Global Talent Management1

Global  Talent  Management1   Hugh  Scullion¹*,  David  G  Collings²  and  Paula  Caligiuri³   Please  cite  as:   Scullion,  H.,  Collings,  D.G.  and  Caligiuri,  P.  (2010)  “Global  Talent  Management”,  Journal  of  World  Business,   45,  2,  105-­‐8.     * Corresponding author: ¹J.E. Cairnes School of Business & Economics, NUI Galway University Road Galway, Ireland +35391493079 [email protected] ² Centre for Innovation & Structural Change NUI Galway University Road Galway, Ireland +35391495385 [email protected] ³Human Resource Management Department Rutgers, The State University of New Jersey 94 Rockafeller Road, 200B Levin Building Piscataway, New Jersey 08854 USA + (1) 732-445-5228 [email protected]

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 The editors are grateful of all of those who submitted their work to this special issue. Additionally we are

extremely grateful to the special issues reviewers who contributed greatly to the development of the papers published in this special issue.     1    

Introduction The topic of talent management has gained mainstream acceptance in the practitioner community as a key management activity in recent years. This was prompted by research, in the late 1990s, by a group of McKinsey consultants who coined the phrase “the war for talent” to reflect the central importance of employees to the success of top performing companies (for a summary see Michaels, Handfield-Jones and Axelrod, 2001). Although the global aspect of talent management may not have received explicit emphasis in the consultants’ early work (neither multinational, global, nor international appear in the index to the Michaels et al, 2001 text) tellingly the vast majority of companies on which their research were based all had some degree of international operation. The interest in talent management has not abated in the past decade. A recent report highlighted that seven in ten corporate leaders spend in excess of 20 per cent of their time on talent management activities (Economist Intelligence Unit, 2006). It seems that Chief Executive Officers (CEOs) are increasingly realizing that talent management is so important that it cannot be left to the HR function alone (Economist Intelligence Unit, 2006). The Boston Consulting Group (2007) found that, although viewed as being of critical importance, talent management was one of the areas in which firms were least proficient. Even more recently, a review by Beechler and Woodward (2009) concluded that notwithstanding the current economic climate “talent remains a critical agenda item” for key organizational decision makers. While practitioners’ interest in the topic of talent management has been gaining momentum, academic research on the same topic has been developing at a slower rate. This special issue is intended to contribute to the emerging academic literature on global talent management and to advance the conceptual and empirical grounding of this emerging area of interest. We begin by considering some of the debates around the conceptual and intellectual boundaries of global talent management. We then consider the factors which have contributed to the increasing interest in 2    

global talent management. Finally we conclude by outlining the contributions to this special issue of Journal of World Business. The conceptual and intellectual boundaries of global talent management One of the key challenges which talent management has experienced in establishing its academic merits over the past decade has been the unresolved issue around its definition and intellectual boundaries. As Lewis and Heckman (2006: 139) conclude there is “a disturbing lack of clarity regarding the definition, scope and overall goals of talent management”. In this regard Lewis and Heckman identify three key streams of thinking with regard to what talent management is. The authors aligned with the first stream appear to be merely substituting the label talent management for human resource management, often limiting their focus to particular HR practices such as recruitment, leadership development, succession planning and the like. A second stream emphasizes the development of talent pools focusing on “projecting employee/staffing needs and managing the progression of employees through positions” (Lewis & Heckman, 2006: 140) typically building upon earlier research in the manpower planning or succession planning literatures. The third stream focuses on the management of talented people. This literature argues that all roles within the organisation should be filled with “A performers”, referred to as “topgrading” (Smart, 1999) and emphasises the management of “C players”, or consistently poor performers, out of the organisation (Michaels et al., 2001). Collings and Mellahi (2009) identify a further stream. This stream emphasizes the identification of key positions which have the potential to differentially impact the competitive advantage of the firm (Boudreau & Ramstad, 2007; Huselid et al., 2005).     The wide variation in how talent management is defined raises two key challenges which apply equally to global talent management. The first challenge is that scholars in this area need to gain clarity and build consensus regarding the meaning of global talent management from practical, 3    

