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KPMGINTERNATIONALTimeforamoreholisticapproachtotalentriskGlobalrisksurveycallsforanewtakeontalentmanagement BetweenMayandAugust2013KPMGInternationalcollaboratedwithglobalresearchfrmBrandonHallGrouptocaptureauniquepictureotalent-relatedriskacrosstheworldspublicandprivatesectors.Morethan1200HumanResourceHRtalentlearningandbusinessexecutivesbasedacross54developedanddevelopingcountriesrespondedtooursurvey.Betweenthemtheyrepresentedgovernmentand15dierentindustries.Justoveraquarterorespondentsworkedincompanieswithmorethan30000employees.Inadditionweconductedaseriesointerviewswithasampleosurveyrespondents.Defningeectivetalentriskmanagementashavingtherightpeopleinplaceattherighttimetodrivecurrentanduturebusinessgrowthoursurveyaskedaboutthetalentriskswithinrespondentsorganizationsincludinghowthesewereperceivedandmitigated.Specifcallyourquestionsocusedonfvecriticaltalentriskcategoriescapabilitycapacitycompliancecostandconnection.Withineachcategorywelookedattheimpactleveloeachriskaswellasthecurrentmitigationeortsinplace.Inotherwordshowconcernedisyourbusinessandtowhatdegreeareyoumanagingthatconcern5CsThe5talentriskcategoriesCapacityRisksaroundthesuccessionintocriticalrolesandretentionocriticalpeopleandteams.InotherwordswillanorganizationbeabletocreateandmaintainthesizeandshapeoworkorceneededtodeliveritsbusinessplanCapabilityRisksassociatedwithbuildingtheskillsanorganizationneedstocompetenowandintheuturethebreadthanddepthoskillsandcapabilitiespresentwithinaworkorceandhowwellalignedthesearetoanorganizationsneeds.CostWhatistheriskoaworkorcebecomingunaordableWhatwillitcostanorganizationtorecruitandretainthepeopleitneedsWillitbeabletoaordtheoverallcostoitsworkorceComplianceRisksrelatingtoemployeebehaviorregulationsandlaws.Thiscategorycoversboththeneedtoensuretalentprocessescomplywithlocallawsandregulationsaswellaswhethertalentmanagementisseenasabusinesscriticalprocessoranadministrativeprocesssimplytobecompliedwith.ConnectionWhatistheriskoanorganizationstoptalentbecomingdisengagedInadditionwillanorganizationstalent-relatedprocessesremainsufcientlyjoined-upWillitbeabletosharetalentbetweenunitsinthewayitneedstoIsitabletoconnectgroupsohigh-potentialpeopletogetherAreleadersabletocreateanemotionalconnectionbetweenhigh-potentialsandthebusinessAboutthisresearch ForewordOrganizationsarecompetingortoptalentonanunprecedentedscale.Thetopicotalentmanagementandtalent-relatedriskconsistentlyranksinthetopthreeoC-suiteconcerns.KPMGs2012BusinessLeadersSurveySucceedinginaChangingWorldbasedontheviewsonearly3000respondentsacrosstheworldsuggeststhatmanagingandretainingtherightpeopleisalreadyseenasacriticalchallengebyalmostoneinourseniorexecutives.Talentrisksaresettoincreaseasglobalizationmulti-generationalworkorcesandcompetitivepressurestakeholdacrossallsectorsandindustries.TimeforamoreholisticapproachDespitetheincreasingconcernortalentissuesthisreportrevealsthatmanyorganizationstakeanarrowapproachtotalentmanagementonethatissteadilyweakeningtheirorganizationscompetitiveness.ConductedinpartnershipwithglobalresearchfrmBrandonHallGroupoursurveyomorethan1200talentmanagersexecutivesandrontlinemanagersbasedacross54countriesshowsmanytalentmanagersremainhighlyocusedontheimmediacyosecuringandretaininghigh-perormingindividualsbutattheexpenseodesigningaholistictalentmanagementsystemthataddresseswiderconcernssuchasescalatingcostsperormancemanagementconnectingemployeestotheenterpriseanddiversity.Thesurveyconcludesthatorganizationsarebeingdriventoimplementshort-termpointsolutionsignoringtheneedtoconfguretheirtalentmanagementeortsinabroadermoresustainablewayonethatalignsmorecloselywiththeirorganizationsstrategicneeds.Untiltalentmanagerstradethewarortalentsone-size-fts-allmentalityinavoroamuchmorefnelytunedandcomprehensivelyplannedapproachthatmeasurestheimpactotheireortstheywillremainstuckinanendlessstruggletopursueandretainahighperormanceewallthewhileignoringtheneedsothemanyandthewhole.MarkSpearsGlobalHeadPeopleChangeKPMGintheUK Contents03041004ExecutivesummaryIntroductionKeyfndingscapabilityandcapacityKeyfndingsconnection-relatedtalentrisksAprofleoglobaltalent-relatedrisksCapability-relatedrisksConnection-relatedtalentrisksCapacity-relatedrisks10Findings10Disengaged13Talentreviewprocesseswhereitallgoeswrong04020310 1822362737202437303816Keyfndingstalent-relatedcostDierentperspectivesAdditionalinsightsAdditionalinsightsIndustryandsectorcomparisonsComparingriskcategoriesSuccessionandcapacityplanningIdentifedrisksacomparisonooursectorsTalentriskinemergingversusmaturemarketsAnanomalyDrillingdeeperStrategicworkorceplanningManagedrisksOthergeographicalcomparisonsTalentriskbyorganizationalsize182236 Againstabackdropoglobalcompetitionortalentourreportrevealsorganizationsarepredominantlyocusedontalentrisksrelatingtocapabilityandcapacity.Thesearethetalentriskstheyaremostlyconcernedaboutandtheonestheyaredoingmosttomanage.Capabilityandcapacity-relatedtalentrisksincludealackofdepthofinternalcandidatesorcriticalrolesaninsufficientpipelineoffutureleadersdifficultiesinretainingkeypeoplealackofclarityregardingwhichrolesarecriticaltothedeliveryobusinessvalueafailuretodeveloptheskillsandcapabilitiesrequiredbythebusinessinthenearuturealackofcompellingdevelopmentopportunitiesortoptalent.BadconnectionsAtthesametimeourreportrevealstalentmanagersarerelativelyunconcernedaboutconnection-relatedtalentrisksnamelywhethertheirorganizationsmobilitypoliciesandprocessesencourageordiscouragemovementbetweencountrieswhethertheirworkforcesarecharacterizedbysuicientdiversityhowwillingbusinessleadersaretosharetalentacrosstheorganizationhowablebusinessleadersaretoengagewithmotivateandnurturebusinesscriticaltalent.Asonemanagerwithamid-sizedUS-basedinsurancecompanyputitOurcompanyspendsalototimetalkingaboutengagement.Butithasntbeenlookedattoocloselyperhapsbecausetheymightbearaidowhattheyfnd.ComplianceMeanwhilethereportrevealsmanyorganizationsareapproachingperormancemanagementorannualreviewsasbox-tickingexercisesailingtoseethisprocessasabusiness-criticalactivityorinsomecasesnotbotheringwithitatall.CostToalesserextentcost-relatedtalentrisksalsoappearovershadowedbytalentmanagersocusoncapacityandcapability.Cost-relatedrisksincludethepossibilityoanorganizationsworkorcebecomingunaordablealongwithaailuretomeasureworkorcecosteectively.SamepageThesurveyalsoshoweddierencesinopinionontalentrisksbetweenHRontheonehandandbusinessleadersandrontlinemanagersontheotherhand.ForexampleexecutivesandrontlinemanagersbasedwithinthebusinessappearlessconfdentthantheirHR-basedequivalentswhenitcomestohowwelltheirorganizationsaremanagingtalent-relatedrisks.BravenewworldFinallywhilethereportshowsperceptionandmitigationotalentrisk-relatedissuesvarieslittlebyorganizationalsizeorsectoritdoeshighlightamarkeddierenceinthewayorganizationsindevelopedandemergingmarketsperceiveandmanagetalentrisk.Comparedwithtalentmanagersinmaturemarketsemergingmarketrespondentselttheirtalent-relatedrisksweregreaterbutthattheyweremitigatingrisksrelativelyeectively.Executivesummary2Timeforamoreholisticapproachtotalentrisk Aprofleoglobaltalent-relatedrisksOurresearchrevealsorganizationsacrosstheworldcurrentlyfearandaremitigatingagainstahostoftalent-relatedrisks.ButwhichrisksaremostlikelytokeepleadershipawakeatnightWhichonesareorganizationsworkinghardesttomitigateAndwhatdoesthistellusabouthoworganizationsareapproachingtalentmanagementirrespectiveoftheirsizelocationorsectorIntroduction3Timeforamoreholisticapproachtotalentrisk Firstupoursurveyshowsrespondentsclearlyocusedoncapability-andcapacity-relatedtalentrisksbothintermsoperceptionandmitigationorisks.Capability-andcapacity-relatedtalentrisksincludedifcultyfllingkeypositionsacontinuedlossotopperormersapotentialshortalloutureleadersduetopoorsuccessionplanningandalackoclarityoverwhichrolesarecriticaltodeliverbusinessvalue.Specifcallywhenweaskedrespondentswhichtalentriskstheyperceivedasposingthebiggestdangertotheirorganizationscapability-orcapacity-relatedrisksdominatedourtop10makingupjustoverhalthelist.Capability-relatedrisksThesearerisksassociatedwithbuildingtheskillsanorganizationneedstocompetenowandintheuturethebreadthanddepthoskillsandcapabilitiespresentwithinaworkorceandhowwellalignedthesearetoanorganizationsneeds.Capacity-relatedrisksThesearerisksassociatedwithsuccessionintocriticalrolesandretentionocriticalpeopleandteams.InotherwordswillanorganizationbeabletocreateandmaintainthesizeandshapeoworkorceneededtodeliveritsbusinessplanKeyndingscapabilityandcapacityManagingyoungtalentrequiresreshthinking.Howeverinthissectoritsworththeeortastheseemployeesaredigitallyfuentandunderstandwellthatpowernowlieswithourcustomersandthatwesubsequentlyhavetomanageourdigitalcapabilitiesaswellaswecaninordertoinfuenceourcustomersincludingtraditionalmediachannelssuchasadvertising.Comingoutothistheoldergenerationdoesnowneedtoupskillthemselvesromadigitalpointoview.GlobalVPoHRataconsumergoodsgiant4Timeforamoreholisticapproachtotalentrisk