State of Talent Management Survey 2011

EXECUTIVE COACHING SEMINARSThe Presenters are Legendary; The Lessons are Leading-edge22 - 23 Sept. 2011, New York City

www.conference-board.org/coachingsems Use discount code NT1 receive a $300 discount off standard prices.

http://bit.ly/kvZx8i

http://bit.ly/lXB40q

http://bit.ly/lif7NI

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 19

All 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

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.

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! Marc Effron Founder New Talent Management Network [email protected]

ABOUT THE NTMN & THE 2011 SURVEY

i i

Please follow us at twitter.com/newtalentmgmtnt

Where you see the mouse icon, click on the advertisement for

more information

http://bit.ly/kehK7v

They have A City Group. !Why don’t you?!

!

Start or join a City Group today!http://www.newtmn.com/CityGroups.aspx!

With OPTI-‐MATCH you canoptimize your coaching and mentoring program to…

…ask the right questions …map your staff’s core skills …prioritize your matches and skills …match the right people automatically …monitor progress …and grow your staff and your business.

Coach and Mentor matchingshouldn’t be this hard.

OPTI-‐MATCH by MediaProCoach/Mentor Matching and Management software

Get started today at www.mediapro.com/mentoror call (﴾425)﴿ 483-‐4702.

by

OPTI- MATCH

ii

http://bit.ly/iVSBiY

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.

EXECUTIVE SUMMARY

Note: In this report we refer to “formal” TM groups and “other” TM groups. Formal talent management groups are those officially called “Talent Management” in their company. Other Talent Management groups are performing TM work but aren’t formally referred to by that label.

1

2

•  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

WHAT WORKS & WHY

Overall Rank Factor responsible for success

Most important factor*

1st 2nd 3rd

1st Executive Team Support 32% 32% 8%

2nd Manager accountability for

completing the process 10% 23% 27%

3rd CEO support 37% 7% 2%

4th Design of process/program 7% 13% 23%

5th Availability of resources 3% 10% 11%

6th Head of HR support 5% 7% 5%

7th HR team support 3% 5% 7%

8th HR technology 1% 2% 8%

* 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 1st choice is counted three times, as 2nd choice is counted twice and as a 3rd choice is counted once.

Those with job experience outside

HR were more likely to say talent

process design was a key to

success

What enables talent management practices to work. . .

. . . and what gets in their way

Overall Rank Factor responsible for lack of success

Most important factor*

1st 2nd 3rd

1st Lack of manager accountability for completing the process

25% 19% 21%

2nd Lack of executive team support 27% 18% 14%

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%

Accountability and executive team support are the

critical ingredients in the success or failure

of TM practices

Despite HR technology’s high

cost, it’s not seen as relevant to talent

practice success and only slightly related

to failure

WHAT WORKS & WHY

A key 2011 insight is that CEO/executive team support and clear accountability for results were the magic ingredients in both the success and failure of talent management processes. These findings were consistent across large and small firms and those with more and less experienced talent leaders.

The secrets to talent management effectiveness begin to emerge

3

WHAT WORKS & WHY

Highly effective talent practices remain within reach but out of the grasp of many organizations

Process effectiveness remains at 2010 levels with an average of 45% of companies rating their processes 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.

4

How would your executives/line managers assess the following TM process on the dimension of effectiveness?

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.

10% 80% 70% 60% 50% 40% 30% 20% 100% 90% 0%

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

Rarely or Never Effective Sometimes Effective Always or Often Effective

Because typical 360’s don’t work . . .

http://bit.ly/khrV1M

WHAT WORKS & WHY How Simple/Easy to Use Our Practices Are: Across all talent management practices, an average of 48% of companies rate theirs as perceived to be simple and easy to use. While succession planning’s score improved from last year, other processes either remained the same or declined on this measure.

How Accountable Managers Are for Action or Follow-Up: On average, 36% of respondents say there is managerial accountability for following-up on talent management practices. Setting clear goals 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?

How would your executives/line managers assess the following TM processes as being simple/easy to use?

10% 80% 70% 60% 50% 40% 30% 20% 100% 90% 0%




Executive coaching


Setting clear goals



Not Very or Not At All Moderately Mostly or Extremely

10% 80% 70% 60% 50% 40% 30% 20% 100% 90% 0%




Executive coaching


Setting clear goals



Rarely or Never Sometimes Always or Often

5

WHAT WORKS & WHY How Transparent Our Practices Are: Transparency remains a highly variable factor in talent management practices, with very low transparency for processes that identify high potentials and relatively high transparency for goal setting and training.

