that talent and create a “British Dream” – that anyone can make it in this country. We must rewire our nation’s mentality so that young people have the confidence that they can be anything they want to be. British businesses need to back these young people.

increasingly face questions from candidates about a company’s working environment, as well as areas such as corporate responsibility.

Employer brand has an element of ensuring you have the ‘right badges’ without inviting a degree of cynicism, she acknowledges. “There are a huge number of badges out there and some companies have identified these as good business opportunities. So we are trying to think about the tags that people are really valuing and looking for in a company. Something like the FTSE4Good status [which signals a commitment to corporate social responsibility] is absolutely an identity mark that helps to attract people to our business.”

Adrian Thomas, head of resourcing at Network Rail, says great resourcing has to incorporate an employer brand strategy so the right messages can be communicated to candidates. “Our CEO recently spoke about the difficulty in getting top talent. Organisations like Network Rail perhaps haven’t had the sexiest reputation in the

Top talent tips • Know what success looks like. Draw a clear link between the skills you are looking for and your business objectives.

• Find out where the people with the skills you need are looking for jobs and target those channels.

• Be attractive to candidates. Make sure your expectations are clear, recruitment processes, work and pay and benefits are in line with the market.

• Look inside the organisation, too. You may already employ someone with the skills and experience you are seeking.

• Be ready for a new recruit. There’s nothing more off-putting for an employee on their first day to find no one knew they were coming.

past but are now offering very exciting careers and opportunities and are directly talking to candidates about these,” he says.

The positive message seems to be paying off: the company receives up to 90,000 applications a year and around 98 per cent of people accept its job offers. “At the apprentice end, numbers are such that statistically it’s more difficult to get into Network Rail than it is Oxford University,” says Thomas. He admits it is a harder sell at the senior level but the strategy is to focus on the engineering, management and planning/ strategy opportunities offered by Britain’s only rail infrastructure company. “We show them the investment and the scale and complexity of what we’re doing,” he says.

Such are Network Rail’s resourcing demands that it has a planning team to forecast recruiting requirements and it aims to have candidates in the pipeline for its top 40 roles at any one time.

A lack of planning ahead is a common reason for the failure of some resourcing strategies to meet the needs of a business. Gilead Sciences is currently setting up a workforce management process, which calculates resourcing requirements for the present, future and medium term. It is essential that strategies are able to identify potential as well as those who can do the job from day one, Weinberg says: “Gauge the slip between experience and potential because that will define your talent pool. Start thinking 70 per cent performance and 30 per cent potential, which will widen the pool to a much broader range of candidates.”

Pauline Howell, vice-president of talent and strategic staffing at Cobham, an aerospace and defence technology and systems company, agrees that a degree of flexibility is needed, especially when an employer moves from essential requirements to desirable ones. “Chances are the perfect candidate doesn’t actually exist, and by being too rigid the best talent stands to be snapped up right before your eyes,” she says.

Martin Edwards CEO, Julia’s House charity Britain has not got enough leadership talent. This is not just in terms of people skills (while many good words are written, the standards are often abysmal), but in the decisive leadership to get us out of this economic hole. Really great leadership requires an element of selfsacrifice, rather than pursuing personal profit above all other ends.

Sir James Dyson Founder, Dyson Britain has an innate inventiveness – from the jet engine to Issigonis’s Mini car. But now we need to do more to patent and export our great ideas and turn them into international commercial success stories. It starts in school – practical subjects such as design and technology can be the spark that leads to a career in engineering.

Employers can inspire young people by showing them exciting developments in industry, ensuring we have talent for years to come.

Keith Evans Managing director, Panasonic UK Yes, Britain has talent, and we firmly believe in what can be achieved through developing human potential. Konosuke Matsushita, the founder of Panasonic, stated, as part of the organisation’s guiding principles and business philosophy, that we do not make products, we make people. This is still true today. We identify talent globally and in the UK we have two talent pools – one identifying talent for tomorrow and another identifying people with the potential to be global high performers.

Emma Sherrard CEO, Quintessentially Group (concierge services) There are definitely talented individuals in the UK. We pride ourselves on finding that talent and nurturing it, because a good team is made up of a selection of qualities, from being innovative and creative to academic. Since the economic turmoil

we have seen a new drive to succeed, especially among younger members of the team.

Our internship programme has identified a desire from savvy individuals, who recognise their worth, to gain some exposure and experience in order to progress.

Sir Brian Souter Chief executive, Stagecoach Entrepreneurs are the engine room of the economy and crucial to a sustained recovery. I believe we have that talent right here in our own country but more needs to be done at an earlier stage to nurture it in the education system. Too much emphasis is placed on academic achievement and not enough on encouraging ideas and enterprise. We need to change that.

David Taylor- Smith Regional CEO UK, Ireland & Africa, G4S plc Yes, Britain has talent, and from our perspective, based in 120 countries, it is the strongest net exporter of global management skills. The UK’s expertise in policing, military and government are highly regarded around the world, and as a small island we punch above our weight commercially

and diplomatically. However, linguistic skills can be a barrier to exporting British talent and we have to be aware that in some parts of the world we are competing for influence against countries that have more flexible technology and a lower cost base.

Brendan Flattery CEO, Sage UK and Ireland (specialist software) Yes, the UK has talent. We look for individuals who can demonstrate a well-rounded set of skills, and we give them regular opportunities to demonstrate those skills, either through commercial projects, or initiatives outside the day-to-day job.

We’ve invested in a structured talent management framework that helps employees achieve their full potential. In return, we expect them to be open to change and willing to buy into and champion our vision as a business.

Reporting by Stephanie Sparrow and Tim Smedley

Business Reporter · September 2011

6

an independent report from lyonsdown, distributed with the sunday telegraph

Industry view

The future’s bright people Talent management decisions need a data-driven, evidence-based approach but companies often lack the necessary tools and processes that would help them to retain key staff Attr acting and holding on to key individuals can make or break a company – which is why talent management is a hot topic among senior executives. “Our clients are concerned about the retention of critical-skill and topperforming employees, so we decided to find out what the biggest issues were for them, and to come up with some solutions to help tackle their concerns,” says Joris Wonders, UK practice leader, talent management at consultants Towers Watson.

“Our research shows that companies see talent as the biggest obstacle to achieving their ambitions for growth. However, many do not have

If you are offshoring your customer services, poor research can lead to choosing a location where staff are hard to find or expensive the processes and tools in place to find and keep the talent who may make the difference between prosperity and stagnation,” says Wonders.

Towers Watson’s research – published as Planting the Seeds of Recovery: Perspectives on Talent Management in the UK – found that organisations currently fall broadly into two different categories.

Some are under considerable financial pressure to do more with less. Budgeting restrictions mean that they are limited in terms of external hiring, so they are increasingly focusing on internal talent.

Other organisations, however, are more bullish. They feel they have got over the worst and are starting to focus on growth, keen to start developing new products and to move into new markets where growth is anticipated, such as Asia and South America. They know that to do this they need to hire and motivate the best people.

The Towers Watson research found that both groups admitted to having gaps in the processes and tools they needed to manage the talent they already have or to recruit new talent.

The research shows that many organisations are either not attempting, or are failing, to properly understand future demand.

This is generally because their talent management practices are not sufficiently linked to their overall workforce planning, which itself needs to be carefully linked to the overarching business goals of the company.

Wonders acknowledges that this is difficult to achieve in economically challenging times.

“HR departments will commonly say that they cannot develop a workforce plan without a fixed overall business plan, but there is a way around this,” he says. He adds that, just as the most successfully-prepared companies build alternative business plans based on various future economic scenarios, so alternative workforce

What motivates top talent?

The best people are different. “The factors that attract, engage and retain top talent are different from those that apply to the general employee population,” says Joris Wonders of consultants Towers Watson.

Towers Watson research shows that the number one attraction for the best people is challenging work, and this applies in the UK, Europe and other parts of the world. Without a challenge, your top performers will tend to get bored and restless, and perhaps take off elsewhere. Next, they are impatient for career advancement. “You must ensure that they can clearly see the promotion ladder and the way to climb it fast,” Wonders says.

Another important issue for these people is the ability to have a real impact on an organisation’s performance – they want their work, decisions and actions to bring visible results.

Most workers want to be fairly recognised for their work, but are not so concerned about seeing the fruits of their labours. Top people also know their worth and want competitive pay. Top talent is more concerned about pay than the average worker.

