A Guide To Talent Management

Crelos_Talent today and tomorrow 16/6/08 14:05 Page 1
3T
The Crelos
3T Report
Talent Management defined for Today and Tomorrow
A Guide to Talent Management for Now and 2010
1. Introduction
Welcome to the Crelos guide to talent management
Talent management is a term that is much talked about. However, for many its
definition, not to mention the development of meaningful strategies, has proved
elusive. We all feel we know talent when we see it, say, in the performance of
a great footballer or Oscar-winning actor. But this doesn’t help us actually get a
grip on how to attract, develop and keep it.
At Crelos we have set out with this report to provide a helpful and, we hope,
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thought-provoking guide to the talent management dilemmas companies are
dealing with today. We also look at some of the challenges that lie ahead. Our
aim is not just to give advice but to stimulate debate about what talent
management really is and its link with business success.
We believe that good talent management is about achieving change through

people. This means helping people grow and understand not just what they can
achieve but what they want to achieve. Our experience to date has convinced
us of the enormous potential to use talent management skills to ratchet up
performance and ultimately transform businesses.
But we have also realised that there is no single, right answer. Talent
management is a dynamic process that must develop and shift with the needs
of a business. We set out here some of the models that we think work but they
do not amount to a blueprint for success. Each business must use these
models to find its own way for ensuring the business has the skills and
expertise needed to survive the demands of the 21st century.
It’s well worth the effort – in addition to business success great talent
management can bring business leaders huge intellectual and personal returns.
What can be more rewarding than to provide the resources and environment
that will enable your people to reach high and give of their best?
In the following pages we set out our definition of talent management for today
and offer some practical advice on how to get it right. We also take a look at the
future of managing people through change by analysing some of the impending
business challenges that will affect our approach to top players in the business.
Above all, we would like to promote a debate about talent management today
and tomorrow. We hope you find it useful.
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2. Talent Management Today
3T Talent management: our living definition

Put simply talent management is the set of processes by which businesses
identify, attract, develop and retain people with the key skills to move the
organisation forward. It involves:
Defining key people needs for future success as part of a current strategy.
Holding quality conversations about talent that result in its development.
Establishing the cost of meeting talent needs against a background of
market constraints and talent gaps.
Identifying what is required for individuals to be successful in key roles.
Developing and using measures to ensure that positive change
actually happens.
Managing an individual’s development in a way that also supports their
personal goals.
It’s a fairly dry list, but taken together these processes can provide businesses
with a powerful set of tools for ratcheting up the organisational performance. The
return on investment can be immense and not just in terms of business
success; it’s hugely rewarding to see motivated, able colleagues achieve their
potential.
Ultimately, talent management is about achieving change through people. As a

result, how businesses approach talent management will be unique to each
organisation; there is no set of standard practices and check lists that managers
can adopt. Our experience of talent management over the past 10 years has
shown that to succeed, talent management must be a dynamic, fluid process
that can flex with the business.
How we got to Talent Management Today –

a quick history lesson
As an idea, talent management grew out of the talent wars of the late 1990s
when firms realised that the downsizing of the 1980s was having a serious affect
on their leadership capabilities.
Up until then, businesses talked more in terms of manpower planning – labour

demand and supply – and it was largely a statistical measure. Talent remained
on the sports field, in the art studio or at the concert hall. However, the rapid
changes in business and industrial structures from the late 1970s on had a
dramatic effect on employers’ understanding of skills. The decline in traditional
manufacturing and the rise of the service sector, with its emphasis on people
and know-how, forced businesses to reassess the value they placed on
individuals’ knowledge, skills and ability. This early foray into talent management
was limited to business leadership. The growing breed of talent managers were
primarily concerned with succession planning at the top and identifying the next
generation of leaders.
The forces shaping talent management today

Some organisations still see talent management as career management for the
top two or three management tiers but in many cases talent at work has moved
beyond general management and leadership roles. The most successful
businesses have extended their talent pools to include specialist functions and
front-line, customer facing roles. They understand that the high flyers who will
take the business forward are often not those in the top jobs at all. A growing
number of firms are also realising that they can use good practice talent
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management as a means of negotiating – and ultimately delivering – change
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within the business.
There are a number of drivers behind this change in attitude. Many of them are
interlinked and include:
globalisation
speed of change
flatter structures
skills shortages
increasing diversity in the workforce
Globalisation
Globalisation and intense competition are transforming talent management
practices by forcing firms to broaden their horizons when it comes to talent
management practices. It’s no longer just the international corporate giants,
such as Shell and Unilever, who are looking to recruit globally and manage
international careers – smaller organisations are also having to face up to this
challenge.
Increasingly, successful organisations have to resort to strategies of size or

niche specialisation to survive and whichever route they choose will have a
major impact on how they attract, assess and develop their key people. Going
for growth inevitably means larger, more challenging roles and the bigger the
role the more talented the job holder needs to be to succeed. However, size and
scope can make it easier to attract talent globally. Meanwhile, organisations that
opt for a niche market will depend on their knowledge and the depth of their
expertise to differentiate themselves from the competition. They will have to
develop talent on this basis.
Speed of change
Perhaps foremost is the ferocious speed of change. Moore’s Law, although it
relates to electronics, serves as a proxy for business and market changes in
general. The law, which has held good for the past 40 years, outlines the
inevitability of exponential change in the technology sector – new products soon
become obsolete to be replaced by the latest innovation. We see this in
business generally; product and service lifecycles are getting ever shorter.
This has huge implications for talent. In addition to looking for the next ‘big
thing’, businesses must continually look ahead at the skills and capabilities they
will need in two, three or five years’ time to manage and deliver innovation.
Skills shortages
Linked to the speed of change is the growth of the knowledge economy.
According to the OECD more than 50% of UK organisations can now be
categorised as knowledge intensive. The Work Foundation, which is in the
middle of a major research project into the knowledge economy, believes this is
having a massive impact on the skills and knowledge businesses need to
compete and on the talent they want to attract and retain.
Understanding what skills the business needs is one thing, finding them is
another. The Cranfield Recruitment Confidence Index, which has been tracking
recruitment trends since 2000, has repeatedly found lack of skills to be the
biggest talent barrier recruiters face. Currently more than eight in ten
organisations (82%) anticipate continued problems filling vacancies.
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Flatter structures
3T Talent decisions are being made more complex by the impact of flatter
structures. The de-layering of businesses began in the 1980s and has
continued intermittently since then. Most recently, whole swathes of middle
manager jobs have disappeared in recent years after the technology bubble
burst at the beginning of the 21st century and with them went a significant
amount of management development, both formal and informal. As a result, a
large proportion of the available talent has the technical knowledge but not the
management experience to succeed in the larger, more complex roles that
business needs them to do.
Taken together, flatter structure and skills shortages have changed able
employees’ perceptions of their potential. They know that their knowledge, skills
and experience are valuable commodities and if an organisation is unwilling or
unable to meet their career ambitions they can look elsewhere. This has
become a major issue for senior managers as well as recruiters. A report from
the Economist Intelligence Unit in 2006 into the activities of chief executives
found many of them accept that they will have to spend a chunk of time
persuading good people not to jump ship for a better offer.
Increasing diversity
Increased workforce diversity is another major driver of talent management.
There have been massive changes in the composition of the workforce over the
past 35 years. The number of women in work, for example, has risen from 56%
in 1971 to 70% in 2005 (source: Labour Market Review 2006, ONS).
Meanwhile, the UK is in the middle of a major wave of economic migration with
workers from Eastern Europe looking for jobs here. More than half a million
migrants came to the UK for work in 2006.
Perhaps most significant of all is the ageing population. The Employers Forum
on Age suggests that from 2010 onwards the number of young people
reaching working age will begin to fall by 60,000 every year, significantly
reducing the size of the traditional labour force. And by 2018 there will be more
people aged over 40 than under 40.
Technology boom
Underpinning all this change is the technology boom which continues to have a
massive impact on talent management. For starters it has opened up
assessment tools to a far bigger audience with up to 50% of personality and
ability testing moving on line. In addition it has revolutionised the way in which
firms can engage and motivate their talent pool.
This is evident in larger organisations that have introduced CRM-type

