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State of Talent Management Survey 2011

The New Talent Management Network\'s 2011 State of Talent Management study.

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State of Talent Management Survey 2011

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  2. 2. Table of Contents About the Survey/About NTMN i Executive Summary 1 Our 2011 Insights What Works and Why 2 What We Do and How We Do It 9 Increasing the Investment 17 Appendix Additional Demographic Data 19All opinions expressed in this document are those of the author and do not necessarily represent those of any survey participants or advertisers. For additional information about the New Talent Management Network, go to www.newtmn.com © New Talent Management Network, 2011, All rights reserved
  3. 3. ABOUT THE NTMN THE 2011 SURVEY About the New Talent Management Network The New Talent Management Network (NTMN) is the world’s largest global network of talent management professionals. With a focus on serving corporate practitioners, we have more than 2,500 members around the world and 10 City Groups providing members with opportunities to learn and network. The NTMN is completely free to members – there are no dues or fees required to participate in any activity. We don’t believe you should have to pay to network and learn. The NTMN has three goals: •  Increase the capabilities of TM professionals and the effectiveness of this profession •  Coordinate opportunities for local, free networking amongst TM professionals •  Improve talent management effectiveness by conducting original research that benefits the TM community Member benefits include participating in City Groups, NTMN webinars, the ability to search our member database, access to the NTMN job board and early access to all of our research. If you’re not already a member, please join us today at www.newtmn.com. Thank you for your continued support! Where you see the mouse icon, Marc Effron click on the advertisement for Founder more information New Talent Management Network marc@newtmn.com Please follow us at twitter.com/newtalentmgmtnt About the Survey The 2011 State of Talent Management Survey advances the New Talent Management Network’s (NTMN) goal of conducting original research to benefit the talent management profession. Our goal is to track and report on the structure, practices, and organization of the talent management community worldwide. 2011 marks the fourth annual survey that we have conducted on behalf of our members. About the Survey Process The survey was administered in March 2011 and was open to any organization interested in participating. Participation was solicited by direct email to NTMN members, Linked-In solicitations and tweets. Surveys were anonymous to encourage the disclosure of sensitive information such as compensation rates. Any survey that did not include a company revenue figure, was missing a significant amount of information or otherwise appeared invalid was not included in the analysis. 111 companies participated in the 2011 survey. i i
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  5. 5. EXECUTIVE SUMMARY OUR 2011 STATE OF TALENT MANAGEMENT REPORT Our fourth annual survey finds that the increased tenure and near universality of talent management (TM) groups still isn’t translating into consistently effective results. This year’s survey provides insights to help address that challenge. We find that senior team support, clear accountability for executing talent processes and simple process design emerge as key drivers of TM success. OUR 2011 INSIGHTS INSIGHT 1: In charge but not in control The keys to talent management success appear to lie largely outside of our direct control. CEO/ senior team support and managerial accountability top the list of reasons why talent management practices are successful. These factors are ranked significantly higher than more controllable factors like having a supportive head of HR or HR team. Surprisingly, HR technology seems to neither help nor hinder these processes. One bright spot – the design of TM processes was seen as a moderately powerful enabler and blocker of success. Survey analytics further show that easy to use process design is significantly related to perceived process effectiveness. INSIGHT 2: Here to stay (for now) Those writing off TM as a passing fad or an exercise in repackaging HR will be disappointed our 2011 results. The average age of TM groups increased to just over four years and 70% of participating companies with more than one thousand employees had formal TM groups. A relative paucity of senior TM talent is keeping compensation at strong levels with pay packages in the $700K - $800K