As 2006 comes to a close there’s no lack of predictions or discussion about what we’ll see in talent management in 2007. But how about in 2016? An interesting paper titled, “The way to work: Space, place and technology in 2016” explores four scenarios for a Blade Runner style future:

1. Disciples of the Cloud: Businesses control all intellectual property and determine where and when work takes place.
2. Electronic Cottages: Businesses control all intellectual property, but workers are able to determine where, when and how they work.
3. Replicants: Businesses depend on specialist consultants, their expertise and intellectual property. Work is much less predictable and reliable, but workers are free to choose where, when and how much they work.
4. Mutual Worlds: Businesses operate as cooperatives of independent contractors. Intellectual property is controlled by workers, who focus on small local ventures, often connected to networks of similar ventures elsewhere to give scale.

Clearly, strategies for effectively managing talent will become even more important business drivers as the years go by. What passes for science fiction today sometimes becomes a reality tomorrow. The report quotes the writer William Gibson's comment in The Economist, June 23, 2000:

"The future is already here – it’s just unevenly distributed."

Happy New Year!

The 2006 U.S. Job Retention Poll of 462 employees and 367 HR professionals, released by the Society for Human Resource Management (SHRM) and The Wall Street Journal’s CareerJournal.com, provides a troubling view for employers:

• More than 75 percent of employees are looking for new jobs.
• 73 percent of HR professionals are concerned about the voluntary resignations at their organizations.

Why are employees leaving?

Although a greater proportion of organizations reported implementing special retention processes in 2006 (49 percent) than in 2004 (35 percent), that still leaves more than half of organizations sitting by while their people leave. What to do? A strong internal mobility process can go a long way towards mitigating two out of the three top reasons for leaving. Mobility can also help reduce the negative impact of high turnover.

There are interesting—and encouraging—results from the 4th Annual Rocket-Hire Online Screening and Assessment Usage Survey. Using validated tools to drive a more rigorous, scientific hiring process is on the rise. Both the interest level is there, along with the widespread adoption of core ATS technology as the foundation of the process.

Among the survey findings:
1. Assessment usage has grown steadily from 2002-2006.
2. 62% of companies not using pre-screens or assessments plan to add them.
3. Behavioral assessment is seen as the next add-on to the staffing process after core ATS implementation.

The survey reported "Lack of Knowledge" and "Costs" as two of the biggest obstacles to an assessment purchase. Neither should be a valid reason today when assessments are another integrated step in an optimized talent acquisition process.

Our approach has always supported enhancing the art of talent acquisition by building the structured foundation of a scalable process. Assessment is an important tool that delivers improved quality of hire results. Rather than gambling on hiring a candidate because “I know the right one when I see them,” a single, focused assessment can gauge personality, cognitive, situational, and skill levels. Hiring can be a higher percentage endeavor than rolling the dice.

If your hiring decisions sometimes feel like you are rolling the dice, get the odds in your favor. Pre-hire assessments integrated into a systematic process give you that advantage.

The war for talent and the talent shortage have been widely debated. Many questions remain on the table. Is there really a demographic shortage? Are the baby boomers abandoning the workforce — or will they work beyond retirement age? How will legislation affect the numbers? Is the shortage only in certain industries — or just manifested in particular job functions?

Here’s a chart from the results of Manpower’s Talent Shortage and Wage Inflation Survey. It makes its own comment on the talent shortage centered in basic economics. When the talent supply/demand balance shifts towards demand — you have to pay more for the limited supply.

Do you currently subscribe to news, sports, or blog feeds to your MyYahoo or other portal page or mail page? If yes, then you will understand the benefits for recruiting: automated candidate connections, rapid sourcing, faster time to fill.

With RSS job agents, candidates can be notified of new positions immediately as they become available. If their current search criteria come up empty, with a couple of clicks they can add a link to their personal homepage to set up a feed for new openings that match those criteria as they arise.

RSS stands for Really Simple Syndication. With Taleo Business Edition 7.5, RSS job agents have been enabled on all careers site job search results. Today’s latest browsers including Internet Explorer, Safari, and Firefox can view information syndicated in this form, including readers built into Yahoo, Google, and Microsoft Office Live.

Build your proprietary candidate pool and keep it stocked with people who apply for positions that are not currently open. You can automate your connection with passive candidates. Just because your top applicant’s preferences don’t match today’s open positions, it doesn’t mean they won’t fit tomorrow. This is a powerful Web 2.0 style sourcing technique.

New research from the Conference Board on jobseeker behavior shows two unexpected results:

1. Print and Internet job searching are equal sources for jobseekers.

2. The largest percentage of job offers came from the Internet search.

Our conclusion? Source candidates through a variety of media channels – as appropriate – then drive all your candidate traffic through your centralized corporate careers site to manage the process.

I was pleased to be a panelist on the HCI webcast, Finding and Grooming Top Local Talent. As more companies venture into more and more locations worldwide, stories about the challenges of global talent management take many twists and turns. Here’s one.

What happens when a country quickly becomes the #1 location in the world for the automotive industry? Anthony Stainer, VP Learning & Talent Sourcing at Faurecia, described this situation in Slovakia: 400,000 jobs with only 100,000 Slovakian workers capable of filling them. That’s not a war for talent – that’s a firestorm!

Ultimately, the efficacy of a global workforce strategy is determined by the local workforce demographics, along with the decisions of other industry players competing for the same talent. Are execs paying enough attention to this in the planning stages – or will Slovakia just be one example among many?

The e-recruitment software market has officially matured. Gartner has produced its first Magic Quadrant covering the space and it’s called: Magic Quadrant for E-Recruitment Software, 2006.

The research note authored by Jim Holincheck covers the current state of e-recruitment, including a market overview, definition of effectiveness, market description, and evaluation criteria.

We are obviously pleased to see that Gartner positioned Taleo in the Leaders Quadrant for our completeness of vision and strong ability to execute. We are even happier to see e-recruiting reach this significant milestone.

Read the research note and learn more.

The Economist Intelligence Unit (EIU) and PricewaterhouseCoopers (PWC) conducted a global online survey of 153 executives in June 2006, supplementing the findings with 22 in-depth interviews, to produce Technology Executive Connections: Successful Strategies for Talent Management.

This is the third edition of PWC’s Technology Executive Connections series. The first survey probed technology executives on environmental issues and impacts; the second examined convergence and M&A challenges.

The focus of this survey shows talent management is becoming a more important issue for technology companies. The findings support the need to implement successful talent management strategies and practices.

The study’s four principal observations:

1. A priority with failing grades. Many technology executives are making human capital management a greater priority, but the survey shows they do not have a high regard for their firms’ capabilities in this area.

2. Acquiring hybrids. Executives are beginning to experience a painful scarcity for the essential employee: that talented, technically-savvy individual who can collaborate, innovate, and manage change.

3. Harvesting talent from within. Technology companies worldwide are focusing on personnel development and training, and, by inference, on the retention of new hires and existing personnel.

4. Managing global markets and global talent. Nearly half of all technology companies say they difficulty finding technical talent in emerging markets, and just under half say these difficulties include the retention of skilled people around the globe.

Here’s two other resources on how you can use talent management to make a difference: Hidden ROI of Talent Acquisition & Mobility: The Executive's Primer and Make Your Hiring Process Faster, Better, and Cheaper: An Action Framework for Your Organization.

Here’s a no-brainer:
• The population of the UK is ageing.
• Simultaneously there is a shortage of talent in many sectors.
• New anti-discriminatory UK Age Regulations were introduced in October 2006.

As the baby boomer generation moves towards retirement there are insufficient younger workers to take their place, let alone satisfy the requirements of a growing economy for more labour and different skills. Couple that with the regulatory imperative for UK Age Regulations compliance and it seems pretty obvious that tapping into—rather than shying away from—the older worker talent pool is the smarter strategy.

We’ve partnered with The Age and Employment Network (TAEN) on a paper that digs deeper into these issues and provides practical strategies for organisations to recruit older talent into their workforce.

Download Tapping into the Older Worker Talent Pool.

With the wave of broader demographic changes, the strategy of hiring older workers is valuable for many developed nations besides the UK.

Lou Adler’s “ground rules in the new playbook” resonate well with Taleo solutions and research. Check out his full article, Are You Playing the Hiring Game to Win?

We can’t help but highlight his rule #5:

“Every person in the recruiting department must be a technology fanatic. People who work in a corporate recruiting environment must thrive on using technology.”

Our version of the article would put that at rule #1. A robust technology platform is either at the core or the support platform for executing on all the rest of the rules:

• Reduce the number of sourcing channels used, but be great at each one.
• Implement consumer marketing "best practices" to rewrite, position, and push your advertising.
• Use advanced CRM marketing techniques to extract maximum value from your resume database.
• Create a sourcing function that allows for deep networking.
• Implement workforce planning.
• Establish process-control metrics.
• Hiring managers must take on a much bigger role in hiring.
• Create an internal executive search team for critical positions.
• Treat your third-party recruiters as partners, not vendors.

Computerworld online recently published Mary Brandel’s article called Fishing in the Global Talent Pool about global hiring strategies for IT. We were happy to see Kent Kirch, Global Director of Recruitment from Deloitte Touche Tohmatsu, quoted in the article:

“We’re hard-pressed to find talent quickly enough to meet our business needs,” he says. “Our approach for recruitment, even for our local companies, is global.”

Kent is one of the talent leaders guiding Deloitte to global success, powered by Taleo. He shares additional insights on our archived webcast, Will Talent Management Drive the Future of HR? Hear even more from Frank Wittenauer of Deloitte and other experts on the online replay of the Recruiting in Emerging Markets webcast.

Case studies outline the global strategies used by Dow, Roche, and DSM. Or you can dig a little deeper and read our paper, Managing Global Deployments.

For your dive into the global pool, make sure you get ahead of the learning curve and know all you can about global talent solutions.

Take a look at how this nice simple chart compares the perspectives of the old Personnel Department to the modern HR managers of People and Talent. McKinsey—coiners of the popular “War for Talent” phrase—offers The New Way to articulate the thinking behind talent management:

The next step is turning the thoughts of The New Way into strategic actions.

• Build your Talent Mindset on the framework of on demand talent management solutions which become your tools for cultural transformation.

• Express the Employee Value Proposition and power Recruiting strategies through tailored careers sites.

• Grow your leaders and differentiate your organization by using best practices for talent acquisition and retention strategies that drive successful employer of choice initiatives.

That’s how you execute on these ideas.

In lockstep with the burgeoning number of websites and Internet users is the ever increasing number of job boards. Some are broad and well established: Monster, Careerbuilder. Others are new, niche boards such as WorkforceHRjobs.com and 37 Signals Gig Board for project work. There are also job listing rollups. One to check out: DirectEmployers Association has developed the JobCentral National Labor Exchange to replace America’s Job Bank.

As the author of one of the very first publications cataloguing job boards, The Jobseekers Guide to Online Resources in 1994—a very slim book at that—I was fascinated to see this latest offering: the AIRS 2007 Job Board & Recruiting Technology Directory. It’s 106 pages, organized by industry and specialty, full of ads, and available as a free pdf download.

I’m sure there are now even more job boards than made this listing. It’s a low barrier-to-entry, highly fluid market. That’s why I stopped publishing job board directories in 1995! But don’t get confused by the quantity. Use the directory as one of your reference sources. Focus on executing a results-driven sourcing strategy linked directly to your talent management system and its source reporting and analytics.

More and more organizations are establishing or extending their Internet presence. Here’s a major milestone: there are now more than 100 million websites on the Internet with web pages easily numbering in the billions.

More and more people are using the Internet. Earlier this year, the Pew Internet and American Life Project reported that 73% of US adults use the Internet.

Globally, you can see the growth in the Pew Global Attitudes poll.

Given that information, it is more important than ever to make sure that your corporate site – particularly the careers section – is fresh, appealing, and uses the best technology as you wage the war for eyeballs…as well as for talent.

We came across a great book that supports the importance of having a talent management system in place: It’s Not What You Say... It’s What You Do – How Following Through at Every Level Can Make or Break Your Company.

“You can have the best product or service, a great bottom line, but without the right people from top to bottom it is impossible to follow through.”

Bestselling business author Laurence Haughton identifies the flawed processes that cause great ideas and breakthrough strategies to slip through the cracks, based on studies with more than 150 companies. To make sure that things actually get done a manager must:

1. Communicate what’s expected in terms everyone can understand.
2. Match the right people to every strategy.
3. Get their teams off to a great start.
4. Maintain momentum long after the mood has passed.