technology to handle people’s careers within the business. They keep a
complete record of their conversations and dealings with each member of the
talent pool just as they would a key customer. In this way they manage an
individual employee’s connection with the business but also the talent trends.
They use the technology to treat their talent as if they were another group of
customers.
Identifying and developing talent in such a complex environment requires talent

managers to take a very singular approach. There is no one size to fit all
organisations and across all time frames. While there are some common
principles of good practice, people’s understanding of talent and how they
manage it will be tightly defined to their particular organisation and its business
strategy.
Most importantly, for a strategy to succeed, talent managers must always be

thinking ahead. Key roles this year may not be the key roles next year or the
year after.
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Ignore talent management at your peril

According to the CIPD, three quarters of UK organisations have not developed a
talent management plan. Yet experience shows us that businesses ignore the
importance of talent management at their peril.
There are numerous examples of firms that have got into serious trouble
through not managing talent properly. For example, when a major accountancy
firm responded to the downturn in the IT industry by slashing its training and
development budget it faced a mass exit of its most promising players.
Meanwhile, telecoms business Energis used talent management as a means of

getting itself out of serious business difficulties. Using talent to differentiate
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itself in a crowded market, it went from a rescue package to being the dominant
partner in a merger with Cable and Wireless – over the space of a few years.
Talent management blockers

Businesses frequently put talent management on the back burner because they
fear the cost of implementing a programme. At Crelos we estimate it costs
about £10,000 per person per year to implement and run a successful talent
management programme for senior managers in large complex
organisations. It’s not the cheapest people intervention that a business might
implement but, if done well, it is likely to be the most effective when it comes
to transforming the business. Furthermore, if the alternative is losing good
people then a glance at direct recruitment costs at this level, which can run at
anything from 15% to 50% of salary, suggests a fairly direct return on
investment in talent management.
Perhaps more frequently firms put talent management on hold because of what
we call the talent management blockers. These are the cultural barriers that
prevent an organisation making the most of their talent investment. We believe
that if we are to move the talent management debate forward it is crucial that
employers are willing to unblock their business cultures. The talent
management blockers that we have identified include:
a. Identifying talent management as a separate,

confined business issue
Many businesses find it hard to grapple with talent management because they
see it as something apart from the rest of their human capital management.
However, talent management impacts every aspect of your people strategy.
selection
performance
The Talent
engagement Lifecycle
delevopment
succession
At Crelos we argue that every business problem ultimately comes back to tal-
ent. For this reason we use a talent management model based on a
five-pronged talent lifecycle that mirrors the employee’s life cycle within the
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organisation. In this way selection, development, performance management,
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succession planning and engagement are all talent management issues.
Unfortunately, in many organisations talent management has been
superimposed onto existing systems attempting to deal with these issues.
Ideally, any business wanting to up its talent management game needs to think
of the employee lifecycle as a continuum – it’s like painting the Forth Bridge.
However, in practice many don’t have that sort of time - senior managers
usually invest in talent management as a reactive measure when they know they
have a problem.
Thus Crelos is often called in during times of major change such as a merger or
acquisition, changes in market conditions or a business downturn. Inevitably
these are challenging times for the business but they also present a fantastic
opportunity to lay the ground for getting talent right.
Case study - Kleinwort Benson Private Bank
Kleinwort Benson Private Bank realised it needed a shift in mindset away from
the old-style merchant bank dealing with a few high value individuals if it was to
cope with growing competition in the private banking sector. It needed customer
facing staff with an entrepreneurial streak and it needed managers who could
drive this change. The result has been a massive expansion in the UK with
offices opening in Manchester, Birmingham, Newbury, Cambridge and Leeds.
b. Failing to link talent management to broader

business objectives
The focus for talent management will inevitably be different for different
businesses, but whatever the crisis or challenge the organisation faces, the
talent management strategy must be directly linked to the business strategy. To
do this, business leaders need to ask and answer questions such as:
What are the talent pain points in the organisation?

Where have we most to gain?
When do we need to do this?
How will we know we’ve got there?
What measures can we use to show we have?
Senior managers need to be prepared for some lengthy discussions around

these issues. In this way they can begin to make a business case for talent
management that the rest of the organisation can buy into. This is vital if
managers are to engage people across the organisation in the talent
management debate and the organisation as a whole.
c. Lack of involvement from the top team

Like all good people strategy, talent management must come from the top to
be effective. There is no business case for talent management if the CEO
doesn’t believe it and run with it.
Qualitative research from the Economist Intelligence Unit shows that CEOs in
major organisations do take talent management seriously. Most of the 20
corporate leaders interviewed claimed to spend more than 20% of their time on
talent management. However, their involvement appears to be rarely linked to a
formal talent management strategy. Rather most CEOs jump in or get involved
in the supporting activities where they feel they can add most value.
This is a dangerous approach to take as it opens the door to the dangerous

game of talent spotting by 'hunch' rather than using formal, proven assessment
and development processes. The business pages of newspapers are littered
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with stories of blue-chip firms with serious boardroom succession issues, but
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leaders persist in believing that they 'know talent when they see it'. And this is
despite the fact that many senior appointments fail to live up to expectations.
3. best practice
All organisations are ultimately looking for a talent management system that is
the best fit for them and their needs. Nonetheless, our experience with
hundreds of organisations at different stages of the talent management lifecycle
has helped us develop some principles of best practice for all our clients. We are
not suggesting that businesses have to tackle all of this at once – many will want
to take it in manageable chunks.
One way of getting started is to use the talent lifecycle to look at where the
greatest pain points are in the organisation. This could mean identifying the
three most critical talent challenges and then prioritising them on the basis of
their short and longer term impact. For example, what would be the cost to the
business if it does not meet this challenge in the next two years? Or the next
three to five years?
At each stage we recommend businesses look at what they already have in

place, how they can build on this and what gaps are left to fill.
a. Identify your talent need

