TALENT REPORT 1

AHRI PULSE SURVEYTALENT REPORT

HR:PULSE

TALENT REPORT 2

Founded in 2003, Talent2 is a leading recruitment firm that focuses on providing exceptional permanent and contract candidates across a number of specialist skill sets to meet your professional and technical talent requirements throughout Asia Pacific.

People are our difference, and the right people are your competitive edge.

Talent2 is now part of Allegis Group and its broader global network of operating companies. In APAC, Allegis Group provides recruitment services through four specialist recruitment brands – Talent2, TEKsystems, Aston Carter and Allegis-BN in eight countries (Australia, China, Hong Kong, India, Japan, Malaysia, New Zealand and Singapore).

Contact: askus@talent2.com Web: http://www.talent2.com

FOREWORD

TALENT REPORT 3

Despite the fact that talent management continually comes up as one of the most pressing concerns of business leaders around the world, the findings in this report suggest that for many Australian organisations, talent management is still a work-in progress. While it is encouraging that only a small minority of respondents (7 per cent) report that their organisation does not offer any talent development activities, only a third (38 per cent) report having a talent management strategy in place.

Of the respondents whose organisations have a talent management strategy, it is pleasing to note that a large majority (79%) report that the strategy has clear goals and objectives, and is strategically aligned to organisational goals and operational objectives (80%) or enjoys strong support from the senior leadership.

Transforming ad hoc talent development activities into a comprehensive talent management strategy can seem like a daunting task for any organisation; however, there is evidence in this report that the benefits of doing so are potentially significant. A strategic, tailored approach ensures organisations get the best out of their people, building high performance workplaces that can achieve organisational objectives and gain competitive advantage.

It is interesting to note that the talent development activities practised in organisations don’t necessarily correlate with what respondents believe to be most effective. For example, the most commonly offered talent development activity in the organisations surveyed relates to courses at external institutions, offered by 64 per cent of respondent organisations. Yet despite it being the most popular option offered by organisations, only 20 per cent of the anonymous respondents to this survey believe it to be one of the

top three most effective talent development strategies. The activity deemed to be most effective by respondents is mentoring, identified as such by 63 per cent of the sample group; yet only 50 per cent of respondents report a mentoring program in place.

These findings suggest that if organisations routinely review the talent development activities available, they might find more effective solutions. Many of these activities noted in the findings, such as mentoring, can take place in-house at little cost, and leverage the talent, skills, and knowledge that already exist within the workplace.

I commend the findings of the report to you.

Peter Wilson AM Chairman Australian Human Resources Institute

FOREWORD

TALENT REPORT 4

“We know it matters. Some go to war for it. Professional sports teams draft for it. Actors audition to show they have it. Others consider it the ultimate solution and try to manage it. Agents contract for it. Some are innately endowed with it while others strive diligently to earn it. All try to grow it. CEO’s declare it as their top priority. Inboxes are filled with prescriptions for it.”

These are the words of Professor Dave Ulrich from the University of Michigan, and he is talking about talent.

The development of talent is at the heart of every organisation and vital for business sustainability and competitiveness, so in addition to the thoughts of international experts like Ulrich, it is very useful to gain a view from the perspective of HR professionals about how Australian organisations are faring when it comes to managing their talent.

I trust the findings in this report will offer a helpful window into the views and experiences of AHRI members on the critical issue of how to manage talent and how organisations, with the contribution of their HR practitioners, can go about making further progress in this area.

I would like to take this opportunity to express my appreciation to those members who contributed to the survey.

Lyn Goodear Chief Executive Officer Australian Human Resources Institute

Acknowledgements

Project Sponsor: Peter WilsonProject Director: Lyn GoodearResearch Coordinator: Dana GrgasReport Author: Paul Begley, Femi Hardwick-SlackDesign: Jasmine Atay

AHRI would also like to thank its Research Advisory Panel members for their input into this survey.

© Australian Human Resources Institute, October 2015

FOREWORD

TALENT REPORT 5

SURVEY OVERVIEW

The survey that resulted in these findings was conducted online in August of 2015, and communicated by email to a sample of the member database of the Australian Human Resources Institute.A total of 565 respondents returned answers to the survey. Responses were treated anonymously.