6

How would your executives/line managers assess the following TM processes on the dimension of transparency?

10% 80% 70% 60% 50% 40% 30% 20% 100% 90% 0%




Executive coaching


Setting clear goals



Not Very or Not At All Moderately Mostly or Extremely

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

for today�’s keyissues.talent managementtalent management

ClarityClarity

Ph: 847-640-8820 | Fx: 847-640-8830 | [email protected] | www.valtera.com

6

http://bit.ly/lJK0Yz

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.

* 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.

Simplicity/��Ease of Use Accountability Transparency Talent Management Practice

STATISTICALLY SIGNIFICANT DRIVER OF EFFECTIVENESS?*

R2

Assessing leaders/360s



Executive coaching

Identify and develop high potentials

Setting clear goals

Succession planning/talent reviews


✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔

✔ ✔ ✔ ✔ ✔ ✔

✔

.40

.48

.64

.45

.54

.58

.68

.50

7

WHAT WORKS & WHY

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

To what extent are each of the following processes/practices integrated into your overall talent management system?

100%

10%

80%

70%

60%

50%

40%

30%

20%

90%

Compensation

7%

17%

34%

20%

21%

Performance Management

23%

33%

28%

9%

7%

Succession Planning

31%

19%

27%

10%

13%

On-boarding

6%

18%

17%

22%

36%

Leadership Training

13%

26%

32%

16%

13%

13%

24%

29%

17%

18%

360 Assessment

+9%

Change from 2010 in Fully or Mostly Integrated rating

+2% +4% +9% -6%

Fully integrated Mostly integrated Somewhat integrated Slightly integrated Not integrated

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

8

•  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

WHO WE ARE & WHAT WE DO

The increasing specialization of talent management groups is reinforced in our 2011 data. A small set of activities defines the typical responsibilities of a TM group – succession planning, high potential management and assessment/feedback. Activities like talent acquisition, engagement and change management are increasingly located outside the domain of talent management.

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%)

For what activities is your talent management group responsible?

% o

f TM

gro

ups

resp

onsi

ble

for

proc

ess

Succession Planning/Talent Reviews

100%

0%

Assessment/Feedback/360s

FREQ

UEN

TLY

RES

PON

SIB

LE

OFT

EN

RES

PON

SIB

LE

SOM

ETIM

ES

RES

PON

SIB

LE

RA

REL

Y R

ESPO

NSI

BLE

High Potential Identification/Development

Talent Strategy

Capability/Competency Model Development

Workforce Analytics

Performance Management

Career/Development Planning Executive Coaching

Training: Management/Leadership

Employee Engagement (surveys/analysis) Organization Development/Change Management Talent Acquisition/Recruiting - External

Diversity Workforce Planning

90%

80%

70%

60%

40%

30%

20%

10%

50%

WHO WE ARE & WHAT WE DO An increasingly distinct focus

10

With 65% of responding companies having formal talent management groups, the function appears to have established a strong foothold in corporations worldwide. The function is also maturing, with the average tenure of talent management groups shifting upward for the third consecutive year to 4.1 years.

Talent management groups are more established


11

2010

2010

2010

How long has your talent management group formally existed?

Less than 1 year

5%

25%

20%

15%

10%

1 year 2 years 3 years 4 years 5 years 6 – 9 years

17%

21%

16%

10%

6%

13% 10%

10 or more years

8%

2010 2010

2010 * 5 or more years

Fewer new TM groups in 2011, and a longer average existence,

suggests that the field is maturing

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 [email protected] www.thementorpartnership.com

http://bit.ly/keqMls


12

Two structural components of TM groups – their size and span of control – were explored in our 2011 survey. TM team size showed a curvilinear relationship with the number of employees in the firm but, surprisingly, no relation to company revenue.

Insights to their structure are starting to emerge

Relationship of company size to number of TM staff

5

20

15

10

10 20 100 30 40 60 80 120 140 Employees (000’s)

Num

ber

of��

Tal

ent

Man

agem

ent

Staf

f

50 70 90 110 130 150

Fewer new TM groups in 2011, and a longer average existence,

suggests that the field is maturing

http://bit.ly/iBT0VT

Span of control data shows that no standard structure exists for this function, with spans of control ranging from 1 to 20.

0% 2% 4% 6% 8%

10% 12% 14% 16% 18%

0 1 2 3 4 5 6 7 8 or more

Perc

ent

of r

espo

nden

ts

Number of direct reports to the head of talent management

Which of the following groups do you serve?

