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Armin Trost

Talent Relationship Management

Competitive Recruiting Strategies in Times of Talent Shortage

ManagementforProfessionals

Forfurthervolumes: http://www.springer.com/series/10101

ArminTrost TalentRelationship Management

TimesofTalentShortage

TranslatedbyEmilyPlank

ArminTrost

FurtwangenUniversity

Villingen-Schwenningen

Germany

ISSN2192-8096ISSN2192-810X(electronic) ISBN978-3-642-54556-6ISBN978-3-642-54557-3(eBook) DOI10.1007/978-3-642-54557-3

SpringerHeidelbergNewYorkDordrechtLondon

LibraryofCongressControlNumber:2014938632

# Springer-VerlagBerlinHeidelberg2014

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Foreword

Ihavebeeninvolvedwithrecruitmentforover10years.Itallstartedduringmy timeatSAParoundtheturnofthemillennium,andIstucktothesubjectupon becomingaprofessorin2005.IhavesincebeenfortunateenoughtomeetHR professionalsfrombothlargeandsmallbusinesses.Ihavespentnumeroushours anddaysdiscussingrecruitmentatseminars,aspartofprojects,orsimplythrough conversation.Indoingso,Ihavealwaysconsideredmyselfanagentofsorts.Iseea lot,learnalot,trytostructurethingscreatively,andthenpassthemon—toclients, colleagues,andstudents.It’smywayofimmersingmyselfinissuesandallowing otherstobenefitfromit.Overtheyears,Ihavecuriouslyabsorbedsuccessstories, observingwhatworksandwhatdoesn’t.IhavedrawnonscientificliteraturewhenI havedeemedthisusefulinpractice.Butmostofall,Ihavelearnedfromthepeople whocompetefortalentonadailybasis.Inthisbook,Iwanttogivebackmuchof whatIhavebeenabletolearnovertheyears,anddosoinastructuredmanner.

Thisbookisapersonalone,sincewhatIdescribeinitis,inaway,alsoa summaryofmyinsightsandideas.Asyouread,youwilldiscoveranauthorwhois enthusiastic,isprovocative,hasfunwiththesubject,isattimessurprisedand sometimesangry,andwriteshisideasstraightfromtheheart,whilealsoaddressing businessprocessesandmorecomplexissues.

Thebookdoes,ofcourse,containmanyGermanexamples,thoughthisshould notposeaproblemforreaders.It’sultimatelyaboutthematterathand,andnotthe countryinwhichtheexampleisset.BasedonwhatIknow,andhaveseeninmy internationalexperience,Icansaythattheideaspresentedinthisbookareuniversal,andcanbeappliedtoanycountry.

Anyonelookingforsolutionsinthestrugglefortalentwillfindlotsofanswers here.That’smypromisetoyou,thereader.Sincethecontentofthisbookcomes fromreal-lifescenarios,itisalsosuitableforreal-lifescenarios.Butit’sultimately uptoyoutoputitintopractice.Iwishyouallthebest,and,lastbutnotleast,hope thatyoufindthetalentyousourgentlyneedtosecureyourbusiness’future.

31January2014

Introduction

Infuture,manybusinesseswillbefacedwithsomethingwhichcouldeasilybe dismissedasa“first-worldproblem”.Theywillbeanxiouslylookingforgood,new staff.Manylabourmarketsarebecomingverytight,particularlyinindustrialised Westerncountries,aswellaspartsofAsia.Wecannowdirectthisproblemto politicians,anddemandadifferentfamilypolicy,relaxationofimmigrationlaws, and,mostimportantly,investmentsineducationforallages.Thisisallwelland good,andIwouldendorseit.Butthisbookaddressestheissueofwhatbusinesses candoinrelationtorecruitment.Iwillthusbeadoptingamicroperspective.Iam oftenaskedwhetherthe“WarforTalent”hasarrived.Andtheansweris:yes,there isalreadyanacutetalentshortage,whichisduetoincrease.Butnowadaysweonly seea“warfortalent”inisolatedcases.Manybusinessesarestillveryponderous, passiveandunimaginativewhenitcomestotheirmethodsofrecruitment.Noone getshurt;thefocusisinsteadonthecandidates’interests.Therightoneswillcome alongatsomepoint.Evenlookingatthelatestliteratureonrecruitment,youwill seethatmostpublicationszeroinonstaffselectioninthiscontext.Yettheproblem nolongerliesinchoosingtherightcandidates—it’singettingthecandidatesinthe firstplace.

Injustafewyears,wewillbeseeingwinnersandlosersonthelabourmarket. Thewinnersaretodayalreadyhavingarethink,focusingoncompletelynew approachestorecruitment.Knownandtrustedmeasures,e.g.CampusRecruiting, aregivenafacelift,andareperformedinamoresystematic,sustainablemanner. Thewinnersconcentrateonemployerbranding,andappearopenandimaginative whenitcomestousingsocialmedia.Winnerswillhavelearnedtotreatcandidates ascustomers.Theyapproachthemactively,andseektobuildrelationshipswith them—overmanyyears.Ibelievethatmostbusinesseswhichtodaycomplainabout thetalentshortagehavegreatpotentialtoimproveintheareaoftalentacquisition. WeakHRmanagersmakeexcusesforthesmallnumberofincomingapplications, citinglowsalaries,location-baseddisadvantages,orthefactthattheirproductsare notsexyenough.StrongHRmanagersactivelylookfornewwaysofreachingoutto relevanttargetgroupsonthelabourmarket.Andthisbookhelpsthemdoit.Isee TalentRelationshipManagement(TRM)astheoptimumsolution.Employerswho

taketheTRMideasandapproachesseriously,andheedthem,willhaveamuch greaterchanceofultimatelycomingoutwinnersonthelabourmarket.Thatismy promisetoreaders.Whileitofcourseappliestolargecompanies,itisevenmore pertinenttothemanysmallandmedium-sizedbusinesses,whichdo,andwill, suffermoreintensivelyfromtheshortageoftalent.

Overtheyears,Ihaveseenalot,hadcountlessdiscussionswithemployers,held seminarsandpresentationsonthetopic,andhelpedbusinessessuccessfullycounter thisskillsshortageusingtheirownmeans.Asascientist,Iamalsoveryfamiliar withbestpracticesandthewayinwhichvariousrecruitmentapproacheswork.This bookisaconsolidated,structuredcompendiumofmyexperiencesandinsights fromthelast10years.Belowisanoverviewthechapters.

Followingthisintroduction(Chap. 1),Chap. 2 examinesthe labourmarketofthe future,discussingthekeyfactorsdeemedtohavebeenresponsiblefortheskills shortage.Demographicdevelopmentandthegrowingneedforstaffintheareasof mathematics,informationtechnology,scienceandengineeringareofcoursementionedhere.Itisalsobecomingclearthatfuturelabourmarketsaregovernedby differentrulescomparedtothepast.Forexample,theInternethasmadethemmore transparentthaneverbefore,resultingingreatercompetition.

