An Oracle White Paper June European Talent Trends for 2012
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1 An Oracle White Paper June 2012 European Talent Trends for 2012
2 Introduction Although the European business climate of 2011 was quite challenging and unpredictable, certain talent trends have emerged that will carry into 2012 and beyond. Chief among these is the need to know more about your talent as a hedge against continued uncertainty. This white paper addresses this issue as well as key trends such as the continued blurring of internal and external talent; the easing of labor laws in response to talent shortages; and accelerating adoption of integrated, business-driven talent management solutions. 1
3 The Economic Uncertainty of 2011 Will Continue into 2012, Requiring a New Level of Business Focus on Existing Talent to Drive Growth and Innovation It s very difficult to predict what will happen in Europe in 2012 with any level of certainty, due to the looming threat of recession, the sovereign debt crisis, reduced government spending, rising levels of unemployment, and increasing competition from the BRIC countries (Brazil, Russia, India, and China). This disruptive uncertainty means that more agility will be required for managing skills gaps and talent as businesses seek to enter new markets and introduce new products and services to survive (and grow). The old cost-cutting model in response to difficult times will continue to lose favor. Many companies still don t have a clear view of their existing talent, and a focus in 2012 will likely be on building out talent profiles for as many employees as possible. Talent management programs have historically focused on the elite executive leaders and senior management, for example. In 2012 there will be a shift in focus away from the elite to include line managers and even rank-and-file employees as businesses seek to leverage talent throughout their organizations in response to challenging and dynamic market conditions. Addressing organizational skills gaps will continue to rely on both build and buy strategies. Recruitment departments will find it increasingly difficult to acquire the right talent. As unemployment levels rise across Europe and the number of open positions decreases, the recruitment team will have to work harder to source and acquire the right talent for the right job at the right time while processing increasing numbers of applications. The war for talent will intensify once again. On the build side, companies will increasingly rely on talent mobility as well as learning and development programs to proactively reassign employees to roles in which they can have maximum impact. Organizations will also transition from functional to organizational ownership of talent. Increasingly, HR and senior executives will be the stewards of company talent and will try to engage and retain employees with opportunities for personal and career growth across functional groups, business units, and geographies while using this movement to fill critical-skills gaps. Integrated talent management solutions, comprehensive talent profiles, and business-led talent practices will be the key drivers of this transformation. The Boundaries Between Internal and External Talent Will Continue to Blur, and Social Recruiting Will Increase Significantly The rapid adoption of social and professional networks will continue, as Facebook and LinkedIn continue their exponential growth, affecting businesses on several levels. The use of professional networks for sourcing will continue to expand in Europe, leveraging the three dominant players LinkedIn, Viadeo, and Xing for information sharing, search, and job posting. In the U.K., the trend continues for agency recruiters to move in-house (hunter turned gamekeeper) as organizations continue seeking to optimize sourcing costs. 2
4 Although the three professional networks will grow in importance for sourcing baby boomers, members of Generation X, and white-collar workers, Facebook will emerge as a cornerstone source in the battle to attract millennials and blue-collar workers. With an ability to present up-to-date company information, job postings, discussion forums, videos, and all forms of rich content in a social network with 220 million European subscribers, Facebook will experience an inevitable rise as a social recruiting pillar. The corporate career site will continue to lessen in importance as candidates leverage networks, rather than traditional channels, to find information on prospective employers. Budgets will shift significantly to social media. The rise of social media will not be limited to recruiting. Historically, high-performing businesses and employees have gotten the job done by leveraging internal networks. Increasingly, leading-edge companies are leveraging external talent through agencies, talent competitions, and crowd-sourcing. We re seeing a blurring of boundaries between internal and external networks as businesses begin embracing wisdom of crowds models to leverage both internal and external talent to execute their business strategies. Talent management solutions, integrated with internal and external networks, will begin to transform succession planning activities. Organizations will tap internal as well as external talent pools for successors, increasing bench strength and introducing a more diverse talent pool. Managers will be able to search for talent and skills among external candidates or internal employees with equal ease. An Aging Population Meets a Highly Regulated Labor Market, Meaning Significant Friction Between Business Needs and Political Inertia Friction is likely to increase between businesses global ambitions for talent management programs and varying local labor constraints within Europe. Close cooperation with works councils and unions will be key in several countries if businesses are to achieve their goals of unified people processes. The recent Global Talent Index Report from the Economist Intelligence Unit highlights some of the issues facing old economy Europe and identifies likely trends between now and This report benchmarks countries on their capacity for developing, attracting, and retaining talent a key driver for economic growth. The U.S. tops the index, and Europe remains well represented in the top 20 up through Europe s advanced infrastructure and continuing high investment in education helps maintain this strong position despite concerns over slow demographic growth and the shortage of recruits with the essential soft skills that companies require most. A key aspect of this report is the relationship between talent-related regulatory climates and the attractiveness of the talent environment. Germany and France are expected to rise in the index between 2012 and 2015, primarily as a result of relaxed labor laws, notably the easing of wage regulations in Germany. As Europe begins to feel the talent-related impacts of the aging of its workforce, this trend toward deregulation will continue, particularly regarding talent mobility to support migration of workers into Europe and the mobility of talent within Europe. The introduction 3