Part1WhichtalentriskswererespondentsmostworriedaboutAninsufcientpipelineoutureleadersRespondentsbiggesttalentmanagementworriesrightnowConcernoverleadershippipelines.Thedataconsistentlyrankspipelineswithinthetopthreerisksidentifedirrespectiveowhetherwelookedattheissuebycountryrespondentsroleorbysizeoemployer.Meanwhileorganizationswithmorethan10000employeesrankedtheirleadershippipelineorlackoastheirgreatesttalentrisk.1CapacityAlackodepthointernalcandidatesorcriticalrolesOrganizationsareleaningheavilyonemployeeswithcriticalskillsstretchingthemtonear-breakingpointinabidtomeetgoalsinnewproductsandgrowingmarkets.Theserolesarenowinhighdemandandonthemove.Organizationswithlessthan3000peopleinparticularseethisriskascritical.2CapacityDifcultiesinrecruitingtoptalentMoreevidencetheemploymentmarketisbeginningtomoveorwardastalentmanagersturntheirattentiontohowquicklytheycanrecruitpeoplewiththemostin-demandskills.3CapabilitySalaryexpectationsocandidateswithcriticalskillsbecometoohighSalaryexpectationsamongtoptalenthavestartedtotrendupwardasolateandseniorexecutivesandorganizationswithlessthan3000employeesseemparticularlyworriedaboutthistalentrisk.4CostDifcultiesinretainingkeypeoplecapabilityriskRetainingtoptalentremainsacriticalissueormosttalentmanagers.5CapabilityAninsufcientbudgetormanaginganddevelopingtalentParticularlyconcernedaboutthisissuewerethebusinessexecutiveswhorespondedtothissurvey.InacttheyweretheonlygrouporespondentswhorankedtheoverallriskcategoryoCostastheirnumberoneriskarea.6CostSkillsandcapabilitiesrequiredbythebusinessinthenearuturearenotdevelopedHR-basedrespondentsandrespondentsworkingatorganizationswithmorethan10000employeesappearedmostconcernedaboutthisrisk.7CapabilityAlackocompellingdevelopmentopportunitiesortoptalentFearedinparticularbytalentmanagersworkingwithinorganizationswithlessthan3000employeesandbytheircounterpartsworkingintheconsumergoodssector.8CapabilityBusinessleadersinabilitytoengagewithmotivateandnurturebusiness-criticaltalentTheonlyconnection-relatedtalentrisktomakeitintotalentmanagerstop10talent-relatedears.Thedatashowsseniorexecutivesandtalentmanagersworkinginfnancialservicesearthisriskinparticular.9ConnectionManagersviewperormancemanagementtalentreviewsetc.asprocessestocomplywithratherthanasbusiness-criticalactivitiesTheonlycompliance-relatedrisktomakeitintotalentmanagerstop10worries.10ComplianceSourceKPMGInternational5Timeforamoreholisticapproachtotalentrisk Itisalsoinstructiveinthiscontexttolookatwhererespondentssaytheirorganizationisexpendingeortwhenitcomestotalentmanagement.Aglanceatthetableoppositeshowsthatthereareanumberotalentrisksthatappearinthelistotop10risksidentifedbutdonoteatureinthelistotop10risksactivelybeingmanaged.TheseareThemanagersviewperformancemanagementtalentreviewsasprocessestocomplywithnotbusiness-criticalactivitiesBusinessleadersinabilitytoengagewithmotivateandnurturebusiness-criticaltalentAninsufficientbudgetformanaginganddevelopingtalent.NishchaeSuriPeopleChangeKPMGinIndiaAcrossthedevelopedanddevelopingworldbusinessesarebattlingever-increasingcomplexityhighercostsmoreintensecompetitionmorestakeholdersnewrisksandtheneedorurthercomplianceleavingusinwhatIliketothinkoastheNewNormal.WiththishighlydynamicandchangingenvironmentasabackdropthesesurveyresultsshowthatnowmorethaneverHRpractitionersneedtodesignandimplementamuchmoreholisticstrategicapproachtotalentmanagement.Ibelievepractitionersmustbecapableobecominganimatorscapableobreathingnewlieandenergyintotheirorganizationsculturepropagatorsabletodesignpeoplepoliciesandprocessestobuildawinningculturechangefacilitatorsabletoinstillinemployeesthebeliesvaluesandbasicassumptionsrequiredortheorganizationtosucceed.MovingwellbeyondthetriedandtestedcurrentpracticesHRmustdeliverdemonstrablestrategicimpactbyconfiguringprocessesandpracticestohardwireinnovationintoanorganizationinordertogeneratebreakthroughssuchasproductinnovationonanongoingbasisusingperformancemanagementtoalignorganizationalgoalswithemployeeexpectationsdrivingdecision-makingonascientificbasisthroughtheuseofdataanalyticsincludingtheidentiicationotalentrisksusingtechnologytoencouragenetworkingandcollaborationcapturingperformancereviewscreatingworkforceprofilesandrecruitingandretainingtalentthroughsocialmedia.NewageHRpractitionersaremotivatingempoweringstimulatinginspirationalandtransormational.Theyvoicetheiropinionsquestionthestatusquoandchallengeconventionalapproaches.Growingupinaneraotechnologytheyaremoreadaptivetochange.Theyactasmentorsandencouragecollaboration.Theyhaveaninnatesenseoconfdenceandownershipothetalentmanagementagenda.ThenewHR6Timeforamoreholisticapproachtotalentrisk Inrecentyearsthebusinesscommunityhaskindofguredoutthatnotonlydotheyhaveproblemsrecruitingkeyemployeestodaybutthattheyregoingtoloseawholebunchopeopletomorrowbecauseeverybodyhasagrayhair.Whentheystartgoingtheresgoingtobequiteawhooshgoingoutthedoor.Soemployershavestartedtogetthetalentmanagementreligionthesmalleronesanyway.Thelargeonesstilldontreallygetit.HRmanagerorasmallUSnichemanuacturerWhichtalentriskswererespondentsactivelymanagingAlackodepthointernalcandidatesorcriticalroles.1CapacityAninsufcientpipelineoutureleaders.2CapacityDifcultiesinretainingkeypeople.3CapabilityAlackoclarityoverwhichrolesarecriticaltodeliverbusinessvalue.4CapacityThetotalcostotheworkorcebecomesunsustainableinrelationtocurrentrevenues.5CostSkillsandcapabilitiesrequiredbythebusinessinthenearuturearenotdeveloped.6CapabilityAlackocompellingdevelopmentopportunitiesortoptalent.7CapabilityDifcultiesinrecruitingtoptalent.8CapabilityThecostoretainingtoptalentbecomesunsustainable.9CostSalaryexpectationsocandidateswithcriticalskillsbecometoohigh.10CostSourceKPMGInternational7Timeforamoreholisticapproachtotalentrisk SigShirodkarPeopleChangeKPMGintheUSWhentalentmanagersaskwhatchangestheymostneedtomakenowinordertouture-prootheirorganizationsapproachtomanagingpeopleIadvisethemtodothreethings.Firstlywiththemostdesirablepeopleinincreasinglyshortsupplypublicandprivatesectoremployersparticularlythoseinthedevelopedworldneedtostartthinkingoutsidetheboxwhenitcomestotheirtraditionalsourcesotalent.Takingthesameapproachtorecruitingorexampleappealingtothesamedemographicsatthesameuniversitieswillleaveanyorganizationstruggling.InsteademployersaregoingtohavetobroadentheirapproachestoplugintoorexampletherelativelyyoungpopulationsthroughoutArica.ThelegacyoEuropeancolonialismmeansthiscontinenthasmanycountriesEgyptisagreatexamplethatsharedevelopedworldinstitutionsbutareullowell-educatedyoungpeoplewhodontreallyhaveanyplacetogowork-wise.Orclosertohometobecomemorefexibletotapintoskilledandexperiencedwomenlookingtoreturntotheworkorcepart-timeaterhavingtakenabreaktostartaamily.Aslongaswekeeplookingortalentinthesameplacesweregoingtohaveaproblem.Newthinkinguntappedtalentpoolsarewhatsneeded.Withsomeluckgovernmentswillrecognizethisandtailortheirimmigrationpoliciesaccordingly.Secondlyemployersacrosstheworldneedtobecomefatterinordertoencourageinnovation.Verysimplymostorganizationsarecurrentlycharacterizedbytoomanylayersbetweensomeonewithabrightideatheguyinthemailroomorthenewlygraduatedstudentandthepersonwhocanrecognizerewardsponsoranddeveloptheiridea.Employersneedtondawaytofattenworkorcestomaketheirorganizationsaplacewhereanyonecancomeorwardwithanideaandwhereeveryoneiscomortabledoingthisandknowshowtodoit.ImnotsayingdoawaywithyourRDteam.ImsayingitstimetostartlookingatRDsimplyasenablerswhohelpbringotherpeoplesideastolight.ThisisparticularlyimportantwiththeMillennialsnowenteringtheworkorce.Attheriskogeneralizingthisgenerationlackstheirpredecessorspatiencearerelativelyentrepreneurialandareverytransient.Subsequentlyitheydoubttheiremployerisinterestedintheirideastheylltakethemselvesandtheirideassomewhereelseordevelopthemthemselves.Finallycompaniesneedtostartlookingattalentasaormocurrencyessentiallyseeingtheirtalentasassetsthatcontributetoacompanysprotsandlosses.Findingawaytomeasurethevalueoeachpersonandeachteamtomeasurethevalueotheirworkandthereturnoninvestmenttheydeliver.Youneedtomeasureandshowthepointandvalueoeverypersontodocumentclearlytheparttheyreplayingindeliveringyourstrategy.Theirdirecteconomiccontributioniskeytothevalueoprojectproductorserviceresults.InthesetermsthetalentmanagementconversationneedstohappenataC-suiteleveleitherledbyabusiness-mindedHRleaderorabusiness-unitleader.Threebigchangesthatneedtohappennow8Timeforamoreholisticapproachtotalentrisk 9Timeforamoreholisticapproachtotalentrisk