Another factor that plays a part is the reputation of the organisation as a great place to work, though that is more important in Europe than in the UK or globally. “Many companies survey their staff to find out what drives them but, despite cutting the resulting data in many ways, they seldom analyse what factors attract, motivate and retain their best talent,” says Wonders.

“The drivers will differ to some extent according to your sector, but only if you know what they are can you design talent management schemes to attract, motivate and keep the best people.”

Universal drivers for talented people Rank

UK

Europe

Global

1

Challenging work

Challenging work

Challenging work

2

Opportunities for career advancement

Opportunities for career advancement

Opportunities for career advancement

3

Ability to have real impact on an organisation’s performance

Reputation of the organisation Competitive base pay as a great place to work

4

Competitive base pay

Opportunities to learn new skills

Reputation of the organisation as a great place to work

5

Reputation of the organisation as a great place to work

Competitive base pay

Opportunities to learn new skills

plans can be prepared in the same way.

Another mistake that companies are making is to take decisions about talent strategy based on insufficient information. “If an organisation was considering a significant investment in IT, property or marketing, the board would expect the decision to be underpinned by solid research data. But in talent management, that level of rigour is often not applied,” Wonders says.

“If you are offshoring your customer services, poor research can lead to choosing a location where staff are hard to find or expensive or where there is a high level of competition for their skills.”

Though companies may conduct employee engagement surveys, they may not segment the survey results enough to allow them to understand what makes their most effective talent tick, Wonders maintains.

The Towers Watson research indicates that the drivers of top talent are different from those which motivate the majority of workers. (See box: What motivates top talent?)

Decisions about talent management have a tendency to arise in the short term. “Without in-depth research and analysis, how does a company decide the number of graduates it needs to recruit each year?” Wonders asks.

Forward workforce planning is much harder if a company has little relevant research. For instance, unless you know many of your employees are coming up to retirement, or are likely to leave through voluntary turnover, it’s hard to know how many new hires to budget for.

“To be effective, talent management functions need staff who are skilled in analysis, modelling and business strategy – and many in the relevant departments would admit these skills are not their strongest suits,” says Wonders.

“It may be that they have to recruit new staff from the supply chain or finance sectors who have this expertise, or it could be hired in from an outside supplier.

“Successfully using talent management tools and processes depends not just on understanding how best to utilise them, but also needs to be

driven by effective leadership, management involvement and attention and consistent, compelling communication,” says Wonders.

“Without that, even the best tools will not deliver optimum results – and the penalty for failure can be high.” www.towerswatson.com

Nurturing talent – the evidence here and abroad UK

Europe

0%

Global 20%

40%

60%

Investment in internal pipeline of talent

61

53 Creating more movement, rotation and development opportunities for talent

51 Ensuring readiness of talent for critical roles

55 56

50

Developing next generation of leaders with new set of competencies and capabilities

42

Investment in new talent with different skills

31 33

60

58

62

50 50

42

Ensuring successful transition of talent into new roles

32 28 25

Just-in-time talent-sourcing approaches, including contingent and alternative workforce designs

8

9

13

Changing the investment mix in various workforce segment

5

7 6

Business Reporter · September 2011

an independent report from lyonsdown, distributed with the sunday telegraph

Industry view

7

Pay as you grow Recruitment can be a risky business without expert help, says remuneration advice, information and software provider Croner Reward Most managers have made the mistake of recruiting someone just because they like them – but there are far better ways of recruiting the right people, and ensuring they stay motivated.

“In our workshops for managers, most admit they have recruited the wrong people simply because they like them,” says Andrew Walker, expert at Croner, which advises companies on workplace issues including pay and benefits.

It’s tempting to recruit people in your own image, but that’s a mistake. “If you were a goalkeeper recruiting a football team, you would not want a team of goalkeepers,” Walker points out. There are plenty of tools and techniques to ensure businesses recruit people with exactly the right mix of skills they need now, and then motivate and keep them. Croner Reward calls it the reward circle – and there are five stations on that circle.

First, recruit the person with the right mix of skills for the position. That means analysing the skills, qualifications and experience required, then recruiting against that model. Bear in mind the way the job Walker: keeping faith will change over time.

If you happen to like the person who most closely fits the bill, that’s a bonus.

Once you have the right person, invest in them – and not just financially. Failure to invest in training and development leads to demotivation, and means staff are not prepared for the way

There are plenty of tools and techniques to ensure businesses recruit people with exactly the right mix of skills, then motivate and keep them the job may change in the future.

Next, be clear about the objectives of the role and agree them with the member of staff. Many companies recruit the right people and train them, but then expect them to do the wrong things.

Businesses must also set the new person standards and examples. Staff must be shown how the company does things and given good examples of how it’s done – from within the company, from the internet, books or even other companies.

The final step is to reward the new employee’s contribution. If employees fulfil their goals but the

company fails to reward them, you cannot expect their loyalty. Walker says: “As a young branch manager I was promised a new Volkswagen Golf if I achieved my targets. I worked hard and succeeded, but the company gave me a used VW Polo instead. I’d met my side of the bargain but they had not met theirs. It destroyed my faith in them.” Commitment is a two-way street.

This all sounds like common sense, but it’s harder to put into practice than it looks. Tools and techniques can help.

When it comes to recruiting the right person, you may know what skills are required but not what reward package will attract them. “We do hundreds of pieces of benchmarking research annually, so we can tell you what companies in your market are typically offering for the kind of talent you want,” says Walker.

The information can be accessed online or over the telephone by subscription, or Croner Reward can provide a bespoke service. Provided with a job description, Croner Reward will supply a report indicating the kind of package to offer for best results.

“We can be a sounding board and give advice about the packages you are considering, as our benchmarking covers cars, pension schemes, private health care benefits and more,” says Viv Copeland, head of the Croner Reward Business Unit.

Croner Reward also supplies face-to-face

consultancy to help companies determine their needs and bu i ld a n e n d - to e nd r e c r u it me nt , performance m a n a ge me nt a nd rewa rds pac k age, designed to be aligned with the company’s goals, to get the best out of its talent and ensure that talent is Copeland: be fair fairly rewarded.

But why not just do it yourself? “Using an outside consultant such as Croner Reward brings objectivity and independence,” says Copeland.

Many companies just do what they have always done when recruiting and rewarding staff – even when it is not working. “We can help you see if your reward package is fair and that you are not rewarding one group of employees more than another, which is legally risky,” she says.

Employees also respect the fact that data about pay and benefits comes from independent, objective advisers, especially when pay is being renegotiated. “The ultimate aim is to help you build a package that ensures your company is the employer of choice,” Copeland adds. www.croner-reward.co.uk

A talent for recruitment If you want the best staff, choosing the right recruitment partner is critical, says Lawrence Harvey Search and Selection The battle for the best talent is firmly on, as the success of any company is heavily determined by the attitude, ability and drive of its staff.

If your competitors employ higher calibre people, the chances are their revenue, productivity and market position will be significantly enhanced. But harnessing the effectiveness of niche recruitment companies and using your agencies pro-actively will save a business money, time and effort.

As director of one of the fastest growing recruitment consultancies in Europe, the most effective advice I can give is to choose the right

Using your agencies proactively will save money, time, effort and ultimately secure the best talent on the market – Glanfield, Lawrence Harvey recruitment partners, define a clear recruitment strategy and have transparent relationships.

With the rapid growth of the recruitment consultancy industry over the past few decades, it is not surprising that using a consultancy has become the norm within the UK job searching culture, with many candidates using selected

niche agencies exclusively. That makes choosing the right recruitment partner even more crucial.

Traditionally, companies have long-standing, preferred-supplier lists of generalist agencies, but there has been an increase in niche recruitment companies which focus on specialist job functions.

This means there are more potential suppliers, which can be daunting for some organisations.

Hence many businesses opt for large generalist recruitment companies or resource process outsourcing companies, which effectively manage a large number of recruitment consultancies.

While this works well for some organisations, when roles are highly skilled and the demand for specialist talent is very high, the benefits of niche recruitment companies become clearer.

Defining a clear recruitment strategy and committing to niche agencies will enable a business to secure the best talent on the market.

However, organisations must empower their hiring managers to deal directly with their chosen recruitment consultancy.