Aligning people to business strategies is what talent management does best. As Haughton points out, “…the research out of Ohio State’s Fisher College of Business is conclusive—managers who make sure they have the right fit between their people and goals before they take action double the likelihood of successful follow-through. That’s more than a 100 percent increase in successful follow-through for simply fitting the right people to your goals.”

With that kind of potential business performance improvement in your hand, how could you not make the investment in talent management?

Computerworld online published an interesting article titled: Helping small businesses choose between On-demand and On-premise software. Though the focus is general, it reiterates the main advantages of on demand talent management and eRecruiting for small to medium businesses:

Lower cost of entry: “avoid the large upfront investment required for software licenses and hardware… reducing the hassles of ongoing IT maintenance.”

No readiness issues: “on-demand … dramatically reduces the technical burden … enabling businesses to devote more of their time to higher-value activities.”

Shorter time to productivity: “…because on-demand deployments are typically preconfigured … they are relatively speedy.”

Support for mobile users: “Whether employees are in the office, at home or in a hotel room in another time zone, access to an on-demand application is identical.”

We heartily agree with these main points: Lower costs. Less burden. Faster. Anywhere, anytime. No surprise, since we offer Taleo Business Edition.

But regardless of our agenda, the article’s argument for on-premise software just doesn’t hold up:

Data accessibility and ownership? Domiciling your data is nice. But it also means responsibility. For smaller businesses, on demand can provide a higher level of state-of-the-art hosting, security, and backup than their IT departments are able to provide.

Transactional volumes? Internet bandwidth and shared processing resources are legitimate variables, but truly scalable multi-tenant on demand architectures are designed to support a higher level of usage than small business networks. At Taleo, we processed more than a billion transactions for 750,000 users in Q2 2006 alone.

Less downtime? Although on-premise removes some remote-connectivity issues, Taleo has achieved 99.9% on demand uptime. How many hiccups has your on-premise email server had this month? How many steps does it take to access your servers on the road?

More seamless hardware/software integration? Complete control over your hardware and software environment might feel nice, but with Web Services APIs and hardwired integrations, it’s a legacy illusion.

Lower ongoing costs? On demand requires subscription fees, but are clearly an advantage over on-premise license, implementation, and ongoing maintenance fees for a greater return on investment. Want to switch on demand providers? Go ahead. It’s much less costly than changing ERP applications.

Many of the largest and most complex global companies with their sophisticated IT environments have chosen Taleo for on demand talent management. The choice for a small business without those kinds of IT resources is even simpler. Explore Taleo Business Edition to learn more.

Many top employers are taking a try before you buy approach to hiring the hundreds or thousands of new entry level workers they need every year. Internships provide a valuable way to get to know the person before committing to a permanent hire. Employers and interns both get a low risk opportunity to find a perfect fit.

The 2006 Experiential Education Survey done by the National Association of Colleges and Employers (NACE) reports that employers offer jobs to more than 70% of interns. 75% of offers are accepted with a 53% full-time hire conversion rate. That’s a great success story for campus recruiting.

The success rate of these real world auditions are also a welcome counterpoint to the dismal findings of the recent report, Are They Really Ready to Work?, lamenting student skill levels. Maybe there is no lack of skills and abilities in the upcoming generation of workers, after all?

The Offshoring Research Network (ORN) is a joint effort of the Center for International Business Education Research (CIBER) at the Fuqua School of Business at Duke University and global consulting firm Booz Allen Hamilton. They have been conducting a multi-year survey and panel study, collecting firm level data on the offshoring experiences of companies across many industries for the last three years.

The newly released report, Next Generation Offshoring, The Globalization of White Collar Work, takes a comprehensive look at drivers, employment impact, location choices, and risks of offshoring analyzed by industry, region, and company size.

Survey says:
1. Labor arbitrage is giving way to accessing talent as the primary driver of next-generation offshoring.
2. Offshoring high-skilled functions does not replace jobs onshore.
3. Companies look elsewhere, because they can’t get it at home.
4. Where you offshore depends on what you offshore.
5. The obstacles to successful offshoring are increasingly internal and organizational.

Implications:
1. Businesses must develop a global workforce sourcing strategy now.
2. Organizational transformation is essential for success in the new business world.
3. Promote policies that cultivate innovation.

Although Information Technology (IT) is still the most popular offshoring function and the prognostication for the future is that IT offshoring will continue to grow at double digit rates, the survey results place HR at the top of the growth in offshoring by business function.

Then again, for a much more whimsical look at those HR jobs described by workers of the future, check out the charming video at www.hr.com/grow.

Here’s a glass half full or half empty item. Readiness for sudden succession by HR professionals is either laudable with 59% prepared or dismal with 41% unprepared, according to SHRM’s 2006 Succession Planning Report.

Succession planning is one spoke in the talent management wheel and can be a driver of business performance when executed well. Find out more about successful talent management in our upcoming webcast: “Will Talent Management Drive the Future of HR?” on November 8, 2006. Joining me will be Kent Kirch, Global Director of Recruitment, Deloitte Touche Tohmatsu. You’ll hear about real-world examples of value generation through talent management practices and technology.

And the answer to how full is the glass? It all depends on whether you’re filling it or drinking from it…

We read an excellent column by Kevin Wheeler called Managing Talent. Kevin articulates three key points that happen to align nicely with our vision of talent management here at Taleo.

1. Become a talent manager, not a recruiter.

Yes, this is becoming important for success. But it requires easy access to relevant information. To be a talent manager, you have to be able to measure and monitor talent management processes.

Towards that goal, Taleo’s talent management dashboard brings reporting and analytics information directly to the desktop. You can track: Time to Fill, Filled positions, Requisition aging, Acceptance rates, Declined Offers, and Source Yield right out of the box.

2. Insist on rigor in job descriptions and hiring manager requirements.

Again, we wholeheartedly agree. Structured data has long been one of our foundations. Our requisition wizard helps recruiters leverage job templates and skills from an existing library to develop a set of talent requirements. Our approach is very structured with specific skills tied to each job requisition.

That front end work pays off on the back end. Once the structured data is completed on the demand side, similar information is captured on the supply side for talent sourcing. Much of the low-value portion of the screening and selection process is automated. For example, Direct Energy reported its hiring cycle time went from 67 to 35 days through precision matching of only best fit candidates.

3. Adopt and start using talent management technology.

We agree and believe that organizations must use technology as a platform for enterprise talent management initiatives. In addition to supporting more than 30% of the Fortune 100, we are very proud that our clients are known for recruiting best practices.

For example, these Taleo clients were recognized by ERE:
• Best Corporate Careers Website: Deloitte
• Best College Recruiting Program: Whirlpool
• Most Strategic Use of Recruiting Technology: Hewlett-Packard

In addition, The 2006 Workforce Magazine Optimas Award recognized these Taleo customers for talent initiatives that directly improve business results:
• General Excellence: Intel
• Global Outlook: Deloitte
• Overall Vision: UnitedHealth Group

When you read the article, notice the subtitle:

It is time to change the way you think about talent.

We couldn’t have said it any better.

Here’s an interesting problem to have. Self-service costs companies less in labor expenses and can be the cornerstone of a profitable business strategy. But in Sweden, due to the relatively high costs of hiring people, self-service has become an economic requirement. Newsweek International reports on the phenomenon:

“It's so expensive to hire people in Sweden that companies from IKEA on down would much rather you helped yourself, thank you…The constant battle by business to get around high labor costs is evident everywhere in Sweden. Here, the gap between high and low salaries is much narrower than in almost any other modern economy. The typical Swedish waiter, say, makes €23,000 a year, or about a quarter of what a Swedish CEO takes home. In Britain, the waiter would earn much less (€17,628), the CEO much more (€164,788). In the United States, the gap would be wider still. Thus, in IKEA-syndrome Sweden, the restaurant world looks very different. McDonald's thrives, according to a recent McKinsey & Co. study, but its fast-food competitor Pizza Hut, with bigger tables and larger serving staff, struggles.”

So it is neither a paucity of jobs nor a scarcity of available labor that is creating this conundrum, but the realities of compensation and cultural structures. Businesses in all industries have created new business models centered on self-service. Think about how the self-service IKEA Syndrome touches your life the next time you walk their aisles, write up your own order, load your own cart, deliver the boxes to your home, and assemble your piece of furniture.

Sirota Survey Intelligence specializes in what they call attitude research. Here is an example of their interesting research. Based on an opportunity sample of approximately 100 HR professionals representing Fortune 500 companies and other organizations, they found:

How do these conclusions track with your current challenges and outlook?

The findings in Human Resource Management Practices and Firm Performance in Small Businesses—a Cornell University/Gevity Institute Research Report—again validate the studies and survey results we are seeing over and over, like in the Watson Wyatt Human Capital Index work.

HR best practices make a bottom-line difference. And that difference can be quantified for organizations of all sizes. Look at these research results for small businesses:

So the research is clear and should be convincing. That’s the easy part. The challenge is implementing effective best practices. That’s the hard part. However, it’s worth it because you can reap a large return from a relatively small investment. For many small businesses, starting with an online recruiting system is a great step in that direction.

A press release email came through titled, “College Grad Resumes Need Help.” It outlined the results of a survey conducted nationally using an online poll placed on the CollegeGrad.com homepage during September 2006. The results are based on approximately 850 respondents.

The main finding: 72% of College Students and Recent Grads Don't Have a Resume or Say Theirs Needs Help. The release goes on to outline the importance of having a resume, as well as the services available to help create or refine one.

On its face, there is nothing wrong here. But it strikes us as the wrong answer to the right problem. Recent college grads may not have resumes, but nonetheless, they have skills. If your organization targets entry-level candidates and participates in campus recruiting, make sure your application process is designed to capture their information without requiring a resume…since most of them don’t have one!

The Wall Street Journal’s career columnist admonishes readers – many of whom are hiring managers – to remember that applicants believe a rude selection process mirrors working conditions. Employers should treat job prospects as customers and invited guests.

According to the Computerworld article, Google Catches Flak for Its Hiring Procedures: Lengthy process turns off some IT pros, developers, it seems Google is learning this lesson. Hiring is hot at Google…but top talent is pushing back and Google is having to streamline the hiring process to meet demands for talent.

An efficient hiring process with automated workflow goes a long way towards capturing the enthusiasm of applicants and hiring the top candidates you want. If your process is any combination of slow, cumbersome, or disrespectful, top talent will take their skills elsewhere - even if you have the market cap and brand perception of Google.

Employer of choice initiatives succeed when your hiring process experience reflects the same high performance culture you work so hard to establish.

Healthcare isn’t the only industry complaining about the lack of skilled candidates. For all the talk of the US losing manufacturing jobs, there are apparently still plenty of factory jobs to be filled. In fact, there are more open positions than skilled workers to go around.

Here’s a proactive approach to solving the problem by a Washington non-profit group. The Manufacturing Skill Standards Council has created a nationwide program to train, test, and certify workers in entry-level skills for openings among today's 10 million factory jobs. The goal is to credential 4 million workers in the next 10 years.

Quipped Michigan Gov. Jennifer Granholm, “We call this 'No Worker Left Behind.”

By all accounts, the heavy demand for healthcare professionals is still on the rise—especially for nurses—with no immediate prospects for improvement. The Bureau of Labor Statistics projects registered nursing jobs will grow 26% in hospitals and 45% in ambulatory care, accounting for 74% of the 623,000 projected increase in employment of registered nurses from 2002 through 2012.

Watson Wyatt’s study, Strategic Rewards and Retention Practices in the Health Care Sector: 2006/2007 Report, reveals more:

• 69% of health care organizations are having trouble retaining critical-skill employees to a moderate or great extent, compared with 43% of organizations across all industries.

• Retaining registered nurses is the most difficult staffing challenge facing health care providers, with 84% listing it among their top three staffing challenges, followed by pharmacists (39%) and rehab therapists (33%).

I’m sure this isn’t news if you’re working in healthcare today, but it serves to reinforce the need for a proactive approach – and a long-term view – towards talent acquisition and retention practices in the face of an unrelenting need. Technology support for managing candidate pools can help track information on future and also current skilled nurses.

For yet more insights into healthcare hiring, read the BusinessWeek cover story titled What’s Really Propping Up the Economy.