Chapter 3 thenprovidesan overviewofTRM.Theindividualcomponents addressedinmoredetaillateronarepresentedinanoverallcontext.Onecommon threadrunningthroughthisbookistheparticularmindsetassociatedwithTRM. TRMisnotonlyacollectionofrelatedconcepts;itisaphilosophyofsorts,based oncertainpremises.Oneofthemainideasbehinditistothinkandactinamanner focusedontalentratherthanonvacancy.Wehavealreadyseenthisdistinctionin otherareas,wherecustomerfocusisgivenahigherprioritythanproductfocus.In future,peoplewillbetreatingtalentonthelabourmarketascustomers,ratherthan merelyconcentratingonfillingemptyseats.

Chapter 4 laysthefoundationsfortherestofthebook’scontent.Itisdedicatedto definingrelevanttargetgroupsonthelabourmarket andthustheissueofwhom youwanttoaddressonthelabourmarket.Thefirsttaskforbusinessesistodefine keyandbottleneckfunctions.Thisstepiscrucial,becauseitclarifieswhicharea (s)ofrecruitmentrequirethegreatestaction.TheaimofTRMisultimatelytofill theseprecisekeyandbottleneckfunctions,tyinginwiththequestionofwhich targetgroupsonthelabourmarketareconsideredrelevantwhenitcomestofilling thesecriticalpositions.Isitbusinesscomputinggraduates?Experiencedlogistics experts?Bythetimewegettoemployerbranding(Chap. 5)andactivesearch strategies(Chap. 6),itwillbeclearthatabusinessneedstoknowwhomitseeksto address,andwhere,onthelabourmarket.

ThefirststepinTRMistoformulatean employerpromise,whichisexaminedin detailinChap. 5.Thisessentiallyentailsbuildinganemployerbrand,butwitha clearfocusontargetgroups.Itisnolongerjusttheapplicantswhohavetoimpress duringaselectionprocess;employersalsohaveto“gainfullysell”theirkeyand bottleneckfunctions.Theanalysisandselectedcommunicationmeasuresmustbe approachedsystematicallytoensureeffortsheredonotendupbeingpurely random.Apartfromtheconventionalcommunicationactivities,peopleare

increasinglyalsotakingintoaccountsocialmedia,aswellasmoremoderntopics, likeemployerPR.

Chapter 6 looksat activesourcingstrategies,i.e.methodsforactivelyfinding potentiallysuitabletalentonthelabourmarket.Itdescribesawholerangeof options,disregardingtheconventional,morepassiveapproaches,suchasjob advertisementsorexecutivesearch.Activesourcingstrategiesaredesignedto reachouttopassivecandidates,i.e.thosewhoarenotactivelylookingforwork themselves.Searchingforcandidatesviasocialmedia,suchasLinkedInor employeereferralprogrammes,isoneofthefocusareashere,asiscampus recruiting.Approachessettobecomemorepopularinfuture,suchastalent scouting,guerillarecruitingandcompetitiveintelligence,arealsosuggested.

Followingtheemployer’spromiseandactivesourcingstrategies,Chap. 7 examinesthethirdcomponentofTRM,namely candidateretention.Businesses wantingtocontinuetosuccessfullyfillkeyandbottleneckfunctionsareboundto buildalonger-termrelationshipwithgoodpeopletheyhavemetsomewherealong theline,inthehopeofultimatelyemployingthem.Whilethisideaisessentially simple,itoftenfailsinpracticeduetothelackofnecessarystructure,sustainability, andprofessionalism.Thischapterthustakesastep-by-stepapproachtoexplainhow tobuildtalentpools,defineandimplementloyaltymeasures,andproperlydocumentinformationonthecandidateretentioncyclepresented.

Chapter 8 looksatthefourthTRMcomponent, candidateexperience. Ifan employerhasdonetheirhomeworkduringtheaforementionedmeasures,they eventuallyreachthepointwhereapromisingcandidateshowsinterestinaspecific job.Thisisthenusuallyfollowedbyaselectionprocess.Basedonmyown experienceandobservations,Iknowthatyoucandolotsofthingsrightandlots ofthingswronghere.Inessence,therecruitingprocessrequiresfast,transparent, responsiveaction,andtypicallygivesrisetoanumberofoftensimple,pragmatic ideas.

ThebookendswithChap. 9,whichaddressesthe frameworkconditions of successfulTRM,makingdetailedreferencetofiveaspects.Itfirstexplainsthat thesuccessofTRM—aswithmanyotherinternalcompanyinitiatives—issolely dependentonmanagementsupport,andshowshowthiscanbeachieved.But specialskillsandanappropriateTRMmentalityarealsonecessarywhenit comestoHR.Andthetechnologyaspectissimilarlyexamined.TRMisnota technicaltopic,buttechnologycanenableeffective,efficientimplementation.I thenstudytheissueofinternationality,andthedifferenttypesofTRMavailable whenkeyandbottleneckfunctionsneedtobefilledinaninternationalcontext.The chapterconcludeswiththerathercomplexissueofcalculatingreturnon investment.

TheLabourMarketoftheFuture

Theso-called“WarforTalent”hasbeentalkedaboutsincethemid-1990s (Michaels,Handfield-Jones,&Axelrod, 2001).Inthemeantime,theworldhas seenseveraleconomiccrises,namelythecollapseoftheNewEconomyintheearly 2000s,andtheworldwidebankcrisisafewyearslater.AsIwritetheseverylines, EuropeandtheworldarestillbattlingtheeffectsoftheEuropeandebtcrisis.Each ofthesecrisescurbedthepreviouslyimmensedemandforspecialists,butwere followedbyanall-clear.Theupswingoccurringafterthesecrisesalsoseesan increaseindemandfortalented,motivatedstaff.Apartfromtheserathershort-term, cyclicalfluctuations,however,thereisthequestionoflong-termdevelopmenton thelabourmarket.WhatmustacountrylikeGermanybepreparedforoverthenext fewdecades?Shortandmid-termdevelopmentsplaylessofarolewhenanswering thisquestion,withthefocusshiftingtomoregeneraltrendsatamacrolevel.