Anotherooursurveysmoreinterestingfndingsconcernsleadersapparentlackointerestinconnectingandengagingwiththeirtalentandwithenablingandencouragingcollaboration.Connection-relatedtalentrisksThesurveysconnection-relatedquestionsaskedrespondentshowtheyperceivedaswellasthedegreetowhichtheyweremitigatingagainsttheriskotheirorganizationstoptalentbecomingdisengaged.Inotherwordsweretheirorganizationstalent-relatedprocessessufcientlyjoined-upWasitabletosharetalentbetweenunitsinthewayitneededtoWasitabletoconnectgroupsohigh-potentialpeopletogetherAndwereleadersabletocreateanemotionalconnectionbetweenhigh-potentialsandthebusinessFindingsInthiscontextitwasinstructivetolookatwhichtalentrisksrespondentswereleastworriedabout.Thesurveyshowedrespondentsarerelativelyunconcernedaboutinternationalmobilitypoliciesandprocessesmakingitdiiculttotransertalentbetweencountriesalackofdiversityintheworkforcebusinessleadersreluctancetosharetalentacrosstheorganization.DisengagedInOctober2013TheWallStreetJournalcarriedastoryaboutGallupslatestfndingsonemployeeengagement.TheGallupresearchshowedthatacross142countriesonly13percentotheworldswageearnerssaidtheywereengagedintheirwork.Theresultsweregatheredromsurveyswith230000workersin2011and2012andGallupaskedrespondentstoidentiythemselvesasengagednotengagedoractivelydisengaged.1Otherresultsromourownresearchoercluesastowhythismightbethecase.OurresearchshowedRespondentsrankedtheriskoftheirbusinessleadersinabilitytoengagewithmotivateandnurturebusinesscriticaltalentasatop10criticalriskplaceditinthetop10risksthatwerebeingleastmanagedseeAppendix.Respondentstoldustheywereworriedabouthowemployeesseetheirleadershipbutnooneisdoinganythingaboutit.Only33percentofrespondentsfelttheirbusinessunitleaderswereincentivizedtosharetalentacrossorganizationsorthebeneitothebusinessandthetalentseeminglyatoddswiththeinclusionodevelopmentretentionandseveralotherrelatedrisksinthetop10risksrespondentsweremostworriedabout.Although60percentoforganizationseeltheirbusinessleadersdoplayanactiveroleintoptalentprogramsover35percenteeltheydonot.Keyfndingsconnection-relatedtalentrisksNowadaysyoungpeopleenteringtheworkorcewanttobemoreagileinthewaytheyareallowedtooperate.Whethertheyreonthejobornottheywanttobeconstantlypluggedintoworkviatechnologyyetbeallowedtomanagetheirworkintheirownway.Inadditionmanyothemareuninterestedinalongcareerwiththesameemployer.Andtheyrelookingtobepartoanorganizationwithameaningandpurposethatgoesbeyondsimplythefnancials.GlobalVPoHRataconsumergoodsgiantSourceTheWallStreetJournalsAtWorkbusinessblogOctober2013.10Timeforamoreholisticapproachtotalentrisk Part2Alackoclarityoverwhichrolesarecriticaltodeliverbusinessvalue.8Alackoworkorcediversity.4Employeerelationshinderratherthanhelptalentmanagementprocesses.3Talentmanagementprocessesbecomenon-compliantwithlocalregulationorexampledataprotection.1Internationalmobilitypoliciesandprocessesmakeitdifculttotransertalentbetweencountries.2Businessleadersreluctancetosharetalentacrosstheorganization.6BusinessleadersandHRtalentteamsinabilitytoworkeectivelytogethertomanagetalent.7Thetotalcostotheworkorcebecomesunsustainableinrelationtocurrentrevenues.9Thecostoretainingtoptalentbecomesunsustainable.10Aninabilitytodefnethenewskillsorcapabilitiesthatwillbeneededbythebusinessinthenearuture.5WhichtalentriskswererespondentsleastworriedaboutComplianceConnectionComplianceCapacityCapabilityConnectionConnectionCapacityCostCostSourceKPMGInternational11Timeforamoreholisticapproachtotalentrisk LauraCroucherPeopleChangeKPMGinCanadaAreseniorleadersabletoengagewithmotivateandnurturebusiness-criticaltalentAretheseemployeesabletomovearoundorganizationsinawaythathelpsthemdevelopandremaininterestedintheirworkAndcanhigh-perormingemployeesconnectandcollaborateinawaythatdrivesinnovationWhiletalentmanagersseeminglyspendalototimetalkingabouttheseandotherconnection-relatedtalentrisksourresearchstronglyindicatestheyareactuallypayingonlylipservicetotheseproblems.Thisissomewhatshockingconsideringhowwellestablishedthepositivecorrelationisbetweenengagedemployeesandsatisedcustomersandbetweenengagedemployeesandproductivity.AterallyouwouldneverhearaCEOsaytheywereunconcernedbyhowconsumersperceivetheirbusinesssbrand.Yetattheendothedayitisyourpeoplewhoaredeliveringyourbrandintoyourmarketdayinanddayout.Theyretheoneswhoshapeconsumerperception.Astheworldglobalizesasvirtualworkorcesbecomemorecommonandaswemovedeeperintoaknowledgeeconomyorganizationswillcomeunderincreasingpressuretoconnecttheirpeople.InadditionGenerationYthegenerationenteringtheworkorcenowisallaboutconnection.Connectionistheirmantrawhetheritswantingtoworkoraleadertheyunderstandabrandtheybelieveinorconnectingtotheiremployerinawaythatallowsthemtoworkfexiblyenoughtosuittheirpreerences.Employerswholeverageconnectionwellandharnessitarethereoregoingtounlocksignicantcompetitiveadvantage.CompanieslikeMicrosotoeragreatexampleowhatthisneedstolooklike.Thatcompanyinvestsinenablingcollaborationbetweenhigh-perormingemployeeswithproductivityrisingexponentially.Alternativelyailingtomanageconnection-relatedtalentriskswilldrivealototalentoutoyourorganizationorcingyoutoootanever-increasingrecruitmentbill.AttheendothedaytobereallysuccessulinleveragingtalentownershipotalentmanagementneedstoextendbeyondHRandhaveeverybodyintheorganizationthinkingabouttalent.Disconnectedorganizationsfaceever-increasingrecruitmentcostsDoleadersplayanactiveroleintoptalentprogramsYes60No35Idontknow5SourceKPMGInternational12Timeforamoreholisticapproachtotalentrisk TalentreviewprocesseswhereitallgoeswrongOursurveyalsoaskedrespondentshowtheirorganizationsviewedperormancemanagementakeyengagementdriver.Specifcallythesurveyaskedabouttheextenttowhichmanagersviewedperormancemanagementonlyasaprocesstocomplywithratherthanabusiness-criticalactivity.Theresultswereinterestinglendingweighttothesurveysrevelationabouthowlightlyorganizationscurrentlyviewconnection-relatedtalentriskssuchasengagementcollaborationandinternalmobility.OntheonehandthesurveyshowedthatHRandbusinessleaderssharedtheviewthatpoorperormancemanagementwasacriticalriskthatwasnotbeingmanagedeectivelyatallcallingitoutasarealchallenge.Howevertheissuealsoturnedupinthesurveyslistothetop10talentrisksrespondentswereleastworriedabout.Whenweaskedhowotenseniorleadershipteamsspenttogetherormallyreviewingtalenteachyearapproximately40percentorespondentsstatedtwoormoredaysperyearandmorethan20percentstatedthattheylackedaormaltalentreviewprocess.Inadditionwealsoaskedrespondentsabouttheeectivenessotheirtalentreviewprocesses.Only39percentoorganizationshavetalentreviewprocesseswhereleadersstayactivelyinvolvedthroughouttheyear.Theother58percentorespondentssaidthattheirorganizationseitherhadnotalentreviewprocessesorthattheirleaderstakenoactionorlosemomentumoncetalentreviewshavebeenconcluded.DoesyourorganizationsformaltalentreviewmeetingsresultindevelopmentplansforwhichleaderstakeresponsibilityWedonthaveaformaltalentreviewprocessYesandleadersremainactivelyinvolvedthroughouttheyearNoveryfewactionsaretakenasaresultofthetalentreviewprocessIdontknowYesbuttheytendtolosemomentumsoonaftertheformaltalentreview7433983Diversitydoesnthave100percentbuy-infromeveryoneinthiscompanyButwithoutsomebodyfromthetopreallydrivingaccountabilityitsgoingtostruggleanddisappear.GlobalVPoHRataconsumergoodsgiantSourceKPMGInternational13Timeforamoreholisticapproachtotalentrisk RuthSvenssonPeopleChangeKPMGintheUKThesurveypresentedtwosignicantsurprisesinrelationtoperormancemanagement.Firstlyitseemsmanymanagersseeperormancemanagementmerelyasaprocesstocomplywithoraboxtotickratherthanabusiness-criticalactivity.Secondlythesurveyindicatesalsothatmanyorganizationsactuallylackaormalperormancemanagementprocess.Fromtheperspectiveoeectivetalentmanagementthisissomewhatworrying.Whenperormancemanagementprocessesarerunbadlytheyeatupmanagementtimecreateendlessprocessandormsandintheendleavepeopledisappointed.Butwhenusedproperlyperormancemanagementdrivesupemployeeengagementencouragesthereefowoeedbackandideasincreasesretentionenhancescomplianceguidesemployeedevelopmentandimprovesproductivity.Aterallsittingdownwitheachotheirdirectreportsseveraltimesayearoersmanagersanexcellentopportunitytoimproveanemployeesunderstandingowhatisexpectedothemincludingwhattheyneedtodotodierentiateyourorganization.Inadditionperormancereviewsespeciallywhenconductedregularlyprovidemanagerswiththeperectchancetocorrectpoorperormancebeoreitaectsthecompanysbottomline.Andiamanagermustreanemployeetheemployeesperormancereviewwilloerproothattheyknewtherewasaproblemincasetheychallengethetermination.Finallyhigh-perormingemployeescanusetheirperormancereviewtoagreetonewgoalsratherthanbeingtemptedtotaketheirtalentselsewhere.Organizationsmissingamajoradvantagearoundperformancemanagement14Timeforamoreholisticapproachtotalentrisk TimPaynePeopleChangeKPMGintheUKIwasdisappointedbutnotoverlysurprisedtodiscovertalentmanagersarerelativelyunconcernedbybothalackofdiversityintheirworkplaceandbyhowwelltheirorganizationwasdealingwiththeproblem.Intermsofthethinkingaroundtalentmanagementitsnowprettywellestablishedthatdiversityisanimportantissue.Andpubliclyatleasteveryoneclaimstobeconcernedaboutit.Askaboutdiversityinisolationitisseenasimportant.Yetaskaboutdiversityinthecontextofothertalentissuessuchasgrowingcapabilityandmanagingcapacityanditslipsdownthelistofpriorities.Thedatastronglysuggeststhatamidtheusualday-to-daybusinesspressurestalentmanagersaresomewhatstubbornlycontinuingtoseetheirpurposeandrolethroughanoutdatedtraditionallenscapableofseeingonlyonesideofthestoryandonesideofthesolution.Eitherthatoritisseenassomeoneelsesproblem.Ibelievetakingameaningfulstanceondiversityandinclusionbackedupbymeaningfulactionwillincreasinglybecomethedifferentiatingfactorintheongoingwarontalentdrivenpartlybyregulatorypressureandpartlybymajortalentshortages.MythbustingGivingthelietodiversity15Timeforamoreholisticapproachtotalentrisk