CEO and executive team

Senior leaders below the executive team

Middle managers Professionals

10%

80%

70%

60%

50%

40%

30%

20%

63% 53%

86% 77%

90%

69% 65%

26% 40%

“Formal” TM Groups Other groups engaging in TM work

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.

WHO WE ARE & WHAT WE DO No consistent organization structure exists for talent management groups

We’re slightly more likely to serve executive leadership

13

AVERAGE (4.7)

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.


In which of the following areas have you held a full-time assignment during your career?

1 - 3 years

5%

20%

15%

10%

4 - 6 years

7 - 9 years

10 - 12 years

13 – 15 years

16 - 18 years

19 - 20 years

15% 13%

20%

14% 9%

17% 12%

How many years of experience do you have specifically in the talent management field?

DID YOU KNOW? 69% of TM

practitioners have held a role outside

of Human Resources during

their career

% o

f res

pond

ents

10%

70%

60%

50%

40%

30%

20%

60%

6%

66% 64%

46%

7%

% o

f res

pond

ents

We’re highly experienced in our field

Many of us have job experiences outside of HR but those with generalist experience are the least likely to have had this.

72% of those with leadership development experience have also had a full-time experience

outside of HR.

Only 38% of those with generalist experience had a job experience

outside HR

14

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.

020 40 60 80 100

Company Revenue ($ Billions)

US

Dol

lars

(000

s)

Vice President Compensation

300

200

400

500

600

700

$800

Compensation Components Manager Director VP

Average Bonus Opportunity* 20% 28% 46%

Average Long Term Incentive* 25% 48% 64%

US

Dol

lars

(000

s)

Director/Exec. Dir. Compensation

350

0

Company Revenue ($ Billions) 20 40 60 80 100

300

200

150

100

250

400

450

*As a % of base salary


The earning opportunity from annual and long-term incentives also remain essentially unchanged from 2010, with levels consistent with those provided in other functions.

15

Base Salary Base + Bonus Total Direct Compensation

Our Availability

Building on 2010’s slight easing in the availability of high quality talent, slightly more respondents said that talent at the VP and Director level was Easy to find. However, overall, the market remains tight for VP/SVP talent.

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%

How easy or difficult is it to find high quality talent management staff when recruiting externally at the following levels?


16

Marc Effron + Miriam Ort

Eliminating Complexity, Adding Value

h a r va r d b u s i n e s s p r e s s

Get your copy today at hbr.org and Amazon.com

One Page Talent Management shows in practical detail how to use simplicity, accountability and transparency to design incredibly effective talent management processes. ��Learn more at onepagetm.com

Filled with bright ideas . . .

Accelerating time to experience

Business Simulations Leadership Programs Strategy Workshops

www.insight-experience.com

http://bit.ly/lVI0zf

http://bit.ly/lZhxAa

•  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

TRACKING THE INVESTMENT

TRACKING THE INVESTMENT

Cautious increases in talent management headcount trumped by a second straight year of significant increases in talent management budgets In an area of tight budgets, spending increases suggest corporate support. While a modest 27% of firms 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?

Decrease staff by more than 10%

Decrease staff by up to

10%

Staff count will remain relatively

stable

Increase staff by up

to 10%

Increase staff by more than

10%

10%

80%

70%

60%

50%

40%

30%

20%

2% 3%

68%

16% 11%

In 2011, do you expect your company's spending on talent management (not including staff), will:

Decrease more than 10%

Decrease by up to10%

No change Increase by up to 10%

Increase more than 10%

10%

80%

70%

60%

50%

40%

30%

20%

3% 4%

41%

27% 26%

Compares to 8% in

2010

Mid-size firms investing the most

74% of companies with 5k – 15K employees are increasing TM budgets,

vs. 42% for all other firms

18

19

APPENDIX

2011 PARTICIPANT DEMOGRAPHICS Employees in participating companies

0%

5%

10%

15%

20%

Location of participating companies

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

North America

Asia Pacific (Including

India)

Europe: Western

Europe: Central or Eastern

Middle East Central or South

America

111 companies participated

VP (35%)

Director (37%)

SVP (18%)

Mgr. (7%)

Other (2%)

What level is the head of your talent management group?

Average: $15.8B

Median: $4B $ Participating Company

Revenue (in USD)

20

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%

State of Talent Management Survey 2011

Business

Transcript of State of Talent Management Survey 2011