Onemacrotrendwhicheveryonenowappearstohaveheardofis demographic development.Muchhasalreadybeenwrittenandpresentedonthistopic,andwe canclearlyseethechangingpopulationpyramids.Theproblemwiththeseage pyramidsisthattheyhardlyreflectactualdemographicdevelopment.Figure 2.1 showsanalternativeillustrationofageinginGermany.1 2010wassetasthestarting point.Allfuturevaluesshowtherelativechangeinvariousagegroupscomparedto 2010.Thisiswherethedramabecomesapparent,notonlyinrelationtothelabour market,butalsointermsofsocietyandsocialpolicy.Theforecastsarequite accurate.WecangetagoodestimateofhowmanypeopleinGermanywillreach theageof25in2035,becausewealreadyknowhowmanypeoplewerebornin 2010.

Theagegroupof25to34-yearoldsisparticularlyrelevant.Thereareanumber ofreasonswhyitwillbedifficulttosecurepriceleadershipinGermanyintermsof producinggoodsorprovidingservices,notleastbecauseofthehighwagecostsand socialsecuritytaxes.Infuture,Germany,orGermanindustry,willinsteadhaveto beabletodifferentiateitselfthroughproductandprocessinnovations.Innovationis

1 Source:U.S.CensusBureau,InternationalDataBase. http://www.census.gov/ipc/www/idb

A.Trost, TalentRelationshipManagement,ManagementforProfessionals, DOI10.1007/978-3-642-54557-3_2, # Springer-VerlagBerlinHeidelberg2014

criticaltothiscountry,andthisagegroupthereforeplaysamajorrolehere,because itisassumedthatpeoplewillreachthepeakoftheircreativeandscientificabilityat thisage.Thisagegroupof25to34-year-oldsremainsconstantuntil2020,after whichitdecreasesinsizebyaround1%ayear.Thisisextremelydramatic.

EquallydramaticistheageingoftheGermanpopulation.In2035,wewillhave 40%morepeopleover65thanwedotoday.Thesimple,accurate“2020/5050”rule ofthumbstatesthat50%ofpeoplewillbeover50in2020.Thisdegreeofageing meansasignificantnumberofstaffatmanycompanieswillretireoverthenextfew years,whichinturnresultsinagreaterneedforpersonnel.Eventoday,moreand morebusinessesareconductingagestructureanalysesanddevelopingscenariosto seehowmanystaffwillneedtobereplacedintheyearstocome.Someofthe figuresarealarminglyominous.

Anotherrelevantmegatrendistheincreasing transparency ofgloballabour markets.Previously,peoplewouldparticularlylookforworkonSaturdays.They wouldbuynewspapers,armthemselveswithahighlighter,andporeoverevery pageofthejobmarket.Oneadvertisementwouldbecompetingagainsttheothers appearinginthesameissueontherespectivedays.Today,ajobadvertisementon theInternetcompetesagainstthousandsofothers.Findingadvertisedjobshasnever beeneasier.Withinjustafewseconds,youcanhaveaccesstoalladvertisements relatingtoaspecifickeyword,worldwide.Oneofthemostadvancedsitesis SimplyHired.2 Broadlyspeaking,itisaplatformwhichlooksandworkssimilarly toGoogle,butonlyadvertisesjobs.Itsjobdatabaseisprobablythelargestinthe world.Figure 2.2 showsascreenshotofthissite.

Therelativechangesinagegroupsin2010inGermany 2 http://www.simplyhired.com

Fig.2.1

Thesocialrelationshipsamongsttalent,andbetweenemployersandtalent,are alsobecomingmoretransparentasaresultofthedevelopmentsinsocialmedia. Apartfromthesearchresults,SimplyHiredadditionallyenablesintegrationwith Facebook,3 meaningseekerscanfindjobsallovertheworldthroughtheirown socialnetwork.Thisisjustoneexampleofhowjobsandsocialnetworksare becomingincreasinglyentwinedontheInternet.

Buttheriseinglobaltransparencynotonlyappliestojobsandprospective workers;italsoappliestoemployers.Rarelyhasiteverbeensoeasyforemployees, jobseekersandapplicantstogaininsightsintohowvariousemployersoperate. Peoplewhobarelyknoweachotherexchangeinformationonemployersvia Facebook,orsubmitratingsonemployerreviewplatforms.Jobvoting4 isprobably themostimportantplatformforemployerreviews.WhatTripadvisorisforhotels, Jobvotingisforemployers.Butwhereverthereistransparency,thereisalso competition,whichmeansboththreatsandopportunitiesforeveryemployer.The possibilitieswillbeaddressedinmoredetaillateroninthisbook.

Sinceindustrialisationinthemidtolatenineteenthcentury,theworkingworld hasbeenundergoingacontinuous shiftfrommanuallabourtomentalwork. This developmentisslowbutconstant,andisrarelydiscussed.Yetitisprobablythe greatestinfluenceroverthewayinwhichHRmanagementhasbeen,andmustbe,

3 http://www.facebook.com

4 http://www.jobvoting.com

Fig.2.2 ScreenshotofSimplyHired

understood.HenryFordisoncesaidtohavecomplainedthat,wheneverhe employedtwohands,hewouldget“abrainattached”.Mostemployeesoccupied themselveswithperformingstupid,mostlymanualtasks.Nowadays,therearestill manyfieldsinwhichstupidtasksareperformed.Thelastfewyearshaveevenseen newfieldscreated,suchassupermarketcashiersandcall-centreworkers.Wenow liveinaknowledgesociety.Mostemployeesgenerateaddedvaluebycreatively usingtheirownorexternalknowledgetoaddressincreasinglycomplexproblems. Conservativeoccupationalvirtueslikediligenceandobediencearelosingtheir importancetotheabilityandwillingnesstogenerateideasandsuccessfullyimplementthemwithothers.

Thisiswhymanycountriesarecomplainingaboutatalentshortage,despite continuouslyhighunemployment.Forexample,engineerunemploymentin Germanyhasdroppedtojustafewthousandoverthelastfewyears.Welltrained peoplewhoareconstantlypreparedtopursuenewdevelopmentsarebeingsought. Ontheotherhand,peoplewithlittleornoeducationwillhaveveryfewjob prospectsinfuture.Byallaccounts,thisdevelopmentissettocontinue,andthe demandforqualifiedstaff(comparedtounderqualifiedworkers)willsteadilyrise. Itisthusacaseof‘increasingneedforspecialists’meets‘decreasingavailabilityof qualifiedprofessionals’.

Overthelastfewdecades,wehavebeenseeingamore globallabourmarket, partlyasaresultoftheaforementionedglobaltransparencyprovidedbythe Internet,butalsoduetothefactthatmoreandmoretalentedpeoplearemoving betweendifferentcountries;aphenomenonalsoknownas“BrainDrain”.