range for talent executives in larger companies. INSIGHT 3: Investment flows in In the post-recession corporate world, increased funding unmistakably signals increased corporate commitment. With 53% of companies increasing TM budgets and 27% increasing TM staff, those who control the corporate purse strings are sending a very clear message about their commitment to talent management. Mid-sized companies were most likely to see increased budgets with 74% of those with 5K – 15K employees receiving more cash for talent management in 2011.Note: In this report we refer to “formal” TM groups and “other” TM groups. Formal talent management groups are those officially called “TalentManagement” in their company. Other Talent Management groups are performing TM work but aren’t formally referred to by that label. 1
  6. 6. WHAT WORKS WHY•  What enables talent management practices to work•  How effective our practices are•  How simple/easy to use our practices are•  How accountable manages are for action or follow-up•  How transparent our practices are•  What the statistically significant drivers of TM process effectiveness are•  How integrated our talent management processes are 2
  7. 7. WHAT WORKS WHYThe secrets to talent management effectiveness begin to emergeA key 2011 insight is that CEO/executive team support and clear accountability for results werethe magic ingredients in both the success and failure of talent management processes. Thesefindings were consistent across large and small firms and those with more and less experiencedtalent leaders. What enables talent management practices to work. . . Most important factor* Overall Rank Factor responsible for success 1st 2nd 3rd Those with job experience outside 1st Executive Team Support 32% 32% 8% HR were more Manager accountability for likely to say talent 2nd 10% 23% 27% process design completing the process was a key to 3rd CEO support 37% 7% 2% success 4th Design of process/program 7% 13% 23% 5th Availability of resources 3% 10% 11% Despite HR 6th Head of HR support 5% 7% 5% technology’s high cost, it’s not seen as 7th HR team support 3% 5% 7% relevant to talent 8th HR technology 1% 2% 8% practice success and only slightly related to failure . . . and what gets in their way Most important factor* Overall Rank Factor responsible for lack of success 1st 2nd 3rd Accountability and executive team Lack of manager accountability for 1st 25% 19% 21% support are the completing the process critical ingredients in 2nd Lack of executive team support 27% 18% 14% the success or failure of TM practices 3rd Design of process/program 12% 11% 21% 4th Lack of resources 7% 13% 14% 5th Lack of CEO support 21% 5% 4% 6th Lack of HR team support 2% 5% 16% 7th HR technology 3% 11% 5% 8th Lack of head of HR support 2% 6% 5%* How to read these charts: “Overall rank” is determined by combining “votes” for 1st, 2nd and 3rd choices. An item selected by a respondent as 1stchoice is counted three times, as 2nd choice is counted twice and as a 3rd choice is counted once. 3
  8. 8. WHAT WORKS WHYHighly effective talent practices remain within reach but out of the grasp ofmany organizationsProcess effectiveness remains at 2010 levels with an average of 45% of companies rating theirprocesses as Always or Often Effective.•  Succession planning practices are seen as being simpler and having greater accountability than in 2010•  Development planning remains the process with the lowest perceived effectiveness and lowest managerial accountability by a significant amount.•  Simple design and managerial accountability explain large amounts of why processes are rated effective.How Effective Our Practices Are: Succession Planning increased in perceived effectiveness –moving from 51% to 61% -- while all other practices either scored at or below 2010 levels. How would your executives/line managers assess the following TM process on the dimension of effectiveness? Assessing leaders (360s, et al.) Development planning Driving employee engagement Executive coaching ID/developing high potentials Setting clear goalsSuccession planning/ talent reviews Training in management/leadership 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Rarely or Never Effective Sometimes Effective Always or Often Effective Because typical 360’s don’t work . . . 4