Many of the talent management conversations we have with new clients start as
discussions about top talent – because this is where most businesses believe
their talent shortages lie. Some of them are right, the stripping out of
management layers has reduced the opportunity for many high flyers to learn
management and leadership skills on the job.
However, when we start drilling down into what the critical roles are in an
organisation and where the talent gaps lie, the resulting talent management
issues are often more complex. The construction industry is one example. Our
work within the industry has shown that the real issue lies at middle
management level, specifically with project managers. Their role has escalated
over the past decade and the performance of individual project managers can
now have a significant impact on business performance.
Most businesses only think about talent management when they find they have
a problem to solve. So the best way to start identifying talent needs is to look
at what the problem is and where in the talent lifecycle the pain points are.
It could be the sales force isn’t performing or all graduate recruits are leaving
after two years. Then again attrition rates at the front line might be way too high,
or perhaps the firm has no idea what it will do when the IT director retires next
year. A closer look at the talent lifecycle should help talent managers establish
where the business is going wrong. Perhaps it is not recruiting enough talent or
failing to develop high flyers when they join you. Maybe it needs to revisit the
succession plan or tackle broader issues of employee engagement.
Businesses must also look externally too when it comes to identifying talent
needs – at the dynamics of talent in the sector such as skills shortages, an
ageing population, migration and the knock on effects of globalisation.
However, don’t be fooled into thinking that defining talent needs will be a
straightforward process. Many organisations find it almost impossible to draw up
a talent pool because they can’t agree about what talent looks like in the
organisation. To work this out, firms need to go back to the board and look at
the leadership style at the top. Does the board have a clear view of what it is
trying to achieve? Is there a clear vision of what good performance is and can
directors articulate it?
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If the aim is to draw up talent pools from across the organisation, firms need to
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be clear about how they assess and manage talent now. Every organisation has
some form of talent management; it just might not be very effective. Questions
to answer might include:
Can new recruits tell you why they were hired after their induction?
Do managers make promotion decisions with 100% confidence?
Is there a common view of what ‘good’ looks like on which managers can
base their decisions?
Businesses should also think through whether or not they are ready for the
robust assessment that good talent management requires. It is vital that
everyone across the organisation understands why senior leaders are
reinvigorating talent management processes and what the implications are for
them.
How ready is the business for a robust talent

management system?
Strong Know ‘what good looks like’ Know ‘what good looks like’
defined
leadership, Introduce low stake Be brave, design & get on
with assessment with it
consensus
view, driving Resource: An implementer Resource: An implementer
talent as a (FT employee) and a profile to own the process LT.
source of sponsor to build trust in (FT employee).
competitive assessment process
advantage
Invest in defining ‘good’ Invest in defining ‘good’

carefully
Disparate Introduce low stake
leadership assessment Design & get on with it
approaching Resource: An implementer
talent in ad Resource: A high impact (FT employee) and a profile
hoc manner influencer to challenge & sponsor to build belief in
locally build buy-in ST business case
(interim/consultant)
Organisational experience of assessment
This could be the time to consider who will head the talent management
programme. Some organisations might choose to let the HR department get on
with it, but this will depend on the credibility of the HR team. A few organisations
have bypassed HR and appointed talent directors with a dotted line to the board.
Ideally there should also be a talent management champion with a senior line
management job.
Ultimately, there is no hard and fast rule however, whoever takes control, talent
management must be seen across the organisation as business critical.
b. Script your talent story

Systems for nominating, assessing and promoting talent are great but
successful talent management is about trust, loyalty and relationships across
the organisation.
So, just as talent management strategy is worth nothing without the backing of
the board, so it will get nowhere without the buy in and understanding of the rest
of the workforce. Ultimately, many people in the organisation have to deliver it
– whether as nurturers of talent or the talented themselves. Scripting and
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communicating a talent story accurately and thoroughly is vital to its success.
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To do this effectively organisations need to decide how transparent they want
the talent management process to be. In the old days of manpower planning
many large companies had a list of the talented but it was largely confined to
the management population and usually kept secret from the vast majority of
them. People only realised they weren’t on it when they found their peers being
promoted around them and knew it was time to get out.
Some senior managers still fear being up front about how their talent
management works and who is in the talent pool. They fear upsetting people
who aren’t on it and don’t know how to have those difficult conversations with
the average performers who beaver away doing a decent but not great job for
years. Others prefer to avoid elitism.
At Crelos we always urge people to be open and honest about the

management of talent. This includes keeping their people up to date with how
they define it, how they assess it and what they do with the results. By not being
open, senior managers are merely suggesting they don’t fully support their
talent decisions or lack the courage to put their names to it.
On a more pragmatic level, the shifting nature of talent and talent needs makes
it especially important to keep everyone in the loop. There will be people who
perhaps don’t fall within the talent pool this year but may have the skills you are
targeting next year. It’s also essential that managers right down the line are kept
informed. Buy-in from line managers is crucial. They may never make it to the
talent pool but they are nurturers of talent. Their importance in keeping their
people engaged is well scripted.
People need to know what happens - or will happen - and why when it comes to
the talent pool. This means ensuring they understand:
what the process is trying to achieve

who or what jobs are in the “pool” - and why
what success looks like at each organisational level
how people are nominated as talented
how talent is assessed
what they should expect from being in the pool
what opportunities are open to those who aren’t.
If there isn’t an open culture then getting this sort of information over in a way
that people believe won’t be easy. However, given that most organisations only
address their talent management at a time of major change or crisis, the
chances are senior managers are already addressing their internal
communications structure. They might want to take the opportunity to push for
more openness and transparency.
The aim should be to use your talent story to create a common language around
talent that becomes part of your brand or employee proposition. You want to
build a reputation for hiring and developing talent in and outside the
organisation so that conversations about talent – who’s got it, how you get it and
what it means to the business – are a common place across the organisation.
Case study – O2
When O2 set up its Sales Academy to develop and fast track it sales force, it
recognised that good communication was key. At each stage the academy team
consulted with internal stakeholders. They arranged separate briefing sessions
for senior managers to ensure consistent messages across the business and
they held many one to one conversations with the sales team to ensure their
concerns were taken on board. In addition they organised a high profile launch
day for sector managers to outline the key business changes driving the
academy.
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c. Nominating the talented
3T One of the key talent management decisions businesses have to take is

deciding how they will nominate potential talent so they can create a talent
pipeline. Nomination won’t necessarily get these people into the talent pool but
it will give them the opportunity to have their skills and competencies assessed.
It could be that the organisation has identified several potential talent pools.
These could include a talent pool of key functional staff in roles that are critical
to the organisation over the next few years; and a leadership pool that top slices
the 100 most senior roles in the business.
Whatever the case, the purpose of the talent pool is to ensure that there are
enough people with the right skills and behaviours - or the potential to acquire
them – coming forward to take on key roles as they become vacant. On the one
hand, organisations want healthy talent pipelines that take account of natural
attrition among high flyers. But on the other, it’s important that the system
doesn’t get clogged up with disgruntled staff wondering what happens next.
The point at which someone becomes eligible for the talent pool depends
entirely on what the business is looking to achieve from its talent management.
However, talent pools are likely to be external as well as internal with
organisations putting considerable resources into identifying the groups of
people with the ability and experience they want to attract into the business.
Recruitment - talent management starts on day one
Recruitment will inevitably play a key role in developing the talent pipeline and
the relationship between talent managers and corporate recruiters is a key one.
Businesses have taken huge leaps in terms of the sophistication of their
recruitment systems but there are still too many occasions when a recruiter’s
primary concern is to fill a vacant desk. If recruiters have done their job well,
talent managers will already have quite a lot of information about a new recruit
and it is crucial that they start having those talent conversations with them from
day one. Research shows that the first 90 days in a job are the time to engage
that person’s trust and loyalty to the business.
When it comes to identifying talented people already in the business, there are
numerous approaches organisations can take. Some advocate self selection.
This could mean individuals putting themselves forward for talent assessment or
simply stating that they want to progress their careers and are willing to put in
the effort.
However, as organisations become more sophisticated in their people

management they tend to take a more elitist view of talent. In which case, they
will advocate a more rigorous process and expect people to jump through a few
more hoops before accepting them into the talent pool.
A few large organisations have talent streaming at every level of the business –
and as people move up the hierarchy they can hop from one talent stream to
another with increasingly complex development opportunities as they go.
Inevitably the organisation’s existing performance management system will play