Theaforementionedmacrotrendsresponsibleforafutureskillsshortageor heightenedcompetitionfortalentincludethedropinuniversitygraduatesinthe subjectsofMathematics,InformationTechnology,ScienceandEngineering,which hasbeenobservedinmanycountries.AstudybytheOECD(2008)showsthat,for everyoneengineeragedover55inGermany,thereare0.9agedunder35.Germany thushasoneofthelowestrankingscomparedtoothercountriesinEuropeand aroundtheworld,e.g.Swedenwithafactorof4.7,Spainwithafactorof3.5,France at2.4andGreatBritainat1.9.

The changingcommunicationpatterns offuturegenerationsisanother megatrend.Ireceivedailyemailsfromstudents,mostofwhicharesuccinct requestsforliteraturetipsorexpertinterviews.Iwouldneverhavedaredto approachuniversitylecturerssodirectlyasastudentintheearly1990s.Thisisa typicalsymptomofnewcommunicativebehaviour.Oneofthereasonsforthisis thefactthattheInternetgivesitsusersaworldfreeofhierarchy.Thosewhoarepart ofitcanbeaddresseddirectly.It’swhatsocialmedialivesoff.Thisissueis discussedinacademiccirclesusinggenerationdifferences.Thefocushereison theso-calledGenerationY,i.e.allthosebornbetween1980and2000,forwhomthe aforementionedbehaviourisatypicalattribute(cf.Tapscott, 2009).Onthelabour market,peoplewillhavetogetusedtofutureemployeesapproachingcompanies withthissamedirectness:“Hi,mynameisJohn,andIjustwantedtoseewhetherit wasworthmywhiletosubmitajobapplicationtoyou.”Employersmustparticularlyrecognisethatcommunicationwillincreasinglytakeplaceviasocialmedia

platforms,andnotonlybetweenemployeesandemployers,butbetweenallparties (seealsoBox2.1).

Box2.1:AWeekofNoInternetorMobilePhone

Duringthe2010summersemester,eightstudentsatmyfacultyat FurtwangenUniversitysignedadeclaration,statingtheywouldrefrainfrom usingtheInternetandtheirmobilephonefor1week.Theywereaskedto writedowntheirexperiencesinasmalldiary.Theaimwastouseaselfexperimenttodeterminetheimportanceofmodernmeansofcommunication ineverydaystudentlife.

Theresultswereastonishing—somewouldsayappalling.Modernlifeis virtuallyimpossiblewithouttheInternetandmobilephones.Itisextremely difficulttostudywithouttheInternet,becauseyoudon’thaveaccessto relevantliterature,youdon’tgetnotifiedabouttimetablechanges,andyou lackanimportantplatformfortechnicalexchangeamongststudents.Itisvery hardtoorganiseyourprivatelife,becausepeoplenowadaysmakeplansin realtime,ratherthanafterlectures,aswasdoneinthepast.Youhaveno accesstoinformationonculturalevents(cinema,concerts),youmissouton last-minuteparties,andifyouwanttotraveltocitynearby,you’llfind yourselfmissingmorethanjusttheonlinetimetable.Ifyou’retogetherasa groupinacityanddon’thaveamobilephone,youhavetogetusedtoholding hands.Ifyoulosetheothers,youhavetomakeyourownwayhome.Thelack ofcontactwithotherstriggersemotionalreactionsreminiscentofwithdrawal symptoms.StudentsfeelisolatedwithoutFacebookandSMS,indicatingthat psychologicalsecurityaspectsareatplay.Ifyoudon’tcheckbackinto Facebookafteraparty,youwon’tknowwhethertheothershavereached homesafely.Parentsalsoworryabouttheirchildren’slackofcontactability. Thosewhousethetried-and-tested“snailmail”mustexpectslowcommunication.Birthdaycardsmustbesent2daysinadvance,ifyouevenremember people’sbirthdaysinthefirstplace.Becausetheseareusuallysavedonyour mobileornotifiedtoyouviaFacebook.

Insum,itcanbesaidthattheskillsshortageinmanycountrieswilldrastically increaseasaresultofthefollowingmacrotrends:

–Demographicdevelopmentsmeanthenumberofretiringemployeeswillrise drasticallyoverthenextfewyears,whilethenumberofyoungerpeopleis dropping.

–TheInternetismakinglabourmarketsincreasinglytransparent,whichfurther intensifiesthecompetitionfortalent.Jobs,employees,candidates,employers, andthesocialrelationshipsbetweenthesepeoplearenowvisibletoeveryone, duetospecialplatformsandsocialmedia.

–Theshiftfrommanuallabourtomentalwork,whichhasbeengoingonfor decadesinthecontextofagrowingknowledgeeconomy,stimulatestheever increasingdemandforhighlyqualifiedstaff.

–Thecompetitionfortalentisbecomingincreasinglyglobal.Thereare complaintsofarising“braindrain”ofhighlyqualifiedworkers.

–Therearenotenoughgraduatesintechnicalandscientificfields.Thelong-term demandforspecialistswillnotbepermanentlymetthroughpubliceducation.

–Futuregenerationswillcommunicatewithandaboutemployersinamoreopen, directfashion,orwillatleastexpecttodoso.Theemployerswhocanreachout totheiryoungertargetgroupsmoredirectlywillbetheultimatewinners.

Inlightofthis,employers,aswellasentirenations,willbegrapplingtofind solutions.Companieswillincreasinglyhavetofaceuptothechallengeofproviding answerstotheselong-term,reliablyforeseeabledevelopments.Soitisnowonder that,inrecentyears,moreandmorebusinesseshavebeenthinkingaboutcreating anemployerbrand,whichmakesalotofsenseinmostcases.However,themost effectiveanswertofillingkeyfunctionsisTR—anew,trend-settingapproachto gaininghighlyqualifiedworkers,particularlyforcritical,hard-to-fillroles.

References

Michaels,E.,Handfield-Jones,H.,&Axelrod,B.(2001). Thewarfortalent.Boston:Harvard BusinessSchoolPress.

Tapscott,D.(2009). Grownupdigital:Howthenetgenerationischangingtheworld.NewYork: McGrawHill. 102TheLabourMarketoftheFuture

AnOverviewofTalentRelationship Management

Theconventionalapproachtorecruitingstaffistoadvertisevacantpositionsand thenhopeforapplications—“PostandPray”.Anexecutivesearchconsultantis hiredincasesprovingdifficulttoobtainapplications.Companiesattendcareerfairs orplaceimageadsincertainmediaandatselecteduniversitiestoincreasethe inflowofapplications.Thistraditionalmethodismorethanadequateformanyjobs. Forothers,however,itisstretchedtoitslimits,dueinnosmallparttothetalent shortagementionedinthepreviouschapter.