  9. 9. WHAT WORKS WHYHow Simple/Easy to Use Our Practices Are: Across all talent management practices, an average of48% of companies rate theirs as perceived to be simple and easy to use. While successionplanning’s score improved from last year, other processes either remained the same or declined onthis measure. How would your executives/line managers assess the following TM processes as being simple/easy to use? Assessing leaders (360s, et al.) Development planning Driving employee engagement Executive coaching ID/developing high potentials Setting clear goals Succession planning/ talent reviews Training in management/leadership 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Not Very or Not At All Moderately Mostly or ExtremelyHow Accountable Managers Are for Action or Follow-Up: On average, 36% of respondents saythere is managerial accountability for following-up on talent management practices. Setting cleargoals fares the best (55%) while development planning rates lowest (19%). How would your executives rate managers’ accountability for action or follow-up for the following practices? Assessing leaders (360s, et al.) Development planning Driving employee engagement Executive coaching ID/developing high potentials Setting clear goals Succession planning/ talent reviews Training in management/leadership 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Rarely or Never Sometimes Always or Often 5
  10. 10. WHAT WORKS WHYHow Transparent Our Practices Are: Transparency remains a highly variable factor in talentmanagement practices, with very low transparency for processes that identify high potentials andrelatively high transparency for goal setting and training. How would your executives/line managers assess the following TM processes on the dimension of transparency? Assessing leaders (360s, et al.) Development planning Driving employee engagement Executive coaching ID/developing high potentials Setting clear goalsSuccession planning/ talent reviews Training in management/leadership 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Not Very or Not At All Moderately Mostly or Extremely Clarity for today’’s key talent management issues. Valtera’’s measurement, analytics and consultation services are focused on getting unequivocal information that will allow you to make the best decisions in choosing new hires, leveraging your existing work force most effectively, retaining key talent, and improving employee engagement and the service climate. When you’’re tasked with strengthening your organization by making the most of your human capital, any or all of our three practices is the perfect place to start. SURVEYS | SELECTION | ASSESSMENT Ph: 847-640-8820 | Fx: 847-640-8830 | sales@valtera.com | www.valtera.com 6
  11. 11. WHAT WORKS WHY What Drives Effectiveness: Simple practices and clear accountability emerge as having a large impact on the perceived effectiveness of nearly every talent practice. STATISTICALLY SIGNIFICANT DRIVER OF EFFECTIVENESS?* Simplicity/ Talent Management Practice Ease of Use Accountability Transparency R2 Assessing leaders/360s ✔ ✔ .40 Development planning ✔ ✔ .48 Driving employee engagement ✔ ✔ .64 Executive coaching ✔ ✔ .45Identify and develop high potentials ✔ ✔ .54 Setting clear goals ✔ ✔ ✔ .58 Succession planning/talent reviews ✔ ✔ .68Training in management/leadership ✔ .50* Linear multiple regression using p .05 to test significance of items. The analysis used perceived effectiveness as the dependent variable and the items assessing simplicity,accountability and transparency as the independent variables. 7
  12. 12. WHAT WORKS WHY Talent Process Integration Integration of talent processes increased slightly from 2010 with performance management and succession planning showing single-digit gains. On-boarding – a new item this year – rated as one of the least integrated processes To what extent are each of the following processes/practices integrated into your overall talent management system? Change from 2010 in Fully or Mostly Integrated rating -6% +2% +4% +9%100% 6% 7% 13% 13%90% 23% 18% 17% 31%80% 24% 26%70% 17%60% 19% 33% 34%50% 22% 29% 32%40% 27%30% 20% 28% 17%20% 36% 16% 10%10% 21% 9% 18% 13% 13% 7% On-boarding Compensation 360 Assessment Leadership Succession Performance Training Planning Management Fully integrated Mostly integrated Somewhat integrated Slightly integrated Not integrated Talent Philosophy Only 36% of companies say they have a talent philosophy or “rules of the road” for managing their talent. •  Large firms are no more likely to have a talent philosophy than small firms •  Having a talent philosophy is not related to how long your talent management group has existed •  If you have a talent management philosophy you’re more likely to rate your company’s talent management processes as more integrated 8
  13. 13. WHO WE ARE WHAT WE DO•  For what processes is your talent management group responsible?•  How long has your talent management group existed?•  What relationship is there between company size and number of TM staff?•  How many direct reports does the head of TM have?•  Which levels of management do you serve?•  How many years of experience do you have in the TM field?•  In which areas of HR do you have experience?•  What are the compensation levels for the top talent management executive (VP or Director): Base, bonus, long- term incentive? 9