some part in identifying talent. The most important issue for any process
designed to nominate talent is face validity. There has to be a sense across the
organisation that members of the talent pool are good at their jobs and are seen
to succeed at what they do. Most organisations assess this through their
performance management systems covering all staff – not just the high flyers.
It is vital therefore that performance management and talent management
complement each other. Nonetheless, organisations need to think carefully
about the role line manager assessments play in identifying high potentials. One
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study has shown that competencies rated by bosses as vital or important did
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not distinguish those who progressed more rapidly through the business. Other
evidence suggests that the best talent spotters are often someone’s peers in
the business. How organisations nominate talent will reinforce those talent dis-
cussions going on across the business from manager to manager, employee to
employee and manager to employee.
d. Assessing talent
Probably one of the biggest advances in talent management over the past five
years has been the increasing sophistication of talent assessment systems.
These have undoubtedly received a massive boost from internet technology
which has made assessment quicker, cheaper and vastly improved employers’
access to it. It has also opened up the information managers can extract from
the data making it far simpler to segment the talent pool to look at the
performance of different groups, set benchmarks etc. These trends are likely to
continue; increased competition within the market is putting test suppliers
under intense pressure to keep costs down and offer more and more facilities.
To assess high flyers accurately, companies need to specify the criteria required
for people to be successful in key roles. These will touch on an individual’s
capability, potential and motivation. Getting this right is crucial. If the criteria are
wrong, the data will be inaccurate and the talent process will fail.
It is also important not to overplay assessment. Its purpose is to help a talent

review panel in its decision making process by providing robust, informative data
against which talent can be benchmarked. It is not an end in itself.
DPA – in a nutshell
When collecting, storing and distributing the data businesses need to be aware
of their duties under the Data Protection Act. This regulates how organisations
use personal information.
At the heart of the Act are eight common-sense rules known as the Data
Protection Principles. Organisations using personal information must comply
with these principles.
These require personal information to be:
fairly and lawfully processed

processed for limited purposes
adequate, relevant and not excessive
accurate
not kept longer than necessary
processed in accordance with an individual’s rights
kept secure
not transferred abroad without adequate protection.
The Act provides stronger protection for sensitive information about ethnic
origin, political opinions, religious beliefs, trade union membership, health,
sexual life and any criminal history.
The Act, with some exceptions, gives people the right to find out what
information organisations hold about them.
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The key measures businesses might use in their talent assessment include:
3T Intrinsic motivation
Cognitive and numerical ability
Behaviours and competencies
Personality
Intrinsic motivation
This intrinsic motivation is a largely unrepresented area of assessment, but is an
absolute must for accurate talent assessment. Different roles have different
motivational characteristics. The trick is to link what people will do – their
intrinsic motivation – with what they are capable of doing – their ability and
behaviour.
Intrinsic motivation can be measured using a psychometric questionnaire.

Crelos favours a tool called Intrinsic. This can provide employers with a really rich
picture of what makes someone tick. For example, it assesses if someone is
motivated by being a line manager or prefers to be a technical expert. It can also
assess whether or not they are goal oriented, want to work alone or in groups
and the level of career progression they would like. It’s a useful means of
looking at other factors that will exert influence on whether to accelerate some-
one’s career, slow it down or slam on the breaks.
Intrinsic motivation is good for identifying fast trackers in large corporates that
need people who are willing to take on big leadership roles, but it should not be
confused with ambition – which is just a statement of aspiration.
Cognitive and numerical ability

These are essentially about intellectual horsepower and are key predictors of
future success in large complex roles. Cognitive and Numerical ability can be
assessed using online, timed psychometric tests. For the most part these tools
are designed to assess how well someone processes and uses information.
However, there is an element of controversy around them, as they suggest a

ceiling to career advancement. It’s a problem for some organisations. Others,
however, are less concerned, having recognised the need for raw intellectual
horsepower when it comes to meeting the increasing complexity of the
business environment head on. Nonetheless, high levels of cognitive ability
alone do not predict career success – they only predict those with the potential
to succeed.
Behaviours and competencies

Behaviours and competencies are often used as interchangeable terms. It can
be confusing but boils down to something quite simple - how individuals achieve
what they achieve. Behaviour works as a measure because it is observable and
has a direct consequence or an outcome. It is also learnable.
Behaviours can be assessed in numerous ways, for example, through evidence

based interviews or by observation in simulated or real environments or using
360 degree-feedback. However, organisations can only assess competencies if
they have set up a competency framework against which individuals can be
measured.
There are plenty of sample behavioural frameworks around but of varying

quality. Crelos uses what is called the Schroder high performance
management indicators as the basis for developing bespoke frameworks for
clients. This defines four groups of behaviour: strategic, people, inspiration and
process. It’s highly reliable as a backbone for a complex competency framework.
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Personality
Psychometric – or personality – tests are many and varied. The more famous
names that most have heard of include Myers Briggs, SHL’s OPQ and Orpheus.
They can provide critical information to support behavioural and cognitive ability
data.
In particular they are useful for determining any mismatch between personal
motive and organisational needs. They are also valuable to individual participants
because they give useful feedback on which to base career or personal
development plans. Importantly, however, they are not predictive of long-term
career advancement.
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People administering tests need to be qualified in interpreting results and
delivering feedback. Some test publishers insist on administrators receiving
bespoke training for their tests but increasingly tests are designed to be
delivered by people who have been through the British Psychological Society’s
training.
Given the plethora of tests on the market, choosing the right one can take time.
On the whole the large, established players are very credible and choosing
between them comes down to what the organisation wants to achieve – for
example is it looking to make recruitment decisions or to develop existing
employees. Seek advice because this is where a business psychologist can add
value. It’s their job to know what’s out there.
e. Reviewing your talent – using the data

In many ways, assessing the available talent is the easy bit for organisations.
The tough bit is confronting the data and using it to make robust, perhaps
difficult decisions about people’s careers.
This should be the job of the talent review panel. How it works will vary from
organisation to organisation. For example at HSBC the talent review panel
discusses every individual being assessed for the talent pool and makes the
final decision. But at O2 the business has set a talent benchmark and anyone
reaching that benchmark automatically enters the talent pool. In this instance
the talent review panel’s role is to look at how the business can best help talent
achieve its potential.
In some organisations the talent review panel is made up of the executive team
or key line managers. In this instance it is vital that the talent review does not
turn into a negotiation for talent between different parts of the business. Crelos
advocates setting up a talent review panel that draws from a cross section of the
organisation. This emphasises the openness and honesty of the system and
creates a sense of ownership across the business.
It is the role of the talent manager to drive the talent management system
forward, to ensure it delivers the right talent for the business and to get buy in
across the organisation.
This is very distinct from the job line managers have in nurturing and
developing talent. Their role is key in developing a culture of excellence that
encourages and rewards talent, but leaving talent decisions up to line managers
is not ideal. Ultimately their aim is to meet their targets so their ideas about
talent can be coloured by a desire to hang on to key people or fear of upsetting
other valuable members of the team.
Talent managers have to navigate what can be a difficult relationship with line
managers who will have a strong view on what talent looks like for them. As a
result a good talent manager needs to be highly resilient.
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Key members of the review panel will include the talent manager and an
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independent observer. The former plays a critical role in bringing the people data
to life and facilitating talent discussions. This is not a leadership role but requires
someone who is socially engaging, honest and good at building relationships.
Meanwhile, the independent observer, who is external to the organisation, is
there to help present and interpret the evidence and recognise when people are
misusing the information. He is not there to take the decisions for the review
panel.
In addition, to ensure the success of the review

