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!