Talent management means determining the talent required and putting in place actions that will attract and retain people who possess the required talents.”AHRI survey respondent

TALENT REPORT 6

KEY FINDINGS AT A GLANCE

• The top three talent management priorities that respondents identify in their organisations are:

1. The retention of key talent (55% of respondents)

2. The recruitment of key talent (39% of respondents)

3. The engagement of key talent (37% of respondents)

• Just over a third (38%) of respondent organisations currently have a talent management strategy in place, 42% plan to develop one in the next two years, and 15% say their organisations have no plans to develop one

• Eight out of ten respondents (79%) whose organisations have a talent management strategy report that it has clear goals and objectives, and is strategically aligned to organisational goals and operational objectives (80%) or enjoys strong support from the senior leadership.

• Two thirds (66%) of respondent organisations include all employees in their talent management strategy, and more than half of those report a focus is given to specific groups of employees. They identified high potential employees (87%) and employees in critical roles (73%) as the top two groups given special focus

• Fewer than half (40%) of respondent organisations allocate at least one employee whose position is dedicated to overseeing talent management

• The most common talent development activity offered by organisations is enrolment in courses at external institutions (64%). This is followed by 360-degree feedback/performance appraisals (58%), mentoring schemes (50%) and secondments (50%)

• The following were identified by respondents as the top three most effective talent management activities:

1. Mentoring schemes (63% of respondents)

2. Job rotation and shadowing (48% of respondents)

3. 360-degree feedback/performance appraisals (45% of respondents)

TALENT REPORT 7

DEMOGRAPHICS

FIGURE 1: GENDER565 RESPONSES

FIGURE 2: OCCUPATION565 RESPONSES

TALENT REPORT 8

DEMOGRAPHICS

FIGURE 3: WORKPLACE LOCATION565 RESPONSES

FIGURE 4: WORKPLACE STATE OR TERRITORY565 RESPONSES

FIGURE 5: ORGANISATION SECTOR565 RESPONSES

TALENT REPORT 9

DEMOGRAPHICS

TABLE 1: ORGANISATION INDUSTRY565 RESPONSES

ANSWER PERCENT COUNTAccommodation and Food Services 2% 9

Administrative and Support Services 1% 8

Agriculture, Forestry and Fishing 2% 9

Arts and Recreation Services 1% 4

Construction 4% 20

Education and Training 12% 70

Electricity, Gas, Water and Waste Services 2% 11

Financial and Insurance Services 9% 51

Health Care and Social Assistance 14% 76

Information Media and Telecommunications 4% 25

Manufacturing 4% 23

Mining 3% 15

Professional, Scientific and Technical Services 10% 55

Public Administration and Safety 7% 37

Rental, Hiring and Real Estate Services 1% 6

Retail Trade 4% 23

Transport, Postal and Warehousing 4% 23

Wholesale Trade 2% 9

Other (please specify) 16% 91

TALENT REPORT 10

DEMOGRAPHICS

FIGURE 6: ORGANISATION SIZE565 RESPONSES

FIGURE 7: NUMBER OF EMPLOYEES IN HR DEPARTMENT565 RESPONSES

TALENT REPORT 11

DETAILED FINDINGS

RESPONDENTS WERE ASKED TO COMMENT ON THE QUESTION: “WHAT DOES THE TERM TALENT MANAGEMENT MEAN IN YOUR ORGANISATION?” WHAT FOLLOWS IS A SAMPLE OF RESPONSES TO THAT QUESTION:

“ Identifying people who would respond well to additional training and development”

“ Discovering what is of interest to the employee and developing it to grow the employee and the business”

“ Engaging and nurturing team members to ensure their personal and professional development, and connecting it back to the business and strategy, thus resulting in high performance from both individuals and teams”

“ It is not clearly understood and only raised with the commencement of a new HR leader”

“ Fostering employees to ensure they are engaged, developed and retained to ensure the business operates effectively and efficiently to meet its goals”

“ The identification and development of talented and aspiring leaders and technical professionals to ensure a sustainable pipeline of skilled employees in critical roles”

“ The full talent cycle - recruitment, onboarding, performance management, advancement, succession planning and development”

“ For this organisation, and due to the nature of the industry and the casual workforce, ‘talent management’ is a very new term that the organisation is just coming to grips with. So, for us, talent management is about keeping, developing and growing the talent we already have.”