panel we encourage organisations to:
Bring the data to life. There needs to be an energising discussion
somewhere along the line. Review panels should not spend their time
together trawling through names on a spread sheet who have ticked all the
competency boxes. There is a skill in making the data come alive and we
encourage people to use colourful language, anecdotes and analogies. One
way of doing this is to put all the information on a big chart alongside
snapshots of these people outlining what they have achieved, what they are
like to work with or how they might perform in a bigger job. It’s vital that
talent managers don’t let the data constrain the conversations the review
panel has about people.
Take some risks. The talent review panel must have the capacity to take the
odd gamble and perhaps put people into roles that might not work for them.
It’s worth pointing out that a bigger role or a step up the ladder isn’t
necessarily the risk factor – the risk is putting someone into a role that is
critical to the business.
Promote but control the role of senior managers. If the panel is to be a true
cross section of the workforce then senior managers will inevitably be
involved - and rightly so. But they should not be allowed to dominate
discussions and must be ready to stick by the decision of the panel, or the
system will quickly lose its credibility. This balance is essential - one large
public sector body that embarked on a major talent management project
decided top managers would form the review panel for the next two
management layers down. However, at the first meeting it became clear that
none was willing to promote talent development if it meant giving up key
people. The process collapsed when the review turned into a negotiation
between different directors and the talent manager.
Keep it regular. The regularity of meetings depends on the speed at which

the organisation moves but Crelos recommends formal talent reviews take
place at least annually and preferably twice a year. This doesn’t stop less for-
mal discussions taking place in between times.
A word on confidentiality; it is vital that everyone involved in the process –

whether they are making talent decisions or being assessed for the talent pool
– understands how the business will use the data. Generally, a person’s
individual assessment report will go to that individual, his line manager, HR and
the talent review panel. These are the people who can support personal
development and enable talented staff to reach their potential. Beyond that it is
personal information and so confidential.
f. Measuring talent
The purpose of a talent management programme is to increase the levels of
skill, expertise and talent within the organisation. To enable firms to understand
how talented they are, Crelos has developed what we call our Talent Index™.
This is a tool that provides managers with information on the gap between their
future talent requirements and the current available talent.
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The Talent Index™

This index is formed using an algorithm that translates scores from individual
assessments in to an overall total score. By taking multiple scores from
multiple assessment exercises and multiple behaviours the index translates
individual data into a percentage score. In this way talent managers and review
panels can reliably and fairly compare individuals in different roles against the
relevant benchmark metrics.
The index is based on the behavioural framework designed by Professor Harry

Schroder in 1989. Schroder’s comprehensive and sophisticated analysis
showed that leaders who exhibit particular behaviours at particular levels will
outperform their peers consistently regardless of the situation or complexity of
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their role. Using this method he demonstrated that it is possible to compare
people in different jobs and operating at different levels of complexity, and
consistently identify high performers.
The Talent Index simplifies complicated individual behaviour or competency

scores and can be used to report at individual, team, and group level. It
provides a common metric for executives to report on and enables them to have
simpler but more meaningful discussions on the strength of their talent pipeline.
It also enables businesses to:
establish a benchmark against which to measure talent pool development

compare individual and group capabilities against internal and external
benchmarks
compare people in different roles
set a baseline for entry into a talent pool
gauge return on investment from training and development interventions.
Crelos has been using this framework for the past seven years with a number of
companies in a range of sectors. For example, O2 has used the index to enable
it to set a benchmark or level of performance that someone must reach to be
considered talented. And British Sugar has used the index to simplify its
graduate recruitment decisions.
g. Talent development
Too often so much effort is put into identifying high flyers that the crucial next
part – their development – is greatly underestimated as a task. And yet, in many
ways, it is the most rewarding aspect of talent management – enabling people
to truly engage with the business and give of their best.
What is more, talented people who have been formally identified as high flyers
will be expecting the business to invest in their progress.
A short guide such as this doesn’t have the scope to give talent development
the weight it deserves, but we can offer a few principles and pointers. For
starters, our experience shows that highly talented individuals need
development programmes that are a cut above the rest. They need
interventions that will challenge and stretch in all directions – intellectual,
commercial and emotional.
It will take time for the investment in development to bear fruit. Imagine an
Olympic selection process that runs for four years, culminating in someone’s
right to represent his country in the Olympic team. Once in the team, because
that sportsperson has met the standard and been judged by carefully set
benchmarks based on years of data, then and only then does the actual
performance begin.
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It’s the same for business talent too – it can take several years for people to
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reach their potential and organisations must be prepared to adopt a whole raft
of formal and informal development tools if they are to get there, from
coaching and mentoring to action learning or formal business school-style
executive development programmes. As far as possible allow your high flyers to
define their own development – consult them about the capabilities they think
are important and discuss possible routes through with them.
Crelos’s five approaches to developing

top talent
Adopting a variety of development programmes and tools is essential if the

business is to engage its talent successfully in the business. Crelos has
successfully used the following five approaches to top talent development with
organisations such as O2 and McAlpine.
Inspiring Interventions – people who have done extraordinary things

including paralympians and adventurers are invited to discuss their
achievements with a small group of top talent.
A Day in the Sun – puts participants in front of the most senior and
influential executives in the organisation and gives them quality time to
discuss their own business issues.
Coaching Triads – working in groups of three and using short sharp
30-minute sessions, senior people coach each other and comment on each
other’s coaching style.
Creating the Future – enables teams made up of members of the talent pool
to enhance their strategic thinking capability while working on live, business
critical dilemmas.
Time to Think – provides external coaches for people on the talent
programme.
Planning for Success – helps individuals to plan their careers emphasising
the small margins between success and failure and the critical role that good
planning plays in success.
Don’t underestimate the impact of providing talent with opportunities to learn

from others – in and outside the business. All successful people can cite one or
two people who have inspired them. To provide role models is one of the single
most important things you can do.
Clearly, the CEO and other board directors who should also be obvious role
models for aspiring leaders in the business and the talent pool should have
plenty of exposure to these senior players. You could also encourage top stars
in the firm to talk about their experiences. Whatever development tools talent
managers opt for, it’s essential that they are kept fresh, exciting and relevant.
Good training professionals know that their interventions need to be changed
and reinvigorated regularly if they are to engage high flyers.
Individuals have to believe their efforts will lead to some positive reward and a
shift in their career – which means having somewhere for them to go. It’s also
essential that the business is clear about what it expects its high potentials to
achieve.
However, be aware of the dangers of asking high flyers to do too much and
creating a ‘they owe me one’ culture. It’s tempting to give people who are
motivated by complex, interesting roles ever bigger, more complex roles. They
are stimulated by the pressure but as the jobs get bigger they inevitably have
to make ever bigger compromises between work and other interests – such as
family and friends.
Talent managers also have to negotiate a delicate path between enabling

people to fail in a project or task and understanding when someone simply isn’t
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going to make the grade. If this is so, businesses have to be prepared to take
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the hard decisions and move people out of the talent pool.
4. the power of numbers