After all, it is these managers who above everyone will have an awareness of the specialist recruiters who attend conferences (or even hold specialist conference calls or events themselves), are involved in networking events or can identify people which come recommended by colleagues within their field. Successful partnerships with niche agencies will mean managers can respond quickly to avoid losing key talent – managers can rely on an agent’s recommendation and shorten

Mobile learning: improving corporate recruitment skills

the interview process. In addition to being more successful in securing key talent, taking such a simple step can reduce the need for large internal recruitment teams.

However, for this to work effectively and to prevent the chaos of CV duplications, potential litigation and high direct recruitment fees, a proactive, company-wide approach must be taken. Clear communication lines between hiring managers and an internal recruiter must be set up to keep all applications and terms of business in a centralised location.

Where many organisations fail, however, is in not recognising that all hiring managers will need training on how to effectively manage suppliers. This will include how to negotiate terms and being able to turn down agencies that are not performing, but also how to develop key relationships with those which are and

maximising these relationships.Taking this proactive strategy and forging strong relationships with selected niche recruitment partners will make any organisation very powerful in attracting key talent from other companies and, perhaps most importantly, direct competitors.

After all, in a tough economic climate, hiring just a few key individuals into an organisation can have a huge impact on the fortunes of a company.

Thomas Glanfield is managing director at Lawrence Harvey Search & Selection. Lawrence Harvey is facilitating regular free quarterly conference calls for hiring managers and internal recruiters trying to attract talent within their niche markets: SAP, IT, oil and gas and change management.

Call 020 3327 3070 www.lawrenceharvey.com

Business Reporter · September 2011

8

an independent report from lyonsdown, distributed with the sunday telegraph

Industry view

The right way to get Hand over the reins of your recruitment the right person The key to recruiting effectively is to base a job specification on your company’s current needs, says Pioneer Consulting Are you getting good value from your recruitment consultants? Many companies are not, but there’s something positive they can do about it.

Ian Lampitt of Pioneer Consulting, a recruitment consultancy specialising in supplying IT and enterprise technology staff to UK and international clients, says: “Companies could help themselves get better value from their recruiters but many of them don’t know how.” Many companies choose their recruitment consultant purely based on cost.

“They reason that all recruiters do the same job, so they might as well go for the cheapest,” says Lampitt.

Then, typically, an internal manager gives the recruiter a job specification based on the tasks carried out by the last person to fill that position or a similar one – which might be fine, except for the fact that the company and its market are constantly evolving.

A lter nat ively, he or she may base the job specification on combining multiple roles, with the aim of saving money. This may appear cost effective at first but rarely identifies suitable candidates.

Some managers may even base the job specification on the tasks carried out when they filled the role themselves, despite the fact that it could have been years ago.

Instead, says Lampitt, the key to recruiting effectively is to base the specification on the company’s current needs. Review the tasks that have to be carried out and work out what skills the candidate is likely to need. Then you can work with a recruitment consultant to devise the ideal job specification.

Be flexible – don’t necessarily use the same old consultant you have been using for years. Choose ones with in-depth knowledge of your sector and the skill-sets you are seeking. More employers are now using specialist, niche recruiters in order to gain in-depth knowledge of that market, Lampitt says.

“An experienced specialist consultant with years of involvement in the field you are recruiting from will be able to advise you about the skills available and even how many potential candidates there may be for your particular role,” he says.

Having identified the right consultant, invite him or her into your company. “Set aside time to explain exactly what your company is trying to achieve, the projects you are working on and what skills the roles will require,” says Lampitt. Of course this is all much more Lampitt: be flexible and choose carefully

time-consuming that what Lampitt calls “the CV firing model” of recruitment. Typically the consultant, having received little more than a basic job specification fires off emails presenting candidates’ CVs to the client one after the other, hoping that one of the candidates fits the bill.

“This may work well occasionally but it is not likely to be successful in the long term,” says Lampitt. “Moreover you will not be getting value for money, however low-cost the recruiter, because the time spent filtering out unsuitable candidates will ultimately outweigh this.”

Equipped with the right information about the vacancy and company, the recruiter can pre-select the most suitable candidates for you.

“The better the recruiter understands the company and the role, the bigger chance that he or she will find you the right candidate quickly, and the longer they will stay with you,” says Lampitt.

As the recruitment consultant gets to know the company better and becomes a trusted adviser, he is likely to find the right candidates more quickly. This should cut down the time taken to source new hires, and result in a better fit between candidate and vacancy, so the whole company benefits.

The success of the approach, however, relies on first choosing the right consultant, and then taking the time to communicate your company’s needs, aims and strategy. “Initially it takes longer

Equipped with the right information about the vacancy and company, the recruiter can pre-select the most suitable candidates for you than simply accepting the ‘CV firing model’ but it can pay off in the long term,” says Lampitt, citing the case of an IT consultancy that was looking for Siebel customer relationship management software experts.

“They had been let down by other recruiters on several occasions, but our consultant, an expert in this field, talked to them at length. As a result he was able to forward two candidates to them in just two hours, and within a short time one of them was hired,” he says.

“Putting more work into your relationship with a well-chosen recruitment consultant can turn out to be time well spent.”

Outsourcing can save time and money – and secure the best talent, says Capita Resourcing It stands to reason that in order to recruit you need recruiters – and that’s a problem for many organisations that were forced to downsize their internal recruitment operations during the recession. Now that many of these organisations are starting to hire again, the first challenge they face is deciding on how to scale up to meet demand. That’s where recruitment process outsourcing (RPO) can help.

“HR leaders are now faced with several options,” says Mike Ruddle, business development director at Capita Resourcing, which provides a variety of bespoke RPO solutions to the private and public sector.

“They can spend a considerable amount of time and money rebuilding their internal recruitment teams, outsource the full process to an RPO provider or deploy a hybrid solution augmenting internal resources with significant support from a third party, for example, outsourcing parts of the process or segmenting the scope of service to cover specific skill categories or divisions within the organisation.”

But why should a company pay someone else to take charge of their recruitment? Ruddle says: “Aside from the fact that the scalability of RPO offers organisations the agility to accommodate wide fluctuations in resource demand, actually, unless you are in the business of resourcing, recruitment is often not core to your organisational capability.

RPO providers are experts in their fields having developed highly sophisticated methodologies – many companies find it makes sense to outsource the recruitment process to specialists, freeing up their in-house HR departments to focus on internal staff development and other strategic HR priorities.

“While cost is clearly important, there is now an increasing focus on quality,” says Ruddle.

“While the emphasis we have seen on cost containment and reduction over the last few years will remain with us for some time yet, some of the more innovative RPO solutions are now delivering strategic impact for organisations.

The partnerships are evolving, much greater emphasis is now being placed on driving quality metrics through RPO and linking the service to the broader organisational talent management programme.”

Technology plays a critical role as an enabler for RPO to optimise the effectiveness and efficiency of the recruitment process. Capita’s service is largely based on utilising specialist marketleading Applicant Tracking Systems (ATS) which underpin the entire recruitment process, from requesting a new hire online through to supporting the screening, vetting and onboarding process, while providing a comprehensive suite of reporting to track and measure Key Performance Indicators.

Ruddle says: “Combining the benefits of technology with an experienced recruiter at the end of the phone maintains consistency in communication and enhances the candidate experience.

Also, the transparency provides the basis from which informed management decisions

concerning the resourcing strategy and process can be made.

Automation drives process efficiency; which in turn reduces the overall time to hire.

This gives you an edge over the competition because it reduces the chances of the best candidates being poached by other companies while waiting for your recruitment process to be completed.”

The savings opportunities that RPO can deliver are substantial. “We delivered a 73 per cent reduction in average cost per hire for one major utilities company, while reducing their onboarding time – which covers vetting, CRB checks and reference checking – from 60 days to 20,” says Ruddle.

Given the close links that RPO providers have developed with technology partners, the RPO providers are at the forefront of some of the latest innovations in the market. Organisations considering RPO are able to benefit from this relationship from both a cost and innovation perspective. Ruddle says: “There are some really exciting developments on the technology side in the area of data benchmarking and diagnostics tools. These can be used by organisations to compare the effectiveness and efficiency of their recruitment process – to operate as a kind of health check in the market from a cost, process

Many companies find it makes sense to outsource the recruitment process to specialists, freeing up in-house HR departments to focus on internal staff development and other priorities and resourcing strategy perspective. For example, organisations with a heavy reliance on temporary resources could benchmark their pay rates against typical rates in their sector, in the surrounding geographical area or for particular skill-sets.”