You can’t improve a process that you can’t measure. That’s why it’s so important to be able to measure, analyze, and optimize your staffing and deployment strategies. Not only can you see your own performance, but you can also compare that performance with other organizations through benchmarking.

You can find out more in our free white paper. Measure, Report, Analyze, and Improve: Turning Analytics into Action describes good metrics and outlines a five step methodology to implement a successful analytics strategy.

What are the benefits? In one survey, 62% of Taleo users said they had used talent management metrics to achieve:
• Better tracking/measurement of employee referrals.
• Improved EEO reporting.
• Reductions in cycle times and time to fill.
• Improved accuracy.

These users now have an award-winning tool to drive improved performance. Taleo Reporting and Analytics™ was just named a Top HR Product of the Year by Human Resource Executive magazine.

Today, technology and information can synch your staffing processes with real business outcomes. It’s the right time to turn analytics into action.

Two independent studies have reported similar findings. Skill and talent shortages are a problem in Canada and a majority of respondents acknowledge the situation. The studies also offer two creative strategies for success in a tight labour market: (1) attract and retain, (2) retrain and retain.

The Hewitt Associates survey called Canadian Employers Struggle to Attract and Retain Employees concludes:

Canadian organizations of all sizes, in all parts of the country, and in all industries are finding it challenging to attract and retain employees, according to an extensive survey conducted by Hewitt Associates, a global human resources services company. As a result, a majority of the 232 survey respondents are implementing new programs focused on flexibility to address the problem.

More than half the respondents cited flexible hours and benefits as the most valuable way to attract and retain talent.

The Workplace Partners Panel (WPP) Viewpoints Survey titled Skills and Skills Shortages: The Views of Business, Labour, and Public Sector Leaders in Canada, released this finding:

The survey revealed that concerns about skills shortages have substantially increased since the first Viewpoints Survey was conducted in 1996. In that year, less than one-third of managers and only one in five labour leaders judged the shortage of skilled labour to be a serious problem. Today, well over 50% of managers along with nearly two-thirds of labour leaders describe it as a “serious problem” for the Canadian economy.

Skills shortages are a growing problem. The effects are being felt today. Solution? A true commitment to executing workplace training programs and making the related investments.

The Hewitt study suggests more flexible workplace policies and procedures to attract and retain talent. The WPP survey focuses on workplace training programs to improve the skills of existing workers. Both stress the need to more rapidly establish HR practices that support the strategies. Most importantly, these studies illustrate the opportunity of using talent management as a framework for strategic success.

How much attention should be paid to one-half of a company’s total budget allocation? Consider this finding from a PricewaterhouseCoopers’ “Trendsetter Barometer” survey:

“CEOs of the nation's fastest-growing private companies are spending almost 50 percent of their company’s total budget on their workforce, yet less than a third have formal programs in place to retain key employees. Moreover, less than a third regularly discuss retention issues during management meetings, or understand why key employees are leaving the company.

“Additionally, with 22 percent revenue growth projected over the next 12 months, 80 percent of these companies are planning net job additions--with an overall workforce increase of more than 9 percent expected. However, nearly half the CEOs surveyed (49 percent) are concerned that a shortage of qualified workers could limit the growth of their company in the year ahead. Similarly, 38 percent see scarcity of skilled, trained workers as potentially creating a barrier in the form of pressure for increased wages.”

It appears there is still a disconnect between cost and proactive talent management on the executive floor. With all the business press coverage on talent driving performance, why does managing your largest investment still remain a mystery?

Baseline magazine recently published their 50 Fastest-Growing Software Companies for 2006 study based on year-to-year growth performance from 2004 to 2005.

First, here are the caveats. Only public companies with at least $10 million in revenue were considered. Nearly 40% of the companies grew through acquisitions which contributed to total revenue growth. And companies with major non-software businesses were not considered.

So what’s so interesting about the results? Eight of the top ten and 36% of the 50 fastest growing software companies are on demand vendors that offer their software as a service. We believe this trend demonstrates further market validation of the on demand software model. Software as a service offers a more successful alternative to traditional licenses due to faster implementation, lack of IT maintenance, and 100% accountability for business processes and uptime performance.

How did Taleo do? Our healthy 33.7% growth rate during the period ranked us at #44. But among those listed in the category of talent management, we are #1!

Although the full impact of the new UK age discrimination legislation is unclear, there is one obvious – and feasible – requirement: defensible record-keeping and reporting. If and when the time arrives to prove compliance, navigating a messy paper trail will expose more risk and vulnerability.

In that light, the results of our new research on the careers sites of the FTSE 100 companies, Careers Site Recruiting in the FTSE 100 Companies: A Missed Opportunity, are all the more significant.

Nearly half of the FTSE 100 companies have no apparent recruitment management technology – the core of any record-keeping and reporting system. They have corporate websites, corporate careers sites, post job positions online…and yet they receive applications via emailed CVs.

Managing a recruitment process with candidate data stored on email CVs is not far afield from file cabinets of paper CVs. In fact, it may be worse. It is so much easier for candidates to submit CVs by email, rather than postal mail. This leads to increased volume.

Lacking end-to-end recruitment technology, these companies miss out on automated support for online pre-screening, skills-based selection, and proactive recruitment from the company’s own talent pool. We wonder how companies which have no technology in place to manage their recruitment processes will demonstrate their compliance to the recruitment methods inherent in the new legislation.

Sourcing and recruitment advertising costs consume high percentages of HR staffing budgets. With increasing pressure on a decreasing talent supply, getting good results from your sourcing investments looms even larger.

Newly released is an interesting and extensive ERE Media and Classified Intelligence research report ($495) that’s based on a survey of 350 recruiters across the United States. The report title tells much of the story: Job Sites Up, Print Going Down: Recruiters Rate Advertising Effectiveness. According to the survey, employee referrals remain a top source of choice; newspapers are quickly losing favor.

Where have the recruitment ad dollars been spent in the past, and what changes are expected for budget allocation? Here the report also offers good info:

As you set your own budgets for next year’s recruitment advertising, you can use this research to get a broader view of source effectiveness and payback expectations. Then you can benchmark against your own plans. Each program should be evaluated on its merit for your organization. If, for instance, employee referrals rank high – be sure that your employee referral program is optimized. None of these sources will be effective for you without ongoing monitoring and analysis.

It’s not especially surprising when Jobster CEO, Jason Goldberg discusses social networks in his recent industry conference presentation, The Future of Hiring Technology. Jobster is on the forefront of applying Web 2.0 to the process of recruitment as part of its vision for both the present and future. But social networks are also a big topic in the mainstream business press, such as in this series of BusinessWeek articles.

We’re going to take a deeper dive on using social networks for improved sourcing and talent acquisition in our upcoming free webcast, Who Do You Know? Sourcing in a Networked World on Wednesday, October 11 at 8:00 a.m. PT (11:00 a.m. ET). You’ll hear from Taleo Research, Jobster, and Nike on how to use social networks to boost your sourcing strategies, work your connections, and recruit top talent.

Is it still a revolution when the media standard Financial Times comments on changes in recruiting? In the FT article “Process of looking for staff undergoes a revolution” author Richard Donkin writes:

“…changes occurring in recruitment today, not to mention the broader labour market, are more significant than those arising in the traditional economic cycle.”

This FT piece looks at how two recruitment services companies have changed their business models to adapt. Donkin concludes “The days of treating the supply of labour like any utility are coming to an end.” We disagree. We think those days already came to an end.

Build a relationship with a target audience first. Now that you’ve got their attention and loyalty, post job opportunities in front of them?

In a kind of reverse engineering, successful niche blogs are launching revenue-producing job board add-ons. A Red Herring magazine article cites GigaOm, the blogging network started by former Business 2.0 writer Om Malik, as the fifth niche job site to come from a blogger. It also references job boards from blogs TechCrunch (with the catchy job site name CrunchBoard), 37 Signals, Alarm:Clock, and Paid Content. Doubtless, there are more…or will be.

As the lines blur between direct and indirect sourcing methods, the fight is on for a minute – no, for moments – of mindshare from potential candidates with like minds. Similar to contextually placed paid ads in search engines, all audiences are fair game.

It’s always gratifying when a study proves what you intuitively know. Professors from Florida State University and Auburn University used a technique called meta-analysis to mathematically combine the findings of 92 previous studies covering 19,319 organizations published since the mid-1980s.

They produced the study, How Much Do High-Performance Work Practices Matter? A Meta-Analysis of Their Effects on Organizational Performance, published in the autumn issue of Personnel Psychology.

Key Conclusions:

• When a company emphasizes human resource activities such as incentive pay and flextime, it can enjoy a 10 to 20 percent improvement in employee retention, employee productivity, profitability and stock price.

• Conversely, companies which cut spending on human resource programs can expect to see their bottom line shrink by up to 20 percent.

• Performance improvements are stronger when companies take a systematic approach to human resources rather than implementing one or two practices.

• When companies cut their HR budgets—which was often the first place to save dollars when the economy took a slide—it had a knockdown effect on retention, productivity, profitability, and stock price.

Study co-author and Lowder Eminent Scholar at Auburn University, Dave Ketchen said: “Over the last 25 years, corporate America has debated whether the human resources function adds value or if it is just a necessary evil. Our results show that negative images of human resource managers miss the mark. Skilled HR managers can make the difference between a company making a profit or losing money.”

Talent drives performance. Talent management matters.

Retention rates and turnover are flipsides of the same issue. Are you keeping the people you’ve hired? Or are you constantly replacing them?

Mercer Human Resource Consulting’s China Employee Attraction and Retention Survey is based on more than 100 companies throughout China and Hong Kong. These locations are experiencing alarming rates of turnover. Average tenure for 25-35 year olds—the age group targeted most by multinational companies—fell from an average of 3 to 5 years in 2004 to just 1 to 2 years in 2005. Although the rates for your organization may not be this extreme, it’s instructive to review the research.

The report’s findings reinforce the basics: the salary and benefits package is very important, closely followed by career development opportunities.

Take a look at your own organizations, wherever they are located. With all the work you are doing on hiring new talent, what methods are in place for keeping them?

There was so much great information shared in today’s “Recruiting in Emerging Markets” webcast sponsored by Taleo. Pete Engardio of BusinessWeek provided an overview of each country’s talent landscape, complemented by “feet on the street” insights from Deloitte Touche Tohmatsu and JPMorgan Chase.

The challenges of working in countries with enormous populations, trying to match specific skillsets to demand (amid environments with high turnover) came through clearly. While striving for quality, the necessity of consistent processes for managing increasing quantity is evident in the one-year volume increase we have seen across the Taleo customer base:

There’s a lot to learn —from location-specific sourcing tactics to unusual retention strategies—from these insights about India and China. If you missed it, watch for the archived presentation.

The recent Fortune magazine piece, Why India will overtake China, explores the current economic environments of both geographic giants. The “Plugged In: Analysis” article outlines the strengths of China:

“China has higher literacy and better infrastructure. It takes a month to start a business in China, and three in India. China has more savings, less debt and less poverty.”

Then counters with a contrary view of India:

“But in important ways, India's economic software is superior. India's banks report about 10 percent non-performing loans; China admits to 20 percent and the true figure could be double that. India's capital markets work the way they should; China's are a rigged casino. India has more engineers and scientists; its domestic entrepreneurs have made a bigger mark.”

Interesting? Yes. Definitive? No. Both China and India along with a number of smaller AsiaPac countries are now significant players in global business. Companies are increasingly tapping their local workforces to staff expanding office and manufacturing locations. Although the dynamics are different, each country presents talent management challenges, especially in recruiting.

Whether one country surpasses the other seems academic. The reality is simpler. If your organization is now—or plans to be—involved in India and China, you need to get savvy about recruiting in those talent markets.

Take advantage of this opportunity to get expert advice on developing recruiting strategies to succeed in China and India from Judy Panagakos of JPMorgan Chase, Frank Wittenauer of Deloitte Touche Tohmatsu, Pete Engardio of BusinessWeek, and Don Chun of Taleo in the upcoming Taleo webcast, Recruiting in Emerging Markets on Thursday, September 7.

Everyone talks about the importance of workforce planning. But they frequently speak without really defining what it means. That is why we like the latest report from the Conference Board, released this month: “Strategic Workforce Planning Forecasting Human Capital Needs to Execute Business Strategy”.