There is no point in embarking on a talent process unless the business is
prepared to measure results. It’s hard to do and takes time and energy but it will
be impossible to evaluate return on investment accurately without this
information. It’s not just about maintaining the business case for talent
management, it’s also about ensuring the process retains credibility with the
people who matter – your talent.
Talent management done thoroughly should result in a significant culture

change and upheaval – not to mention disappointment for some – so everyone
in the organisation, from the top down, has to know it’s worthwhile. Ultimately
what people want to know is: what impact is managing talent having on business
performance?
Talent management is a journey and it could be two, three or four years before
the results really show through but a few quick wins might help smooth the path
with sceptical senior managers. The most obvious and immediate result is
likely to be on the recruitment budget. Given that recruiting a senior executive
costs a business anything from 15% to 50% of that person’s salary, every time
it fills a job internally that money is saved.
Measuring the process

There is a range of metrics that businesses can use to indicate whether or not
talent management is delivering results in the longer term. These should focus
on both the talent management process itself and its impact on broader
business and people results. It is important to establish baseline metrics at the
outset of the project against which to benchmark its progress. Talent managers
should also set out a clear set of measurable targets they want to achieve – both
talent targets and business targets.
To assess the success of the process, it’s worth returning to what the business
set out to do in the first place. Senior managers want answers to questions
such as:
Have we established a viable talent pool?

Have we improved core behaviours in accordance with the targets set?
Have we filled those key roles?
Do we have realistic projections for how our talent needs will develop?
Have we met the targets and deadlines we set ourselves?
Impact on the business

When it comes to looking at the impact talent management has had on
business results try relating them to existing measures such as the balanced
scorecard. People will be familiar with the process and understand what the
figures mean to them. It is also easier to use an existing mechanism rather than
invent new ones that have to be sold into the business.
Types of measurement to use could include:
Finance – income, shareholder value, added value, rates of return, costs

Output – units produced or processed, throughput of sales, new accounts
Impact – attainment of a standard (quality, level of service etc), changes in
behaviour, completion of work/project, level of take-up of a service
Reaction – judgement by others; colleagues, internal and external cus-
tomers
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Time – speed of response or turnaround, achievements compared with
timetables, amount of backlog, time to market, delivery times
People – recruitment costs, attrition rates, internal promotions.
Many organisations already collect a lot of this data in some form. The important
thing is to devise a system that enables the business to relate it to talent
management. A bit of creative thinking throughout the process should help
them to do this. For example businesses could analyse:
The performance of teams/units run by talent pool leaders. How do growth

figures, profitability and operating costs measure up against other units?
Engagement scores and attrition rates within the talent pool. Are high flyers
more engaged than their colleagues, and less likely to leave the business?
Internal promotion. Are people from the talent pool making it into the high
profile jobs that come up or is the business still filling key roles externally?
We have worked with several firms that have successfully used metrics to
bolster their talent management processes. Impressively, O2 has directly
attributed £60m of revenue to its talent strategy for the sales team.
Be prepared to look further afield at the by-products of talent management. For

example, the programme should ideally have an impact on recruitment,
retention and engagement among people who have not made it into the talent
pool too. It will be good news if people feel they all have something to aspire
too. But bad news if the majority of average performers now feel ignored.
Building firm Alfred McAlpine, for example has linked improved satisfaction with
career development among all staff and a 9% increase in workforce engagement
to its talent management process.
Not all metrics will paint a talent success story and businesses need to know
how they intend to use the figures that don’t come up to scratch. The danger is
that senior decision makers might lose their nerve when what’s really needed is
some tweaking of the system. For example, if senior roles are still being filled
externally it could be that you’ve got the assessment process wrong, or it could
be the development opportunities aren’t in place to enable people to reach their
potential.
Finally, don’t forget to do some thorough research into the views of the people
who really count – the talent pool. Ultimately, they are the people who should
be saying whether or not the system works.
5. the 10 top tips for

talent management
today
1. Lead from the top. Talent management is a boardroom issue and senior
managers should be setting the standard, becoming role models and men-
tors to talented people further down the business.
2. Define your talent needs. Establish a clear and precise definition of what
talent is in the organisation – something everyone can recognise and buy
into.
3. Prepare for tough conversations and decisions. These will take place across
the business and involve board directors, talent managers, line managers and
individuals.
4. Set out key behaviours and skills. These are the competencies you expect
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talented people to exhibit. They need to be marked out for each of your key
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talent roles.
5. Nail down reliable assessment methods. Ensure that your talent pool
understands how they are assessed and how the information will be used in
developing their careers within the organisation.
6. Script your talent story. A successful talent management strategy will

inevitably result in a major shift in culture within the organisation and employ-
ees need to know what will be expected of them. Externally, potential recruits
know what to expect if they join the business.
7. Invest in developing your talent. This is the fun bit – seeing people grow. And
people in the talent pool will be expecting opportunities to develop their skills
and ultimately their careers.
8. Review your high flyers’ progress regularly. This will involve providing
objective feedback for individuals on their performance and prospects.
Processes need to be in place for managing people out of the talent pool if
they aren’t making progress.
9. Identify clear measures. Clear metrics will enable you to show return on
investment in talent management. Reporting should be simple, regular and
supported by fit for purpose technology.
10. Develop your talent management skills. There is significant value to be

gained in employing qualified talent managers to deliver your talent
strategy.
6. the top 10 challenges

for talent today - and
how to overcome them
1. Is it elitist? Yes it is – after all, you are looking for the elite inside and outside
the organisation who will take it forward. Some organisations get around this
by allowing anyone to nominate themselves to the talent pool. Others opt for
keeping the talent pool a closely guarded secret. However, more organisa-
tions are realising that for talent management to be effective they have to
accept an element of “open elitism”.
2. What about the people who don’t make it? It depends how ajar you keep the
door. Talent pools will shift from year to year so it’s a serious error to confine
all development and promotion opportunities to the people in the talent pool
now. People who have not made it into the talent pool this year should be
given clear feedback which includes an indication of if and when they can be
reassessed.
3. How do we manage individual egos? Backing up talent management with

effective personal and career development is essential if you want to retain
the people in your talent pool. They are expecting something to come of
being chosen. Good feedback on all assessment and development activities
is also vital and needs to be done by someone skilled in the job, especially if
you are looking to manage someone out of the talent pool.
4. How do we manage people’s expectations? Understand what individuals in the

talent pool want out of the process but don’t over promise. If you’ve done
your job properly, then you will have already identified key roles for your tal-
ent stars to move into. But if for some reason career progression is slowing
down make it clear to them why. If you want to keep them find an alternative
such as a project or a secondment.
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5. Rigorous assessment is expensive – how do we ensure we are getting value
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for money? Technology, especially the Internet has significantly reduced the
cost of assessment, but to do it properly still requires a considerable invest-
ment of time and money. Clearly, businesses need evidence to justify that
spend. If you want a quick win start measuring the reduction in recruitment
costs from more internal promotion.
6. Can we put a value on the whole of our talent management process? At the
very outset of the project you should have outlined the key metrics against
which you will judge whether or not talent management is delivering the skills
and competencies the business needs. These will include a range of people
measures that can be computed accurately such as attrition rates and
recruitment costs. They should also include some hard financial measures
related to business success. It’s also worth identifying the growth in talent
within the organisation as a result of your talent management programme.
Crelos has established a Talent Matrix to enable clients to do this.
7. Who owns the process and the people who make it into the talent pool? It’s
a collective. The board needs to support it and set the standard, talent
managers need to ensure it happens but line managers and individuals need
to feel they have a stake in it too. Line managers’ fear of losing their key
people can be a barrier that organisations have to overcome.
8. Can we stop our talent becoming targets for head hunters? Of course not.
Few organisations offer a job for life and talented people have become used
to moving jobs to further their careers. But you can mitigate the effects by
giving your stars recognition and by understanding what turns them on – it
could be money but is just as likely to be the quality of the roles you offer.
9. How can we ensure consistency in talent management across the business?