But, says Ruddle, all this counts for nothing without commitment on the client’s behalf.

“Senior management has to be fully behind the idea of RPO, working with their provider in true partnership and jointly communicating the concept to key stakeholders within the organisation,” he says. “Used properly, RPO should deliver a better quality of candidate, faster, and at a lower cost.”

Capita Resourcing will be exhibiting at the DSEi 2011 Expo from 13-16 September at the ExCeL, London. Please come and see us at stand N7-272 in the Security Zone next to the Security Showcase & Demonstration Arena Jennifer Dodd is marketing manager at Capita Resourcing www.capitaresourcing.co.uk

Business Reporter · September 2011

an independent report from lyonsdown, distributed with the sunday telegraph

Retaining great people

9

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Hang on to them

Star track: the next generation Getty Images

Encouraging your best employees is key to being on top of the world

By Widget Finn

The difference between world-class and “average” organisations lies in the people they employ. Keeping the talent to grow a business and contribute to its performance has never been more important. If organisations are to survive economic turbulence and be ready to take advantage of recovery, they need the best people to lead them through. But the challenge is identifying the high-fliers for such circumstances and encouraging them to stay.

“In the current downturn, the requirement for innovation, courage and risk-taking is at its greatest,” says Mike Hawes, HR director at B&Q. “These are characteristics of top talent. Talented people enjoy a crisis, so they can show their steely credentials and nerve. The downturn is flushing these out and giving people real CV-enhancing opportunities to build their experience and boost their skills.”

Waiting for talent to be flushed out could be a lengthy business. Fortunately there are other methods, including a huge range of software and packages to help organisations identify future leaders. Hertfordshire County Council is among those making the most of technology to seek out its stars. The council has launched a talent and Leadership Strategy to identify the top 5 per cent of staff with high potential. Its nine-box model identifies an individual’s resilience, delivery above expectations, ability to develop creative solutions and exceptional performance. Louise Tibbert, head of HR says the aim “is to target and hothouse those with potential to go forward and become the leaders of the future”.

Once identified, these high-fliers are supported with an individual development plan that includes feedback from bosses and colleagues, internal coaching and mentoring, and challenging project work. An internal leadership academy provides fine-tuning that includes an annual

interview with a senior manager. Rather than formalised approaches and packages that can be costly, some organisations prefer to track the performance of their emerging talent through informal monitoring by the line manager. The dayto-day contact between managers and staff can be the most effective way of assessing potential and development.

Donna Miller, HR director of Enterprise RentA-Car, says: “New employees have individual training with their branch manager and are often given responsibility early on by being involved in mentoring or a ‘buddy’ scheme. Crucially, they know from the start how and what they must do to progress. At recruitment stage we assess candidates on six skills, including leadership and customer care, and through regular reviews we identify their performance against these competencies and recognise who is ready for promotion.”

Retention is always a key issue for employers – PricewaterhouseCoopers (PwC) estimates that staff turnover costs the UK £42 billion a year in loss of knowledge, experience and contacts. The good news when budgets are tight is that throwing money at the problem isn’t the answer. PwC has found that high-fliers are more interested in non-material incentives, such as the chance to lead projects and even simple praise, rather than bigger salaries. Training and development are also high on the wish-list of talented people, who know that these will have more value for their career prospects than a pay rise.

It follows that whatever economies are made, money spent on devel­ oping talent is an essential investment.

Innocent Drinks is a small company with a big development Tibbert: hothouse for future leaders

programme for its “smarts” – Innocent-speak for talented people. Helen Hatton, head of HR business partnering, says: “We send our people on the best sales courses and technology programmes, and all our managers take part in the Innocent Academy, which is a development programme designed by London Business School and delivered by Innocent. They know that they will also have the opportunity to be involved in major projects, which wouldn’t happen in a larger organisation.”

Hatton also cites the Innocent culture as a strong retention weapon: “People like working for an entrepreneurial company with strong values.”

Innocent must be hitting the right buttons, since its retention rates are 80 per cent a year, with nine “Village Elders” – staff who have been in the company almost since it was founded in 1999.

Good people will stay in an organisation when they can see a challenging career path ahead.

Jill Shedden, group HR director, has been with Centrica for 23 years. What kept her so long? “The company has gone through huge changes over two decades, which has given me the opportunity for a different career every two or three years.

With the new generation of talent, we offer them structured career development and show them how they’re contributing to the future of the company through our financial results and key investments.”

The prospect of riding the recession and coming out the other side equipped to take advantage of an economic upturn can seem daunting to many employers. But their most valuable weapon is the quality of their people.

Britain’s talent will go where the opportunities are, they’ll stay where they are made to feel valued and they’ll do their best where they’re in tune with the organisation. If you hire people who’ll fit your organisation and have the ability to take it forward, then encourage them to stay by recognising their worth and offering them development and a career path, then you could be on the way to being a world-class winner.

With costs draining the graduate pool, organisations are tapping apprenticeships and other growyour-own-talent schemes As higher university fees threaten to reduce the size of the graduate pool, organisations are spreading their nets widely to find future high-fliers – the next generation of talent.

Take Hertfordshire County Council.

The council has maintained its annual intake of around 12 graduates despite budget pressures, but is assessing its needs 10 years ahead. “With a potentially shrinking graduate pool the challenge is to remain attractive to graduates as an employer,” says Louise Tibbert, head of HR, “but we’re currently considering whether we should also be targeting 16- to 18-year-olds, or establishing post A-level business apprenticeships”.

Apprenticeships are a way for organisations to grow their own talent. The National Apprenticeship Service was launched in 2009 to increase the number of employers offering apprenticeships and has enlisted the support of some of the UK’s leading organisations.

Richard Harpin, chief executive of HomeServe, is a great believer in long-term apprenticeship schemes. “Over the next three years we are investing £1m in our schemes, with 20 per cent of our engineer workforce coming from apprenticeships by 2013.”

Professional services firm PwC is also looking ahead, says Charles Macleod, its UK head of talent. “If graduate numbers are reduced, we will take more people through our school-leavers programme.

We annually recruit a hundred school-leavers, who study for the Association of Accounting Technicians exams while getting work experience.”

Despite the economic climate, some companies are investing in their future by sponsoring undergraduates. For example, supermarket chain Morrisons is funding 20 undergraduates on Bradford University’s three-year BSc in business and management.

The firm is paying fees but students must work for Morrisons for at least three years once they graduate. Meanwhile, management consulting firm Accenture offers graduates a golden hello of around £11,000 to help them pay back their student loan.

Internships have received bad publicity over the past year, criticised as a source of free labour or for hindering social mobility, but they remain an important part of the talent recruitment programme for many organisations, and there is evidence that pay can be involved.

For example, 45 per cent of employers in the CBI’s Education and Skills Survey 2011 offer internship opportunities, and 89 per cent say that they pay these interns at or above the appropriate minimum wage for that role.

At PwC, 350 undergraduate interns are hired during the summer vacation for a month at a pro rata salary of £25,000 a year. Some 90 per cent of these interns arerecruited after graduation, says Macleod, who points out that they are an important part of the firm’s recruitment programme. “If you are doing your selection correctly, then you’ve picked people with the right credentials who will be your future talent,” he says. WF Macleod: programme for school-leavers

Business Reporter · September 2011

10

an independent report from lyonsdown, distributed with the sunday telegraph

Industry view

An investment that works for you Manpower says talent will be the most vital factor in helping companies to succeed over the next decade – but with a shortage of qualified and skilled workers, where will employers find it?

UK companies currently face a talent conundrum. With high unemployment there is no shortage of workers. But at the same time the qualified and and experienced talent needed to fill key positions is just not available.

What’s the answer? Krissie Davies, operations director at Manpower, the global leader in contingent and permanent recruitment workforce solutions, recommends some options.

“We refer to this conundrum as the talent mismatch,” says Davies. “Many qualified and skilled people retired or took redundancy in the recession, so now that companies are growing again, the skilled people they need are hard to find.”

Companies can see that talent will be the most important factor in helping them to succeed over the next decade – but where do they get it?

ManpowerGroup’s Talent Shortage Survey of almost 40,000 employers across 39 countries and territories showed that one in three employers say they cannot find the right talent to fill vacancies.