Thischapterwillthuspresentanoverviewofanapproachwhichenables employerstoeffectivelyandsuccessfullyfillhard-to-fillpositionsusingtheirown resources.ItwillsubsequentlybereferredtoasTRM(TalentRelationshipManagement),basedontheconceptofCustomerRelationshipManagement(CRM, Jackson, 2005),whichisalreadywellknowninsales.Thebasicprincipleswillfirst bediscussed,followedbyageneraldescriptionofhowTRMworks.Therespective activitieswillbeexaminedinmoredetaillaterinthebook.

3.1TalentFocus

Thetraditionalapproachtorecruitmentistofocusonvacancies.Avacant, approvedpositioninneedoffillingsparksactionintheareasofHRmarketing andrecruiting.Arecruitingprocessisonlystartedwhenavacancyarises. Employersusuallyplaceajobadvertisementbasedontherespectivepositionand associatedchallenges,andthenawaitandpreselectapplications.Promising candidatesundergoamoreintensiveselectionprocess,withthebestoneultimately offeredthejob.Theproblem—thevacancy—issolved;theprojectiscomplete, andcanbefiledaway.Unsuccessfulapplicantsaresentarejectionletter.Thetop halfofFig. 3.1 illustratesthisvacancy-focusedapproach,contrastedwithatalentfocusedoneatthebottom.

TalentfocusisaprincipleofTRM,andmeansmakingthetalentthefocalpoint ofyourthoughtsandactions.It’snotacaseofseekingtalentforavacancy,but ratherviceversa:avacancyissoughtforanidentifiedtalent.Talented,motivated

A.Trost, TalentRelationshipManagement,ManagementforProfessionals, DOI10.1007/978-3-642-54557-3_3, # Springer-VerlagBerlinHeidelberg2014

Talent-focused approach

Fig.3.1 Vacancy-focusedversustalent-focusedrecruitingprocesses

candidatesarealwayssought,regardlessofacutevacancies,atleastintermsof hard-to-fillpositionswhichpermanentlyorfrequentlyrequireacertainamountof staff.Atalent-focusedmindsetinvolvesthinkingofeachconversationasajob interview,justlikeeverysalesperson’sconversationisviewedasapitch.In extremecases,it’snotjusttheHRdepartmentwhichisconstantlyonthelookout forpromisingtalent,butallstaffandmanagers.Ifthetalentisgivenapositive initialassessment,attemptsaremadetoestablishalong-termrelationshipwith thesecandidates,withaviewtoemploymentatsomepoint.Indoingso,the employerbearsinmindthecandidates’individualcareerpreferencesandactively caterstothese.

3.2TRMisStrategicandLong-Term

Aswillbedemonstrated,TRMactivitiesparticularlyrelatetokeyfunctions, i.e.functionsofextreme,strategicimportancetoacompany.ThismeansTRM hasadirectinfluenceoveracompany’sfuture.Thesepositionsnotonlyrequire suitablestaff,butstaffwhoarealsosignificantlybetterthanthoseincomparable positionsatrivalcompanies.ThisiswhyTRMtalksabout“talent”,i.e.candidates whodemonstratethepotentialtoputinabove-averageperformancesinthelongterm.Gainingtalentedstaffismuchmoredifficultthanemploying“normal” workers.Theyusuallyadoptapassiveapproachtotheirsearchfornewcareer prospects,andhavenumerous,attractiveoptions.

3.3ActiveEmployersLookforPassiveCandidates

TRMisanextremelyactiveapproachfromanemployer’sperspective.Fora numberofmonths,ithasbeenclearthatpeopleareunderstandingthechangein powerrelationshipsonthelabourmarket.IhearmoreandmoreHRprofessionals sayingthat,infuture,itwillnolongerbeaboutthecandidateapplyingtothe company,butviceversa.ThisnewattitudeisafundamentalpartofTRM.

Businessesactivelylookforpromisingcandidates,endeavourtopresentselected jobsinthebestpossiblelight,andthentrytosellthem.It’snotjusttheapplicant whohastoimpress;theemployeralsohastoappearattractivetopotentially interestedparties.Avastpercentageofacompany’sworkforce,particularlythe management,considertherecruitmentoftalentedspecialiststobeoneoftheirmost importanttasks.Thisformofactivityispermanentandongoing.Nurturing relationshipsoftenrequirespatience.

TRMisbasedontheassumptionthat,thebetterqualifiedanemployee,themore passivetheyareaboutsearchingfornewcareerprospects.Topcandidatesnolonger applyoftheirownaccord,butinsteadwaittobeapproached.Itisthusassumedthat employersneedtobeactiveinordertosecurehighlyqualifiedemployees.

3.4TargetGroupFocus

Aswillbecomeclearerthroughoutthisbook,TRMtiesupaconsiderableamountof resources.Searchingactivelyforcandidatesandnurturinglong-term,personal relationshipsistime-consuming,andoftenunnecessaryformanyareasofacompany.Mostpositionswillalwaysbeeasytofill,purelyduetotheunemployment existingintherespectivecountry.Findingasuitablecashierforasupermarketis easy,anddoesnotrequireanyspecialeffort.Fillingselectpositionsrequiresmore work.IwillexplainthepositionsforwhichTRMisadvisable.Inthisrespect,TRM isalwaysfocusedonthetargetgroup,notonthemasses,andthisiswhat distinguishesitfromemployerbrandingorconventionalHRmarketing,which hasabroaderreach.

Figure 3.2 comparesTRMwithemployerbrandingandrecruiting.Employer brandingusuallypositionsandpresentsacompanyasanattractiveemployertothe entirelabourmarket(Trost, 2013),whilerecruitinginvolvesdealingintensively withindividualcandidatestofillspecificjobs.Intermsofreachandproximityto thecandidate,TRMthussitsbetweenthesetwospheresofactivity.

TRMmeansintensivelyfocusingonthepre-definedtargetgroup.Thosewanting torecruitdoctorsmustunderstandwheretofindthisrarespecies,whichworking conditionsthepeopleinthistargetgroupprefer,andwhattheirmedia preferencesare.

3.5TRMComponents

BelowisanoverviewoftheTRMcomponents,withFig. 3.3 showingagraphic summary.Thevariouscomponentswillbeaddressedingreaterdetaillateroninthis book.

TRMstartswith definingthetargetgroup.Asalreadymentioned,TRM concentratesonhard-to-fillpositionsrequiringasignificantnumberofstafffor thelong-term.Theseareknownasbottleneckfunctions.Ontheotherhand,TRM particularlycomesintoeffectwhentheidentifiedpositionsarestrategically

Fig.3.2 TRMbetween

Employer Branding

Talent Relationship Management

Recruiting

Proximity to candidates

relevantroles,i.e.rolesthecompanyshouldfillwithbetterstaffthanthose occupyingsimilarpositionsatrivalcompanies.Thesearealsoknownaskey functions.Thisnowraisesthequestionastowhotherespectivetargetgroupson thelabourmarketare.Theresearch&developmentdepartmentofapharmaceutical companywillbelookingfordoctors,chemists,biologistsorpharmacists,whilethe purchasingdepartmentofaretailtraderismoreinterestedinbusinessadministrationgraduateswithrelevantprofessionalexperience.Purchasingisconsidereda keyfunctionifaretailtraderisdistinguishedbypriceorquality.