  14. 14. WHO WE ARE WHAT WE DOAn increasingly distinct focusThe increasing specialization of talent management groups is reinforced in our 2011 data. A smallset of activities defines the typical responsibilities of a TM group – succession planning, highpotential management and assessment/feedback. Activities like talent acquisition, engagement andchange management are increasingly located outside the domain of talent management. For what activities is your talent management group responsible? 100% RESPONSIBLE FREQUENTLY 90% Succession Planning/Talent Reviews High Potential Identification/Development 80% Assessment/Feedback/360s % of TM groups responsible for process Talent Strategy 70% RESPONSIBLE Performance Management Capability/Competency Model Development OFTEN 60% Career/Development Planning Executive Coaching Training: Management/Leadership 50% Employee Engagement (surveys/analysis) RESPONSIBLE Organization Development/Change Management 40% Talent Acquisition/Recruiting - External SOMETIMES 30% Diversity Workforce Planning Workforce Analytics 20% RESPONSIBLE RARELY 10% 0% Is there anything that non-formal TM groups do more than formal TM groups? These other groups more frequently engage in traditional OD activities like engagement surveys (67% vs. 47%), change mgmt. (75% vs. 46%), and executive coaching (75% vs. 58%) 10
  15. 15. WHO WE ARE WHAT WE DOTalent management groups are more establishedWith 65% of responding companies having formal talent management groups, the function appearsto have established a strong foothold in corporations worldwide. The function is also maturing, withthe average tenure of talent management groups shifting upward for the third consecutive year to4.1 years. How long has your talent management group formally existed? 2010 25% * 5 or more yearsFewer new TM groupsin 2011, and a longer 20% average existence, 2010 2010 21%suggests that the field 2010 15% is maturing 2010 16% 10% 17% 13% 10% 2010 10% 5% 6% 8% Less than 1 year 2 years 3 years 4 years 5 years 6 – 9 years 10 or more 1 year years AVERAGE (4.1) The Mentor Partnership LLC New York – Geneva – Chicago – Australia   Experience Matters Our faculty of former Global 1000 CEOs mentor, support, and develop current CEOs, members of the executive team, senior leaders, and high potentials. We work with those newly appointed to the top leadership, aid in succession planning, guide expatriate leaders, develop high potentials, and help those facing a higher level of business complexity. Many call on us when they need a finishing school for their top leadership. Steve Dumont, Managing Partner, 203.640.8869 sdumont@thementorpartnership.com www.thementorpartnership.com 11
  16. 16. WHO WE ARE WHAT WE DOInsights to their structure are starting to emergeTwo structural components of TM groups – their size and span of control – were explored in our2011 survey. TM team size showed a curvilinear relationship with the number of employees inthe firm but, surprisingly, no relation to company revenue. Relationship of company size to number of TM staff Talent Management Staff 20 Fewer new TM groups in 2011, and a longer 15 average existence, Number of suggests that the field is maturing 10 5 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 Employees (000’s) 12
  17. 17. WHO WE ARE WHAT WE DONo consistent organization structure exists for talent management groupsSpan of control data shows that no standard structure exists for this function, with spans of controlranging from 1 to 20. Number of direct reports to the head of talent management 18% Percent of respondents 16% 14% 12% 10% 8% 6% 4% 2% 0% 0 1 2 3 4 5 6 7 8 or AVERAGE (4.7) more We’re slightly more likely to serve executive leadership Our 2011 data shows a significantly smaller gap between the groups served by formal talent management groups and other groups (OE, OD, etc.) that have talent management responsibilities. Previous surveys showed the “other” groups primarily focused on middle managers and below. Which of the following groups do you serve? 90% 80% 70% 60% 86% 50% 77% 69% 65% 40% 63% 30% 53% 20% 40% 10% 26% CEO and Senior leaders below Middle managers Professionals executive team the executive team “Formal” TM Groups Other groups engaging in TM work 13
