When we consider that a company’s ability to innovate and develop leaders is largely dependent upon its ability to attract, retain—but most importantly to engage—talent, the shift in CEO priorities to talent management makes sense. Here, we look at some of the ways they plan on doing this.

1. turning the
downside upside
Why talent management
is now the top
priority of CEOs
Teresa Carroll

2. 2 | turning the downside upside
Fear turns to motivation. In 2010
talent management was third on the list of CEO priorities.
A year later it’s number one. What’s changed?
Global markets remain uneven and expanding in emerging markets, where the When asked about their top business
unreliable, but the CEO mood is shifting. economic recovery is most promising. concerns for 2011, CEOs returned this list:
Rather than waiting for the next piece of
news out of Europe, the US or China, the It seems that fear and trepidation has turned 1. Talent Management
world’s C-suite executives are stepping off to motivation and CEOs are now looking for 2. Navigating risk
the roller coaster to chart their own course. sound strategies to move forward through 3. Innovation
rather than ‘waiting’ for the clouds to clear. 4. Leadership development
After three years of market volatility,
CEOs have come to one grand, unified This newfound motivation and When we consider that a company’s
conclusion: they are confident that with the confidence will mean fresh approaches ability to innovate and develop leaders
right inputs, they can continue to grow. to some old problems. Above all, talent is largely dependent upon its ability to
management issues are rising to the attract, retain—but most importantly to
In fact, 30% of public company CEOs surface and CEOs are looking at these engage—talent, this shift in CEO priorities
and 45% of emerging-company CEOs with increased intensity and rigor. makes sense. Here, we look at some
anticipate significant growth through of the ways they plan on doing this.
2012—regardless of the volatile investment In fact, it’s talent issues that dominate the
climate. For many, this growth means CEOs’ list of top challenges for 2011.

3. 3 | turning the downside upside
Talent is required to address risk.
Adapting to the persistence of volatility is now a key issue for
organizations, and they need the right people to help them do it.
To achieve growth within the current
economic and political climate, executives “We pay much more
are taking a more proactive approach to risk. attention now to making
sure we understand
CEOs are asking their teams to be and pressure-test the
67% 72%
more aware of the risk-reward tradeoff. upside/downside of
Volatility is no longer a reason to sit still, various decisions.”
so companies must adapt. Yet, in the
John V. Faraci, Chairman and
face of continued volatility and uncertain
CEO, International Paper
public investment, organizations must
increase the veracity of the investment
analysis and apply more stringent stress
tests to ensure the risks are worth it. Two-thirds of CEOs (67%) say Almost three-quarters (72%)
they will formally incorporate say they will devote more
risk scenarios into their senior management time to
strategic planning. addressing risk.

4. 4 | turning the downside upside
Talent is required to innovate. The appetite
for change is strong and CEOs are looking to reorganize and
realign their workforces to put innovation at their center.
Innovative companies have our attention.
The world moves fast and people
want to know what’s coming next.
As such, CEOs are focused on innovation 78% 79% 84%
as a key element of success in a climate of
ongoing volatility, and they’re confident
their innovations will succeed.
It’s clear, however, that CEOs already find
access to the right talent to execute on
transformative plans restrictive. Some 39%
of CEOs this year expect the majority of 78% expect their 79% believe innovation will 84% of CEOs have changed
their innovations to be co-developed. development efforts to drive efficiencies and lead to strategies in the past two
Instead of direct hiring and working generate ‘significant’ new competitive advantage. years, effectively changing
through all elements of product or service revenue opportunities over their talent needs.
development internally, organizations see the next three years.
the speed to market as equally critical
to success as the innovation itself.

5. 5 | turning the downside upside
Talent is required for good leadership.
As job tenure continues to fall the outlook for companies looking to
develop leadership ability over the long term faces serious setbacks.
CEOs worldwide recognize the need to • More than half of employers (57%) say the Difficulty filling jobs by country
grow talent internally, but only 23% of talent shortage impacts key stakeholders.
90%
business leaders say their firms are “strong
at developing future leaders”. Already, Organizations are struggling with how to 80%
companies are facing an acute internal talent develop agile leaders that possess the 70%
supply problem: business acumen and cultural savvy to 60%
operate in a global market. In fact, 66% 50%
• Should the need arise, 51% of companies of CEOs believe there is a limited supply 40%
state they could not name a CEO of candidates with the right skills, while 30%
immediately and 39% report having no another study shows 75% of companies 20%
internal candidates whatsoever. are experiencing a deficiency in candidate 10%
qualifications.
n zil n .S. d o ny ma ly bia n d
• Of those enjoying strong internal talent, pa U key an ic nce de eru an
Ja Bra taiwa l lgariaex rma na rica ita
om ngary swe africa p irel
tur zea m e pa l
austria hu fra
64% are highly concerned about losing bu g costa co
new south
those future leaders through voluntary
turnover.

6. 6 | turning the downside upside
How will they meet these challenges?
CEOs know what they’re up against, now they must find the right
adaptive strategies and lead their organizations through the change.
In this new reality, CEOs are looking to be proactive and adapt their organizations
for success. As a result, three key talent trends have emerged for 2012:
1. Talent development: ensuring a strong supply or ‘talent pipeline’ and looking to diversify
the talent pool are essential to filling growing vacancies in specialist and high-skill roles.
2. Talent retention and engagement: improving the critical measures of loyalty,
commitment, and motivation is key to overcoming the list of CEO priorities for 2011.
3. Talent mobilization: talent is more mobile than ever and there is strong
growth in repatriation as well as medium-term contracts for foreign workers
to assist local talent learning to run new ventures/outsourcing projects.