WhatistheriskoaworkorcebecomingunaordableWhatwillitcostanorganizationtorecruitandretainthepeopleitneedsinfveor15yearsWillorganizationsbeabletoaordtheoverallcostotheirworkorcesAretalentmanagersevenmeasuringworkorcecosteectivelyOursurveyshowedanapparentconcernabouttalent-relatedcostwithtwocost-relatedissuesappearingwithinthetop10talentrisks.Specifcallythesewereunsustainablesalaryexpectationsofcandidateswithcriticalskillsaninsufficientbudgetformanaginganddevelopingtalent.Howeveronceagainitisequallyinotmoreuseultotakealookatwhatrespondentssaidtheywerenotworriedabout.SpecifcallytheywereunconcernedaboutthetotalcostotheworkorcebecomingunsustainableinrelationtocurrentrevenuesthoughUS-basedrespondentswereconsiderablymoreworriedaboutitthanthoseoutsidetheUS.Ourdatafndsthatmanybusinessesdonoteventracktherealcostotheworkorceasakeymetric.Over62percentoforganizationseitherdonttracktotalcostoworkorceatallortheyuseitonlyinalimitedscopeandthisdidnotchangedramaticallyorcompanysize.Keyfndingstalent-relatedcostUsingtotalcostofworkforceasakeymetricNoYesextensivelyIdontknowYesinalimitedscope24382711Aterthreetofveyearsacollegegraduatewillleaveus.Itusedtocostapproximatelyhaltheirsalarytotraintheirreplacement.NowitsprobablyclosertoUS350000.Thatsatremendousamountomoneyyouregoingtohavetospendiyoudontwanttohiretherightpersonandthentokeepthemengagedandmotivatedtocontinueworkingoryouanddevelopingthemselveswiththegoaloprogressingthroughyourcompanyinsteadooutthedoor.E-learningmanagerontheretailsideoamedium-sizedUS-basedspecialtymanuacturerSourceKPMGInternational16Timeforamoreholisticapproachtotalentrisk Part3PeterOutridgePeopleChangeKPMGinAustraliaWithsalaryexpectationstrendingupagainitwasunsurprisingtoseetheresearchshowtalentmanagersworriedaboutrisingworkorcecosts.Howevertheresultsindicatetheyrenotnearlyasconcernedastheyoughttobegiventheextenttowhichloomingtalentshortageswillsoonrenderworkorcecostsunsustainableormanyorganizations.OursurveyfndingsromaUS-basedclientisindicativeothedirectionotravel.Untilaewyearsagotheorganizationwouldspendapproximatelyhalagraduatessalarytotrainareplacementwhenthegraduateletthecompanyaterfveorsixyears.NowthatfgureisclosertoUS350000.Atpresenttalentmanagersappeartobeapproachingworkorcecostsrommerelyashort-termperspectiveandonethatsoverlyocusedoncapacityandcapability.Yetromacostperspectiveitwouldbebettertotakeabroaderapproachthatalsoconsidersconnection-relatedtalentriskssuchasemployeeengagementandcompliance-relatedtalentriskssuchashoweectivelytheyretacklingperormancemanagementtherebydrivingdownattritionstrengtheningtheiremployerbrandsandultimatelyreducingoverallcosts.Aterallitsgoingtobeagreatdealmorecost-eectivetoengagedevelopandprogressemployeestothepointwheretheywanttokeepworkingoryouthanitistoseethemwalkoutthedoor.Meanwhiletalentmanagersmustbecomebetteratmeasuringcosts.ThismeansbecomingmoreconfdentwithanalyticstothepointwhereanHRmanagercanreportontotalworkorcecostsincludingthecostsoretrainingtonamebuttwoexamplesasopposedtosimplyhowmuchthepayrollisincreasing.HRmanagerssimplyarentlookingorandconveyingtothebusinesstheinsightthatisavailableromacloserinspectionothenumbersandtotalworkorcecosts.Risingcostscallforbroadermoreanalyticalapproach17Timeforamoreholisticapproachtotalentrisk Oursurveyshowsthereislittlevariationbyorganizationalsizeorsectorwhenitcomestowhattalentrisksrespondentsmostworryaboutorareactivelymanaging.HoweverwhenitcomestoattitudesandperceptionsoHRleadersontheonehandandexecutivesincludingCEOsaswellasrontlinemanagersontheothersomecleardierencesemerge.ComparingriskcategoriesThesurveyshowedexecutivesandrontlinemanagersweremostconcernedaboutcost-relatedtalentriskswhileHRleadersweremoreconcernedaboutcapacityrisks.Meanwhilewesawevengreaterdierencesinthethreegroupswhenaskedabouthoweectivelytheyeltthevariousriskcategorieswerebeingmitigated.OverallHReltthatallareaswerebeingmitigatedmoreeectivelythanbothexecutivesandmanagersexceptworkorcecost.Additionallywesawaslightdierenceinthetotalaverageriskratingoeachgroup.Specifcallyrespondentsintherontlinerolesthoughtthatriskshadahigheraverageriskrating3.07outoapotentialmaximumo5thanHR2.9orexecutives2.87.Differentperspectives3.153.203.253.303.353.403.453.503.553.603.65HRExecutivesBusinessleadersPerceivedaveragetalentriskmitigationlevel3.583.383.3PerceivedaveragetalentriskmitigationlevelThisdataisbasedonaveragestoaive-pointscale.Halapointdierenceisequivalenttoa1020percentdierenceinperceptiongiventhesamplegroupsdistribution.Scale1Notmanaging2Identifednoplanstomanage3Planstomanage4Managingandseeingprogress5ManagingandmitigatingriskSourceKPMGInternational18Timeforamoreholisticapproachtotalentrisk Part4CapacityCapabilityCostConnectionComplianceBusinessleadersHRExecutives3.543.853.563.833.553.503.633.703.353.353.233.042.913.133.17PerceivedlevelofriskimpactbyrolesPerceivedlevelofriskmitigationbyrolesDifferentperspectivesBusinessleadersvs.HR2.53.03.54.0CapacityCapabilityCostConnectionCompliance3.293.093.093.173.103.212.953.203.142.672.482.442.692.572.982.53.03.54.0SourceKPMGInternationalSourceKPMGInternationalThisdataisbasedonaveragestoaive-pointscale.Halapointdierenceisequivalenttoa1020percentdierenceinperceptiongiventhesamplegroupsdistribution.Scale1Notmanaging2Identifednoplanstomanage3Planstomanage4Managingandseeingprogress5ManagingandmitigatingriskScale1Notmanaging2Identifednoplanstomanage3Planstomanage4Managingandseeingprogress5Managingandmitigatingrisk19Timeforamoreholisticapproachtotalentrisk DrillingdeeperWhenwedelvedevendeeperintothedataweoundthedierencesbetweenHRandrontlinemanagersperceptionsoriskwereparticularlypronounced.HRrespondentsweremoreconcernedaboutrisksrelatedtocapabilityspecifcallyinsufcientleadershippipelinesandalackodepthointernalcandidates.HRrespondentsalsoeltthatacrosstheboardrisksidentifedwerebeingwellmanaged.ThisperceptionwasnotmatchedbybusinessleaderswhoeltthatalmostallriskswerebeinglesseectivelymanagedthantheirHRcounterparts.Meanwhilerontlinemanagerseltthatoveralltalentriskswereabiggerconcernthantheothergroupsspecifcallyrankingthecapabilityrisksconcerninginsufcientleadershippipelinesandalackodepthorinternalcandidatesashigh.Theyalsoeltthatalmostalltheriskswerebeinglesseectivelymitigated.HoweveroneriskthatHRandrontlinemanagersagreedwascriticalyetverypoorlymanagedcenteredonperormancemanagementnamelythatmanagersviewperormancemanagementasaprocesstocomplywithratherthanabusiness-criticalactivity.BothrontlinemanagersandHRrespondentsagreedthiswasariskthatwasbeingmitigatedverypoorly.OverallHRhasthehighestleveloconfdenceintheirorganizationstalentriskmitigationlevelscomparedtoexecutivesandrontlinemanagers.Thisisarealconcernasitbringsintosharpocustheactthatrontlinemanagersarestrugglingtoeelapositivereturnromtalentmanagementeorts.Thisurtherreinorcesthelong-standingcredibilityissueHRaceswiththebusinessnotalwaysseeingthevalueotheircontributions.20Timeforamoreholisticapproachtotalentrisk PatriciaMolinoPeopleChangeKPMGinBrazilWhenitcomestoperceptionsotalent-relatedriskwhydoHR-basedtalentmanagersdierromtheirexecutiveandsenior-levelequivalentsIbelievethisdisconnectiscausedbytwosignifcantshortcomingsonthepartoHR.FirstlyHRcontinuestotakeapredominantlyprocess-andtransactional-ocusedapproachtotalentmanagementanapproachitmusttradeoronethatsmuchmoreclearlyalignedwithitsorganizationsstrategicobjectives.SecondlyandsubsequentlyHRmustbecomemuchbetteratmeasuringthevalueoitsworkdemonstratingaclearreturnoninvestmentwhenitcomestoshowinghowitsworksupportstheorganizationsstrategy.InanageincreasinglyengagedwithbigdatamostHRteamsatleastunderstandthepotentialvalueoHRanalytics.Yettheycontinuetooeronlygenericandbasicoperationalandtransactionalmeasurementsmetricsthatprovidelittleinthewayostrategiccorrelationsoradditionallypredictivedataoractualinsightsthatcouldhaveapositiveimpactontheirorganization.EssentiallyHRscurrentapproachtotalentmanagementremainsanchoredinthepresentandinthepast.ItsconcernedwithwhatsgonebeorewiththeexistingworkorceandwithitsorganizationsimmediateprioritiesratherthanprovidingtheC-suitewithtangibleintelligenceaboutwhatsgoingtohappenintwofveor10yearsandhowtheorganizationshouldbereactingtothesechanges.HoweverdierencesoopiniontoonesideitsalsoworthpointingoutthatbothHRandbusiness-basedtalentmanagersaretakingtoonarrowanapproachtotalent-relatedrisk.Irrespectiveohoweachgrouprankseachkindotalentriskbothremaintootightlyocusedoncapabilityandcapacityandtoalesserextentcostandcomplianceattheexpenseoothercoretalentmanagementprioritiessuchasemployeesabilitytoconnectwithleadershipandwitheachotherinawaythatimprovesengagementandcollaborationorenablesinnovationorexample.Untilalltalentmanagersdiscardtheircurrentone-size-fts-allmethodologyinavoroabroaderapproachthatsmorecloselyalignedwiththeirownorganizationsuniquestrategicneedstheywillcontinuetostruggletomovetheirpeopleagendasorwardandwillwitnessthecontinuedweakeningotheirorganizationalcompetitiveness.HRandbusinessleaderswhatsdrivingthedifferenceofopinion21Timeforamoreholisticapproachtotalentrisk