“The problem is cropping up in the UK and in many other countries, and the slow recovery is making the mismatch all the more stark,” says Davies. The old “just in time” approach to hiring will not work anymore as it is reliant upon there being a big pool of available and qualified talent.

In the years of the economic boom, talented employees moved jobs every couple of years, so there was always a ready supply of people looking for new positions.

But now, high-quality talent is much less likely to change jobs and demographic changes mean the working-age population is declining. “Just in

time” hiring is not a long-term solution.

Faced with this problem, companies have three choices, says Davies.

First, they can settle for the available candidates. This will allow a company to build up its workforce but given the shortage of wellqualified people, how well will they be fitted for the role they are hired to fill? A mismatch can have long-term effects on productivity and, in the worst cases, result in company meltdown.

Alternatively, companies can try to get more out of their existing workforce in order to boost productivity. A study by Right Management, ManpowerGroup’s talent and careers specialist, found that it was not uncommon for some employees to be doing three jobs. However, overstretching the workforce leads to discontent – 84 per cent of workers said they were seeking a new position.

Thirdly, companies can “manufacture” their own talent by looking for a “teachable fit”.

This involves looking for candidates, either internally or externally, who may not have all the technical skills required for the role that needs filling but who have the right

soft skills and capabilities to enable them to be trained for it.

Introducing this new long-term mindset usually means a re-evaluation of the company’s workforce strategy, but most are ill-equipped to do this.

“Many companies recognise that talent is going to be the key investment for their future, but often do not know what potential talent they have among their own employees,” says Davies.

“Our research shows that only 13 per cent of companies have a documented workforce strategy. Given that talent shortages are set to grow in the next few years it is quite alarming that they are so ill-prepared to start growing their own.

Worse, many companies do not realise that they face a potential talent drain. The talent shortage is global, and top talent is willing to move worldwide to follow the best jobs.

“Many emerging markets, such as the BRIC countries, are showing greater economic growth than Europe and aspiring executives in their twenties and thirties are likely to be attracted by the deals that companies there can offer,” says Davies.

The good news is that companies can get help in tackling the problem. Davies recommends working with recruitment advisers in drawing up future workforce strategies and looking for teachable fit solutions to talent shortages.

“Give recruitment advisers the time to come and help you discuss your recruitment strategy,” says Davies.

“Manpower can bring access to international research about the market and we are developing new tools, such as the capacity to pinpoint talent hotspots, which can help.”

But none of this will work until top management prioritises the issue, says Davies.

“Companies must ensure talent management and planning is as much a part of their forward strategy as financial planning. It can no longer go on the back-burner.

“They literally cannot afford to get it wrong.”

Hard to fill jobs in 2011 1. Engineers 2. Chefs/cooks 3. Management/ 3. executive 4. Sales representatives 5. Drivers 6. Technicians 7. Skilled trades 8. Teachers 9. Accounting and 9. finance staff 10. IT staff Source: ManpowerGroup’s UKTalent Shortage Survey Results 2011

Discovering the next best thing Manpower identifies the teachable fit framework as a new approach that aims to ease the talent mismatch. When you cannot find the talent you need for a particular hard-to-fill role, you can instead look for the teachable fit. That means finding a candidate, inside or outside your organisation, who may not be exactly what you are looking for, but who can be trained to fit the role. The secret of identifying a teachable fit is to: • Analyse the capabilities needed for a given role • Ask which of them are teachable in an efficient way • Ask if there is enough time and money to develop them in the candidate, and • Ask if the candidate has the motivation and capability to develop them

Does the role require a degree or high-level technical skills? In fact, soft skills might be more important. Talent and career management company Right Management found that the key factors prompting accelerated performance were not technical skills or previous experience, but cultural fit and interpersonal savvy.

Can the capability of the candidate be developed by courses, mentors or opportunity to practise? If so, do any existing staff have the time or expertise to be instructors, or would you have to buy in training? How cost-effective is that?

Manpower quotes the example of a company needing software engineers. The heart of the job involves configuring new products or designs and diagnosing new situations.

Teachable fit analysis indicates that a relevant degree or equivalent experience is essential, but some of the knowledge about new technologies is gathered continuously and depends on the candidate’s inclination to learn. Candidates with the right intellectual profile could learn or hone the required skills on the job.

So the best source of candidates could be the company’s own programming, information systems or engineering staff, who can upskill to software engineering. Failing that, product or manufacturing engineers with extensive experience in computer aided design and group technology systems might make the change quite easily.

See Manpower’s Teachable Fit white paper at www.manpower.co.uk/whitepapers

Grow your own After winning some new long-term contracts, The Oshkosh Corporation and Marinette Marine Corporation in the US faced a serious shortage of welders.

Knowing it would be a continual problem, Oshkosh started working with a local college to provide accelerated learning courses to people referred by the company for specific training.

In India, talent development company the National Institute of Information Technology is working with business process management company Genpact, to supply its employees with industry-specific soft skills.

Skills such as adaptability and intellectual curiosity are being developed in employees to ensure that the company maintains an adequate talent pipeline in the future.

Business Reporter · September 2011

an independent report from lyonsdown, distributed with the sunday telegraph

11

Global leaders

If your face fits...

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Adaptability is crucial for making a mark abroad

By Julie Nightingale

In today’s global market, it is not just customers who may be overseas but also large parts of the business itself. And customers, cultures and workforces can be hugely diverse, presenting unprecedented challenges.

The consequences of failing to prepare staff adequately for a global leadership role can be dire, according to research from international HR consultancy Mercer. If the company wants to expand globally, but lacks a plan for equipping people with the skills and experience to lead in that environment, “they will ultimately find that they don’t have the talent to build their sales, marketing and other operations,” says Jay Conger, professor of leadership studies at Claremont McKenna College, California, who led the Mercer research.

“It will also be difficult for them to mobilise or spread the culture of the organisation into an emerging market, because if you use outsiders or locals who have not been socialised in the culture you won’t be able to spread core values,” Conger adds.

“And strategy is like culture – it’s a mindset.

So if you rely on locals or outsiders you hire specifically for those roles, they may not have as much clarity around what the strategic intent is.”

For Chris MacRae, head of global talent management at pharmaceuticals multinational GlaxoSmithKline (GSK), which operates in more than 100 countries, leaders in this environment have to be able to “think above a country level” and handle overlapping political and economic factors, as well as logistical ones.

“If you are managing four, five or six markets in a sub-region or a big region with 20, 30, 40 markets, you have to balance those different agendas and still drive a business strategy that can work within them all. The level of complexity is so much more difficult,” she says.

GSK has a number of programmes to help its leaders understand the global landscape. Its Esprit programme sends MBAs to work in multiple markets around the world for three to four years to give them a wide breadth of experience early in their career. And the Enterprise Leadership programme recently took senior people – ones earmarked for a place on the company’s internal

executive board – to Kenya to talk to healthcare specialists and NGOs, as well as government, multinationals and other businesses.

“All of those people on that programme have worked in a variety of countries in western Europe or North America but [Kenya] is such a different market that it opened people’s minds to a completely different business model,” says MacRae. Local management culture can be difficult for foreign businesses to grapple with at first.

In India, for example, managers tend to tell the bosses what they want to hear, rather than offer a more critical appraisal of an operation’s performance, says Wayne Searle, head of organisational development and talent acquisition for global telecoms company Cable and Wireless Worldwide.

“A great number of colleagues in India on secondment found it very frustrating that there was a great amount of will and desire to do a number of things but people couldn’t articulate why the application [of a technology] would be good for the customer or what the return on investment would be,” Searle says. “It was just: ‘This is better than the competition.’ ” To prepare managers to handle – and change – that culture, Searle runs one-to-one coaching sessions with senior staff “to convey that openness is required, rather than something stage-managed”.

Computacenter, which operates in western Europe, South Africa and Kuala Lumpur, and through partnerships in 50 other countries, sends its senior executives on three- or four-year international assignments as part of their career development. At the foods giant Nestlé, Ed Marsh, head of talent and organisational development, says the approach is to develop people with the right principles and aptitudes to be effective as a leader in a variety of different circumstances.

“Adaptability and agility are probably the defining factor of what we look for. They mark leaders out and are effective in a variety of situations,” he says.