If talent management is to have credibility in the business it is vital that line
managers stay within the system – rather than making their own talent
decisions based on their own preferences. They have to be convinced that it
is in their interests not to do this and that’s down to being rigorous in your
assessment of talent and transparent about what you do, why and when.
10. Where do we start? Be pragmatic – look at where the problem is, where it
hurts the organisation most and where you have most to gain from your
return on investment. It may not be the perfect place for talent
management purists, but you have to start somewhere.
C. Talent management tomorrow – an evolving

definition
In the late 1990s, when large firms started to think about managing talent, they
viewed it as a recruitment problem – how could they find and attract people with
the right leadership skills for the firm.
Talent management has moved on a long way since then. It’s no longer a
recruitment issue but embraces the full spectrum of people management, while
the definition of talent – certainly in the most forward thinking organisations –
has moved well beyond the senior management population. The most success-
ful firms have started to realise that they can only transform their businesses
through their people. They are using issues around talent to put themselves in
position to face the challenges of the coming decade
All the evidence of our work at Crelos confirms that talent management process-
es and practices must continue to shift and alter in this way, if firms are to sur-
vive and thrive. To enable firms to evaluate what these might be for their busi-
nesses, we have identified key talent challenges for the coming five years, and
the actions businesses must take to meet them head on.
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Big picture challenges

Globalisation
Big picture: The increasing connectedness of business and the movement
around the globe of goods, services, production, capital and labour has become
the biggest challenge businesses face. We have seen the growth of the agile
corporation that can shift production, finance and people swiftly from one side
of the globe to another. The obvious evidence for this has been the boom in
outsourcing internal administration and customer service overseas.
Challenge: Globalisation raises some major talent issues. It’s not just about
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having the talent edge over cheaper, overseas competitors, although that’s
important too. Large multinationals have well developed systems for moving
people around the globe but in reality there are only a finite number of people
willing and able to be this flexible. Even smaller organisations working globally
need to start thinking about how they can source or develop talent in the
countries in which they operate. UK construction firms, for example, are
targeting the flood of available skills and labour in eastern Europe. It includes a
significant number of people with vital management skills and experience. India
is another good source of management talent at the moment.
There is also the issue of managing talent virtually. The aim should still be to
achieve a level of consistency across the globe in terms of how you assess and
develop people. This will need to take account of different country cultures but
fundamentally businesses should aim for a common view of talent across
borders.
Action: Take a global view of your talent and be outward looking enough to work
out where you should source your talent. Sitting in a UK headquarters it’s easy
to imagine you have all you need about you. But there will be key roles outside
the UK that need filling, and there will be ambitious staff in the overseas
operation who want to develop their careers. If you don’t do it, the chances are
your competitors in that country will.
Business downturn
Big picture: The US economy is stagnating, China is booming but other parts of
Asia are less buoyant, the Euro zone and the UK have revised growth figures
down. Businesses are bracing themselves for some sort of slow down if not
worse. This is despite the fact that change cycles continue to speed up. The
result is that businesses will have to live with continuing and increasing
uncertainty.
Challenge: This will be both good and bad for talent management. A reduction
in jobs will make it easier to attract and retain staff. But there will be a real
temptation among businesses to cut back on people budgets, including talent
development. If talented people are unable to meet their needs and ambitions
with you they will take their skills and experience to more exciting opportunities
elsewhere.
Action: In an uncertain business environment it is ever more vital that

businesses can track the impact talent management is having on business
results. This means ensuring the set of talent metrics in place link the system
back to the bottom line. They have to be more than ‘feel-good’ figures.
Technology
Big picture: The impact of the internet will continue to alter the way firms attract,
manage and retain talent. The most significant changes are likely to emerge
from the growth of social networking. Public networks such as Face Book and
Second Life are already providing firms with an opportunity to market their
employer brand.
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Increasingly, talent managers will want to use the technology to establish
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virtual talent communities within the business. Shell has used its intranet site to
operate something along these lines for several years with groups of staff
around the globe, who perhaps never meet or speak, sharing problems and
solutions. As the technology becomes more sophisticated it could prove a
fantastic way for relatively small organisations to link and engage talent across
the world.
Technology also has the potential to enable employers to have a much more
personal relationship with their talent pool. Some, such as Orange, are already
using ideas around customer relationship management to segment the
workforce and tweak their employee offering to meet more individual needs.
There is no reason why this cannot be done for the talent pool. The assessment
process should already have enabled firms to gather precise data on high flyers’
work styles, preferences and progress.
Challenge: Talent managers will need to keep a close eye on the technology and
where it’s going if they are to get greatest leverage from it. This means having
a clear idea of what they want to gain if, for example, they decide to set up a
networking site, as well as understanding how they can best exploit it.
Action: Set out a clear set of talent management goals that you want to achieve
by exploiting the technology. Businesses will never get the maximum return on
technology if they only occupy that space because everyone else seems to be.
Career development:
Big picture: People’s career expectations have changed over the past 30 years
but some of the rhetoric around the war for talent, specifically that there are no
more jobs for life and people don’t want them either, is probably too simplistic.
So too is the belief that it’s all about work life balance. Research into the careers
of senior executives found that career changing events rarely related to their
personal life. Perhaps not surprisingly, most cited work-related events such as
promotion, a pay rise or a growing intellectual interest in the job.
Figures relating to career mobility also suggest that there will continue to be
plenty of ambitious people out there who feel passionate about their work and
want to make a mark. Far from being job hoppers more than half of senior
executives expect to work for no more than seven organisations over their entire
career, while the OECD has found that most European workers stay a decade or
more in a job. Even more career-mobile Americans only move jobs on average
every four years.
Nonetheless, the career ambitions of Generation Y – people born since 1980 –

provide evidence that many young people leave university looking for an
employer who can offer them more than just a job. For these younger high
flyers, the psychological contract – the set of unwritten obligations and benefits
that bind employers and employees – is changing. They expect more flexibility
alongside meaningful work and they are prepared to change jobs to get this.
Challenge: businesses need to understand where the balance of power lies

when it comes to career planning. Faced with economic uncertainty, it could
swing back in their favour over the next few years. Employers need to be
careful how they respond to this and be wary of taking too reactionary an
approach. Flexibility may not be a prime motivator for everyone in their career
choices, but it will remain important to some, at certain stages of their careers.
Talent managers need to have a greater insight into the shifting needs of their
talent population.
Action: Develop talent relationship managers who can act as internal careers
agents for the talent pool, helping them understand what they want from work
and the opportunities available to them in the business.
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Future of testing
Big picture: Access to assessment tools will continue to expand in terms of the
number of users and the data firms can collect. This will become increasingly
more detailed and accurate when it comes to predicting job success.
There will be changes in the sort of tests firms carry out too. There is already a
growing number of roles-based vocational testing coming onto the market. They
often offer a quick and dirty response to a short-term issue.
Firms are also likely to start using testing to manage risk rather than identify
potential. This is already common in the post-Enron US where organisations are
using integrity testing and bio data to predict a person’s honesty. Disasters such
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as the Northern Rock debacle could encourage UK businesses to take a similar
path. Interestingly, research has shown a correlation between high integrity
scores and high performance.
A further change will be the use of video conferencing technology to replace one
to one observations and assessments. Clients are already asking for it as a
means of reducing their costs and it will happen.
Challenge: However, there are obvious negative connotations to these trends