AdditionalinsightsSuccessionandcapacityplanningThenumberoneriskidentifedbyrespondentswasaninsufcientpipelineoutureleaders.Thiswasalsorankedasthesecondhighestriskwhichwasbeingactivelymanaged.Incontrastwhenweaskedorganizationshoweectivetheircurrentsuccessionplanningprocesseswereover39percentoorganizationsstatedthattheyeitherhadnosuccessionplanningprocessorthattheirexistingprocesswasnotatalleffective.Only26percentoforganizationselttheirsuccessionplanningwasextremelyorveryeective.Notsurprisinglyorganizationsunder3000employeeshadthegreatestdifcultieswiththeirsuccessionplanningprocess.Over46percentofthemelttheirsuccessionplanningeortswerenoteective.Incontrast36percentoforganizationsover10000employeeselttheirsuccessionplanningprocesseswereveryorextremelyeective.EffectivenessofsuccessionplanningWedonothavesuccessionplansNotatalleffectivelistswithnoactionSomewhateffectivelistswithregularactionVeryeffectivesuccessionplanningdiscussionsExtremelyeffectiveactivelyworkwithsuccessorsIdontknow2118322063SourceKPMGInternationalTimeforamoreholisticapproachtotalentrisk22 Part5Criticalrolesflledwithinternalcandidates26222010913Lessthan2526to5051to7576to90Morethan90IdontknowFurtherinterrogationothedatarevealedthatthosewithextremelyeectivesuccessionplansweretwiceaslikelytobeeffectivelymanagingtheriskothetotalcostotheworkorcebecomingunsustainablethreetimesmorelikelytobemanagingtheriskothecostotoptalentbecomingtoocostprohibitivethreetimesaslikelytousetotalcostoworkorceasakeymetrictwiceaslikelytofeeltheyhaveanadequatebudgetortheirtalentmanagementneedstwiceaslikelytoexpecttheywillreceiveanincreaseintheiroveralltalentmanagementbudget.Incontrastthosewithoutsuccessionplansweretwiceaslikelytorespondthattheyconsideredalackocompellingdevelopmentopportunitiesortoptalentasahighrisk.Furthermore25percentorespondentswhodonthavesuccessionplansinplaceindicatedthattheythoughttheirtalentmanagementbudgetswouldbereducedinthenextyear.Eectivesuccessionplansarealsotightlyconnectedtotheextenttowhichrespondentsindicatedhowmanycriticalrolesareflledwithinternalcandidates.Morethan43percentotheorganizationssurveyedwerefllingover50percentotheircriticalroleswithinternalcandidates.Companysizedidntmaketoomuchoadierenceinthisquestionwithorganizationsover10000employeeshavingonlyaslightlyhigherpercentageointernalplacementsovertheotherrespondents.SourceKPMGInternationalTimeforamoreholisticapproachtotalentrisk23 StrategicworkforceplanningWhenweaskedrespondentsabouttheirapproachtostrategicworkforceplanningensuringthattheyhadtherightpeopleandskillstomeettheirbusinessgoalstheywerenotveryoptimistic.Over64percentoftherespondentshavenomeaningfulworkforceplanninginplaceortheyonlyplanforasmallgroupofcriticalroleswithintheorganization.Inthiscontextcompanysizedidnotmakeabigdifferencewithcompaniesover10000employeesjustslightlymorelikelytoconductdetailedworkforceplanning.Ontheotherhandwhenweaskedorganizationsabouttheireffectivenessatassessingthecriticalskillsandcapabilitiesoftheirworkforceakeyelementofeffectiveworkforceplanningwesawdramaticdifferencesincompanysize.Over28percentofallorganizationsdonotassesstheiremployeesonaregularbasisforongoingdevelopment.Fororganizationswithfewerthan3000employeesweseethisjumpto34percentoftheorganizations.Wealsoseethatonly11percentoforganizationsfeeltheyareextremelyeffectiveatassessingcriticalskillsandcapabilitiesassessingemployeeseverysixto12months.Forsmallorganizationsthisreducesto4percentoftheresponses.NostrategicworkforceplanningBasicapproachSimpleapproachDetailedapproachComplexapproachIdontknow722352574ApproachtostrategicworkforceplanningSourceKPMGInternationalTimeforamoreholisticapproachtotalentrisk24 WedonotconductregularassessmentsNotatalleffectiveForspecicprojectsorprogramsweassessSomewhateffectiveEverycoupleofyearsweassesssomeemployeesVeryeffectiveEverysixto12monthsweassessallleadershiprolesandtracktheminemployeeprolesExtremelyeffectiveEverysixto12monthsweassessallemployeesandtracktheminemployeeprolesIdontknow15132929113EffectivenessofassessingcriticalskillsandcapabilitiesofworkforceSourceKPMGInternationalTimeforamoreholisticapproachtotalentrisk25 DrMichaelGekePeopleChangeKPMGinGermanyAbusinessprocessdesignedtoensureorganizationshavethetalenttheyneedoruturebusinesssuccessstrategicworkorceplanningoersanextremelypowerultoolormitigatingcapacity-andcapability-relatedtalentrisks.Itisperhapssurprisingthenthatevenwiththebiastowardcapabilityandcapacityrevealedbythisresearchthevastmajorityoorganizationscontinuetoignorethepotentialostrategicworkorceplanninginsteadinsistingonmakingplansortomorrowbasedonthepeopletheyhaveandthesituationtheyareintoday.Iwouldestimatethatatpresentonly10to15percentoorganizationsacrosstheworldhaveimplementedorbeguntoimplementstrategicworkorceplanningwithonlyahandulactuallyreachingmaturity.MostorganizationshaveyettobeginthejourneyhistoricallyheldbackbypoorqualityHRdatadispersedacrossdierentsystemsalackotechnologyrequiredtoruntherightsimulationsandbyaninabilityomanyHRmanagerstospeakthesamebusinesslanguageastheirstakeholders.Allthisischangingasthowever.ResearchbyKPMGin2012showedveryclearlythatstrategicworkorceplanningisnowatoppriorityormanyexecutives.AsarasIcanseeahugeamountocompaniesarerightnowwakinguptoitspotentialandaretakingtheirfrstewstepstowardadoption.Theywontfndthejourneyadifcultone.Ateralleectivestrategicworkorceplanningisactuallyveryeasytoimplement.Attheriskoover-simpliyingorganizationscanachievethisgoalsimplybysecuringsomerobustworkorcedatathencombiningitwiththecorrectapproachandtechnologyinrelationtotheirworkorcesimulations.Thatsitreally.AppliedcorrectlystrategicworkorceplanningwilldeliverinarelativelyshorttimewhathasuntilthepastewyearsremainedtheHolyGrailotalentmanagementadata-drivenquantitativeinsightintotalentrisksthataccuratelyhighlightsexactlywhereorganizationsneedtoinvestinordertoflltheirskillsgapstomorrownextyearandin10yearstime.ClosingthecapabilitygapTimeforamoreholisticapproachtotalentrisk26 TalentriskinemergingversusmaturemarketsThesurveyshowedamarkeddierenceinthewayorganizationsindevelopedanddevelopingmarketsmanagetalentrisk.Developedcountrieswereequallyconcernedaboutcostcapacityandcapabilityrisks.Perhapssurprisinglydevelopedcountryrespondentsalsohadtheleastleveloconfdenceintheiroverallmitigationeortsocompliance-relatedtalentrisks.Bycontrastrespondentsbasedinhigh-potentialmarketselttheirtalent-relatedrisksweregreaterbutalsoelttheyweremitigatingriskseectivelyunlikedevelopedmarketrespondents.Inadditionhigh-potentialrespondentsalsoelttheirhighesttalentriskswererelatedtobuildinganddevelopingcapability.Duringthenext10yearsweexpect70percentoourgrowthtocomeromdevelopingandemergingmarkets.Onthisbasisanotheroourbiggesttalent-relatedworriesrightnowiswhetherornotwehavethequalityandquantityodevelopingworldtalenttomakethishappen.Converselyourdevelopedmarketsappearfatwithlimitedprospectsorgrowthorcingustoconsiderwhetherweshouldactuallybeworryingalsoaboutourleadershippipelineinthesemarketsasmuchaswehaveinthepast.GlobalVPoHRataconsumergoodsgiantTimeforamoreholisticapproachtotalentrisk27 3.03.03.53.54.04.02.02.02.52.5CapacityComplianceConnectionCostCapabilityAverageriskimpactlevelAverageriskmitigationlevelHighriskhighmitigationLowrisklowmitigationDevelopedcountriesScale1Notmanaging2Identifednoplanstomanage3Planstomanage4Managingandseeingprogress5ManagingandmitigatingriskThisdataisbasedonaveragestoaive-pointscale.Halapointdierenceisequivalenttoa1020percentdierenceinperceptiongiventhesamplegroupsdistribution.3.03.03.53.54.04.02.02.02.52.5CapacityComplianceConnectionCostCapabilityAverageriskimpactlevelAverageriskmitigationlevelHighriskhighmitigationLowrisklowmitigationHigh-potentialcountriesSourceKPMGInternationalTimeforamoreholisticapproachtotalentrisk28 PeterOutridgePeopleChangeKPMGinAustraliaWithemergingmarketeconomiesgrowingastmanymultinationalsseetheirbestbetorgrowthinBrazilRussiaIndiaandChinaBRICandincreasinglysouth-eastAsiaSouthAricaandTurkey.Atthesametimedemographictrendsmeanthesecountrieswillalsosoonprovideabigchunkotheglobaltalentpool.Neverthelessmultinationaltalentmanagersapproachingemergingmarketsmusttreadcareullyinthewarortalent.Tobeginwithcultureisking.SoiyouhaveaprojectinIndonesiayoumightbetemptedtollagapinyourteambyfyinginsomeoneromSingapore.YettheculturaldierencesbetweenmostAsiancountriesareessentiallyquiteextremeandfyingsomeoneromoutsideIndonesiamayormaynotgodownverywellwithyourIndonesiaprojectcolleagues.ItsnotthesameasgettinganAustralianorexampletogoandworkintheUKorCanadawiththosethreecountriessharingacommonculturalheritage.FromatalentmanagementperspectiveAsiasverydiverseculturesaddaninterestingcomplicationtothetalentmanagementchallenge.Secondlymanagingtalenteectivelyinemergingmarketsotenrequiresorganizationalstructuresandcareerpathsthataremorealignedtoculturalvaluesthanwemightbeusedtointhedevelopedworld.ForexampleinIndiaprogressionthroughjobtitlesandrankisanimportantpartothecultureonethatrunsdirectlycountertomaturemarkettrendstowardfatterless-hierarchicalorganizations.Asalwaystheanswerwillprobablyliesomewhereinthecenter.Thentherestheactthatremunerationprogramsmustrefectalocalesparticularandotenrapidlychangingexpectationsandnorms.Whatworksinamaturemarketmaynotgodownthatwellelsewhere.Finallyemergingmarketproessionalstendtoprizecompanieswithgame-changingbusinessmodelsofferingopportunitiestohelpdeveloptheirnationandtheworldeconomy.Inasimilarveintheyarealsoattractedtocompanieswithastrongandpreerablylocallyocusedcorporateresponsibilityagendaasmanyotheseproessionalsmayhaveexperiencedoratleastbeentouchedbyrelativepovertyrsthand.ManagingtalentinemergingmarketsTimeforamoreholisticapproachtotalentrisk29 