“ Retaining and developing individuals with potential”

“ Identification, retention, nurturing and development of existing talent in the organisation, acquisition of fresh talent, utilising talent effectively to attain organisational objectives.”

“ It doesn’t mean a thing. Generally the concern is about performance, not about identifying individual talent and having a strategy in place to further develop them.”

“ All the HR practices that are part of attracting, engaging and retaining employees.”

“ Talent management is not widely used in our organisation. However, we do have pathways that are available for people to progress into a new role of their choice.”

“ Talent Management is a set of integrated organisational HR processes designed to attract, develop, motivate, and retain productive, engaged employees. The goal of talent management is to create a high-performance, sustainable organization that meets its strategic and operational goals and objectives.”

“ Not a lot. We ensure that we are able to cover critical roles and ensure that those successors are adequately trained to cover them. We do not actively manage emerging talent.”

“ This term is not used extensively but for our organisation it means the development of our senior management team and also our second tier managers for succession planning and some individual development and retention.”

“ Developing and retaining our well performing staff, including high potential individuals. In our sector - software - good talent is hard to find so we take a broader view of talent, although we manage it differently for high potentials vs good performers”

“ Determining the talent required and putting in place actions that will attract and retain people who possess the required talents”

“ In theory, proactive tracking and planning of key talent towards risks and opportunities for both individuals (e.g. retention, development) and business strategic priorities (e.g. critical roles/capabilities, expected opportunities/threats). In practice, we get bogged down in the process rather than using the results.”

TALENT REPORT 12

DETAILED FINDINGS

Figure 9 reveals that the retention of key talent was identified by the largest number of respondents, with more than half (55%) of respondents reporting it to be one of the top three talent management priorities. This is followed by the recruitment of key talent (39%) and the engagement of key talent (37%). The use of technology to support talent management (3%) and tracking and evaluating talent initiatives (4%) were identified as priorities by the smallest number of respondents.

Figure 8 reveals that talent management is an essential priority in 10% of respondents’ organisations. It is a high priority in just under a third (29%), a medium priority in 41% and a low priority in 15%. Only 5% report that talent management is not a priority in their organisation.

FIGURE 8: IN YOUR ORGANISATION, HOW MUCH OF A PRIORITY IS TALENT MANAGEMENT? 475 RESPONSES

FIGURE 9: WHAT ARE THE TOP THREE KEY TALENT MANAGEMENT PRIORITIES FOR YOUR ORGANISATION?477 RESPONSES

TALENT REPORT 13

TALENT MANAGEMENT STRATEGY

According to figure 10, just over a third (38%) of respondent organisations has a talent management strategy in place. Fewer than half (42%) don’t have a talent management strategy in place but plan to develop one in the next two years, while 15% don’t have one and have no plans to develop one.

38% 42%

15%

6%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Yes we have a talent management strategy

No, but we plan to develop one in the next two years

No, and we don’t have any plans to develop one

Other

FIGURE 10: DOES YOUR ORGANISATION HAVE A TALENT MANAGEMENT STRATEGY IN PLACE? 478 RESPONSES

Talent management is not widely used in our organisation. However, we do have pathways that are available for people to progress into a new role of their choice.”AHRI survey respondent

TALENT REPORT 14

TALENT MANAGEMENT STRATEGY

Table 2 reveals that a large majority of the respondents who answered this question either strongly agree or agree that the talent management strategy in their organisation has clear goals and objectives (79%), is strategically aligned to the organisational strategy and operational objectives (80%), or has strong support from senior leadership (80%). A lower proportion of respondents strongly agree or agree that the talent management is enabled by integrated HR practices across the HR function (64%), and slightly more than half (51%) strongly agree or agree that their talent management strategy is working well.