5 of more-ambitious and harmonized talent management programs across Europe against this backdrop of a less regulated labor market in key countries can be anticipated. Interest in More-Integrated Talent Solutions Accelerates Although full-suite buyers will remain a minority in 2012, so will companies that buy a single talent management solution as a long-term strategy. Some companies may start with a point solution, but only initially. The vast majority of HR teams will have a larger strategic vision that includes multiple, integrated talent management modules, and an increasing number will move down that path in According to Gartner s Jim Holincheck, 86.1 percent of companies already have at least two talent management modules and 55.6 percent have three. 1 Judging from the Oracle sales pipeline and inquiries, these multisolution deals will increase significantly in Taleo (acquired by Oracle in June 2012) was already seeing significant increases in these kinds of deals in the second half of 2011, and pipeline activity for Oracle suggests that 2012 will represent an inflection point in the adoption of suite-based talent management solutions. This trend is in some ways an outgrowth of the other trends noted above. Economic uncertainty is driving companies toward consolidation of systems, efficiency and cost savings in contracting models, and reduction of complexity. At the same time, organizations need to maximize the value of their people, given the uncertainty in Europe and the potential for serious systemic shock. In this climate, growth is unlikely to come from spending. Growth needs to come from innovative ideas and moreefficient, more-effective use of talent, which also enables the organization to respond with more agility in the face of disruptive events. Another driver is the role that business leaders are playing in HR and talent processes. They are much more involved in talent management than ever. For business leaders, the distinctions between recruiting, onboarding, performance management, succession, and development are largely artificial. They want the best people on their team, assigned appropriately to work that draws forth their best contribution and efforts and developed and compensated properly to drive long-term engagement and continued high-value contributions. Whereas HR sees bright lines between recruiting and performance management, business leaders see a need to achieve business objectives through people. For HR all talent decisions are driven by business need and value. As business leaders become ever more involved in HR and talent processes, the demand for integration and suite solutions will increase. 1 Jim Holincheck, The Talent Management Suite Market Emerges, Gartner, May
6 Talent Management Is Recognized as a Core Business Process Talent data is the last business information set to be digitized into minable, searchable data. All other major corporate systems financials, inventory, sales, and marketing have enterprise-grade systems and data models supporting them. These systems, in turn, have led to the rise of business intelligence solutions that help organizations make sense of this data and improve their decision-making. Talentrelated data, to date, has not been treated with the same rigor. With the rise of integrated talent management solutions and underlying unified talent profiles and normalized data models, talent data is now as digital and accessible as any other corporate data set. This enables talent data to be more readily incorporated into key planning and strategy discussions. At the same time, business leaders are increasingly influencing or even owning key aspects of talent strategies and practices within the business. This shift of ownership is leading to an increasing demand for talent data that matches the quality, accessibility, and relevance of other business data sets. As the speed of business continues to increase, the ability to collect talent data, gain insight, and make informed decisions about people and processes will become increasingly important. European business leaders, as key stakeholders in talent management processes, will become more involved in the definition of talent management system requirements and even the selection process, triggering a dramatic increase in the adoption of solutions that satisfy their data, analysis, and reporting demands. For these companies, talent data and processes will be held in the same regard as critical business data and processes. 5
7 June 2012 Oracle Corporation World Headquarters 500 Oracle Parkway Redwood Shores, CA U.S.A. Worldwide Inquiries: Phone: Fax: oracle.com Copyright 2011, 2012, Oracle and/or its affiliates. All rights reserved. This document is provided for information purposes only and the contents hereof are subject to change without notice. This document is not warranted to be error-free, nor subject to any other warranties or conditions, whether expressed orally or implied in law, including implied warranties and conditions of merchantability or fitness for a particular purpose. We specifically disclaim any liability with respect to this document and no contractual obligations are formed either directly or indirectly by this document. This document may not be reproduced or transmitted in any form or by any means, electronic or mechanical, for any purpose, without our prior written permission. Oracle and Java are registered trademarks of Oracle and/or its affiliates. Other names may be trademarks of their respective owners. Intel and Intel Xeon are trademarks or registered trademarks of Intel Corporation. All SPARC trademarks are used under license and are trademarks or registered trademarks of SPARC International, Inc. AMD, Opteron, the AMD logo, and the AMD Opteron logo are trademarks or registered trademarks of Advanced Micro Devices. UNIX is a registered trademark licensed through X/Open Company, Ltd. 0612
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