This is a must read for anyone serious about workforce planning and this short posting would not make justice of the several case studies and models.

But first, the definition: “Strategic workforce planning (SWP) is the analytic, forecasting, and planning process that connects and directs talent management activities to ensure an organization has the right people in the right places at the right time and at the right price to execute its business strategy.”

A nice view is their segmentation of the different approaches to address the issue. Overall, five approaches that are shown below classify how companies address the challenge to plan their workforce.

We agree with many of the 12 recommendations made to have an effective strategic workforce planning process in place, but we would focus on these three:
1. Data Integrity and up to date standard skills and competency as foundation.
2. Competent HR partner that participate in the business planning process.
3. Focused on critical talent and start small and simple.

For many organizations today the world of talent is a global one. Putting the right people in the right places takes very special meaning in this global landscape of infinite options.

Mercer has published a good framework to help you achieve this goal.

At the micro level, it is always very important to be able to execute. At Taleo we have promoted the concept of workforce logistics. You have to be nimble enough to deliver in your situation. Fortunately today more talent management departments are being consulted prior to making global location selection decisions. So it is imperative to use a strong model to select what will be the best geography.

Cost is the obvious factor and will weight more often than the other factors, but don’t forget to take into account its fading effect over time. Typically, salary growth rates are faster in developing regions. But cost is not the only factor. As shown below, the future labor market from both demand and supply sides is very important as well.

Economic incentives can be strong as well, as shown in Ireland in the past. A factor that can have a way bigger effect than showed here is the work ethic. For jobs with long learning curves, retention is a critical cost and time to market component. As many companies are struggling today to retain quality employees in developing regions, a complete view can prepare them for the right long-term ROI of a macro decision.
But don’t forget, a good macro decision will never counter poor execution.

“The gut-feel proponents start to seem like people who eschew antibiotics in favor of good old-fashioned bloodletting.”

That was the tone of the article from Inc. Magazine’s interesting cover story about what they call the new science of hiring.

But there are tools that work and others that don’t. This article provides a good overview of the different tools that are efficient. For instance, the conventional unstructured interview is much worse than the structured interview or the behavioral interview.
But structured interviews can be improved when we combine them with assessments. According to the article, even though the assessment industry is rich with 2,500 options, it can be very effective. Especially for large organizations which have a large volume of similar positions. For instance, users of Taleo Assessment easily tailor various assessments to their companies and cultures and saw dramatic improvement in retention and quality.

Another interesting quote was the requirement made by some companies to provide 12 references!
That leads us to the most important questions: Do the tools improve business performance? What value do they create? It is not the question asked in the article: Do you believe in the science of hiring or not? We must be more focused at the real process level: What is reasonable to ask a manager to do?

After asking a manager to schedule and interview dozens of candidates, review all their tests and assessments, and speak with their references, it can be seen as too much to ask.

Technology enables managers and HR to automate much of that today. But until managers understand the wisdom of the quote below, we may see only approximate approaches:

"I think the hiring process is the most important process in business, but it's probably the least disciplined in terms of how it's executed across American business."

IDC performed a survey at the Taleo WORLD conference in May 2006 and compiled their results into a new survey called “Talent Pulse Survey”.

Two key learnings for us: (1) retention is a key concern and (2) competencies are well used among Taleo customers.

To the question: “Which of the following issues are you most concerned about regarding your workforce of the future?” — retaining top talent was the #1 issue.

Many Taleo customers have responded to improving retention by implementing Taleo Workforce Mobility to facilitate the mobility of internal talent. They (56%) nevertheless also are concerned about the impending labor shortage.

The good news is that close to 40% of the organizations responding use competencies for all positions and 32% use them for select positions. Another 21% plan to implement competencies.

We have covered here before how competencies are in fact the foundation of a good talent management strategy. Taleo has historically spent much more time developing competencies than many other vendors and offers skills and competencies embedded in the solution. The high results coming from the survey (even surprising the IDC analyst) are a good testament of the hard work done in this area.

AMR Research announced their annual review of the On Demand enterprise application market share and growth projections. An AMR research analyst says:

“Software-as-a-service is on fire, making sure that strong overall growth continues for the next several years.”

They see the customer relationship management (CRM) and the human capital management (HCM) markets as the fastest growing enterprise application segments with projected growth of 10% for 2006. This may look slow compared to Taleo’s growth rate above 20%, but it’s very fast compared to traditional ERP at 3%!

2006 looks like a turning point for SaaS. Not only will enterprise software move towards on demand, but desktop applications as well. We saw Google acquire Writely for online word processing and release Google Spreadsheet while the Microsoft Live product suite went beta.

Maybe it’s time to dust off the NC (network computer) announced 10 years ago by Sun and Oracle. With on demand online software, that thin client approach could become a reality tomorrow!

The Economist Intelligence Unit and DDI have produced a report called “The CEO’s role in talent management” based on 20 interviews of CEOs and COOs of $1B+ companies worldwide.

The conclusion should be a motivation for HR people: “The management of a company’s pool of talent is now too important to be left to the human resources (HR) department alone and has become the responsibility of the top executive.”

All 20 leaders said that it was their responsibility and 30% said they spent up to half their time on talent management.

The CEO’s view of talent management included: identify potential; psychological testing and performance assessment centres to determine capability gaps; training and development programs, relocations, project work, and job experience to accelerate development.

“However, few of the executives appear to have a strategic approach to talent management of the same rigor as other business planning processes.” An interesting point I noticed is that the importance of 360-degree feedback seems to be stronger for non-US companies, as out of the five CEOs mentioning doing it, four were non-US.

But why are CEOs all of a sudden spending time on talent management? According to the Economist, two factors largely account for this: “the shift in focus towards intangible assets such as talent” and “increased board scrutiny in relation to both ethics and performance”.

But what is the role of HR if it is not the sole owner of talent management? All of the interviewees say that HR departments are responsible for:
1. Executing talent management strategy.
2. Being custodians of the talent management process.
3. Providing guidance and fresh thinking about talent management programs.

Where to start? As you have seen, many processes must be tackled, but a constant seems to appear when CEOs start to think about talent management. They think about recruiting and internal mobility & development as the starting points.

As many leaders strive to optimize organizational performance, many are turning to talent management. We’ve seen references on this blog to the many aspects of an optimized talent supply chain. But we’ve also seen that there is often a disconnect between what leaders or people in charge of policy development believe and what the employee population are looking to achieve.

The latest Gallup panel poll of 540 adults showed another very important aspect of job satisfaction that re-affirms best of class talent management practices.

To the question: “What do you particularly like about your job?”, the first category of answers that came out was not related to salary or benefits—they were #s 5 and 14. What came on top was “Doing what suits me best/fulfilling” at 18%; “Interacting with the public/helping people” at 15%, and “Freedom/flexibility to do job my own way” at 13%.

In other words, as social beings we like the interaction and feeling that what we do is helpful to others, but we want to be doing it in a way that is flexible and gives us the freedom to best organize our time.

But above all, and this is where talent management best practices come first before organizational structure, people want to be doing the job that is right for them. That is the role of talent selection and deployment: assist the individual to find a niche where they can not only be the most productive for the organization, but also the most personally fulfilled, working in the career that’s the best fit!

If you are involved in global talent management, you must ask yourself this question even if you don’t always want to admit it: “Where is it the least costly to hire, employ, and fire?”

We were pleased to see the World Bank report: “Doing business in 2006 – Creating Jobs”.

So here is the answer on the table below where the hiring cost indicator measures all social security payments (including retirement fund; sickness, maternity, and health insurance; workplace injury; family allowance; and other obligatory contributions) and payroll taxes associated with hiring an employee.

Hong Kong has an average cost of hiring at 5% of salary, US is at 8%, UK 9%, Portugal 24%, France 42%, Belgium 55%, Australia 21%.

What about the cost of firing?

The firing cost indicator measures the cost of advance notice requirements, severance payments, and penalties due when dismissing a redundant worker, expressed in weekly wages.

Hong Kong firing cost is 13 weeks salary, UK at 34 weeks, Portugal 98 weeks, France 32 weeks, and Belgium 16 weeks.

This question was asked to the staffing.org respondents of their 2006 survey.

For organizations, the #1 rank was given to technology. #4 was branding. #7 contingent workforce management. #2 was still the job board selection!
Outsourcing was #6.

Here are more key Q&As:

What was the metric that organizations will focus next year on? It’s quality with 58%. Time was second with 23%.

Are they planning to reduce their budget for next year? About 15% will reduce and 28% will increase.

For the job seekers (879 employed in Internet technology, research and development, product development, and sales professionals), one key pain point was well above all the others: provide good communication and follow up.

Our friends at Staffing.org have released their 2006 Staffing Performance Report on staffing metrics. It’s a good read for anyone trying to get benchmarks and many other interesting data.

For years we supported their emphasis on quality of hire; it should be the #1 metric that any organization measures. However, today only 40% of organizations have some measure of quality.
I won’t speak more about this as we already push enough hire quality on this blog: here.

There are other great metrics that add a bit more context and meaning, including a new way to calculate cost per hire. This better approach is to make a ratio out of it and divide the cost per hire by the average compensation recruited. This gives the recruited cost ratio. This year it is 14.8% with about an equal spilt between internal and external spend. The ratio varies greatly by industry from about 8% to about 23%.

The only metric we do not fully support is the way they measure time to start and prefer to make a ratio out of it. The ratio is actual time to start divided by contracted time to start. Why don’t I support it fully? Because most of the requisitions are needed tomorrow. And if it can be good to set the expectation to the hiring manager for a specific time (as we have seen with a couple of organizations), it lowers the expectation for the recruiting department. What they see as success is to meet the expectation, not to go as fast as they can.

In the previous posting we looked at how Google changed the Job Search industry. Today we will consider how Taleo and other similar talent management tools will change the Job Search industry.

As much as we saw three criteria yesterday, we believe in this case, that one core reason will prevail: quality of applications and hire.

Talent management software like Taleo enables something very powerful: knowing which source brings the most applications, short listed candidates, and hires. Once you compare this with your spend, it gives you, the employer the power to know which source is the best for which job.

We saw several employers starting to use it to its full power, but it is just the beginning of a tidal wave. This is often an ROI argument not even used for the implementation of a talent management solution, but it is in fact more than we think it is.

It has been already used to produce the new industry of referral tools like Jobster and H3. As referral is often the #1 source of new employees in many companies, it was only natural to focus on it.

So as search relevance for job seekers was critical for individuals, candidate relevance for employers is just as critical. It is a two-sided effort and the best matching tool from both the candidate and employer perspectives will win!

A couple of years ago, everyone was saying the game was over for the search industry. Yahoo! was declared winner and Excite, AltaVista, AskJeeves, and the others were far behind…until Google.

What was the difference? How about improved search relevance, simpler user interface, and a new business model.

In the job board or job search market today the big declared winner has been Monster, until…well, time will tell. Which factors will cause a transition, if any?

Lately the vertical job search we see a similar pattern as in pure search. Search relevance seems to be the first area that everyone attacked. Originating with the idea of DirectEmployers, today’s vertical search is everywhere. From simplyhired and Jobster to HotJobs and the recent relaunch of Monster’s flip dog

But from the user prospective, search relevance is not only the number of jobs available.
The interesting different approaches start with careerbuilder.com that approaches search relevance with their job recommendation engine, and Jobster with their social network approach. Jobster connects the concept of Vault or Wetfeet to the vertical search.

User interface is not always seen on the top of the list, except for simplyhired and indeed. Just compare their home page to Monster and you will get the feeling.

The last but most critical factor for long term success is the business model. There we have not seen any new strays from the traditional game. The only one we saw was covered in a previous posting we made here.

What has been learned from Google? Don’t sleep on your laurels.

The traditional metrics used in talent management are often either around performance or about talent acquisition.

While in Sydney with the growing Taleo user community in the Southern Hemisphere, we reviewed the metrics that they monitor today. Comparing this to a couple of years ago, we see a great improvement in the precision that all organizations can achieve today.

Our recommendation for years has been to take into account these five key principles when selecting metrics:
1. Business Alignment
2. Actionable
3. Consistent
4. Time Trackable (internal benchmark)
5. Peer Comparisons (external benchmark)

The most important thing for us is after you have made sure you are aligned with the business, you must make sure that those metrics are actionable. Today, tools are not the issue anymore for controlling the process. The key thing is what you DO with those data.