CompaniesintheAsiaPacifcregionhavealongwaytogotounderstandingwhateectivetalentmanagementis.AsiaPacifcgeneralmanagerataglobalprovideroperormanceknowledgeandlearningsolutionsOthergeographicalcomparisonsWhenitcomestotalent-relatedriskhowdoemergingmarketscompareOuranalysiscomparedhowtalentrisksandeortsatmanagingthemwereperceivedinvariouscountriesandregionstheUSAsiaPacicexcludingIndiaIndiaBrazilWesternEurope.SimilaritiesOnthisbasiswesawplentyosimilarities.TheseincludedtheriskofaninsufcientpipelineorutureleadersoneothetopthreerisksoreachotheabovegeographiestheriskofalackofdepthforinternalcandidatesorcriticalrolesellwithinthetopthreeprioritiesorourothefvegeographieswithonlytheUSmovingitdowntoaprioritylevelosixconnection-andcompliance-relatedtalentriskselltothebottomotheprioritylistscomingtorestbesidetherisksobusinessleadersinabilitytoengageandmotivatecriticaltalentandmanagersviewingperormancemanagementonlyasacomplianceactionratherthanabusiness-criticalactivitytheriskofdifcultiesinretainingkeypeopleanddifcultiesinrecruitingtoptalentweregenerallyseenasequallydifcultbyrespondentsexceptinIndiawhereretainingtoptalentwasperceivedasahigherrisk.WesternEuropeincludesBelgiumDenmarkFranceGermanyIrelandLuxembourgNorwayPortugalSwedenSwitzerlandandtheUK.30Timeforamoreholisticapproachtotalentrisk AllrespondentsUSAsiaPacifcexcl.IndiaBrazilIndiaWesternEuropeAninsufcientpipelineoutureleadersAninsufcientbudgetormanaginganddevelopingtalentAninsufcientpipelineoutureleadersDifcultiesinrecruitingtoptalentAninsufcientpipelineoutureleadersAlackodepthointernalcandidatesorcriticalrolesAlackodepthointernalcandidatesorcriticalrolesSalaryexpectationsocandidateswithcriticalskillsbecometoohighSalaryexpectationsocandidateswithcriticalskillsbecometoohighAlackodepthointernalcandidatesorcriticalrolesAlackodepthointernalcandidatesorcriticalrolesAninsufcientpipelineoutureleadersDifcultiesinrecruitingtoptalentAninsufcientpipelineoutureleadersAlackodepthointernalcandidatesorcriticalrolesAninsufcientpipelineoutureleadersDifcultiesinretainingkeypeopleDifcultiesinrecruitingtoptalentSalaryexpectationsocandidateswithcriticalskillsbecometoohighDifcultiesinrecruitingtoptalentThetotalcostotheworkorcebecomesunsustainableinrelationtocurrentrevenuesDifcultiesinretainingkeypeopleSalaryexpectationsocandidateswithcriticalskillsbecometoohighAlackocompellingdevelopmentopportunitiesortoptalentDifcultiesinretainingkeypeopleDifcultiesinretainingkeypeopleAninsufcientbudgetormanaginganddevelopingtalentSalaryexpectationsocandidateswithcriticalskillsbecometoohighDifcultiesinrecruitingtoptalentAninsufcientbudgetormanaginganddevelopingtalentAninsufcientbudgetormanaginganddevelopingtalentAlackodepthointernalcandidatesorcriticalrolesThecostoretainingtoptalentbecomesunsustainableAninsufcientbudgetormanaginganddevelopingtalentManagersviewperormancemanagementtalentreviewsasprocessestocomplywithnotbusiness-criticalactivitiesDifcultiesinretainingkeypeopleSkillsandcapabilitiesrequiredbythebusinessinthenearuturearenotdevelopedAlackocompellingdevelopmentopportunitiesortoptalentAlackoclarityoverwhichrolesarecriticaltodeliverbusinessvalueAlackocompellingdevelopmentopportunitiesortoptalentSkillsandcapabilitiesrequiredbythebusinessinthenearuturearenotdevelopedSalaryexpectationsocandidateswithcriticalskillsbecometoohighAlackocompellingdevelopmentopportunitiesortoptalentManagersviewperormancemanagementtalentreviewsasprocessestocomplywithnotbusiness-criticalactivitiesDifcultiesinrecruitingtoptalentBusinessleadersinabilitytoengagewithmotivateandnurturebusiness-criticaltalentAlackocompellingdevelopmentopportunitiesortoptalentBusinessleadersinabilitytoengagewithmotivateandnurturebusiness-criticaltalentBusinessleadersinabilitytoengagewithmotivateandnurturebusiness-criticaltalentThecostoretainingtoptalentbecomesunsustainableDifcultiesinretainingkeypeopleManagersviewperormancemanagementtalentreviewsasprocessestocomplywithnotbusiness-criticalactivitiesBusinessleadersinabilitytoengagewithmotivateandnurturebusiness-criticaltalentSkillsandcapabilitiesrequiredbythebusinessinthenearuturearenotdevelopedManagersviewperormancemanagementtalentreviewsasprocessestocomplywithnotbusiness-criticalactivitiesBusinessleadersinabilitytoengagewithmotivateandnurturebusiness-criticaltalentSkillsandcapabilitiesrequiredbythebusinessinthenearuturearenotdevelopedSkillsandcapabilitiesrequiredbythebusinessinthenearuturearenotdevelopedBusinessleadersreluctancetosharetalentacrosstheorganizationManagersviewperormancemanagementtalentreviewsasprocessestocomplywithnotbusiness-criticalactivitiesTop10risksbycountry12345678910CapacityCostCapabilityConnectionComplianceSourceKPMGInternational31Timeforamoreholisticapproachtotalentrisk NhlamuDlomuPeopleChangeKPMGinSouthAricaForbusinessesineverysectorAricaoersexcitingprospects.Thepastdecadehasseenslowandsteadyeconomicgrowthacrossthecontinent.Andnowamidabackdropoincreasedpoliticalstabilityallingpublicdebtanddecliningdiseaseaggregateannualgrowthisexceeding5percentwhilethecontinentscollectiveGDPforecastisUS2.6trillionby2020.BoastingabundantnaturalresourcesAricas1billionpredominantlyyoungconsumersareexpectedtobuyUS1.4trillionworthogoodsandservicesin2020.Neverthelesscompaniesmovingintothecontinentwillincreasinglycomeupagainstasevereshortageoskilledproessionals.Neitherthegraduatesromlocaluniversitiesnorthesteadilyincreasingstreamoreturningexpatswillmeetdemand.InsomeoAricasmostresource-richcountriessuchasAngolaitiscommonorexecutivestolastonlymonthsinarolebeoremovingontoanothercompanyatamultipleotheirprevioussalary.SowhatshouldbusinessesexpandingintoAricabeawareowhenitcomestotalentriskandtalentmanagementCapacityandcapabilityIncreasinglybusinessesareattemptingtocountertheskillsshortagebytakingahomegrownapproachtocapacityandcapability.Specifcallysomecompaniesaredevelopingtheirowntalentbyinvestingtheircorporateresponsibilitybudgetsintodedicatedbespokeeducationprograms.Oeringawin-wintheseprogramstrainyounglocalpeopleintheskillsengineeringandfttingorexamplemostrequiredbythecompany.ProvidingvisibleevidenceobusinessescommitmenttoAricaslonger-termdevelopmenttheprogramsareusuallycomplementedbyinvestmentsinschoolingsystemsanduniversitiesandsupportorcareullyidentifedtalentedstudentsbeoretheyevenleavesecondaryschool.Connection-relatedtalentrisksMeanwhilebusinessesusingreturningexpatstoflltheirtalentgapsshouldbesensitivetotheactthattheseproessionalsotenexperiencesomedegreeocultureshockwhenitcomestotheirnewemployersapproachtotalentmanagement.Forexampleproessionalsjoiningstate-ownedbusinessesasopposedtothelocalbranchoamultinationalcaneasilybecomedisengagedintheaceounamiliarremunerationregimesorapproachestosuccessionplanning.Andirrespectiveotheemployermanyreturningproessionalsareotendisturbedbypoorsocietalsaetystandardsorbysubstandardinrastructuresuchasschools.ComplianceFinallyAricaissometimescharacterizedbymuchmoretightlyregulatedlabormarketsthanbusinessesmaybeusedtooperatingin.SouthAricaoersagoodexample.Herethelawobligesallemployersinnouncertaintermstocomplywithdiversity-basedhiringquotasastipulationthatcanleaveless-diverseemployeesrustratedanddisengaged.ManagingtalentinAfrica32Timeforamoreholisticapproachtotalentrisk