ORGANISATIONS THAT HAVE A TALENT MANAGEMENT STRATEGY

ANSWER STRONGLY AGREE (1)–

AGREE (2)– NEITHER AGREE NOR DISAGREE (3)–

DISAGREE (4)–

STRONGLY DISAGREE (5)–

The talent management strategy has clear goals and objectives

18% 32

61% 108

11% 19

8% 14

2% 4

The talent management strategy is aligned to the organisational strategy and operational objectives

29% 52

51% 90

14% 24

5% 9

1% 2

The talent management strategy is working well

6% 10

45% 80

35% 62

11% 20

3% 5

The talent management strategy has support from senior leadership

30% 53

50% 89

14% 24

5% 9

1% 2

The talent management strategy is enabled by integrated HR practices across the HR function

16% 29

48% 84

22% 38

13% 23

1% 2

TABLE 2: RESPONDENT VIEWS ON THEIR ORGANISATIONS’ TALENT MANAGEMENT STRATEGY 177 RESPONSES

TALENT REPORT 15

FIGURE 11: WHO IS INCLUDED IN YOUR ORGANISATION’S TALENT MANAGEMENT STRATEGY?177 RESPONSES

32% 34% 32%

2% 0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

All employees (a 'whole workforce' approach)

All employees, but special focus is given to a select

group / groups of employees

Only a select group / groups of employees are

included

Other (please specify)

FIGURE 12: WHICH OF THE FOLLOWING GROUPS ARE SELECTED FOR SPECIAL FOCUS IN YOUR ORGANISATION’S TALENT MANAGEMENT STRATEGY? 60 RESPONSES

FIGURE 13: WHICH OF THE FOLLOWING GROUPS ARE SELECTED FOR INCLUSION IN YOUR ORGANISATION’S TALENT MANAGEMENT STRATEGY? 57 RESPONSES

Figure 11 shows that approximately a third (32%) of respondent organisations include all employees in their talent management strategy, another third (34%) include all employees but give special attention to a select group or groups of employees (see figure 12 for further detail), and the remaining third (32%) report that their organisations include only a select group or groups of employees (see figure 13).

Figure 12 reveals that of the respondents whose organisations include all employees in their talent management strategy but give special focus to certain groups, 87% report high potential employees to be one of these groups. Almost three quarters (73%) report that employees in critical roles are a group selected for special focus, and just under half (42%) say senior managers are chosen.

Figure 13 shows that of the respondents whose organisations only include select groups in their talent management strategy, around three quarters (77%) report high potential employees to be one of these groups. More than two thirds (67%) say that executive leaders are included in the talent management strategy, 65% include senior managers, and 60% report that employees in critical roles are selected for inclusion.

TALENT MANAGEMENT STRATEGY

TALENT REPORT 16

Figure 15 shows that almost two-thirds (64%) of respondents report that their organisation offers courses at external institutions as a way of developing talent and 58% offer 360-degree feedback and performance appraisals for that purpose. Half of organisations offer either mentoring schemes (50%) and secondments (50%. Only 9% offer school-leaver development programs compared with 37% that offer graduate development programs. Only 7% report that their organisation does not offer any talent development activities.

Figure 14 reveals that more than half (56%) of respondent organisations do not have at least one employee whose position is dedicated to overseeing talent management, while 40% have at least one dedicated person in the role.

FIGURE 14: DOES YOUR ORGANISATION HAVE AT LEAST ONE EMPLOYEE WHOSE POSITION IS DEDICATED TO OVERSEEING TALENT MANAGEMENT?467 RESPONSES

FIGURE 15: WHICH OF THE FOLLOWING TALENT DEVELOPMENT ACTIVITIES DOES YOUR ORGANISATION OFFER? 460 RESPONSES

TALENT MANAGEMENT STRATEGY

TALENT REPORT 17

Figure 17 show that in total, 87% of respondents believe an organisation’s talent management initiatives are either somewhat important (40%) or very important (47%) with respect to candidates considering job opportunities. Only 1% of respondents believe it is of low importance, and none thought it was of no importance at all.