Root cause analysis is the tool that will lead you to the greatest impact. Take the time to do it.

When we were in Singapore, we were invited to an official ceremony called “A Memorandum of Understanding” between bodies representing two sides of the organization that often don’t really understand each other.

The SHRI (Singapore Human Resource Institute) and the ACCA (largest international accountancy body with 110,000 members and active in more than 170 countries) signed a Memorandum of Understanding. This summit meeting between HR and Accounting was engineered by an ex-head of HR that was trained as an accountant first and understood both sides.

An interesting remark was spoken during the introduction by Allen Blewitt, CEO of ACCA. He said that one of their studies revealed that female entrepreneurs tended to perform better. One explanation he suggested was probably the fact that females in general are better people managers!

Again this is the beginning of a trend that we see appearing. Some universities have started to provide programs to educate people across the board. Take for example the Exeter University program where ACCA played an active role.

We believe that when the finance profession starts to understand the levers of values that HR and specifically talent management are providing, they will only have one option: devote more attention to talent management!

Prior to asking this question, it is also good to ask: what is engagement? In a study done in Singapore, 86% understood it as job satisfaction and 80% as commitment to work. But only 62% as being productive or 13% as working hard.

So that begs these next questions: Is engagement enough? In other terms, as an employer is it enough for me to use it as a talent management metric?

We don’t believe so. It lacks one fundamental element: effectiveness.

So we created this 2x2 describing that indeed the best performers to have and work with are engaged and effective or an “engaged achiever”. But as a manager, to choose between an empty promoter and a cynical performer, I go with the latter anytime!

We are getting ready to speak at the SHRI Forum 2006 conference in Singapore on “Managing Talent for Maximum Performance”. The theme of this event is Engaging Your Workforce. Maybe it’s a reaction to the successive studies which have shown that engagement rates in Singapore are some of the lowest in the world!

I have been reviewing the literature on engagement and it is clear that superior engagement means better performance for the organization.

So organizations should strive to engage their talent as much as they can.
But what exactly is the impact? According to Gallup, it costs Singapore and its population of about 4 million people, billions of dollars in productivity loss.

We found a short intro by ISR that describes the impact on your margin:

Tomorrow we will ask the question: Is engagement enough as talent metric to monitor your business?

Often in the quest of finding the best talent, we are lured towards new tools that promise we will get even the most passive candidates. We often forget that a passive candidate is not synonymous with a good match.

A good match is way more important. So we decided to build a view of sourcing practices around two axes: X= Accuracy of Match and Y=Passive/Active.

What is the best practice for sourcing? Your new experienced recruits. Why? They are the most trusted sources for their ex-colleagues. Because everyone knows who the top performers are once you have worked together for a while.

Referrals at large can be a hit or miss and an organization’s resume databases are a powerful source if they are well structured such as Taleo’s Talent Master.

All talent departments are doing exit interviews. But how many are doing welcome/sourcing interviews?

Reminding yourself of the basics is always good. Peter Cappelli from The Wharton School where he heads the Center for Human Resources gives a simple though not simplistic reminder in a recent article from HR Executive magazine.

The key question all HR leaders are asking themselves: How can I become a peer with the decision makers in my company? In other words, why am I not at the table as well?
The answer to this question is another question: Do you know the HR related issues that impact the business goals set by those leaders?

Cappelli suggests three examples:
• “What will the culture of the company be?
• “How will we get key players in the company to buy into our goals?
• “How do we find and develop the type of talent that is of concern to the company leaders?”

That reminds us of a discussion with an executive one day where he was saying his organization’s talent is critical. But when asked how HR was helping him with that, he looked surprised and said that was not HR’s role.

So maybe we should pause and ask ourselves two more questions: Do we know what matters to our leaders? Do we know what matters and where we should be involved?

Korn Ferry asked onboarding related questions to their global panel of executives. They found that only 30% of executives are satisfied with their onboarding process.

The question has always been: How much is at stake? Is it a big deal?

It is always hard to get an accurate answer for the cost of bad onboarding. We created a model in our research (Onboarding: Speeding the Way to Productivity) to explain it as shown below.

The key view takeaway from the Korn Ferry survey is that executives count the time it takes not in weeks or days—but years. 87% said it was more than one year and 54% said it takes more than three years to be fully productive!

Onboarding is a big deal!

SHRM has just released their 2006 Job Satisfaction study.

Satisfaction is an important goal for organizations to reach as it has been shown that profitability, productivity, employee retention, and customer satisfaction are linked to employee satisfaction.

Often the debate is centered on what are the top five reasons to achieve superior satisfaction among our employees. This is often the wrong debate. The way to impact employees satisfaction lies within a variety of programs. The most interesting question for us is to understand the disconnect of perception of what is important for the employee versus what HR believes is important. This is the key as HR owns the organization of programs to improve employee satisfaction. It’s also where the slips will happen.

The gap analysis we performed on the SHRM data is normalized to take into account the relative importance of the different factors. The analysis shows some very interesting disconnects.

The absolute top five factors for the employees were compensation/pay, benefits, job security, flexibility to balance life and work issues, and feeling safe in the work environment.

The story is different when we put them in the light of the gap in perceptions.
Meaningfulness of work and job variety are the two areas that employees value way more than HR can even imagine. In absolute terms, the difference is above 20%. On the other side, HR overemphasized the relationship with the supervisor and the recognition that management gives regarding job performance.

So maybe HR should stop sponsoring employee of the month programs and increase job rotation and contextualize the job meaning for their employees instead?

Sometimes people wonder why software as a service (SaaS) took off so quickly in the HR world. One of the key reasons I believe is the fact that strategic HR is a mission critical function, but is rarely supported enough by IT.

In the latest Taleo Research paper, “The Gap between IT and Strategic HR in the UK (free download)” this disparity is shown very clearly. Of course payroll and administrative HR are covered for the most part. But when you look at workforce planning, performance management, recruitment, and internal mobility; only less than a third of organizations estimate that they are adequately supported.

But it is not new to have a long laundry list of things that we want to improve. The question is most often: Which one will we tackle first? To the question of priorities, most respondents selected Employee Communications. And Talent Management was in second place, way above any others!

A recent survey by HR Executive magazine of 156 HR people showed the often obvious flaws in the performance rating process as it is done today.

Everyone but 7% in the organizations responding to the study met or exceeded expectations!

We all agree that positive feedback is more motivating than a negative performance report, but to say that 93% of the employees at these organizations are exactly on track or performing better than average seems a little unrealistic to me.

The major flaws reside in the fact that we link performance ratings to compensation. Nobody want to hear about their weaknesses if it means they are to be paid less! The second reason is the fact that we don’t like confrontation and presenting negatives in front of colleagues.

With 72% of performance management not yet automated, we see this as an opportunity to improve and integrate a tool into the talent process that could deliver much more business value.

A recent survey of 502 HR people by Spherion showed that over the past five years, usage of screening and assessment have been increasing by over 50% on average.

Recently, the reasons for increased use have been believed to be security issues—and of course they have played a role. But even as the scarcity of quality workers becomes more acute, the productivity of hiring managers comes under increased pressure. Any time spent on administrative activity is becoming more costly. The true reason we believe for the increased use of screening and assessment is quality.

But it is also simple ROI: What is the point of spending several extra expensive hours of management time in the interview process if you have to reject a majority of those applicants anyway for lack of compliance to your screening standards? Maybe the process should be revisited and you should use automated assessment and screening tools that will pay for themselves by increasing manager productivity!

The companies listed in the Deloitte Fast 500, which annually ranks the fastest growing companies, came with a report of what their CEOs called “2006 Technology Fast 500 CEO Survey Results”. Taleo has been part of the Deloitte Fast 500 for a few years now and the results are music to our ears.

High-quality employees is the main mantra for this year with 66% of CEOs listing this as the most important factor to contribute to the growth of their company by far. Last year, only 24% cited this factor!!

As a consequence, 41% say the most important operational challenge had been to find and retain qualified employees (up from 27% last year). This is clearly the #1 issue and far ahead of any other!

Did we say that leading organizations are using Taleo to solve this challenge?

We recommended using Return On Workforce (ROW) in our previous posting. Now let’s focus specifically on the “People Business”.

We looked in the past at the good work that the BCG did on the workonomics of the “People Business”. Here again is a great approach to help leaders to think of what to tackle first when they think of people productivity.

The value added to an organization by people is obviously the difference between their output and their pay. But what really optimizes the output? The answer: a competent and motivated workforce that has assets in support and optimal utilization.

At Taleo, we focused first on optimizing the long term impact that some decisions make around competence and capacity, such as skills and talent, hiring, attrition, and promotion. Talent management is part of people management and we could even say it precedes it!

What should talent management really care about? Cost of labor, time to fill positions, job fill ratio, alignment with target, time to productivity, performance rating?

In short, all of those metrics are important. But at its simplest expression, it all boils down to one key metric: Return On Workforce (ROW). As noted below: it is the ratio of operating income divided by total labor costs (all costs including salary and overhead as well as all contingent labor).

As a generic metric, many factors will influence the calculation, so it is crucial to know how talent management affects ROW. On the cost side, we see all the main topical discussion points: offshoring, downsizing, and compensation alignment. On the productivity side, we see that skills, utilizations, and motivations are crucial.

But if you have only one metric to discuss with your C-level executives, we would go with ROW! If you want more details on this topic, you can read our article published by Accenture and called Key Metrics for Today’s Talent Economy (available online – free subscription).

We all know that talent is the fuel of business performance, but what can you do to optimize it? We’ve showed in the past that the Taleo index demonstrated stronger financial performance among companies that take talent management processes seriously. We have found similar results as well in the Cedar Crestone survey, providing more proof.

As you can see, the operating income growth is positively impacted by a full adoption of talent management applications and some examples of them are listed in table 2.

We recently read the latest Cedar Crestone report, HCM Benchmark Study. Lexy Martin did a very fine job of outlining many interesting findings in this 92-page report.

We especially liked the way she created a simple view called the HCM Blueprint:

Making the distinction is important between administrative applications (HRMS in red) and service delivery and performance focus (Talent Management in green).

In view of all of those components, the major HRMS ERP vendors (SAP, Oracle, PeopleSoft) have been making the case for years that it is way cheaper to have one unique solution to provide it all. Many organizations today, especially under the pressure of the CTO, are still under that belief. In fact, this survey shows exactly the opposite: It is cheaper to have a mix of best of breed applications than to have a huge ERP system as shown below!

Cost is one thing. But what about ROI? So we quote the last sentence of the report: “that it is those organizations with a mixed application environment that more frequently have achieved ROI than those that stay with a primarily ERP-based set of applications.”

For a long time, staffing suppliers and vendors have seen a vendor management system (VMS) as a threat. But as described in a recent article in Contingent Workforce Strategies, they are starting to see it more as an enabling tool for their customers. The most progressive suppliers are looking to integrate to the VMS in order to reduce their operational cost and hopefully gain more market share than their less proactive competitors.

Since Taleo has been a provider of a VMS solution called Taleo Contingent, it pushed Taleo Research to look at the ROI of these solutions. We published studies and have been puzzled by the lack of ownership in many large companies to this huge ROI!

The adoption growth has been slower in 2005 than before as shown below, but we believe that the recent threshold reached and supplier understanding of the value could make this market grow much faster in the future!

We were reading the Towers Perrin report recently where they were asking a very simple question: How do organizations measure success in talent management today?

Here are their answers below in percentages:

Surprisingly, we sometimes still hear that a few companies question on demand infrastructure and the software as a service (SaaS) that it delivers. If that is the case in your organization, I would send them this link to read the CIO survey by CIO Insight magazine.

Refer specifically to the question: “Where does your company stand with regard to the following new technologies?” As you can see, 31% of CIOs have already deployed a SaaS application, 14% are testing it, and 23% are making evaluations. So they are probably in the 32% that either have no interest or are unaware of the impact.

Our only question is this: why are they the exception today?

We read with great interest an article from The McKinsey Quarterly called “Strategy in an era of global giants”. Since many Taleo customers are global giants, I was positively surprised to see the high importance placed on talent management.

The key finding here is the fact that large organizations have been able to increase their net income threefold while only increasing their revenue by a factor of two between 1984 and 2004.

Some of this success is rooted in the fact that “successful mega-institutions recognize an ever more direct link between their profitability and their large professional-talent pool”.

As shown on the charts below we can see the uplift created in 2004.