HowaretalentrisksperceivedineachothesegeographiesUSFortheUScost-relatedtalentrisksappearcriticalwithrisksrelatingtoinsufcientbudgetsortalentmanagementandconcernsaboutcriticalcandidatessalaryexpectationsrisingtothetop.AlthoughUS-basedrespondentssawleadershiprisksascriticalthisriskdidalltothirdplaceintheirprioritylist.Wethensawrecruitingandretainingriskstakeprecedenceoveraconcernoralackodepthointernalcandidatesorcriticalroles.Bycontrastthelatterellwithinthetopthreerisksoreachotheotherourgeographies.BrazilBrazilwastheonlyareatopushdifcultiesinrecruitingtoptalenttothetopoitslistoidentifedrisks.AsiaPacifcexcludingIndiaAsiaPacifcwastheonlyareatoincludeourcost-relatedtalentrisksamongitstop10risks.Italsowasoneotheewareastonotrankconnection-orcompliance-relatedtalentriskswithinitstop10.IndiaConnectionandcompliancerisksweregenerallynotseeninthetopfveoallrisksaresultthatappearsalsoinourgeographicbreakoutsexceptorinIndiawheretheriskomanagersviewingperormancemanagementonlyasaprocesstocomplywithratherthanabusiness-criticalactivitywasrankedasahigherriskthanwasthecaseintheothergeographies.Meanwhilealthoughbusinessleadersinabilitytoengagewithmotivateandnurturebusiness-criticaltalentailstoeatureprominentlywithinIndiastop10risksthisriskdoesappearwithinthetop10orallotheothergeographies.ManagedrisksAlackodepthointernalcandidatesandaninsufcientpipelinewereseenastopmitigatedrisksacrosstheUSandAsiaPacifcthoughnotinBrazilIndiaandWesternEurope.InIndiaandBrazilrespondentstoldustheywereconstantlyconcernedaboutrisksrelatingtotalentretention.DifcultiesinretainingkeypeoplehadahigherriskmitigationthandifcultiesinrecruitingexceptintheUSwhereretainingkeypeoplewasnotmitigatedashighlyasitwasintheothergeographiesandretentionwasnotmitigatedatall.ThetotalcostotheworkorceriskwasregardedashighinWesternEuropebutwasalsonotedasnumberthreeonthisregionslistotop10mitigatedrisks.Asintheprevioussectionlookingatgeographiesidentifcationorisksconnectionandcompliancewerenotgenerallyinthetop10ormitigationwithonlyIndiaincludingariskromboththesecategorieswithinitstop10mitigationrisk.Whenwelookurtheratwhetherornotcountriesusethetotalcostoworkorcemetricthereisasignifcantspanacrossgeographieswithalmost80percentoIndiancompaniesusingthismetricbutlessthan50percentoUScompaniesusingit.33Timeforamoreholisticapproachtotalentrisk AllUSAsiaPacifcexcl.IndiaBrazilIndiaWesternEuropeAlackodepthointernalcandidatesorcriticalrolesAlackodepthointernalcandidatesorcriticalrolesAninsufcientpipelineoutureleadersAninsufcientpipelineoutureleadersDifcultiesinretainingkeypeopleAlackodepthointernalcandidatesorcriticalrolesAninsufcientpipelineoutureleadersAninsufcientpipelineoutureleadersAlackodepthointernalcandidatesorcriticalrolesDifcultiesinretainingkeypeopleAninsufcientpipelineoutureleadersSkillsandcapabilitiesrequiredbythebusinessinthenearuturearenotdevelopedDifcultiesinretainingkeypeopleAlackoclarityoverwhichrolesarecriticaltodeliverbusinessvalueAlackoclarityoverwhichrolesarecriticaltodeliverbusinessvalueAlackodepthointernalcandidatesorcriticalrolesAlackodepthointernalcandidatesorcriticalrolesThetotalcostotheworkorcebecomesunsustainableinrelationtocurrentrevenuesAlackoclarityoverwhichrolesarecriticaltodeliverbusinessvalueSkillsandcapabilitiesrequiredbythebusinessinthenearuturearenotdevelopedThecostoretainingtoptalentbecomesunsustainableAlackoclarityoverwhichrolesarecriticaltodeliverbusinessvalueDifcultiesinrecruitingtoptalentDifcultiesinretainingkeypeopleThetotalcostotheworkorcebecomesunsustainableinrelationtocurrentrevenuesAlackocompellingdevelopmentopportunitiesortoptalentThetotalcostotheworkorcebecomesunsustainableinrelationtocurrentrevenuesDifcultiesinrecruitingtoptalentSkillsandcapabilitiesrequiredbythebusinessinthenearuturearenotdevelopedAninsufcientpipelineoutureleadersSkillsandcapabilitiesrequiredbythebusinessinthenearuturearenotdevelopedThetotalcostotheworkorcebecomesunsustainableinrelationtocurrentrevenuesAninabilitytodefnethenewskillsorcapabilitiesthatwillbeneededbythebusinessinthenearutureThetotalcostotheworkorcebecomesunsustainableinrelationtocurrentrevenuesAlackoclarityoverwhichrolesarecriticaltodeliverbusinessvalueDifcultiesinrecruitingtoptalentAlackocompellingdevelopmentopportunitiesortoptalentSalaryexpectationsocandidateswithcriticalskillsbecometoohighDifcultiesinretainingkeypeopleSkillsandcapabilitiesrequiredbythebusinessinthenearuturearenotdevelopedManagersviewperormancemanagementtalentreviewsasprocessestocomplywithnotbusiness-criticalactivitiesAlackoclarityoverwhichrolesarecriticaltodeliverbusinessvalueDifcultiesinrecruitingtoptalentAninsufcientbudgetormanaginganddevelopingtalentSalaryexpectationsocandidateswithcriticalskillsbecometoohighAlackocompellingdevelopmentopportunitiesortoptalentAlackocompellingdevelopmentopportunitiesortoptalentAlackocompellingdevelopmentopportunitiesortoptalentThecostoretainingtoptalentbecomesunsustainableThecostoretainingtoptalentbecomesunsustainableDifcultiesinrecruitingtoptalentSalaryexpectationsocandidateswithcriticalskillsbecometoohighSalaryexpectationsocandidateswithcriticalskillsbecometoohighThecostoretainingtoptalentbecomesunsustainableSalaryexpectationsocandidateswithcriticalskillsbecometoohighDifcultiesinretainingkeypeopleSkillsandcapabilitiesrequiredbythebusinessinthenearuturearenotdevelopedAninsufcientbudgetormanaginganddevelopingtalentBusinessleadersinabilitytoengagewithmotivateandnurturebusiness-criticaltalentSalaryexpectationsocandidateswithcriticalskillsbecometoohigh12345678910Top10mitigatedrisksbycountryCapacityCostCapabilityConnectionComplianceSourceKPMGInternational34Timeforamoreholisticapproachtotalentrisk 35Timeforamoreholisticapproachtotalentrisk TopindividualrisksbyindustryDoestalentriskvaryacrossindustriesApparentlyso.Inparticularacomparisonothewaytalentriskisperceivedandidentifedwithinfnancialservicesconsumergoodsenergyandliesciencesmakesorsomeinterestingreading.IdentifedrisksacomparisonooursectorsThetoptworisksorallourotheseindustrieswerealackodepthointernalcandidatesandaninsufcientpipelineoutureleaders.Meanwhiledifcultiesinrecruitingtoptalentanddifcultiesinretainingkeypeoplewereseenasthenextmostcriticalrisksorthreeotheindustrieswithconsumergoodstheonlyindustrytoelevatecandidatesalaryexpectationsortoptalentaboveconcernsregardingtherecruitmentotoptalentaswellastoptalentdevelopmentopportunities.Respondentsworkinginconsumergoodswerealsolessconcernedabouttheriskoretainingtoptalent.Furthermoreenergy-basedrespondentsstoodoutasbeingconcernedaboutapotentialailuretodeveloptheskillsandcapabilitiesrequiredbythebusiness.IndustryandsectorcomparisonsThisdataisbasedonaveragestoaive-pointscale.Halapointdierenceisequivalenttoa1020percentdierenceinperceptiongiventhesamplegroupsdistribution.Scale1Notmanaging2Identifednoplanstomanage3Planstomanage4Managingandseeingprogress5ManagingandmitigatingriskFinancialservicesbankinginsuranceinvestmentsConsumergoodsEnergyLiesciencesCapacityInternalcandidatedepth3.29CapacityInternalcandidatedepth3.39CapacityInternalcandidatedepth3.45CapacityPipelineoutureleaders3.44CapacityPipelineoutureleaders3.28CapacityPipelineoutureleaders3.38CapacityPipelineoutureleaders3.39CapacityInternalcandidatedepth3.35CapabilityRecruitingtoptalent3.27CostCandidatesalaryexpectations3.16CapabilityRecruitingtoptalent3.38CapabilityRecruitingtoptalent3.17CapabilityRetainingkeypeople3.26CapabilityRecruitingtoptalent3.08CapabilityRetainingkeypeople3.14CapabilityRetainingkeypeople3.09CostCandidatesalaryexpectations3.17CapabilityToptalentdevelopmentopportunities3.07CapabilityDevelopingrequiredbusinessskills3.09CapabilityToptalentdevelopmentopportunities3.09SourceKPMGInternational36Timeforamoreholisticapproachtotalentrisk TopindividualmitigatedrisksbyindustryWhilethisriskwasrankedasatopfveconcernwithinenergynoneotheotherindustriesrankeditasatopconcern.ManagedrisksWhenlookingatthetopmanagedriskstheresultsdidbegintovarymorebetweentheseourindustries.Capacityrisksclarityocriticalrolesandaninsufcientpipelineoutureleadersweretheonlyrisksthatellwithinthetopfvemanagedrisksacrossallour.Wealsosawahigher-levelocusondevelopingtalentprovidingdevelopmentopportunitiesandontalentretentionacrossthreeindustriesexcludingliesciences.Liescienceswastheonlyindustrytonotincludeacapabilityriskwithinitstopfvemanagedrisksalthoughthisindustryrankedthecapabilitycategoryasawholeasitssecondbest-managedcategory.AnanomalyRecruitingtoptalentwasrankedasoneothetopfverisksacrossallindustriesyetnoneothemratedtheirmanagementothisriskveryhigh.Inacttheocusorthreeotheourellonretainingtoptalent.Part6Thisdataisbasedonaveragestoaive-pointscale.Halapointdierenceisequivalenttoa1020percentdierenceinperceptiongiventhesamplegroupsdistribution.Scale1Notmanaging2Identifednoplanstomanage3Planstomanage4Managingandseeingprogress5ManagingandmitigatingriskFinancialservicesbankinginsuranceinvestmentsConsumergoodsEnergyLifesciencesCapabilityRetainingkeypeople3.95CapabilityRetainingkeypeople4.06CapacityInternalcandidatedepth4.00CapacityPipelineoutureleaders4.15CapacityInternalcandidatedepth3.91CapacityClarityovercriticalroles3.97CapacityClarityovercriticalroles3.97CapacityInternalcandidatedepth3.91CapacityPipelineoutureleaders3.85CapabilityDevelopingrequiredbusinessskills3.96CapacityPipelineoutureleaders3.97ComplianceManagersviewTMprocessesasCompliance3.73CapabilityLackotalentdevelopment3.77CapacityPipelineoutureleaders3.95CapabilityDevelopingrequiredbusinessskills3.81CostCostoretainingtoptalent3.73CapacityClarityovercriticalroles3.74CostSustainablecostoworkorce3.94CapabilityRetainingkeypeople3.80CapacityClarityovercriticalroles3.69SourceKPMGInternational37Timeforamoreholisticapproachtotalentrisk