conceptual, and theoretical perspectives. The second key challenge is that global talent management needs to differentiate itself from international human resource management. That is not to say that global talent management cannot draw upon international human resource management (see for example Tarique and Schuler, 2010), but it must differentiate itself from international human resource management to have merit in being studied in its own right. Global talent management (GTM) has been defined in broad terms as an organization’s efforts to attract, select, develop and retain key talented employees on a global scale (Stahl et al., 2007). A key aspect of this definition is the focus on a key group of core employees, rather than the multinational’s entire human capital pool (see also Becker, Huselid and Beatty, 2009; Boudreau and Ramstad, 2007; Collings and Mellahi, 2009). This definition emphasizes an international focus and emphasizes the role of multinational enterprises’ internal systems in ensuring key strategic employees are attracted, retained and deployed to best meet the organizations strategic priorities. However, as noted above, a separate stream of literature emphasizes (Boudreau & Ramstad, 2007; Huselid et al., 2005) the importance of the positions which these talented individual employees fill in the context of talent management systems and argues that this should be the point of departure for talent management systems. Finally in the global context there is also scope for comparative studies which consider how talent management systems operate in different national contexts. For example, Doh, Stumpf and Tymon (2010) explore talent management in the Indian context, while Iles, Chuai and Preece’s (2010) contribution considers the Chinese context and McDonnell and colleagues (2010) consider the Irish context. Thus, the collective definition we propose for global talent management is as follows: Global talent management includes all organizational activities for the purpose of attracting, selecting, developing, and retaining the best employees in the most strategic roles (those roles necessary to achieve organizational strategic priorities) on a global scale. 4    

Global talent management takes into account the differences in both organizations’ global strategic priorities as well as the differences across national contexts for how talent should be managed in the countries where they operate.

Our hope is that the definition we offer is a starting point upon which the research community can use to shape, build, and strengthen knowledge in the area of global talent management. We now consider the factors which over the last decade have driven the emergence of global talent management as a key strategic issue for managers and scholars alike. Factors influencing the emergence of global talent management Global talent management is a relatively new multi-disciplinary field of enquiry which has emerged in recent years as a key strategic issue for multinational corporations (MNCs) for several reasons. First, there is a growing recognition both of the critical role played by globally competent managerial talent in ensuring the success of MNEs reflecting the intensification of global competition and the greater need for international learning and innovation in MNCs (Bartlett & Ghoshal, 1989). Second, competition between employers for talent has shifted from the country level to the regional and global levels (Sparrow et al, 2004). There is a growing recognition that MNCs need to manage talent on a global basis to remain competitive and that talent may be located in different parts of their global operations (Ready and Conger, 2007). MNCs are facing growing difficulties in recruiting and retaining the necessary managerial talent for their global operations and increasingly MNCs compete for the same global talent pool (Stahl et al, 2007). Third, shortages of managerial and professional talent have emerged as the key HR challenge facing the majority of MNCs. (Bjorkman and Lervick, 2007; Scullion and Starkey, 2000). Fourth, research highlights that shortages of international management talent have been a significant constraint on the successful 5    

implementation of global strategies (Scullion, 1994; Cohn et al, 2005) and shortages of leadership talent in particular was identified as a major obstacle many companies face as they seek to operate successfully on a global scale ( Sparrow et al, 2004 ; Stahl et al, 2007). Finally, the growth of the emerging markets has resulted in a further demand for a distinctive type of managerial talent which can operate effectively in these culturally complex and geographically distant markets (Scullion, Collings and Gunnigle, 2007). On balance, this suggests that, while the rhetoric of maximizing the talent of individual employees as a unique source of competitive advantage for MNCs has been central to the discourse surrounding strategic HRM in recent years, the extent to which organizations effectively manage their human talent –especially on a global scale -- often fails to live up to this hype (Cohn et al, 2005; Scullion & Collings, 2006). Research has suggested that MNCs are frequently unable to identify who their most talented employees are and where they are located around the world (Collings, Scullion & Morley, 2007). Global talent management is critical because it is impossible for firms to leverage an asset they do not realize they have. To bring us closer to the goal of better understanding and hopefully improving global talent management, this special issue bring together a number of papers by leading researchers on different aspects of global talent management from different cultural contexts around the world. New empirical and theoretical insights into global talent management are explored in the different contexts of Europe, Asia and North America. The emerging markets of India and China are given particular attention due to their strategic importance, their distinctive cultures affecting talent management in those countries and the dearth of research about them. A common theme of the papers in the special issue is the recognition that global talent management has emerged as a critical element of strategic human resource management in the multinational enterprise (Scullion and Collings, 2010). The contributions in this special issue, which examine 6    