We all acknowledge the value of talent. We also agree strongly with the authors stating the fact that we need a new performance metric. While they recommend profit per employee, we tend to diverge a bit and recommend operating margin over total labor spend! Let’s not forget the increase in contingent labor in the last 20 years!

For more on this important issue, see our previous posting on People Metrics That Matter and our article for Accenture: Key Metrics for Today’s Talent Economy.

The last two days in Orlando were full of unique value for all the Taleo customers that join our yearly event. It is always a good feeling to see more than 500 people so devoted to talent management congregate and exchange best practices.

Not only were many Taleo partners and Taleo experts sharing their insights, but also leading organizations such as: HP, Gap Inc., Intel, Mercer, Honeywell, JPMorgan Chase, J&J, and many others. All of them felt it was really a true privilege to be able to share talent management ideas among the best in the world!

Also it was good to see Deloitte Touche Tohmatsu rewarded by a third party jury for their incredible use of Taleo. It took the strong internal leadership of Kent Kirch to pull off their great internal mobility program worldwide.

Leadership was the topic that the conference keynotes were all about. Carly Fiorina, former CEO of HP, was an exceptionally gifted speaker who inspired our customers to lead their organizations towards new heights.

I asked Carly: “How should HR and talent management leaders present change programs to the executive suite?” She highlighted three key criteria that she was always looking for:

1. Is it relevant for the business or is it just another HR project?
2. Do you know the people in the business intimately in order to make this call?
3. Have you thought this through in detail?

Carly also discussed the value that Taleo brings to make HR become more strategic. In fact, HP was using Taleo when she was there and helped during the merger.

Yesterday morning, Ken Blanchard, the author of many books including The One-Minute Manager, was a voice of motivation towards authentic leadership. One important concept that he brought forward was that all organizations need to have clarity on their values. But more important than that was to have your values ranked in order to enable unambiguous decisions when a value conflict may arise!

In short, Taleo WORLD was two full days of many highlights. We see a bright year ahead for the hundreds of HR professionals that will return to their organizations with many fresh ideas and take talent management to a true leadership role!

Last week, I watched the documentary movie called Enron: The Smartest Guys in the Room. I think it should be a compulsory movie to watch for all MBA students and strongly recommended for anyone who works in business.

The interesting fact about Enron is that it was featured as one of the exceptional companies in the McKinsey book, The War for Talent!

Does that mean that McKinsey was another victim of the hype around a company that pulled Andersen down and put many financial institutions in an ethically questionable position?

We don’t think so. Many of the practices that they instilled were good. The problem is in the choice of the core values. We know that the key to sustain success is to have a disciplined organization based on core values. When a lack of ethical core values starts to be obbvious as portrayed in this movie, you get: electricity price and supply manipulations in California, accounting scandals, and tremendous loss of value. Let’s simplify what brought them down: greed as a core value! But being smart or talented doesn’t mean a smart guy or gal will immediately turn into a wise guy!

Values and ethical leadership are the keys to getting the most out of great talent, as opposed to talented people trying to get away with as much as they can!
At Taleo we are proud to emphasize our core values to our employees, partners, and customers:
Quality, Integrity, Passion, Humanity, Partnership, Innovation.

Several years ago, a VP of HR was telling me that their company, a member of the Fortune 500 list, was extremely bad at offering the next opportunity to its talented employees. How did he know? Exit interviews explained the issue: it was easier to find opportunities outside than inside the company!

That is exactly what McKinsey outlines in their article: “Making a market in talent”.

The paternalistic approach of the traditional succession plan should fall by the wayside and be replaced with Talent Marketplaces.

This approach is well described in the article: HR becomes a market maker!

We have in fact seen a lot of Taleo customers using many of these techniques. I invite you to read the real-world case studies at:
http://www.taleo.com/customers/case-studies.php

In conclusion, we strongly agree with the closing sentence of this article: “talent markets represent the cutting edge of resource allocation”.

We very much enjoyed the article Rethinking the Value of Talent by Jeffrey Joerres and Dominique Turcq in strategy+business.

The key idea that is very well explained here is how to think about “business critical” talent versus simple titles. This is leading savvy organizations to start thinking about talent in four general roles:

Those four roles are best explained by the authors. Here is a direct quote:
• “Creators devise and implement an organization’s distinguishing value proposition or business model. They include senior executives and the chief designer in a fashion house. These are scarce resources with skills that take a long time to acquire and are costly to develop and maintain.
• Ambassadors represent the organization’s public face and are responsible for customer experience. Among other positions, they are bank tellers, supermarket cashiers, nurses, and field installation technicians. In most cases, these workers are easily replaceable and their skills do not have to be particularly sophisticated, but if they don’t do their job well, the business can suffer significantly.
• Craft Masters ensure the quality, timeliness, and cost-effectiveness of an organization — the essential ingredients for the faultless execution of a business strategy. These are the design engineers in a high-tech business, the “nose” of a perfume brand, the whiskey blender in a distillery, and the auditor in an accounting firm.
• Drivers keep the business running. They are assembly-line operators, back-office agents, and administrative assistants. Although they are neither crucial to the success of a venture nor hard to hire, in most companies they represent the largest category of human capital, and bad management of this group can lead to operational disruption or quality problems.”

Applying these four roles will lead to a refinement in all traditional talent management metrics that will give organizations more meaningful data and less meaningless averages!

Talent management initiatives often struggle to show how important they are for the success of their company as measured by stock value. The simple reason is that they impact so many intangibles that it is difficult to show an incontestable causation. And we are not going to claim this here either.

However, we came up with a simple idea. As acknowledged in the industry, Taleo customers are as the most progressive in talent management. So we had to see if there was an impact overall in their stock performance when compared to a benchmark.

So we compiled an index comparing the companies using Taleo versus the Standard & Poor’s 500 to see if the obvious would be revealed. Here we see a widening gap between the performance of large companies that invest in people through talent management and those that do not. Therefore, we can say that talent drives superior performance.

This approach is barely new as some investment firms put it a step further and invest only in companies that invest in their people!

Here is what Lisa Rowan, Analyst and Program Manager at IDC had to say about our last study when we found Taleo client stock prices outperformed the S&P 500 by 49 percent in 2004:
“Large organizations have tremendous opportunities to increase performance through talent management initiatives. It is interesting to see the results as those in the S&P 500 – Taleo customer comparison. These findings support IDC’s research indicating that talent is emerging as a key differentiator in today’s knowledge economy.”

It has been over two years since we published our report and recommendations on quality of hire. More than ever, it has become a hot topic. If you want to see how AstraZeneca (a $24B company with 65,000 employees) put quality of hire into action, come and listen to this webcast Thursday, May 4 at 9:30 a.m. ET or 2:30 p.m. London time (GMT).

Presented by People Management magazine, this webcast will feature myself co-presenting on the topic: “Is Talent Management the future of HR?” with Tim Wood, from AstraZeneca based in the UK. The discussion will be broader than just quality of hire, but having glanced at a preview of what Tim will present, you’ll see a great example of how HR is moving away from simple efficiencies towards real measures of effectiveness!

Register now at: http://www.peoplemanagement-taleo.com

We are often asked to explain the difference between Talent Management and HR.
If we look at history, the Personnel Department changed its name at the end of the 1980s or the beginning of the 1990s and became the Human Resource Department.

What we are experiencing today is very different. We are seeing a division at the core of the human resource function. One side is becoming the transactional expert and getting more and more outsourced to efficiency houses that can run payroll like nobody else.
The other side is becoming a strategic function where it is often seen as too important to outsource and where HR consulting firms are charging big fees.

The true obstacle for people like us that truly believe in Talent Management and its multiplying effect is that it’s possible to run a company with a limited investment in Talent Management. That’s what companies managed by accountants do. We’ve heard people say in this case, “They know the price of everything, but the value of nothing.”

But it is also the way you get a lot less value out of your talent. In fact, in an economy that is becoming increasingly service oriented, it is a recipe for failure. Now you can show the numbers people some numbers. We will show you in our next posting what the market capitalization of Taleo customers has done compared to the S&P 500 after paying attention to Talent Management.

A study from Veritude presented an interesting contradiction for us. As you can see on the chart below, HR is close to last on the strategic value for an organization, but customer service is #1.

This shows again the confusion between Talent Management and transactional HR. Of course printing a check is important as is making sure that the administrative system is working well, but that is not the same as having effective talent management in place.

We see Talent Management directly impacting customer service and consequently should rank much higher in importance. Indeed, customer service is defined as: “the provision of labor and other resources, for the purpose of increasing the value that buyers receive from their purchases and from the processes leading up to the purchase.” And that article also highlights the importance that outstanding service organizations put on training and recruiting.

So our conclusion is that if HR is close to last, talent management is close to first!

For those in your organization who might be skeptical of the software as a service (SaaS) delivery model, tell them to read this recent Business Week article by Jeff Kaplan.

Read how the managing director for THINKstrategies consulting lists and debunks the eight Saas myths. Pay special attention to Myth #5. As you can see, smart companies in the market know that you can get more than CRM delivered by SaaS and are taking advantage of the time, effort, and cost savings!

We were amused by an AFP note describing the many creative ways that Indian operations are using to find new employees.

The first one was to modify the Speed Dating concept into the job fair market. In other words, you are interviewing and sometimes even extending offers on the spot!
We often suggested that Taleo users ask their candidates to apply on the spot using Taleo’s automated prescreening system. You can select who could be interviewed onsite in order to take advantage of the momentum in this unique face to face interaction! Imagine the motivation of a newly hired candidate saying: “They hired me on the spot!”

The second creative way is to deploy kiosks in malls or book stores in order to capture young programmers. That’s not too far from the party hiring practices in the San Francisco Bay Area region here during the dot-com boom. You could see job ads in movies theatres or career booths at garden shows in efforts to target the right demographics. The difference is probably a couple of years of technology improvements. Recruiters today can expect to not only reach people, but also capture their info in the same transaction!

The next war for talent announces many new creative ways to reach your targeted audience! Email us if you have the most unusual way to do it!

We read this interesting article from Forbes: Get me Personnel! Who's got the hottest job in China? The HR guy
As described in the article and seen in the experiences of many Taleo customers, China is a new growing environment. Consequently, wages in China for top HR executives of multinational companies grew 20% in each of the last two years.

The key driver according to Forbes is the cost of bad hires, especially those linked to intellectual property (IP) loss and fraud. So if you have not read Taleo Research’s latest report on background checking, you will see that it’s not only in China that we should be worried (see below)!

An updated FAQ on the new OFCCP ruling just came out.

The specific Q & A that got our attention was:

“Does a contractor "consider" an individual merely by running a (basic qualifications) search that brings up the individual's resume, if the contractor never opens the resume?
If the contractor does not open the resume as a result of appropriate data management techniques that limit the number of resume "hits" that are reviewed, then the contractor has not "considered" that individual.”

This brings us to the new definition of a resume in the electronic world. For years, we have pushed the concept that a resume or any document of unstructured information is very hard to capture, work with, and automate. So consequently, the most advanced systems like Taleo include the resume, but also way more structured data that brings the power of the matching system to a new level. It is often possible to pre-screen without opening a resume.

We won’t speculate on how this can or cannot change the ruling, but a structured competency approach is certainly less inclined to generate mistakes and should align talent management closer to the original purpose of the OFCCP rule of non-discrimination.

We were pleased to see the Saratoga April Newsletter emphasize the hidden cost of HR, especially in the staffing function in their Metric of the Month: Indirect HR.

They illustrated the point using an example of two companies in comparison. The first company has a ratio of one HR person for 120 employees and HR cost per employee of $1,200. The second has a ratio of 180 and spends $1,000 per employee.

You may think that the second employer is better off. Until you realize that all staffing costs are reassigned to the line and are not accounted for in the HR budget! We covered this topic and more in our report on ROI, but we are often surprised to see how many companies struggle to prove a 10X return because the budget is not theirs!

I hope this piece coming from Saratoga (now part of PriceWaterhouseCoopers and an entity close to the heart of many CFOs) will help to convince them.

We reviewed with interest the data provided by the CEO briefing from the Economist Intelligence Unit. This was truly a comprehensive global survey with 555 executives representing 68 countries. And two-thirds were C-level executives or board members.

Contained are both good and bad news for talent management and HR. The bad news is that they rated HR as the lowest performing business area. We can argue the issue as we want, but that is the fact.