that will affect the employer/employee relationship and businesses will need to
find ways of dealing with this. Business psychologists need to be wary too of a
possible backlash against testing if it becomes too ‘gimmicky’.
Action: Don’t over-rely on testing and don’t underestimate the importance of a

one-to-one relationship between assessors and the high flyers they are
assessing. It has to be seen to be fair if it is to retain credibility but people will
be put off if access to the talent pool becomes little more than a testing
conveyor belt.
Diversity
Big picture: Changing demographics, an ageing population, a growing number
of migrant workers from an expanding European Union and the increased
participation of women in the labour market is opening up new talent pools to
employers and will force them to move away from their traditional talent sources
- white, middle class heterosexual men. This is already evident in the latest
report from the government’s Migration Impact Forum which found migrant
workers contribute an estimated £6bn to the economy.
The impact of more women in the workplace is also well documented. A third of
new businesses in the EU are started by women, while research from Cranfield
School of Management has shown that companies with women on the board
have a higher market capitalisation than those without.
Many businesses dismiss diversity as a compliance headache and a set of boxes

they have to tick for fear of being sued. In fact diversity offers threats and
opportunities to talent managers way beyond the legal restrictions.
Challenge: This is a massive talent issue for businesses. Fundamentally, they

have to bear in mind that if they don’t identify, develop and deploy the talent in
what are perhaps non-typical groups, their competitors will. To do this they have
to have much greater awareness of what different groups of employees want
from work. For example, while 574,000 migrants came to work in the UK last
year 385,000 also went home suggesting either that many are looking for a
short term challenge, or employers failed to meet their career needs.
Similarly with talented women: the idea that they do not take top jobs because
they have families and need to work flexibly is naïve. But jobs – as much as
working patterns – will have to be more attractive for people to bother upending
their lives to get to work. The success or failure of diversity policies could well
lie in the ability of employers to segment the workforce just as they do their
customer base.
23
Action: Revisit your assessment practices regularly to ensure that they are not
3T
excluding any potential talent groups. They should be a true reflection of what
the business needs not a means of duplicating what you already have.
Growth in management jobs

Big picture: Over the past few decades the number of management and
leadership roles has increased massively. Although business hierarchies have
become flatter, jobs have become bigger and more complex. The result is that
more roles demand management skills such as influencing people, building
relationships, managing resources, communicating effectively. The dilemma for
talent managers is that flatter structures have meant fewer learning
opportunities for new managers who are finding themselves with significant
responsibilities earlier and earlier in their careers.
Challenge: There is no sign of this trend abating. Far from it; if there is a
significant economic downturn then employers will be looking to get even more
back from their talented people. However, the knock on effect of increasingly
complex jobs is it will be harder and harder to fill them.
Action: Look for ways to provide meaningful development opportunities for your
talent pool and look several promotions ahead. What competencies will people
need to get there and perform? What opportunities through mentoring, project
work and other dynamic development does the organisation need to have online
and when?
Changes in the education system

Big picture: UK secondary and tertiary education has developed rapidly over the
past 20 years and this is set to continue as stresses in the system build up. The
move to more competency based education via the new national curriculum will
be good for business. However, the explosion in the range of qualifications on
offer coupled with grade inflation make it nigh impossible for employers to
understand what qualifications mean and what the education system is
delivering. The problem continues into university education. If 50% of the
population are coming out with degrees, as the government intends, then this
ceases to be a way of sifting and recruiting talent.
The education system itself is responding. For example, at secondary school

level, the introduction of the International Baccalaureate as an alternative to A
levels is spreading to the state sector. Meanwhile, universities are talking about
introducing entrance exams as a further means of selecting the brightest. There
is also a serious discussion taking place around breaking up the current degree
classification system to provide employers with a more explicit breakdown of
graduates’ academic performance and achievements.
Employers, too, are putting greater store on professional qualifications. It’s

always been a prerequisite for accountants and lawyers but the value of a
professional qualification is spreading to the softer professions such as
marketing, human resources and project management.
Challenge: Talent managers will need to keep abreast of all these changes in the
education system and understand what they mean for their talent needs.
Professional qualifications present a particular challenge to employers. While
they help manage risk to a degree, employers could end up putting talented
people into professional silos rather than encouraging them to grow and
develop.
Action: Get involved with your local schools and universities. Be prepared to
offer work experience, placements and longer-term secondments to students.
Universities all have people dedicated to building links with employers while the
local education business partnership will give you an inroad into local schools
(National Education Business Partnership Network www.nebpn.org).
24
3T
Crelos
www.crelos.com 01491 845535 info@crelos.com

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Crelos_Talent today and tomorrow 16/6/08 14:05 Page 1

We believe that good talent management is about achieving change through

2. Talent Management Today

3T Talent management: our living definition

Ultimately, talent management is about achieving change through people. As a

How we got to Talent Management Today –

Up until then, businesses talked more in terms of manpower planning – labour

The forces shaping talent management today

management as a means of negotiating – and ultimately delivering – change

Increasingly, successful organisations have to resort to strategies of size or

This is evident in larger organisations that have introduced CRM-type

Identifying and developing talent in such a complex environment requires talent

Most importantly, for a strategy to succeed, talent managers must always be

Ignore talent management at your peril

Meanwhile, telecoms business Energis used talent management as a means of

Talent management blockers

a. Identifying talent management as a separate,

organisation. In this way selection, development, performance management,

Case study - Kleinwort Benson Private Bank

b. Failing to link talent management to broader

What are the talent pain points in the organisation?

Senior managers need to be prepared for some lengthy discussions around

c. Lack of involvement from the top team

This is a dangerous approach to take as it opens the door to the dangerous

At each stage we recommend businesses look at what they already have in

a. Identify your talent need

How ready is the business for a robust talent

Invest in defining ‘good’ Invest in defining ‘good’

Organisational experience of assessment

b. Script your talent story

communicating a talent story accurately and thoroughly is vital to its success.

At Crelos we always urge people to be open and honest about the

what the process is trying to achieve

c. Nominating the talented

3T One of the key talent management decisions businesses have to take is

Recruitment - talent management starts on day one

However, as organisations become more sophisticated in their people

Inevitably the organisation’s existing performance management system will play

It is also important not to overplay assessment. Its purpose is to help a talent

These require personal information to be:

fairly and lawfully processed

Intrinsic motivation can be measured using a psychometric questionnaire.

Cognitive and numerical ability

However, there is an element of controversy around them, as they suggest a

Behaviours and competencies

Behaviours can be assessed in numerous ways, for example, through evidence

There are plenty of sample behavioural frameworks around but of varying

e. Reviewing your talent – using the data

In addition, to ensure the success of the review

Keep it regular. The regularity of meetings depends on the speed at which

A word on confidentiality; it is vital that everyone involved in the process –

The Talent Index™

The index is based on the behavioural framework designed by Professor Harry

The Talent Index simplifies complicated individual behaviour or competency

establish a benchmark against which to measure talent pool development

Crelos’s five approaches to developing

Adopting a variety of development programmes and tools is essential if the

Inspiring Interventions – people who have done extraordinary things

Don’t underestimate the impact of providing talent with opportunities to learn