both strategic and operational aspects of talent management provide a comprehensive overview of the area. The special issue also highlights emerging topics which will shape the area of global talent management research over the next decade and seeks to provide a platform for researchers to develop our theoretical and empirical understanding and knowledge of global talent management in the future. Rather than representing a comprehensive and defining contribution to the literature on global talent management, we view the papers in this special issue as contributing to the emerging conceptual and empirical foundations of this increasingly important area of study. A key challenge for the special issue, however, is to locate the current discussion and debate about global talent management within the wider context of the current economic crises and a key aim for the special issue is to contribute to a more informed and critical research agenda in global talent management in the context of the current global economic crises. We now briefly introduce the papers which make up the special issue: Contributions to the special issue The paper by Doh, Stumpf and Tymon examines the challenges of talent management of knowledge workers in India, one of the largest and fastest growing emerging economies in the world where economic activity has considerably outpaced the availability of skilled employees. The authors develop and test a model of talent management with data from 28 Indian companies and almost 5,000 professional staff. The paper highlights the importance of intrinsic rewards as a key element of the talent management system in the Indian context and suggests that employers should more closely examine non pecuniary mechanisms to encourage employee retention and employee satisfaction, particularly in challenging labour market environments. Our second paper from Tarique and Schuler provides a comprehensive review of the research in global talent management and seeks to better organize the literature through creating a framework 7    

for understanding and advancing further research in the area. The framework highlights some critical challenges in global talent management and the drivers of those challenges. The paper helps guide the future research agenda in this field and also seeks to inform the work of senior HR professionals who are engaging with talent management issues in the global context Our third paper by Makela, Bjorkman and Ehrnrooth seeks to address the fundamental question of who is considered a talent and why and develops our understanding of the decision processes involved in the identification and evaluation of internal talent in the MNC. A framework is developed by the authors which suggests that talent pool inclusion is a two-stage decision process involving both experience based and cognition based managerial decision – making. They use an in depth case study of a Finnish MNE to highlight that talent pool inclusion is determined by a wider range of variables than that suggested by the existing literature. The fourth paper by Mellahi and Collings adds to our understanding both of the underlying causes of talent management failure in multinational enterprises and the barriers to effective global talent management. The paper contributes to theoretical development in this area, using insights from both agency theory and bounded rationality theory explains the failure of global talent management systems to effectively promote talent from across the corporate network Next, McDonnell, Lamare, Gunnigle and Lavelle seek to redress the empirical deficit in the study of GTM through an empirical study using empirical data from 260 MNEs in Ireland. Their study highlights that many MNEs continue to adopt an ad hoc rather than a strategic approach to the management of their high potential staff and that integrated approaches to talent management are far from universal. One unexpected finding was that MNCs operating in low tech\low cost sectors are significantly more likely to have formal global talent management systems.

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In their contribution, Farndale, Scullion and Sparrow consider the role of the corporate Human Resource function in multinational corporations in global talent management. The consider global talent management from two perspectives: increasing global competition for talent, and new forms of international mobility. The first considers the mechanisms of GTM, and the second, individual willingness to be mobile, especially in emerging markets, and the organizational capability needed to manage this talent. New Corporate HR roles are identified which show how these issues might be addressedand the major future challenges facing Corporate HR are considered. The contribution by Feisel, Hartmann and Schober use qualitative data to examine the extent to which Western MNCs transfer their talent management strategies to China and adapt them to local requirements. The study highlights that, despite the importance of key cultural considerations in the Chinese context, trends in recent years have moved towards a harmonisation between international standards and host country culture. The paper by Iles and Chuai examines the relationship between talent management practices and HRM through an empirical study of MNCs and consultancies in Beijing. The paper contributes to our understanding of what drives firms to adopt talent management practices in this context and to our knowledge of the HRM practices required to effectively support talent management initiatives in different contexts. Finally, the paper by Li and Scullion examines the issue of developing expatriate managers’ local competence in emerging markets from a knowledge–based perspective. The paper argues that local knowledge in emerging markets differs significantly from corporate knowledge transferred to those markets and that this has implications for the implementation of talent management strategies at local level. The paper highlights the need for further research to bridge the link between talent management and knowledge management.

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