Whenitcomestotalent-relatedriskisbiggerbetterOrislessheadcountmoreSize-wiseoursurveyshowedsomeinterestingresults.Organizationswithlessthan3000employeesfeltthattheircapabilityandcapacityriskswerehigherrisksthananyoftheremainingthreecategories.Inadditiontheseorganizationsfelttheyweretheleasteffectiveatmitigatingthoserisks.Furthermorethesesmallerorganizationswerealsostrugglingmorewithmitigatingcompliancerisks.Ontheotherhandtheyfelttheyweredoingverywellatmitigatingrisksassociatedwithcost.Bycontrastmid-sizedorganizationsthosewithbetween3000and10000employeesfelttheywerelesseffectiveatmitigatingcostissuesbutwerelessworriedaboutcost-relatedrisksthansmallandlargeorganizations.3.03.03.53.54.04.02.02.02.52.5CapacityComplianceConnectionCostCapabilityAverageriskimpactlevelAverageriskmitigationlevelHighriskhighmitigationLowrisklowmitigationBelow3000employeesScale1Norisk2Lowrisk3Somerisk4Highrisk5CriticalriskThisdataisbasedonaveragestoafive-pointscale.Halfapointdifferenceisequivalenttoa1020percentdifferenceinperceptiongiventhesamplegroupsdistribution.TalentriskbyorganizationalsizeSourceKPMGInternational38Timeforamoreholisticapproachtotalentrisk Largeorganizationsmeanwhileelttheywerethemosteectiveatmitigatingcapacitycapabilityandcostrisksriskstheyratedascritical.Inadditionlargeorganizationsalsoeltthatconnectionrisksthoserelatingtoemployeeengagementweregreaterthananyothergroup.Perhapsunsurprisinglyorganizationswithlessthan3000employeeshadthegreatestdifcultieswithsuccessionplanning.Forty-sixpercentothemelttheirsuccessionplanningeortswerenoteffective.Incontrast36percentoforganizationswithmorethan10000employeeselttheirsuccessionplanningprocesseswereveryorextremelyeective.3.03.03.53.54.04.02.02.02.52.5CapacityComplianceConnectionCostCapabilityAverageriskimpactlevelAverageriskmitigationlevelHighriskhighmitigationLowrisklowmitigation300010000employeesScale1Norisk2Lowrisk3Somerisk4Highrisk5CriticalriskThisdataisbasedonaveragestoaive-pointscale.Halapointdierenceisequivalenttoa1020percentdierenceinperceptiongiventhesamplegroupsdistribution.SourceKPMGInternational39Timeforamoreholisticapproachtotalentrisk 3.03.03.53.54.04.02.02.02.52.5CapacityComplianceConnectionCostCapabilityAverageriskimpactlevelAverageriskmitigationlevelHighriskhighmitigationLowrisklowmitigationAbove10000employeesCriticalskillsandcapabilitiesWhenweaskedorganizationsabouttheireectivenessatassessingthecriticalskillsandcapabilitiesotheirworkorceakeyelementoeectiveworkorceplanningwesawsignifcantdierenceswhenitcametosize.Morethan28percentoallorganizationsdonotassesstheiremployeesonaregularbasisorongoingdevelopment.Yetororganizationswithewerthan3000employeesweseethisjumpto34percent.Meanwhileonly11percentoorganizationselttheywereextremelyeectiveatassessingcriticalskillsandcapabilitiesassessingemployeeseverysixto12months.Forsmallorganizationsthisellto4percent.Finallyonly53percentoorganizationswithlessthan3000employeeselttheirleadershiptookanactiveroleinthecoachingprocesscomparedto70percentorespondentsworkingatorganizationswithmorethan10000employees.Scale1Norisk2Lowrisk3Somerisk4Highrisk5CriticalriskThisdataisbasedonaveragestoaive-pointscale.Halapointdierenceisequivalenttoa1020percentdierenceinperceptiongiventhesamplegroupsdistribution.SourceKPMGInternational40Timeforamoreholisticapproachtotalentrisk 41Timeforamoreholisticapproachtotalentrisk CalltoactionconclusionRobertBoltonPeopleChangeKPMGintheUKTalentmanagementisnowabusiness-criticalprocessoreveryorganization.Soitissomewhatsurprisingthentoseesomanyorganizationspersistinginmanagingtheirpeopleinafawedmanner.AsourresearchclearlyshowstalentmanagerscontinuetoretaintheWarorTalentastheirdominantmentalmodelblindlyadheringtoanarrowneedtohireandretainrockstarhighperormersatallandever-increasingcost.Ithaslettalentmanagersirrationallypreoccupiedwiththeroleotheindividualcertainindividualsinparticularattheexpenseothewiderworkorce.Yetevidenceshowsthatahighperormersimpactonanorganizationssuccesswhencomparedtoahigh-perormingworkforceismuchlesssignicant.Aslongagoas2001theStanordUniversityproessorJereyPeerpublishedapaperFightingtheWarorTalentIsHazardoustoYourOrganizationsHealthinwhichhepointedoutthattalentmanagementproessionalsandtheirpracticesovervaluedindividualsattheexpenseotheteam.Thewarortalentosterscompetitionbetweenemployees.Yetcommonsensealonesuggeststhatintenseinternalcompetitionisunlikelytodrivecollaborationandagility.Peerpointsoutthatcompaniesthatengagedinwarortalentpracticessetupcompetitivezero-sumdynamicsthatmakeinternallearningandknowledgetranserdicultandcreateanattitudeoarroganceinsteadoanattitudeowisdom.Andperhapsmostimportantlythewarortalenthasencouragedtalentmanagerstoignoreconnectivitycomplianceandtoalesserextentcost-relatedtalentrisksleavingorganizationsvulnerableatbesttodisengagedemployees.EnlightenedpeoplemanagementLookingorwardtalentmanagersmustisolateandaddressamuchbroaderarrayotalentriskstakingintoaccountacriticalneedtoconnecttheirpeopletoeachotherandtoleadershiptoorecastandmanagecostsandtomoveawayromanapproachtocompliancethatseesrontlinemanagerssimplytickingtheboxonperormancereviewsorailingtoconductthematall.AndbeyondtheseveCsocapacitycapabilityconnectioncostandcompliancetalentmanagersmustalsohardwiretalentriskintotheirwiderenterpriseriskmanagementrameworkstherebyplacingitrmontheradarotherightpeopleattherightlevel.Inadditionitiscrucialthatorganizationsbegintoevaluatetalent-relateddecisionsortheirreturnoninvestmentworkinginanevidence-basedway.Thismeansidentiyingthespecicaspectsotalentmanagementthatsupporttheirorganizationsprioritiesandmeasuringtherightthingsintherightway.Iitstargetedproperlythisbenet-basedanalysiscanprovideaclearviewohowbesttotuneintotalentandwheretodialyourtalentmanagementupordown.Intheworkorceotheuturetherellbelessoanobsessionwithaselectewhigh-potentialsthetop200andsortingindividualsintonineboxes.Insteadwelltalkabouttalentedteamsaswellasindividualsandorganizationsandtalentecosystemsthatpromoteorganizationalversatilityandempoweremployeestoworkcollaboratively.Inshortwewillocusonaholisticapproachthatgeneratessuccessulleadershipineverypartothebusiness.BycontrastthecurrentnarrowapproachleavestalentmanagersvulnerabletothepreerencesandpreconceptionsotheC-suite.Thiscannotberightoranybusinessnoworintheuture.Timeforamoreholisticapproachtotalentmanagement42Timeforamoreholisticapproachtotalentrisk 43Timeforamoreholisticapproachtotalentrisk WhichtalentriskswererespondentsdoingleastaboutAlackoworkorcediversity.4Employeerelationshinderratherthanhelptalentmanagementprocesses.3Managersviewperormancemanagementandtalentreviewprocessesmerelyassomethingtocomplywithratherthanabusiness-criticalactivity.7Talentmanagementprocessesbecomenon-compliantwithlocalregulationorexampledataprotection.2Internationalmobilitypoliciesandprocessesmakeitdifculttotransertalentbetweencountries.1BusinessleadersandHRtalentteamsinabilitytoworkeectivelytogethertomanagetalent.6Businessleadersreluctancetosharetalentacrosstheorganization.5Businessleadersinabilitytoengagewithmotivateandnurturebusiness-criticaltalent.9Aninsufcientbudgetormanaginganddevelopingtalent.10Aninabilitytodefnethenewskillsorcapabilitiesthatwillbeneededbythebusinessinthenearuture.8ConnectionComplianceComplianceCapacityConnectionConnectionComplianceCapabilityConnectionCostAppendixSourceKPMGInternationalTimeforamoreholisticapproachtotalentrisk44 Timeforamoreholisticapproachtotalentrisk45 ContactusRobertBoltonKPMGintheUKT442073118347Erobert.boltonkpmg.co.ukLauraCroucherKPMGinCanadaT14167773417Elcroucherkpmg.caNhlamuDlomuKPMGinSouthAfricaT27827190224Enhlamu.dlomukpmg.co.zaDrMichaelGekeKPMGinGermanyT492114757500Emgekekpmg.dePatriciaMolinoKPMGinBrazilT551121833183Epmolinokpmg.com.brPeterOutridgeKPMGinAustraliaT61293358692Epoutridgekpmg.com.auTimPayneKPMGintheUKT442073118002Etim.j.paynekpmg.co.ukClaudiaSaranKPMGintheUST13126653088Ecsarankpmg.comSigShirodkarKPMGintheUST19739126536Esshirodkarkpmg.comMarkSpearsKPMGintheUKT442073114753Emark.spearskpmg.co.ukNishchaeSuriKPMGinIndiaT911243074888Enishchaesurikpmg.comRuthSvenssonKPMGintheUKT442073113623Eruth.svenssonkpmg.co.ukPauletteWelsingKPMGintheUST12128727635Epwelsingkpmg.comMarkWilliamsonKPMGintheUKT4402073118693Emark.williamsonkpmg.co.ukTheinormationcontainedhereinisoageneralnatureandisnotintendedtoaddressthecircumstancesoanyparticularindividualorentity.Althoughweendeavortoprovideaccurateandtimelyinormationtherecanbenoguaranteethatsuchinormationisaccurateasothedateitisreceivedorthatitwillcontinuetobeaccurateintheuture.Nooneshouldactonsuchinormationwithoutappropriateproessionaladviceaterathoroughexaminationotheparticularsituation.2013KPMGInternationalCooperativeKPMGInternationalaSwissentity.MemberfrmsotheKPMGnetworkoindependentfrmsareafliatedwithKPMGInternational.KPMGInternationalprovidesnoclientservices.NomemberfrmhasanyauthoritytoobligateorbindKPMGInternationaloranyothermemberfrmvis--visthirdpartiesnordoesKPMGInternationalhaveanysuchauthoritytoobligateorbindanymemberfrm.Allrightsreserved.TheKPMGnamelogoandcuttingthroughcomplexityareregisteredtrademarksortrademarksoKPMGInternational.DesignedbyEvalueserve.PublicationnameTimeoramoreholisticapproachPublicationnumber130736PublicationdateNovember2013kpmg.comsocialmediakpmg.comapp