Once a year, Nestlé assesses talent across its 443 factories (in 81 countries) and 281,000 employees. It examines both performance and potential, especially the ability to learn new things, as well as emotional intelligence and people skills. The findings are mapped on to a grid to indicate what might make people fit for

Key skills for success Consultancy firm Mercer recently published research into global leadership development, led

by Jay Conger, professor of leadership studies at Claremont McKenna College, California.

It pinpoints a set of key competencies leaders need for their company’s globalisation strategy to succeed: • enthusiasm for learning about other cultures and sensitivity towards leading across different cultures • a sense of adventure and entrepreneurship • Insight and understanding into the economics and politics of a country and the local movers and shakers • networking capability – without it, leaders tend to be much too reliant on people who might potentially be their “handlers” which is not going to be enough to be very effective at the executive level • a global leadership mindset, which Conger defines as an ability at the executive level to understand the complexity of the geopolitics of the place, and to identify and take advantage of opportunities.

promotion. The process is common to many large organisations but it takes on a greater significance for a company operating internationally, says Marsh. “We are trying to avoid the classic syndrome of promoting the best functional

experts to be the leaders – someone may be a great sales person but doesn’t necessarily make a great sales manager, for example. When you move people internationally, any limitations that people may have get exaggerated, so it’s doubly important [to avoid that] in the international environment.”

Nestlé’s graduate and MBA recruits spend seven or eight years acquiring expertise and building a track record, so only come on to the company’s radar as having international leadership potential in their early 30s. However, Marsh says this extended development period may have to change in line with the different priorities of this generation of graduates.

“We are trying to find more ways of getting people short-term project assignments outside their country of origin in their late 20s. They do need to have at least three to five years as a marketing manager, engineer or other role to have value somewhere else. But definitely the earlier we can get people expat experience the better.”

Largely because it sets such store by learning through experience, the company is confident, says Marsh, that it can compare the calibre of its people from country to country. “Our development methodology is primarily ‘Give someone something to do and see how they get on’. Whether they fall or are successful, you can see the results for yourself, whereas putting them through the right educational or training programme is more of a gamble.”

Power play in the away game A collaborative management style is increasingly necessary for Brits being sent overseas. So why haven’t more of them adopted it?

By Julie Nightingale Globalisation has brought a raft of both challenges and opportunities for British businesses, large and small. Key among them is finding the people who can get to grips with new cultural and political environments, as well as the economic shifts that success in global markets now demands.

A major problem is that there are huge pressures to localise management – particularly in the key economies of Brazil, Russia, India and

China, says Paul Sparrow, professor of international human resource management at Lancaster University Management School. “Any British expatriates who need to operate there have to be particularly effective and skilled to compete,” he says.

“In the long term, the answer is to develop talent within these countries and then make sure they fit back in with your corporate culture, rather than to keep trying to send expensive expatriates out to these operations.

However, early in the relationship expatriates often have to be used.”

Some British incomers may have

to rethink their management style: the days of an expatriate being able to tell overseas operations what they must do have long gone, he suggests.

“Many of the business arrangements in these countries are through joint ventures or strategic partnerships, and this requires a much more collaborative type of leader.”

This problem afflicts many multinationals, Sparrow points out. It reflects the fact that many expats – who used to be the ones who spread the corporate culture into the foreign operations – now have to work in positions that rely

much more on being able to create trust, build influence and develop networks. They find it difficult to adjust because, back in the corporate HQs, position still equals power.

This maxim doesn’t apply when you’re working a joint venture and your company does not have ultimate control or responsibility.

Several studies in the last decade, here and overseas, have pinpointed skills that global managers need in order to be effective. So why haven’t businesses tuned into the need for a change in approach until now? “It is because many of the competency and

leadership models that are being used are based on domestic success and on more transformational models of leadership, rather than ones based on mutual collaboration,” says Sparrow.

The casual approach that some companies take in deciding who to deploy overseas is another contributory factor, he says.

“You have to accept that in many cases companies don’t really think about this as a selection decision – someone just lays their hands on you at the coffee machine and tells you that you need to go. That is not a good strategy either!”

Business Reporter · September 2011

12

an independent report from lyonsdown, distributed with the sunday telegraph

Industry view

The view from here Skills, knowledge and experience all count but good management can make all the difference. We ask three industry leaders how to get the most from your greatest assets

Joris Wonders

Huw Hilditch-Roberts

Kevin Vaughan-Smith

Why is talent management particularly important now?

What is the most important talent management issue for companies today?

How does employee engagement contribute to making a company great?

As organisations start to grow again, they see the need for new talent – and then they panic. Chartered Management Institute (CMI) research shows that only half of the top 2,000 UK companies have a fixed talent management process to identify and develop internal talent.

As a result, companies often rush to hire new managers rather than consider how their in-house talent can be developed to meet their needs.

The tie between engagement and company performance is clear: engaged employees lead to higher customer satisfaction, which in turn leads to more repeat business, more cross-selling opportunities and more referrals by customers to new customers.

If you have the highest customer satisfaction in your industry, you will have the highest growth. A FranklinCovey study of the most effective retail outlets in the US – undertaken for the Coca-Cola Foundation – showed that the highest performing stores had the highest employee satisfaction and the highest customer satisfaction. It also showed that high customer satisfaction scores resulted from high employee satisfaction.

Our research and clients tell us that senior leaders are more concerned than ever about talent management. Some organisations are driven by a need to do “more with less”. Tighter recruitment, training and development budgets mean they need to develop and deploy their existing talent more carefully.

However, other organisations are focusing on growth, so they need the right people and capabilities in place to deliver it.

What are the biggest mistakes companies are making in managing talent today?

Companies finding it harder to manage talent are often struggling with one of three things: failure to develop a compelling employee value proposition (EVP), which sets out what’s unique about working for that company; not adequately linking their workforce planning to their business planning; or not having the processes to identify, engage and deploy their top talent effectively.

How are they losing out as a result?

Without an EVP, it is harder to compete for and to retain talent.

When the employment market picks up, the impact of this will be even more severe. Failure to link workforce planning to business planning can have dire consequences: if a company is entering new markets or developing new products or services, a lack of capability can result in competitive disadvantage. Alternatively, over-resourcing can prove costly. Lastly, failure to identify, engage and deploy existing top talent means it is wasted – and may ultimately choose to leave the organisation.

“Tighter recruitment, training and development budgets mean organisations need to develop and deploy their existing talent more carefully” What solutions can you offer to tackle these problems?

We help organisations define, implement and communicate compelling value propositions for employees, from reward to career development, and other drivers of engagement such as leadership.

Our workforce analytics work can help organisations make decisions about investment in talent that are based on real evidence, bringing a rigour that senior leaders are increasingly demanding from their HR department. Our tools, processes and supporting technology can also help companies do a better job of identifying, engaging and deploying talent.

Joris Wonders is UK practice leader, talent management at Towers Watson www.towerswatson.com

“Companies often rush to hire new managers rather than consider how their in-house talent can be developed to meet their needs” How does this affect company performance?

Hiring a new manager could mean recruitment costs of up to 25 per cent of the recruit’s annual salary, plus associated expenses.

Bringing in a new manager also risks disengaging existing talent.

CMI studies show that 84 per cent of managers want to be considered as having high potential. If they feel overlooked in favour of a new recruit, their motivation and engagement will almost inevitably drop, resulting in a negative working environment.

That affects performance, and staff turnover may well increase.

And all the while the talent the company needed may have been there, just waiting to be developed.

How can the CMI help?

Members can use our online network to access peer advice about identifying and managing talent. We also offer online guidelines covering areas such as diversity, because it is known that using talent from a wider range of backgrounds reduces disengagement and increases productivity.

We also offer bespoke management training programmes around identifying talent. Training existing managers can literally save lives. For example, after managers at Serco, which runs Doncaster Prison, were given specially-designed CMI training, re-offending and suicide rates were reduced from the highest in the UK to some of the lowest.

Huw Hilditch-Roberts is director of membership and business development at the Chartered Management Institute www.managers.org.uk

What are the biggest mistakes that companies are making in managing talent today?

Companies too often treat their employees as if we were still in the industrial age rather than in the knowledge worker age. They define employees as “full-time equivalents” or a job spec, and the finance department sees them simply as expenses.

When we change to see them as a whole person with needs in the four dimensions of “body” (“Am I reasonably paid and physically cared for at the workplace?”), “spirit” (“Do I work at something that makes a contribution?”), “mind” (“Do I have opportunities to develop in my role?”) and “heart” (“Do I work with people I respect and who respect me?”), we create opportunities for them to engage their whole being with the job.