Ifthetargetgrouponthelabourmarkethasbeendefined,itisthenaquestionof howtheycanbeconvincedoftheadvantagesofthekeyorbottleneckfunctions.A clear,authentic,persuasiveargumentisultimatelyrequired.Theseargumentsare collectivelyknownasthe employerpromise,formingthebasisfortheapproach,as wellasforallHRmarketingcampaignsaimedatthetargetgroup.Inprinciple,the methodisidenticaltothatofdevelopinganemployerbrand,withthesoledifferencebeingthattheactivitiesperformedhereareaimedatcertaintargetgroups,and onlyselectedfunctionscanbepositionedandpresented.

Activesourcingstrategies specificallyinvolvefindingsuitable,talentedand motivatedpeople,andcontactingthempersonally.Asmentionedabove,theaim istoidentifypassivecandidates.Anumberofoftenwell-knownapproachesare adoptedhere,suchascampusrecruiting,employeereferralprogrammesorsearches forcandidatesonsocialmediaplatforms(e.g.LinkedIn).Inrecentyears,many forward-thinkingcompanieshavealsodaredtoexplorecompletelynew,creative, andsometimesaggressivepaths.

TheessenceofTRMistobuildatalentpool,andmanagepersonalrelationships withselectedtalentinastructured,systematicmannerthrough candidateretention. Theideabehindthisisprettysimple:employerstrytostayincontactwith Reach

AnoverviewoftheTRMprocess

promisingtalentinordertosecurethemforthecompanysoonerorlater.Asshown inFig. 3.3,thisisacyclicalprocessinwhichanemployercontinuouslythinksabout howtofurthertherelationshipandanynecessarymeasures,andactsaccordingly. Allpreviouseffortsultimatelyaimtogaintalentedcandidatesasemployees.The focusisthusongettingacandidatetoeventuallyexpressconcreteinterestina usuallyactivelyofferedjob,promptingasortofselectionprocess,whoseintensity naturallydependsonpriorknowledgeaboutthecandidate.Itisparticularlycrucial inthisphasetoconveya positivecandidateexperience.Thisalsoespeciallyapplies tocandidateswhohaveapplieddirectlyforaposition,andwhowerenotpartofa candidateretentionprogramme.Theanalogywithconsumerexperienceinamarketingcontextisnotjustacoincidence(cf.Baron,Conway&Warnaby, 2010).This bookwillconcentrateonthreeTRM-relatedcriteriafordealingwithcandidates, namelyspeed,transparencyandpersonalappreciation.Thesearecertainlyhelpful forfillinganypositionatacompany,butaresimplyessentialwhenitcomesto fillingcriticalpositions.

References

Baron,S.,Conway,T.,&Warnaby,G.C.(2010). Relationshipmarketing:Aconsumerexperience approach.London:Sage. Jackson,T.W.(2005).CRMfromarttoscience. DatabaseMarketing&CustomerStrategy Management,13(1),76–92. Trost,A.(2013).Employerbranding.In Employerbranding.Arbeitgeberpositionierenund prasentieren (A.Trostthed.,pp.13–77).Cologne:Luchterhand.

Fig.3.3

DefiningRelevantTargetGroups

TRMalwaysstartswithdefiningthetargetgroup,i.e.clarifyingwhichgroupsof peopleonthelabourmarketyouwanttosecureforspecificpositions.Targetgroups maybecertainoccupationalcategories,staffinspecificrolesatothercompanies,or evengraduatesfromparticularcourses.Initsbroadestsense,thisstepisanelement ofstrategicworkforceplanning,inwhichso-calledkeyandbottleneckfunctionsare ofcriticalimportance.AnHR-baseddistinctionismadebetweenvariouscompany positionshere(cf.alsoBecker,Huselid,&Beatty, 2009;Huselid,Beatty,& Becker, 2005).

Theidentificationofkeyfunctionsisgearedtowardsthecompanystrategy,with themainfocusbeingonwhichcompanypositionsareparticularlyrelevantwhenit comestosecuringacompetitiveadvantage.Bottleneckfunctionsaredetermined basedonfuturepersonnelrequirements,takingintoaccountthedifficulty associatedwithhiringthese.Itisthennecessarytodefinewhichfuturechallenges mustbeovercomebythestaffmembersinbothkeyandbottleneckfunctions,and whichskillsareconsideredessentialforthis.Onlyoncethishasbeenclarifiedcan weanswerthequestionastowhichtargetgroupsonthelabourmarketare potentiallyabletosuccessfullyfillkeyandbottleneckfunctions.Figure 4.1 summarisesthesesteps.

Thefollowingsectionswillthoroughlyexaminethispathfromcompanystrategy andpersonnelrequirementstodefinitionoftargetgroupsonthelabourmarket.The diagramstartsbyidentifyingkeyandbottleneckfunctions.

4.1KeyandBottleneckFunctions

Imagineacompanywantstoemploy100newstaffoverthenext12months.This employerisgivenabudgetof1millionEurosforpersonnelmarketingand recruiting.Howshouldthecompanyspreadthebudgetinordertosecurethese 100staffmembers?Thereareseveralpossibleoptions.Theobviousapproach wouldbetoevenlyspreadthebudgetoverthe100newappointments,though hardlyanycompanywoulddothis.Alternatively,youcoulddivideupthebudgetso

A.Trost, TalentRelationshipManagement,ManagementforProfessionals, DOI10.1007/978-3-642-54557-3_4, # Springer-VerlagBerlinHeidelberg2014

Fig.4.1 Fromcompany strategytotargetgrouponthe

Company strategy personnel requirements , Key & bottleneck functions

Challenges & competencies

Target groups on the labour market

thatalargerportionisusedforthehard-to-fillpositions.Broadlyspeaking,these arebottleneckfunctions.Youcouldalsodedicateagreaterpercentageofthebudget tothosepositionsofstrategicimportancetothecompanywhicharealsousually moredifficulttofill.Theseareknownaskeyfunctions.Eventhoughmost businessesadoptthisapproach,mostofthemfailtoprioritisesystematically.