  18. 18. WHO WE ARE WHAT WE DO We’re highly experienced in our field The typical TM practitioner is a deep expert specialized in talent management and closely related areas like leadership development. Few of us have experience in other HR disciplines but many of us have worked outside of HR. How many years of experience do you have specifically in the talent management field? 20%DID YOU KNOW? % of respondents 69% of TMpractitioners have 15%held a role outside 20% of Human 10%Resources during 17% 15% 14% their career 12% 13% 5% 9% 1-3 4-6 7-9 10 - 12 13 – 15 16 - 18 19 - 20 years years years years years years years Many of us have job experiences outside of HR but those with generalist experience are the least likely to have had this. In which of the following areas have you held a full-time assignment during your career? 70% 72% of those with leadership development experience have % of respondents 60% also had a full-time experience 50% outside of HR. 40% Only 38% of those with generalist 66% 64% 60% experience had a job experience 30% outside HR 46% 20% 10% 7% 6% 14
  19. 19. WHO WE ARE WHAT WE DO What We Earn 2011 compensation figures were largely unchanged for base salary, bonus and total direct compensation. The graphs below are for Directors and Vice Presidents who are in the the top talent management role in their company. Vice President Compensation Director/Exec. Dir. Compensation $800 450 400 700 350 600US Dollars (000s) US Dollars (000s) 300 500 250 400 200 300 150 200 100 0 0 20 40 60 80 100 20 40 60 80 100 Company Revenue ($ Billions) Company Revenue ($ Billions) Base Salary Base + Bonus Total Direct Compensation The earning opportunity from annual and long-term incentives also remain essentially unchanged from 2010, with levels consistent with those provided in other functions. Compensation Components Manager Director VP Average Bonus Opportunity* 20% 28% 46% Average Long Term Incentive* 25% 48% 64% *As a % of base salary 15
  20. 20. WHO WE ARE WHAT WE DOOur AvailabilityBuilding on 2010’s slight easing in the availability of high quality talent, slightly more respondentssaid that talent at the VP and Director level was Easy to find. However, overall, the market remainstight for VP/SVP talent. How easy or difficult is it to find high quality talent management staff when recruiting externally at the following levels? Impossible Very Difficult Average Easy VP/SVP 2% 45% 47% 7% Director/Executive Director 4% 29% 53% 12% Manager/Sr. Manager 0% 17% 61% 22% Accelerating time to experience Eliminating Complexity, Adding Value Marc Effron + Miriam Ort h a r va r d b u s i n e s s p r e s s Business Simulations Filled with bright ideas . . . Leadership Programs One Page Talent Management shows in practical detail how Strategy Workshops to use simplicity, accountability and transparency to design incredibly effective talent management processes. Learn more at onepagetm.com www.insight-experience.com Get your copy today at hbr.org and Amazon.com 16
  21. 21. TRACKING THE INVESTMENT•  In 2011, how do you expect your talent management staff count to change?•  In 2011, how do you expect your talent management budget (excluding staff) to change? 17
  22. 22. TRACKING THE INVESTMENTCautious increases in talent management headcount trumped by a second straightyear of significant increases in talent management budgetsIn an area of tight budgets, spending increases suggest corporate support. While a modest 27% offirms plan to add talent management staff in 2011, 53% will see their budgets increase with 26%seeing increases of more than 10%. In 2011, how do you expect your talent management staff count will change in size? 80% 70% 60% 68% 50% 40% 30% Compares 20% 16% 11% to 8% in 10% 3% 2% 2010 Decrease staff by Decrease Staff count will Increase Increase staff more than 10% staff by up to remain relatively staff by up by more than 10% stable to 10% 10% In 2011, do you expect your companys spending on talent management (not including staff), will: 80% 70% Mid-size firms 60% investing the most 50% 74% of companies with 5k – 15K employees are 40% increasing TM budgets, 41% vs. 42% for all other 30% firms 20% 27% 26% 10% 3% 4% Decrease more Decrease by No change Increase by Increase more than 10% up to10% up to 10% than 10% 18
  23. 23. APPENDIX19
  24. 24. 2011 PARTICIPANT DEMOGRAPHICS Employees in participating companies $ 20% Participating 15% Company 10% Revenue (in USD) 5% 0% Average: $15.8B Median: $4B Has a group/dept. formally referred to as “Talent Management” •  Overall: 63% •  Companies with less than 1,000 employees: 30% •  Companies with more than 1,000 employees: 70% 111 companies participatedWhat level is the head of your talent management group? Mgr. Other (7%) (2%) SVP Location of participating companies (18%) 90% Director 80% (37%) VP 70% (35%) 60% 50% 40% 30% 20% 10% 0% North Asia Pacific Europe: Europe: Middle East Central or America (Including Western Central or South India) Eastern America 20