“Companies too often treat their employees as if we were still in the industrial age rather than in the knowledge worker age” How can employers avoid those mistakes?

Leaders must recognise that their job is to unleash the talent of the workforce, not direct and measure their performance in the industrial-age manner. They need to examine their existing industrial-age systems and realign them to support the needs of knowledge workers.

Kevin Vaughan-Smith is managing director of FranklinCovey UK and Ireland www.franklincovey.co.uk

Business Reporter · September 2011

an independent report from lyonsdown, distributed with the sunday telegraph

Incentives

13

Perks of the job How can companies find the right balance between rewarding staff while keeping costs down?

Motivating talent during economic turbulence is a key challenge for employers who are under pressure to keep the pay bill down while retaining or attracting the people who could lessen the impact of the downturn.

Over the past couple of years, employers do not appear to have used financial incentives to boost talent. The average pay rise across the UK economy has loitered at around 2.5 per cent, according to figures from Incomes Data Services.

Furthermore, says the Chartered Institute of Personnel and Development, over the past year, three-quarters of employees have been subject to a pay freeze or even a pay cut.

For the most part, this appears to have been consistent regardless of the seniority of employees.

However, despite David Cameron’s mantra of “we’re all in this together”, the latest directors’ pay research from Deloitte suggests that the pay gap between the most senior people in the business and the majority is widening once again.

The Executive Directors Remuneration Report, out this month shows that a two-year period of austerity in directors’ pay is coming to an end.

Most firms are increasing executive pay this year and in many cases increases for executives are well above the average. For example, in FTSE 100 companies, pay increases for senior executives this year are typically within a range of 2.5-7.5 per cent with a median of 4 per cent.

Stephen Cahill, partner in the remuneration team at Deloitte, is surprised by the salary increases and sees some parallels with pay trends

a decade ago when senior executive pay seemed to be operating in a parallel universe. “We believe that it is important to avoid falling back into the cycle of increasing directors’ salaries at an ‘executive rate’,” he says and expresses some concern at the impact on the morale of other talented staff.

“Remuneration committees should consider increasing directors’ salaries only where there is a real and compelling reason for doing so,” he warns. “Any increases should be limited to the general level of increase for other employees.”

Meanwhile, many organisations are thinking creatively about how they spend their limited resources. For example, voluntary and flexible benefits such as cycle-to-work schemes and childcare vouchers are a good way of enhancing benefits without busting the pay bill. Some savvy employers are also developing a set of non-financial benefits specifically for high performers.

This is certainly the case at AddPeople a 90-strong digital marketing company in Manchester. “We reward employees who excel at their job because they are the future of the business,” says director of sales Phillip McNulty. Three years ago it implemented a novel way to recognise special performance, when it introduced Club Elite for high performers in the sales, customer care and the technical departments. Employees who hit a certain target on deals or build a special relationship with customers are invited to join Club Elite which

% of companies 35%

Salary increases

30%

FTSE 100 FTSE 250

25% 20% 15% 10% 5% 0%

0%

0% – 3%

3% – 5%

Greater expectations

By Stephanie Sparrow Are pay and reward systems leaving Britain’s most crucial pool of talent feeling short-changed? Some of the latest research suggests that this might be so.

The report Great Expectations: Managing Generation Y from the Institute of Leadership and Management (ILM) and Ashridge Business School looked at the expectations and experiences of graduate employees aged 29 and under. It found that remuneration is an area of discontent for the group, which is motivated by status, salary and career advancement.

5% – 10%

more than 10%

Day at the races: companies are looking for different ways to reward their best people

gives them access to rewards such as a week in Paris, a private box at the races and meals at Mayfair restaurants. There are currently 10 members of the club – all have stayed with AddPeople and three have been promoted since joining Club Elite.

Baringa Partners, a consultancy in the utilities and financial services markets is also offering more than a pay rise to its high flyers. Each quarter, staff are invited to nominate a colleague who has demonstrated an exceptional contribution to the business. That colleague is offered a reward tailored to his or her individual interests such as a spa day or a golfing weekend. The most recent winner, for example, received her reward for leading a team of 120 people in a client-project that involved weekend shifts to avoid disruption to the client’s business.

Effectively, this reward scheme is recognising someone’s contribution and saying well done and thank you. Managing partner Mohamed Mansour believes this attitude to high performance has been instrumental in the organisation’s success.

It has seen turnover grow by 38 per cent in the year to march 2011 and headcount rise by 42 per cent to 173. It has also won a national best workplace award for two years in succession.

Like most small businesses, in a climate of economic restraint, “our success lies in our talented people”.

Sheffield’s got talent Universities need talent—their reputation rests on attracting and retaining top quality academics supported by the best staff. At the University of Sheffield this is reflected in a performancerelated pay scheme that is designed to reward high-achieving employees.

A grading structure underpinned by job evaluation, with bespoke profiles written specifically for the University, ensures that each job is paid fairly right through to the most senior staff. For the top academic talent, pay is closely linked to personal performance and salary increases are not automatic - they are awarded to recognise an individual’s contribution.

This approach has been supplemented since 2006 with Exceptional Contribution Awards (ECAs) whereby an individual who shows exceptional performance or demonstrates sustained excellence can be rewarded with a one-off, lump sum.

ECAs are applied flexibly and locally, and are decided upon by a panel process for consistency purposes. For example, they may be given to academics for excellence in research, teaching, leadership or a blend of these.

“Our reward strategy supports the university’s aim of developing excellent staff,” says Andrew Dodman, director of HR.

Generation Y employees need special handling and rewards to stop them getting itchy feet

Generation Y typically refers to people born from 1985 to 2001.

Despite that age range being the fastest growing segment of the workforce, and graduates being a highly sought-after group of employees, they feel that they have little influence, and a significant proportion of that group (45 per cent) think that their salary is either below, or greatly below, expectations. Opportunities for career advancement were the next biggest disappointment (at 38 per cent).

This sense of being let down could lead to Generation Y exercising their itchy feet. More than half of graduates (57 per cent) think they will leave their

employer within two years, with 40 per cent expecting to leave within a year.

There are dual tensions at play here: organisations invest time and money to develop their graduate population as a talent pipeline, but the graduates’ desire to move on undermines its effect on competitiveness. So what can cashstrapped employers do? The first thing is to realise that pay and reward “are not synonymous”, says ILM chairman Peter Cheese.

“Pay is an aspect of reward and reward is about recognition,” he says.

“Generation Y expects it because it has grown up with constant recognition about its achievements.”

Reward should be about acknowledging achievements, such as staff recognition schemes and vouchers, and pay can be used flexibly to meet employees’ life stages and needs.

“Part of a £25,000 total pay package might be health care,” says Cheese. “This could be flexed for someone of 24 years who would prefer to receive just pay. Whereas someone of 35 years with a young family might be interested in health care benefits.”

Cheese, who also sits on the Talent and Skills leadership team at Business in the Community, points out that such “segmentation” in how employee groups are managed will

become integral to holding on to talent.

Managers will have to match effective performance evaluation with graduate expectations about career, salary and status. For their part, graduates should realise that they don’t need to switch companies in order to develop a portfolio career.

“The Generation Y notion of gaining experience through many jobs needn’t mean moving from the organisation,” he says. “Managers need to point out where other opportunities and projects could be available internally.

“Targeted talent management, that recognises individuals, has to be the direction we take.”

Business Reporter · September 2011

14

an independent report from lyonsdown, distributed with the sunday telegraph

Industry view

Spotting something special Talent is in short supply so choosing the right recruitment partner is crucial to securing the best for your business It’s perhaps a truism, but talent is always in short supply – even with relatively high unemployment. A good recruiter is essentially a talent spotter, able to identify the best quality candidates whatever their availability in the marketplace. In fact, it could be said that finding talent is sometimes harder during periods of economic turmoil as candidates tend to stay put rather than jump into the uncertain waters of a new role.

How, then, to pick the best recruiter – and, by definition, the best candidate? When choosing a recruitment partner, there are two key considerations to bear in mind. Firstly, choose a niche player, and secondly, make sure that your chosen recruiter is a member of the Association of Professiona l Sta f f ing Companies (APSCo).