FIGURE 17: HOW IMPORTANT DO YOU THINK AN ORGANISATION’S TALENT MANAGEMENT INITIATIVES ARE TO CANDIDATES CONSIDERING A NEW JOB OPPORTUNITY? 458 RESPONSES

47%

40%

9%

1% 0% 2% 0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Very important

Somewhat important

Neutral Low importance

Not at all important

Other

TALENT MANAGEMENT STRATEGY

Figure 16 shows that almost two-thirds (63%) of respondents believe mentoring schemes are one of the most effective talent development activity. Almost half (48%) believe job rotation and shadowing is one of the most effective, and 45% believe 360-degree feedback and performance appraisals are particularly effective talent development activities. Interestingly, while courses at externally institutions is the most commonly offered talent development activity, with 64% of organisations offering them (see figure 15), only 20% of respondents believe this to be one of the most effective talent development activities.

FIGURE 16: WHICH OF THE FOLLOWING TALENT DEVELOPMENT ACTIVITIES DO YOU BELIEVE TO BE THE MOST EFFECTIVE? PLEASE SELECT UP TO THREE ANSWERS.460 RESPONSES

TALENT REPORT 18

TALENT MANAGEMENT STRATEGY

Figure 19 reveals that in total, 45% of respondents indicate that they expect the budget for talent management to slightly increase (36%) or increase significantly (9%) in the next two years. Only 8% expect the talent management budget to slightly decrease (6%) or significantly decrease (2%), while 41% expect the budget to remain the same.

FIGURE 19: HOW DO YOU EXPECT THE BUDGET FOR TALENT MANAGEMENT TO CHANGE IN YOUR ORGANISATION OVER THE NEXT 2 YEARS? 456 RESPONSES

Figure 18 shows that recruitment is the most common activity supported by HR technology, with 64% of respondents reporting it is used in their organisation. This is followed by training and development, which 57% of respondents say their organisations use HR technology to support. Succession planning and workforce planning were the least common, with only 16% and 22% respectively using HR technology, but both high proportions of respondents (54% and 52% respectively) who would like it to be used in the future.

FIGURE 18: DOES YOUR ORGANISATION USE HR TECHNOLOGY TO SUPPORT ANY OF THE FOLLOWING?458 RESPONSES

TALENT REPORT 19

TALENT MANAGEMENT STRATEGY

WHAT ARE THE GREATEST TALENT CHALLENGES FOR YOUR ORGANISATION?

“ Understanding the most effective way to make it happen”

“ Senior leaders not having a strong enough focus on development, and employees not taking development into their own hands”

“ Keeping high potential employees engaged”

“ The CEO understanding what it is and being committed to TM strategy”

“ To communicate talent management to frontline employees, including career progression opportunities”

“ To have managers understand how important it is to have talent management within the organisation”

“ Flat line hierarchy structure - retaining and developing talent without the promotion opportunities”

“ Lack of a contemporary HRIS delivering robust data, talent bank facilitation and leadership vision of effective HR services”

“ Talent management for frontline staff who work remotely and have limited contact with their leaders and managers”

“ The changing nature of work and the need to keep up with different requirements - change and innovation. Growth in new work and shrinking in other areas”

“ Downward pressure on staffing; red tape; chronic under investment in technology”

“ Shortage of skilled staff”

“ Ability of organisations to manage the flexibility and essential agility required for workforces of the future”

“ Leadership - leaders recognizing the value of releasing talent to secondments, rotation, new roles”

“ Outdated thinking on talent management”

“ Retention of key employees”

“ Senior management buy in and HR’s ability to execute”

“ Embracing it. I used to talk endlessly about it with zero success. Until the Department puts a value on talent, they won’t spend a cent”

Our greatest challenge is keeping high potential employees engaged.”AHRI survey respondent

AUSTRALIAN HUMAN RESOURCES INSTITUTE LIMITEDABN 44 120 687 149Level 13, 565 Bourke StreetMelbourne Victoria 3000T (+613) 9918 9200F (+613) 9918 9201

WWW.AHRI.COM.AU

Disclaimer: This publication represents a sample of the views andperspectives of the AHRI member respondents who contributed to theworkplace survey on which it was based. Although AHRI has exerciseddue care and skill in its preparation, it does not warrant its accuracy,completeness, currency or suitability for any purpose.

/ahriphotosSearch: AHRI @AHRItweets /AHRIAustralia hrmonline.com.au