The good news is that out of the 12 operational priorities listed, Better Talent Management Practices (using phrases like “Better recruitment, development and management of employees”) came in the top 4. Talent practices finished ahead of research & development, financial systems, supply chain, partner & supplier relationships, back office systems, and production improvement. And also way ahead of internal control and risk management.

For all of us who think in gap analysis, such as what is the most important and has the least performance should come first, we see Talent Management being #1!

“After 30 years of training, I am increasingly convinced that hiring is more important than training”
Stephen R. Covey, Author of The Seven Habits of Highly Effective People

Earlier this week, we were moderating a panel for the HCI track on Global Talent Sourcing. (If you missed it, we are running a similar topic next week live at the HCI conference).

First, the debate focused on the term “Offshoring” because it sounds a bit too Western-centric. Kent Kirch from Deloitte prefers to use “Global Sourcing” as it is more reflective of a global aspect of usage of talent and does not reflect on a “side of a shore.”

Another area of specific interest was the view of the panel on the total cost of putting some of your workforce in growing countries such as China and India. The key message was: do not limit your accounting at just a straight cost comparison. As is often done, we compare the costs of one engineer in India and one in Silicon Valley and we see potentially 80% of savings. But this view is incomplete because it ignores the lack of soft skills and management skills that increase the total cost. In short, a one to one salary equivalence is often too simplistic.

Finally, one area where we see global talent management strategic value not used enough today is helping management in their global talent deployment decisions. These key HR decisions should be based on several business drivers -- but most importantly -- on the availability of global skills. In other words, analytics and workforce planning will drive the truly successful global talent management strategies going forward. Are you ready?

We have not commented a great deal about the perception of Taleo (TLEO) and the talent management space by the public market. As you may know a quiet period is very restrictive and Taleo observes a very strict line of conduct.

But today is different. There are no more restrictions. As we see financial analysts expressing their views on the talent management space, we can comment.

I would say it is easier to comment on their views than to pick one word (Buy, Neutral, or Sell) to sum up the status of a whole company or even an industry.

Because Taleo is the only public pure play software as a service (SaaS) talent management provider with good organic growth, it does not make a financial analyst’s task easier. Like any value assessment, they have to find comparable companies within the talent management space.

Of course, all vendors that sell software using a SaaS model look at salesforce.com selling CRM and observe the nearly 13 times revenue market capitalization and wish they could get there.

We were pleased to read Mark Verbeck’s review of Taleo, as Mark has been following the space for a while. Mark understands the tremendous value of the SaaS model and articulates the benefits very well: “The bottom line is this model makes the software company more responsive and devoted to customer success while simultaneously improving the effectiveness of the software company in developing and maintaining its applications.”

That is why we believe SaaS will only grow from here like many others.

An interesting survey by Veritude seems to show that HR measurement of ROI went down significantly from 2005 (38%) to 2006 (20%). If you need a place to start in developing your ROI analysis, read our report.

If you believe it’s not needed, think twice!

It is interesting to see Microsoft jumping on the talent bandwagon by saying that people are the most important asset of your business. Of course, their point is to make sure that you have the right software tools to empower your people, so they announced (press release here) their “People-Ready” business vision with a website and white paper.

Steve Ballmer spoke last week in New York (webcast here) and here are some of his views:

“Successful businesses succeed based upon on the quality and the performance of their people. Successful businesses make a practice on trying to hire the very best in every job in their business…these companies, I would call them People-Ready businesses.”

We can’t agree more with his ideas:

“We start with a few kind of fundamental premises, people drive outcomes, it's people that develop customer relationships, it's people that will drive innovation in process, in products, in services for your companies. It's the people who build the connections with your business partners and trade partners in this increasingly flat world. And it's people who improve operations.”

Of course, Microsoft is right to say that you need the best business productivity software tools for your people to do the work. But we would complement and preface their new message with this: you need the best people to do the best work and that is only possible if you support a talent management centric strategy at your organization. To truly be People Ready, you need more than software, you need the right people! To prove this, we tried an experiment at home and offered a new laptop running Microsoft Office to our baby. Although she had access to the finest technology, she did not achieve any meaningful results for us, other than looking cute. Joke aside, remember that technology alone is an empty promise. Make sure you put talent first!

We always like to read the yearly study that Mark and Gerry at CareerXroads put together on hiring: CAREERXROADS 5TH Annual Sources of Hire Survey.

As it’s outlined, the study is only based on 24 companies, so it can only be seen as anecdotal, but we found some interesting data to consider.
• 18% of the labor force is contingent (temporary or contractor).
• The average requisition load is 140 requisitions per year per recruiter.

We summarized their findings of hires by source in the chart below:

We enjoyed reading the paper from Mercer Human Resource Consulting and Harvard Business School Publishing called “Tempered by Fire: Where HR Is. Where It Needs to Go.”.

This paper was based on meetings held with 65 HR leaders from multinational firms.
Why was it a pleasant read? Because it provided many clear statements of where the talent management industry is going and what challenges HR professionals are facing. Here a couple of non ambiguous discussions:

The debate on outsourcing is over, outsourcing has won! The debate is now more about how much to outsource and what skills are required to manage outsourcers.

“The war for talent is back, but it looks different.” What will be the core HR function in five years? Almost everyone put talent management at the top of the list.

The core disappointment of all those senior practitioners was around HR as a decision science. I see this as the origin of the frustration about giving HR a seat at the executive table and being perceived as more strategic over the years.

In straight talk, HR as we knew it is dead. Only an analytic driven talent management function will stop those endless discussions about proving your value and getting the seat you deserve.

Is your organization ready? Are you ready?

Tomorrow, Taleo Research will release a new report on background screening practices in US large companies. You can download the full report here. We are not only covering the findings in this report, but also recommending key best practices.

The big surprises are that 57% of companies think they should be doing a better job of background screening. Also, 27% of organizations experienced a major problem —workplace fraud (10%), employee theft (10%) or workplace violence (7%) — that might have been prevented at the point of hire during the background check.

The most interesting finding for me was that only 29% of companies have ever run an audit of their current screening provider. I guess the industry is about to change with this little statement…

By the way, did I mention that today Taleo came out with an integrated background checking module called Taleo Verify for both hiring and ongoing background screening? Check out how Taleo addresses these issues here.

We all know that the industry is shifting from an off-line to an online world, from on-premise software to Ondemand software, from an advertising focused talent attraction strategy to a data mining-centric approach,... We sometimes wonder how fast and profound is the impact?

McKinsey produced a good projection of how much the classifieds have lost to the online players. As you can see on the chart, the online impact is huge; even when the jobs increased again and new competitors were present, the ad volume went down!

Hence the question for all of us as vendors or those responsible for talent management within organizations: are we capitalizing on the positive effects of these tectonic shifts such as online streamlining, the Ondemand solution platform or even data mining-centric talent management strategies?

We found it interesting to dive into the NORAS 2006 survey. This survey looks at 18,724 online jobseekers on commercial job sites in the UK.

Here are the lessons we take from it and advise organizations to take into account:

1. 10% of people had no work permit. A pre-screening tool to weed those out is important if you don’t provide relocation and don’t sponsor visa.
2. Another 10% were outside the country with a work permit. This can be a good strategy to bring hard to find skills from abroad, or bring them back.
3. 20% were senior manager or above with 2% chief executive; 5% were earning more than £100,000 ($173k or EU118k). That shows you can reach senior individuals online, so don’t be shy to post those jobs.
4. 25% are not actively looking for jobs. Again, the possibility to reach passive seeker is a reality.
5. Virtually all (87%) active seekers are visiting more than one site. And the greater percentage of seekers (35%) found those sites through a search engine. So make sure some of the spend of your sourcing budget is on search engine optimization on services such as HRSEO.
6. For jobseekers that still believe online applications are not working: 68% obtained an interview, and 62% obtained a job as a result of an application posted online. Persistence pays,…

Have you wondered which countries are most affected by the talent shortage? Manpower surveyed 33,000 employers across 23 countries, and here is the list we compiled:

Ever wonder what are the hardest jobs to fill?

1. Sales Representatives
2. Engineers
3. Technicians (primarily production/operations, engineering and maintenance)
4. Production Operators
5. Skilled Manual Trades (primarily carpenters, welders and plumbers)
6. IT Staff (primarily programmers/developers)
7. Administrative Assistants/Personal Assistants
8. Drivers
9. Accountants
10. Management/Executives

Another study about the aging workforce came out from Ernst and Young. 70% of the survey respondents have a title of VP of HR or above.
The traditional programs to counter the effect of the aging workforce are all mentioned: hire retirees as consultants, phased-in retirement, mentoring,…

But what attracted our attention is the chart below: The Human Capital issues of most concern: Availability of talent (38%) and Talent management (29%) are the 2 top issues. This is especially interesting in contrast to compensation and benefits programs (7%). Obviously, if you don’t change location, offshore or outsource, there is little you can do about availability of talent. So your focus should be on Talent Management!

Every year, Fortune magazine delivers their list of America’s most admired companies. The survey is a rigorous process that The Hay Group performs based on nine key areas:
1. Ability to attract and retain talented people.
2. Quality of management.
3. Social responsibility to the community and the environment.
4. Innovativeness.
5. Quality of products or services.
6. Wise use of corporate assets.
7. Financial soundness.
8. Long-term investment value.
9. Effectiveness in doing business globally (World’s Most Admired Companies list only).
The great news, highlighted by Jason Corsello of Yankee Group is that Taleo is powering many of those companies (50% of the Top 10!).

I was on a panel yesterday with many vendors in the talent management space and we were asked to explain: “What is Talent Management?”

I was surprised by the number of people who limited their definition to what they were doing: “Talent management is performance management, incentive compensation, or talent acquisition.”

If you look at what the analysts are saying, talent management is often much broader than that and includes training and development, succession and workforce planning, and even sometimes knowledge management.

Maybe a better definition than saying what talent management does it is to look at what it impacts. Talent management impacts labor related skills and competencies and they impact business performance. In order to do this, all true talent management systems MUST have a talent repository. At Taleo, we call it a Talent Master file and it is the true core of any functionality that would evolve into any suite of products.

At a Conference Board event last week, I was asked on a panel by Row Henson, now at Oracle, “Why do you think HR has been so slow to adopt Human Capital Analytics?” I built my response on five reasons, and asked the audience if they had more, but nothing substantial came to complement these:

1. Legal: except for regulatory reasons such as EEO, there is no established business obligation to report on any broad talent issues.
2. Cultural: HR and talent management have not been historically using metrics to represent results like finance or operations.
3. Value perception and funding: many executives understand that talent is key, but often they don’t know what to ask for and do not fully understand the key value drivers, so they are reluctant to fund those initiatives.
4. Lack of standards: even if we compile some data, it is often hard to benchmark ourselves against other companies, as there is little or no common standard.
5. Technical: until now, there were very few systems that could enable good talent management analytics.

Note that I said “until now”. Many of my colleagues at Taleo would highlight our existing benchmark data, staffing metrics and scorecards that Taleo currently produces, and our soon to be unveiled unique approach to talent analytics. Let’s hope that finally overcoming technical issues (#5 above) will enable Talent analytics to become the new standard for talent management metrics.

Note: the only companies that say they report systematically to their executives were companies that adopted the balanced scorecard approach! It is time that executives wake up and notice that talent metrics are some of the best leading indicators they can have at their fingertips!

Interesting results in the 2006 DirectEmployers Association Recruiting Trends Survey conducted by Booz Allen Hamilton.

Corporate websites are working well for sourcing:
• Fifty-one percent of new hires were sourced from the Internet.
• Employer websites were the single best source of new hires in 2005, followed closely by employee referrals.

Quality and recruiting processes are improving:
• Fifty-eight percent of respondents felt that the quality of hires in 2005 had improved relative to previous years.
• Fifty-six percent of respondents agreed that recruiting technology had made the job of recruiting easier.

The Source Value Index (see below) provides an indicator of the value of a source from an investment perspective. Referrals, social networking websites, and corporate careers websites are ranked as the top three.

As for the future, most study respondents anticipate their organization relying more heavily on their own website (74%) and employee referrals (68%) as a source of applicants in 2006.

After I recently attended a wedding reception in honor of two Taleo employees who had found romance in the workplace, my inquisitive mind asked: “Is it only at Taleo that relationships are formed?”

So I did some research. According to a SHRM study released this year, 40% of people have been involved—at some point in their career—in a romance at work! Yes! 40%!