Sowhatareacompany’s keyfunctions?Hereareafewexamplestostartusoff. Inmylectures,Ioccasionallyraisethequestionofwhichjobisthemostimportant atUnitedAirlines.Theanswersvary,butthemostcommononeisthepilot.Pilots getaplanefromAtoB.Theyhaveresponsibilityonboard,andwearauthoritative uniforms.However,whatdifferencewoulditmakeifUnitedAirlinesemployednot justaveragepilots,butthebestintheworld?Itwouldn’tmakeanydifference. Passengerswouldn’tnoticethedifference,andwouldn’tchangetheirconsumer behaviouraccordingtothequalityofthepilots.Itisexpectedthatpilots’ qualificationswillcomplywithreliableinternationalstandards.Obviouslyapilot’s qualificationwouldmakeadifferenceincriticalsituations.Weonlyhavetothink ofUSAirwaysflight1549,whenpilotChesleySullenbergerlandedtheAirbus A320,carrying155passengers,safelyontheHudsonRiverinNewYorkfollowing suddenenginedamageon15January2009.Butpassengersdon’tusuallyexpect thosesortsofincidents,otherwisetheywouldn’tgetontheplane.Atbest,apilot wouldbeconsideredakeyfunctionifanairlinewerepositionedasthesafestinthe world,andthusappealedtocustomerswhowereparticularlyafraidofflying.

AnyonefamiliarwiththeretaileranddiscountstoreWalmartknowsthatitoften hasattention-grabbingpromotions,offeringexpensiveproductslikeBlack& Deckerlawnmowers,flat-screenTVs,laptopsandevendrumkitsatsensational prices.Thefactthatthesesortsofproductscanbesoldatthesepricesisoftentothe creditofcertainpurchasersorpurchaserteams.Whatdifferencewoulditmaketo Walmartifitemployedthebest,ratherthanaveragepurchasers?Itcouldmakea drasticdifference,becauseitistheseverypromotionswhichgreatlyappealto

currentandpotentialcustomers,boostingsalesandsupportingthediscountstore’s low-pricestrategyinthelong-term.

NathanMyhrvold,aformerstudentofStephenHawkingandbrilliantmathematician,wastheChiefTechnologyOfficeratMicrosoftuntil1999.Heoncecoined thephrase:“Thetopsoftwaredevelopersaremoreproductivethanaveragesoftwaredevelopersnotbyafactorof10or100,oreven1,000,but10,000.”Atfirst glance,thissoundsheavilyexaggerated.Butanyonewhohasworkedinthe softwareindustrywillknowthatthebestdevelopersdothingsmuchbetteranda lotdifferentlytoaveragedevelopers.Theyaresignificantlyfaster,moreefficient, andmakefewererrors.Theybearinmindfuturedevelopmentswhencreating currentsoftware,andanticipatecustomerrequirementsbeforethecustomershave evenarticulatedthesethemselves.Softwarecompaniesoftengeneratemillionsof dollarsinsalesusingtheresultsofjustafewstaff,whiletheworkofother employeessimplyfizzlesout.

SowhatisthedifferencebetweentheUnitedAirlinespilotsandtheWalmart purchasersorMicrosoftdevelopers?Thelatterarestaffwithkeyfunctions, i.e.functionswhichhaveadirectimpactonacompany’ssuccessandcompetitiveness.ThegraphinFig. 4.2 showsthedifferencebetweenkeyfunctionsandother roles.

Inmostrolesatcompanies,anemployee’sperformanceisproportionatetothe addedvaluegenerated.Ifastaffmemberworks10%fasterormoreproductively thananother,thedifferenceinaddedvaluebetweenthesetwopeoplewillalsobe 10%.Onescrews500partstogethereveryday,andtheother550.Theaddedvalue generatedforthecompanydiffersaccordingly.Thisisparticularlythecasein productiondivisionsorotherareasinvolvingstandardisedprocesses.Whenit comestokeyfunctions,however,anabove-averageperformancecandrastically increaseacompany’svalue.ApharmaceuticalcompanylikeBayercanearn billionsofdollarsinsalesbydevelopinganewproductinitsresearchand developmentdepartmentandlaunchingitquicklyonthemarket.Thiscompany hasaninnovationstrategywhichclearlyallowstheresearchanddevelopment departmenttoperformthekeyfunctions.Atothercompaniesinthesameindustry, whichinsteadpursueapricestrategyandseektokeepthepricesofgeneric medicationaslowaspossible,competitivenessisdeterminedbycompletelydifferentfunctions.Atcompaniesintheclothingandfashionindustry,suchasHugo Boss,designersarecriticallyresponsibleforthesalesultimatelygeneratedbya collection.Ifadesignermatchesthecustomers’tastes,thishasfar-reaching consequencesforthecompanyasawhole.

Thefunctionswhichcanbeconsideredkeyataparticularcompanydirectly dependonitsstrategyandpositiononthemarket,andthereforeonthequestionof whycustomersbuyitsproductsorservices.Manymonthsago,Iwaspartofan interestingdiscussiononthistopicwithmanagersfromretailcompanies.Wetalked aboutwhichpositionswerekeyfunctions.Thepurchasesandsalesdepartments wererivals.Thedecidingfactorintheendwastherealisationthatpeoplewant customerstoenteradepartmentstorebecauseofthepriceandqualityofthe products,notthefriendlyorexpertsalesadvice.Theshoppingexperiencetook

Fig.4.2 Therelationship betweenperformanceand addedvalueforkeyfunctions andotherroles

moreofabackseat.Theproblemwasthusresolved.Ifthepriceorqualityplaysa roleinretailtrade,itcanbeassumedthatpurchasingisakeyfunction,asis frequentlyalsologistics.Figure 4.3 clearlyshowswhichrolesatacompanycan usuallybeconsideredkeyfunctions,dependingonthecompany’sstrategicfocus. Manycompanieswilladmitherethattheydon’thaveaclearcorporatestrategy. Thisisunderstandable,becausemanycasesofbusinessmanagementdon’tfollow classictextbookrules.MostmanagingdirectorsandexecutiveboardshavepresumablynotreadMichaelPorter,nordotheyincorporatehisideaswhenmakingtheir decisions.Thisdoesn’tnecessarilymeanthatthesecompaniesarepoorlymanaged. Manyinsteadactinaccordancewiththemottoof“wedowhatwedoandtrytobe betterthantherest.”“Weproducesafetysystems,listentoourcustomers,anddo ourbest—that’sourstrategy.”Thisistypicalofwhatyouwouldhearfrom decision-makersatlargeandmedium-sizedbusinesses.Yetmostcompanieshave along-termfocus.Managingdirectorsandexecutiveboardchairpersonsusually haveawell-thought-outanswertothequestionofwhytheircompanywillstillexist in10years.