A niche recruiter should have a greater depth of knowledge and genuinely understand the markets in which its clients operate. This is doubly important if Swain: good recruiters are talent spotters

you operate in a highly specialised industry or require someone with very specific skills.

Niche recruiters tend to have the specialist knowledge and depth of relationships to provide higher levels of service. Many niche recruiters

Finding talent is sometimes harder during economic turmoil as candidates tend to stay put rather than jump into the uncertain waters of a new role will produce shortlists, undertake candidate profiling and in-depth market research rather than simply submit CVs and candidates.

There are other benefits, but niche recruiters with the technical know-how to really understand client needs can add much more value to the recruitment process.

My second point about choosing an APSCo member may seem shamelessly self-promoting,

but among thousands of recruiters in the UK finding quality can be a hit-and-miss affair.

Membership of APSCo is that mark of quality.

It is important because any recruiter you partner with will be an ambassador for your brand. Choosing a recruiter with a high level of professionalism and ethics is therefore vital to protecting and promoting your brand values.

This is particularly vital in niche sectors where skills shortages can be a significant problem. The

ability to identify and attract the right candidates can be business critical, so recruiters who are able to promote and sell your brand to that rare candidate can add immense value.

There are thousands of recruiters in the UK, but picking the right one is harder than ever. An APSCo member would be a good starting point.

Ann Swain is chief executive of APSCo www.apsco.org

A Fresh Approach to Growth Apprenticeships can bring real business benefits by; • • • • •

Reducing training costs Increasing productivity Developing a skilled and accredited workforce Generating increased sales Improving customer service results

To find out how Apprenticeships can work for your business;

Call 08000 150 600 or visit apprenticeships.org.uk www.apprenticeships.org.uk

Business Reporter · September 2011

an independent report from lyonsdown, distributed with the sunday telegraph

Industry view

15

Achieving the best of their abilities Don’t wait until someone leaves to tell them how good they are – celebrate talent all the time and your company will reap the benefits Without employees, an organisation would not exist. And without talented and motivated employees, an organisation has no hope of flourishing and staying competitive. Internal talent management is vital to the success of an organisation; ensuring that staff and future leaders are engaged, productive and working to their full potential is highly beneficial to a company’s future.

Entice your market’s top talent If you hope to be the employer of choice in your particular sector then you must be serious about wanting to make talent a key influencer in your company. Try to involve large numbers of stakeholders in recruitment. This does not mean horrific interview panels of 15 or more staff each asking two questions. It means informal consultation, for example, sitting a potential recruit in the work area of the team they may be joining for an informal Q&A session for 15 minutes.

Then create a stunning induction programme that turns interest in the organisation into deep respect and profound admiration. The aim is to develop a constantly reinforced belief in the new recruit that they have made the right choice in coming on board and that all the talk and promises made at interviews are followed through and delivered.

Everyone has potential Create an ethos where every employee is acknowledged as having potential. A broad talent philosophy that makes sure everyone is challenged and given the chance to move jobs can be encouraged by an in-house learning and

What is the point of thinking someone is doing an exceptional job if that is not communicated to the individual concerned?

Everyone should feel valued development programme. By identifying where skill shortages lie within the organisation, you can be sure that your training programmes are relevant and can work towards enhancing the talent pool.

Share the talent and communicate success A significant percentage of staff discover that they were valued and appreciated only on the day they leave or when they decide to hand in

their notice. This mindset of focusing on flaws and weaknesses, rather than successes and strengths, needs to stop. What is the point of thinking someone is doing an exceptional job if that is not communicated to the individual concerned?

Everyone should feel valued and there has to be an organisation-wide culture of sharing talent and not holding on to it, otherwise successful teams become too competitive and problems begin.

This requires a systematic review of everyone in the business in order to prevent people from falling through holes into an abyss of perceived indifference.

Reduce the admin burden, give HR responsibility The HR team has to take a more proactive, dynamic and central role in any organisation and look holistically at the overall people strategy.

This, in turn, must mesh with the learning strategy and engage with the bigger picture: the overall performance and people proposition. Sadly, this is not happening in many organisations.

Acquiring and growing talent should not just be one peripheral aspect of an HR strategy – it must be its core. All else should fall out from that proposition.

The reality, however, for many HR departments is that they are caught up in tactical detail and administrative tasks. By reducing the

administration burden on the HR team, they can be free to play a more strategic, prominent role in the company’s overall people strategy.

Create a learning organisation There are plenty of other things you should do in order to spread an unmistakable message that staff are valued and respected and have a future in your organisation. For example, create personal development plans and build them in to appraisal systems; solicit regular performance feedback and offer staff regular secondments to other parts of the business. Also provide staff with opportunities to take time out of their regular day-to-day chores to work on more strategic projects. These all have their place, and will certainly go a long way in helping to create a “learning organisation” ethos.

Businesses have never faced so many challenges. However, by applying these simple tips, organisations of all sectors and markets can realise the benefits of having a highly talented, loyal and productive workforce. This, no doubt, will go a long way in helping your business to stay on top, overtake the competition and overcome the daily hurdles presented by today’s everchanging world.

Kevin Young, is general manager EMEA, SkillSoft www.skillsoft.com

How Orange started to feel the love Thanks to technology from Merced Systems, one of Britain’s leading brands has revolutionised the performance of its people How do you help one of Britain’s most successful brands become even better? For Merced Systems, it was assisting Orange develop an employee performance programme that has transformed its people management.

Orange – run by Everything Everywhere alongside T-Mobile – is considered leading edge in terms of innovation and customer satisfaction. When, in the mid-2000s, it faced fierce competition from some of its rivals for market leadership, the company set a goal of being the best-loved communications brand in the industry.

But what did this mean for frontline employees, and how would the company meet this ambitious target? Orange started by talking to contact centre teams about what was important to them and whether policy and processes were stopping them performing.

This was valuable, but even more insightful was the analysis of advisers and team manager performance in terms of customer satisfaction, efficiency and effectiveness. How can one adviser manage to achieve 92 per cent customer satisfaction while another, doing the same work, achieved only 58 per cent? How did this happen when they have the same processes, policy, shift and technology?

Orange wanted to move employees up the effectiveness curve and therefore had to take

control of what was really driving performance.

Thanks to insight and technology from Merced Systems, the company essentially turned the performance of its people over to its customers with the introduction of the Brilliance programme.

This frontline employee performance programme for customer services is driven primarily by customer feedback. Customers are asked for feedback directly after contact with Orange. Depending on how they contact Orange, customers complete short surveys via email, SMS, WAP or the voice-recognition system.

Orange uses this feedback in two ways.

First, to drive behaviour through the incentive of variable pay as it pays a Brilliance Bonus to employees receiving the best customer feedback.

Second, the scores from the tens of thousands of customer comments received each month are used to establish which processes and polices could inhibit frontline employees from performing to their full potential.

Contact centre advisers receive the customer feedback via online scorecards as soon as the surveys are completed. But it’s not only customer feedback – they also see their performance in terms of the volume of transactions they handle and the efficiency and effectiveness of the work they are doing. They can also see the performance of their peers. Team managers get similar access to the data and can compare performance within their

team and across the different teams of agents.

They then use this near real-time data to inform continuous and targeted coaching on aspects of performance their teams should improve.

So what have been the results? Orange made many process improvements, resulting in an improved rate of first contact resolution – a critical measure which managers believe helps to retain more customers. In the first six months of the Brilliance programme, Orange also saw a 27 point increase in Net Promoter Score™ a customer feedback measure which gauges if customers will recommend the company. Of course, this meant the overall bonus payments increased, but according to Orange, it was money well spent.

Everything Everywhere director of strategy and planning Nick Lane says: “Providing our teams with insight into their performance on their desktops has not only driven performance improvements, but also wide adoption of the programme and improved employee morale.”

“Brilliance has freed up our managers, who are no longer drowning in paper and data but can easily access a 360-degree view of performance and spend time with their people to advance their careers.” He adds: “I can’t overestimate how important it is to look beyond averages. For example, paying managers based on average performance of their team could be based on

pure chance as to the individuals they have in their teams and not their leadership.”

“We stepped away from this approach and now reward our performers and look at how we replicate behaviours. Overall trust in the data is fundamental. Our customers manage the pay of our people – it has to work as it impacts their lives.”

Net Promoter Score is a registered trademark of Bain, Satmetrix and Frederick F. Reichheld www.mercedsystems.com