7. 7 | turning the downside upside
1. Talent development:
improving pipeline and diversity.
Recession has accentuated the shortage of required skills
in the workforce. An ill-prepared talent pool is faced with
skill requirements they simply cannot deliver.
CEOs are looking for immediate talent of talent. Many are also overhauling their
pipeline improvement by expanding their internal programs and improving the “If we don’t solve the
recruitment strategies. Many are increasing application of knowledge in the workplace. education issue then the
their benefits packages, emphasizing problem will eventually
development opportunities, or broadening Organizations are also shifting their talent 54% degrade the private
their candidate search outside their country. focus. They’re looking to underused sector’s ability to recruit
sources of talent and innovation—women,
They are looking to develop a wider variety a capable workforce.”
of workers who will bring new talents, older workers and outside contractors,
Tan Sri Dato’ Azman Hj. Mokhtar,
skills, and ideas to the table—diversity and for instance—to feed the pipeline of skills
Managing Director, Khazanah
pipeline are the key strategies for improving and ideas that will meet local demands. Nasional Berhad, Malaysia
the current rate of talent development.
There is also growth in the use of returning
More than half of CEOs surveyed by PwC expats. Many companies entering new More than half of CEOs say
(54%) say they are planning to work with markets are identifying local talent to send they are working to improve
government and the education system to abroad for training, or are repatriating the quality of the next
improve the quality of the next generation talent to their home regions. generation of talent.

8. 8 | turning the downside upside
2. Talent engagement & retention:
leveraging what you have.
With the economic recovery and expansion of the job
market, leaders fear an exodus of star talent.
Employee engagement has significantly a significant increase in turnover among • Using more non-financial rewards, such
decreased in the past five years. this group, followed by Generation as training and mentoring programs,
And executives are starting to X (ages 30-44) at 46 percent. with a focus on career trajectories,
worry—close to two-thirds (63%) particularly for Generation Y employees.
are concerned about employee Most executives (70%) identify employee
retention over the next 12 months. engagement as a critical component • Expanding use of more flexible
to achieving their business objectives. work arrangements (telecommuting,
• Among global employees surveyed this Forward-looking companies are: job-sharing, part-time) and non-
past spring, just 35% expect to remain linear career paths to meet growing
with their current employer compared • Using engagement studies to anticipate work-life balance needs.
with 45% in 2009. And, nearly two out and address barriers to inclusion,
of three global employees surveyed productivity, or flight risks within • Spreading employee stock
(65%) report they are either passively particular groups of employees. ownership more widely.
or actively testing the market.
• Refocusing efforts and investments
• Generation Y workers are considered on those employees who will be
most likely to be on the move, with 63% most valuable to their businesses in
of executives predicting an increase or light of their growth ambitions.

9. 9 | turning the downside upside
3. Talent mobility:
moving the work and the worker.
The near future will see a significant shift in talent mobility, as
skilled employees from both emerging and mature markets
increasingly operate across their home continent and beyond.
Talent is more mobile than ever: In the long run, talent mobility has a • Repatriation is growing. Many
positive effect on the quality of workforces, repatriated workers that are recruited to
• This year, 59% of CEOs are planning and on levels of innovation. Talent return home are armed with skills and
to send more staff on short- and long- mobility manifests in a variety of ways. business acumen developed abroad,
term international assignments. while retaining the valuable cultural
• Expatriates are still widely used to sensitivities of their home country.
• Many companies are allowing employees manage expansions, with organizations
to choose between international in the Americas being the most
assignments that are of interest, and that likely to have expat leaders.
will develop their leadership talent.
• ‘Management trainers’ are widely
• Virtual assignments are on the rise, thanks used for medium-term contracts so
to technological tools such as instant that expansions/outsourced functions
messaging, cloud computing and social can eventually be run by locals.
media, which facilitates collaboration.

10. 10 | turning the downside upside
conclusion
Ongoing market volatility, skills shortages, 1. The need to proactively manage risk; To ensure they get the most of the
and the increased pressure to adapt talent they have, and to maximize their
to this new business reality have made 2. The need to innovate more, chances of engaging the right, new
CEOs reassess the importance of talent and more often; and talent, CEOs are focusing on these three
management in their organizations. key areas: talent development, talent
3. The need for strong leaders to manage
engagement and talent mobility.
One year ago, talent management a more complex business environment.
was third on CEOs’ list of priorities, This change in c-suite priorities offers a
now it’s number one. Three key valuable—and somewhat hopeful—lesson:
challenges of have driven this shift: waiting for conditions to improve is no longer
an option. Instead, proactive management
of talent is the key to overcoming the
challenges of the next year and beyond.

11. 11 | turning the downside upside
references
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Manpower Group. (2011). 2011 Talent
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Economies Through Fostering Talent Mobility.
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Workforce.

12. About the author
As SVP, Centers of Excellence for Kelly Services, Teresa Carroll
is responsible for leading a team that manages the brand, develops
solutions for clients, and supports Kelly’s vision of providing the world’s
best workforce solutions.
About Kelly
Kelly Services, Inc. (NASDAQ: KELYA, KELYB) is a leader in providing workforce solutions.
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