Discussionsontheissueofwhichfunctionsatacompanyaretobedeemedkey functionsarepoliticallycomplex,andmustbeconductedanddecidedonatthe highestlevel.Themainreasonwhythesediscussionsaresocomplexisbecause theyaddresstherelativeimportancebetweenvariousfunctionsatthecompany,and therespectivemanagersarenotwillingtodowngradetheirareainfavourof another.Acharacteristicerrorveryoftenalsoemergeswhenidentifyingkey functions.Forinstance,peoplefrequentlyarguethataparticularroleisakey functionbecauseitisindispensable.Whatwouldthecompanybewithouta functioningITdepartment?Evencompaniesfocusingoninnovationadmitthat alltheinnovationsintheworldwouldbeuselessiftherewerenosalesdepartment.

Strategic focusKey function

Innovation, technological leadershipResearch & Development GrowthSales

Brand leadershipMarketing, Design

Price leadershipPurchasing, Production Planning

Thisargumentisnotconstructiveinthiscontext,forcompaniesshouldassumethat allfunctionsarenecessaryandindispensableinsomeway.Thesesortsof discussionsarelikedebatingwhichhumanorganorbodypartisthemostimportant. Allorgansareimportant,andonlyveryfewaredispensable.If,however,someone wantstobebetterthanmostotherpeopleinaparticulararea(sport,art,science, culture),certainphysicalormentalfunctionsdoneedtobemoredevelopedthan others.Thediscussionheatsupfurtherwhendealingwithfunctionswhichhavethe potentialtodosignificantharmtothecompanyasawhole.ITisoftencitedhere too,asitisrightlyassumedthaterrorsinIT,particularlywhencontrollinghighlevelbusinessprocesses,canparalyseentireareasofthecompany.TheroleofHR isanotherfrequenttopicofdebate.IfHRisnotabletorecruitsuitablestaff,this weakensthecompany’scompetitiveposition.Aweaksalesdepartmentdoesn’t exhaustmarketpotential.Non-functionalqualitymanagementresultsincustomer dissatisfaction,whichinturnweakenscustomerloyaltyandthusdemand.Thelist couldgoonandon.Withabitofimagination,itcanbearguedthatpoorperformanceinmostfunctionssignificantlyharmscompanysuccessandcompetitiveness. Butthat’snotwhatdefiningkeyfunctionsisabout.Definingkeyfunctionsinstead explicitlydealswiththequestionofwhereacompanycanachieveabove-average valuethroughabove-averageperformance.

Thereisonlyonesingleexceptionhere,namelywhentheriskofafunction failingiscomparativelyhigh,andtheconsequencesthereofarejustasdramatic. Thisideaisbasedontheconventionalclassificationofrisksaccordingtotheir probabilityofoccurrenceandthemagnitudeoftheirconsequences.Doctorsata hospitalareatypicalexample.Itcanbeassumed,thatsurgeonswillhavea minimumqualificationstandard.Itisparticularlywisetoemploythebestdoctors atahospital,becausethesedoctorsareabletoreducethehighprobabilityof surgicalfailure.Butiftheoperationdoesfail,ithasdrasticconsequences,sinceit cancostthepatienttheirlife.

Apartfromkeyfunctions,TRMalsoinvolvesidentifying bottleneckfunctions. Thesearefunctionswhichwillrequirealargenumberofemployeesinfuture,but whicharealsohardtofill.Andyet,theydon’tnecessarilyhavetobeofstrategic importancetotheorganisation.Thequantitativedemandforemployeesistheresult ofquantitativeworkforceplanning.Thedifficultyinfillingpotentialbottleneck

Fig.4.3 Keyfunctionsbasedonacompany’sstrategicfocus

functionsexternallybecomesapparentthroughexperience.Here,itissimplya questionofhoweasyorharditwastofillvacanciesinthepast.Forinstance,many hospitals,particularlyinstructurallyweakregions,areanxiouslylookingfor qualifiednursingstaff.Althoughwellqualifiednursesarenecessaryforahospital tofunction,mosthospitalsarenotdistinguishedintermsofthequalityoftheir nursing.Thisisthereforenotacaseofakeyfunction,butratherabottleneck function.Manymajorcompaniessupporttheirbusinessprocesseswithsoftware madebySAP.NumerousSAPcustomershavecontinuoushighdemandforSAP specialistsinordertofurtherdevelop,service,andmaintaintheseoftenvery complexITsystems.Thismeansthat,althoughtheITdepartmentisrarely strategicallyrelevant,itisnecessary.Atthesametime,therearehardlyany availableSAPspecialistsduetothehighexternaldemand.

TRMalsoprovidesasuitablesolutionforfillingbottleneckfunctions.Asa startingpoint,boththekeyandbottleneckfunctionsmustbeidentifiedthoroughly. Discussionstodatehaveshownthatthreecriteriashouldbetakenintoaccount whendefiningkeyandbottleneckfunctions:

–The strategicimportance ofafunctionintermsofcompanysuccessand competitiveness.

–Thefuture quantitativeworkforcedemand forafunctionbasedonquantitative workforceplanning.

–The availabilityoftalent ontheexternallabourmarketintermsoffillinga positionwithinafunction.Thelowertheavailability,theharderafunctionis tofill.

DifferentcompanyfunctionscanbepresentedinanHRfunctionportfolio,as showninFig. 4.4 (cf.Stewart, 1997).

Figure 4.4 illustratesthedifferentiationbetweenvariouscompanyfunctions. Thecircleswithinthisportfoliorepresentthedifferentfunctions.Alongwiththe criteriaof‘availabilityoftalentonthelabourmarket’and‘thestrategicimportance ofvariousfunctions’,thesizeofthecirclesdemonstratesthequantitativedemand estimatedforthefuture;thelargerthecircle,thegreaterthedemand.

Basedontheaforementionedcriteria,functionAisabottleneckfunction, becausethedemandforstaffingisestimatedasbeinghigh(largecircle),yetthe availabilityoftalentonthelabourmarketislow.Italsoappearstobeoflow strategicimportance,thoughthisisirrelevantwhenitcomestodefiningbottleneck functions.DandCarekeyfunctions,becausetheyareintheright-handhalfofthe portfolio.Theyareofstrategicsignificancetothecompany.Onceagain,the quantitativeworkforcedemandplaysnorolehere,meaningCisalsoakeyfunction. FunctionDisparticularlycritical.Itisnotonlyabottleneckfunction(highdemand andhardtofill),butalsoakeyfunction.Acompanywiththefunctionportfolio showninFig. 4.4 wouldthusdowelltofocusitsTRMonfunctionsA,DandC.We alsonoticethattheaboveexampleshowsnofunctionsinthebottomright-hand area.Itlacksfunctionswhichareofhighstrategicrelevanceandwhichare simultaneouslyeasytofill.Thisisrathertypicalforanumberofreasons.

Myownexperiencewithmanycompanieshasshownthatthissortoffunction portfoliocreatesgreatclarity,andisthankfullyadoptedbymanagementbodies.It