But all surprise aside, for most people, choosing a life partner is probably the most important decision in an adult life. After that, comes the choice of your career. And if working with someone helps to discover the fit compatibility between individuals for a life partnership, the same can be said for work attitude and skills.

Indeed, I often recommend that managers “test” their potential employees. Not only by using assessments, but also by letting them come into the organization as a temp or a contractor and then converting them into a full time employee – if they fit.

That is exactly what Taleo Contingent and Taleo Professional solutions enable organizations to do today. In the age of the growing free agent nation, that could end up as the best strategy for capturing rare talent.

P.S. According to the same survey, workplace romance is dropping the negative stigma that was associated with it in the past. And as long as the courtship and relationship proceed in a civilized, harassment-free, professional manner within HR guidelines and are aligned with organizational objectives, then why not? So who will be the next couple in your workplace?

It is always interesting what comes out of this huge gathering of very influential politicians and business leaders at the World Economic Forum. As in 2000, one session contained the word talent in the title. This year that title was “The Global Talent Tap”. Perhaps the theme didn't evolve from the “War for Talent” of the 2000 forum, as The Global Chief Executive Officer of PricewaterhouseCoopers, USA, noted that in his 30 years of experience, he has never seen such an incredible shortage of, or demand for, talented people.

But Talent Management is a multifaceted concept that applies most meaningfully according to who and where you are. If you are the CEO of Infosys in India that needs to recruit 20,000 people and go through 1.4 million applications, it is a number game. If you are a company in need of creative innovation in order to grow, it is a qualitative game. But all will agree with Elaine L. Chao, US Secretary of Labor who said this in a session on the jobs of the future: "The greatest challenge is investment in human capital."

But there is always a big paradox here, as highlighted by Herminia Ibarra from INSEAD: "In the 1990s, companies claimed to be investing heavily in human capital, but as soon as there was a downturn, these budgets got slashed. So, is there something different going on now?"

I believe that there is something different going on now, and this something is called visibility of financial impact of human capital investment. This is exactly what I have been invited to speak about at the Conference Board event in New York next week, see you there!

Following the Microsoft announcement a couple of months ago about Windows Live and Office Live services, today SAP had a press conference to announce their move into Software as a Service (SaaS).

For them, this action is a response to customer demand. For everyone else, it’s a great validation for all on demand providers today serving large enterprises!

Targeting large enterprises and the upper mid-market, we think that it could be a strategic hit at salesforce.com for targeting the SAP users in the upper market. This CRM solution will start at $75 per user per month. And SAP is a bit shy of offering a “hybrid” solution, or the possibility to migrate from the on demand to on premise option.

Their interesting model differentiation is called isolated tenancy versus multi-tenancy.
This approach is another sign that the solution is mainly targeted at very large organizations. The ease of implementation with the isolated tenancy model is there. But the cost savings could not be.

Anyhow, this announcement is a major move in the enterprise software market and here at Taleo we see this as good news. It provides further validation that our model is what customers are looking for.

The Society of Human Resource Management (SHRM) recently released a report on Talent Management. We like it when our customer and the most significant HR association with its over 200,000 members takes a look at what we see as the most critical factor of HR today.

With only 11% of respondents having an HR department of 25 or more individuals and 22% more than 10, the results represent mostly the collected voices of small companies.
The top four areas of improvement the respondents looked for in their talent management programs were:

(1) Building a deeper reservoir of successors at every level (28%),
(2) Creating a culture that made employees want to stay with the organization (17%),
(3) Identifying gaps in current employee and candidate competency levels (17%), and
(4) Creating policies that encouraged career growth and development opportunities (16%).

However, one interesting trend to note was that about 60% of respondents said that their budget for recruiting and development initiatives will increase over the next three years, while only 45% said the same for the retention initiative.

If you like historical data charts, read on. In the right column at the bottom of our blog under Links of Interest, we have posted historical data charts from our past research. On the Taleo Research Trend Watch page, you will find talent management data going back to 1998. Recent stats are not included, but can be found in our latest reports.

Looking back, we see how little the core issues have changed. For instance, 80% of candidates found it important or very important to have salary range information posted on a career website in 2001.

If you take a look back at the trends, you may find that the keys to successful talent initiatives today are sometimes the same. In other words, don’t forget the basics!

Enjoy the reading.

We commissioned CedarCrestone to undertake an independent survey of our customers. First the good news: 97% of our customers are satisfied with Taleo.

But this survey uncovered many more interesting results. The top five Taleo functional areas most frequently used are: Staffing Metrics Reporter, Workforce Mobility, ACE screening for top candidates, integration, and Taleo Agency.

Most of those solutions solve key business issues such as providing consistency by replacing costly and inefficient paper or email based processes. The most interesting elements are the three key values achieved: process standardization, process efficiency, and visibility into performance through metrics.

These were exactly the same value enablers highlighted in IBM’s CFO study that we covered in our 01/05/06 blog entry – Finance and HR On the Same Roadmap Going Forward – only a couple of days ago.

When we asked our customers what were the most important elements of their future talent management strategies, 59% said workforce planning, 27% succession planning, and only 23% mentioned performance management.

More details on the survey at www.taleo.com

The superiority of traditional best of breed or point solutions versus integrated ERP suites has been an everlasting debate in the industry. CIOs have heard conflicting messages from our industry for years—sometimes from the same software CEO!

At the AMR conference recently we heard SAP saying that “best of breed is dead” and Microsoft arguing that “the future will be best of breed”. But what is emerging on the horizon is a new platform concept for enterprise applications. That is service oriented architecture (SOA).

The selection of a SOA is likely going to be a big technology decision.

So what is SOA? SOA is not a product, although several vendors offer products which can form the basis of a SOA. Examples of such products include SAP NetWeaver, IBM WebSphere, or BEA AquaLogic.

A service oriented architecture is essentially a collection of services. These services communicate with each other using web services technologies such as XML, SOAP, and WSDL. We are seeing many application vendors realize the integration pain among their customers as an opportunity to have a SOA infrastructure in place to align those issues.

In fact by default you have vendors launching a SOA initiative to acknowledge the fact that point solutions must coexist. Nobody has a lead in delivering SOA and as AMR puts it: “the next four years will be marked by fierce platform wars as enterprise application and infrastructure vendors jockey to control and own the SOA platform”.

But again, as this IT shift around middleware and standards is taking place, it does answer our original question of what will prevail: best of breed.

As you are reading a blog right now, you probably know what it is. A blog is a weblog or web page where individuals express opinions and point of view on a specific topic using a diary or a journal.

Here on the Taleo Blog, we express our views on the talent management industry and the latest research. The tone on blogs is always less formal than traditional controlled marketing jargon. So a question could be: Are Fortune 500 companies using this new method of communicating?

We all know that companies like Sun Microsystems or Boeing use blogs as a general PR tool. Honeywell and Microsoft also sponsor blogs specifically for talent related issues.

But what about the rest of the Fortune 500? Are these mentioned companies the exceptions? Today you can in fact monitor how many are blogging at the Fortune 500 Business Blogging Wiki.

So if your company is reluctant to blog today, send them to this website!

# 5: The battlefield for talent will shift.

"Ongoing shifts in labor and talent will be far more profound than the widely observed migration of jobs to low-wage countries. The shift to knowledge-intensive industries highlights the importance and scarcity of well-trained talent. The increasing integration of global labor markets, however, is opening up vast new talent sources. The 33 million university-educated young professionals in developing countries is more than double the number in developed ones. For many companies and governments, global labor and talent strategies will become as important as global sourcing and manufacturing strategies."

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More details on other trends see www.mckinseyquarterly.com

Now and then we receive this question which is one variation of the statement:

“My managers don’t believe the people we are looking for are on the Internet. Is it smart for us to use that channel exclusively?”

Most of the time, those managers are wrong. Indeed, the latest Pew survey shows for the US that 83% of the people below 50 years old are using the Internet. But it gets better.

Internet use goes to 92% if you are looking for people with a college degree in any age group. And 94% of people making $75,000 a year are online.

What if you pay your people less than $30,000 a year? You still have 54% reach across all ages. Is Internet use universal? Not yet. But if you are betting on this trend and using the Internet as the main and recommended way to interact with your future employees, the answer is yes.

If your managers are still not convinced, a humorous response might be to look for the most unusual job descriptions online. These responses came over the Internet and were collected by a CareerBuilder.Com survey.

Here’s a sample of what they found:

Window washer for skyscrapers
Ocean scuba guide
Karate instructor
Lifeguard at nude beach
X-mas tree decorator

We all have a Hidden Head-Hunter (H3) in us. That is the premise of H3, a new employee referral service company.

This online referral concept is simple. You are hiring and ready to pay a referral bonus. You send me the position information using H3’s social networking technology that works like LinkedIn. If I refer you a candidate that you hire, you owe me the bonus. If I refer it to a friend in my network that finds the person, we share the amount! And H3 gets 10% on top.

What is a simple idea for this new startup that’s still in beta can possibly save a fair amount of agency costs. What are the other benefits for a small company to use H3? You are not bothered to pay each person individually. They do all the accounting for you and you pay only one bill.

Their success rate so far has been filling 10% of the positions that were posted through their network and they are targeting 33%. They targeted the SME market and with 150 customers, they seem to have made good progress. If you are a larger company and use already an employee referral system, this is a reminder that referrals are a great source of candidates.

The quote I like best (adapted from the famous JFK inauguration speech) comes from their CEO, Hans Geiskes an ex-Monster executive, and can be applied to all talent management departments when speaking to hiring managers: “Don’t ask what HR can do for you, ask what you can do for HR.”

And the answer is of course: keep those referrals coming!

Every one of us that surfs the Internet probably knows all about the small contextual paid search ads that are displayed on the right hand side of Google search results. Very few companies have been using them for talent sourcing, but Google actually posted some for their own internal needs.

As shown on the image below, this simple technique could be used by all companies and could radically change the talent sourcing industry without any acquisition for Google!

The latest IBM CFO survey that covered 889 CFOs and senior finance professionals in 74 countries disclosed an interesting roadmap for the future.

In order to transition from simply reporting historical financial data and assuring compliance to becoming more predictive and actively partnering with the business in decision making, several changes are needed.

This establishment of an agile finance organization, to a great extent, can be applied by HR leaders to building an Agile Talent Management Organization.

Agility is more than just being responsive to change. Three key actions must be delivered simultaneously: mitigate risk, improve performance, and enable growth.

Lately the HR focus in the US on the new OFCCP ruling on Internet applicant compliance – or co-employment for instance – may have made some HR leaders lean too much towards risk mitigation.

A strategic Talent Management organization sees OFCCP as only one aspect of the full spectrum. Looking only at risk will inevitably reduce you to a compliance department. Talent Management is way more and requires a holistic view. Finance faced this as well. Sarbanes-Oxley compliance put immense pressure on them.

Just like in finance, building an agile talent management model starts with a simplification and standardization of processes and technology to establish a single talent system of record with a talent master file for each individual. The second goal is a strong yet flexible analytics platform to provide immediate insight into your operations.

We believe that the on demand, software as a service (SaaS), configurable platform is uniquely designed to enable this model. A high level of configuration – as opposed to customization with the associated heavy upgrades – makes it the perfect technology infrastructure for the agile talent management model of the future.

In a recent Hudson survey of 10,000 US workers titled Why Employees Walk: 2005 Retention Initiatives Report, we found an interesting distinction that we have not seen before.

Most companies and good managers employ good people practices for increased productivity and retention. The traditional factors covered are salary, benefits, relationship with manager, work-life balance, opportunity for advancement, and training.
They ran the traditional gap analysis and the top opportunities to satisfy workers are in order within benefits, salary, and opportunities for advancement.

But like in all surveys, each individual is specific. Every successful manager must know those differences and selectively apply them individually to each employee.

The best first level distinction was the consistent higher expectation from women. Salary was ranked as very important by 87% of women versus 80% of men. Benefits 83% vs. 77%, relationship with manager 70% vs. 59%, work-life balance 77% vs. 68%, and training 57% vs. 49%.

The only exception is the opportunity for advancement. Men were more demanding with 58% vs. 51%.

This study shows the need for a high touch, specific approach to retention. To succeed at retaining your best employees, you need a flexible technology solution so you can tailor any talent management process you put in place. Why? Because we are dealing with a unique individual every time!