HEALTH WEALTH CAREER BUILDING TALENT A C Q U I S I T I O N EXCELLENCE

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1 HEALTH WEALTH CAREER BUILDING TALENT A C Q U I S I T I O N EXCELLENCE

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3 THE IMPACT OF NEW MARKET REALITIES ON TALENT ACQUISITION Successful talent acquisition is determined by the ability to cope with the new complex business and talent landscape. Due to increasing pressure on business caused by shortening of innovation cycles, constant reinvention of business models, and digitisation, companies are struggling when it comes to hiring critical talent and acquiring new skills. Against the backdrop of an even more complex talent landscape, talent acquisition has become a field that companies need to master to gain competitive advantage and outperform competition. This landscape is highly disrupted due to demographic shifts and a globally mobile talent market, new expectations of high-calibre talent, transformative technological developments, as well as the rise of freelancers/ contractors engaged in project work for multiple organisations. In addition, the skills required across today s organisations have shifted from traditional high performance in set roles to an emphasis on flexibility, innovation, and resilience in the face of disruptive change. New Market Realities Driving Talent Acquisition Requirements Demographic shifts Global talent mobility New expectations from high-calibre talent Transformative technological developments Rise of freelancers 1

4 T A L E N T A C Q U I S I T I O N MATURITY MODEL AND FRAMEWORK The confluence of new market realities poses a challenge for organisations to successfully acquire and retain the best talent. Talent acquisition leaders have used the past few years to move from basic recruiting (mainly administrative and operative focus) towards a more strategic talent acquisition function building a highly competitive, dynamic, and value-adding HR cornerstone. As large multinationals and technology companies take the lead in establishing strategic talent acquisition functions, there is a considerable spread of maturity levels (Figure 1) seen across different market players. Figure 1: Five Levels of Talent Acquisition Maturity Model LEVEL 1 LEVEL 2 LEVEL 3 LEVEL 4 LEVEL 5 Meanderers Traditionalists Efficiency Masters Strategists Pioneers Recruiting happens on an ad-hoc basis. No clear ownership for the process. No quality standards in place. Limited use of recruiting systems. Post-and-Pray and interviewdriven operational recruiting process owned by HR. Inconsistent standards, practices, and systems utilised across company. Global strategy and organisation in place, monitoring and improving overall talent acquisition operational effectiveness. Global core process, with an integrated recruiting system and demand planning ensuring minimum standards. Use of preemptive solutions to identify and forecast skill gaps well ahead of competitors. Proactive identification and engagement of internal and external candidates through recruiting enablers (e.g. talent relationship management; internal talent scouts). Big data analytics and machine learning algorithms guide automated smart matching of applicants. Digital candidate experiencecentric process including video interviews, gamification, and personalised content. 2

5 To help companies stay ahead, Mercer has used extensive market research and project experience to develop a maturity model that describes the five levels that companies can advance along to remain effective and relevant in the talent acquisition landscape. It is built on a comprehensive Talent Acquisition Excellence Framework (Figure 2) that is built around the talent acquisition core process and supported by Strategy, Enablers, Infrastructure, and Governance components. This framework helps organisations understand the varying degree of maturity they display and identify the elements they can leverage to move ahead on the maturity curve. Figure 2: Talent Acquisition Excellence Framework STRATEGY Ambition. Principles and strategic pillars. Roadmap. C A N D I D A T E E X P E R Demand management I E N C E Sourcing M A N A G E M E N T Prescreening ENABLERS Strategic workforce planning. Talent relationship management. Brand management. GOVERNANCE Organisation and operating model. Roles and responsibilities. Quality and metrics. Onboarding C O R E PROCESSES Hiring Selecting and matching INFRASTRUCTURE Technology. Digital platforms. External providers and vendors. 3

6 CASE STUDY Deutsche Telekom Technology-Backed Candidate Experience Deutsche Telekom needed to position itself as an attractive employer to fill thousands of job openings per year. To do this, the organisation leveraged the implementation of a single HR system worldwide that integrates all HR services, including talent acquisition. This system ensures quality and efficiency through a standardised process that provides candidates a positive, userfriendly, and transparent experience. Furthermore, the organisation s career portal accepts applications via mobile devices and allows users to link their professional social media accounts when applying. An integrated chat function grants potential applicants the opportunity to easily interact with recruiters at the firm. To ensure transparency, candidates are given personalised feedback concerning their application, regardless of the outcome. CORE PROCESS Creating an efficient and effective Core Process is no longer a nice to have but a must have in any talent acquisition framework. Organisations have to accept that there is no room for complacency, even if they currently have a strong employer brand. An optimised candidate experience ensuring high accessibility, transparency, simplification, speed, and personalisation has to be in place in order to stand a chance in the competition for highcalibre talent. To stay on top of the market, the core process needs to be built on constant scouting and evaluation of new trends. For instance, sourcing is increasingly driven through actively identifying and approaching external talent (through channels such as LinkedIn) as well as internal talent (for example, through talent marketplaces or internal talent scouting), while selection has come to include the use of big data analytics (for example, to automatically apply smart matching of second-best candidates to alternative positions). Source: Deutsche Telekom Human Resources Report 2013/2014 and Mercer research. 4

7 STRATEGY To remain competitive in the talent markets, organisations need to define such a Strategy that sets their direction for succeeding in talent acquisition. Informed by the organisation s business and people strategies, it clearly outlines the goal and value-add of talent acquisition for the company (for example, cost-driven efficiency versus long-term oriented employee quality). It is built around distinct principles the company wants to apply (for example, lowversus high-touch candidate experience) and concludes with a long-term roadmap summarising which framework elements the company needs to achieve its desired future state. ENABLERS To attract highly qualified and competitive talent in the market, companies will need to constantly seek and build relationships with key talent. Enablers such as Talent Relationship Management and Brand Management are key touchpoints for this purpose creating a proactive approach to build and nurture talent pools. Strategic workforce planning will also be critical in identifying critical workforce segments and related skill sets, providing insights to reexamine talent pipelines both externally and internally. CASE STUDY Leveraging workforce analytics to elevate the strategic role of the talent acquisition team A leading global medical device manufacturer needed to determine whether sufficient talent was available to meet its business needs. Cluster analysis was used to identify the profile of employees who would be the most suitable and stable in the blue-collar role. Geospatial analysis then showed where to find high-potential talent in Singapore and how to bring in talent more effectively and efficiently. The insights led to the design of an appropriate employee value proposition, reshaping the employment deal to be a better fit for the target profile and revamping the recruitment agency partnership for greater effectiveness. The solution has a cost savings potential in excess of $1 million over the next three years. 5

8 CASE STUDY Mercer Smart Matching Platform Mercer Match mobile platform helps employers find the best-performing talent through neuroscience and big data. Using digital games based on decades of neuroscience research, Mercer Match can rapidly identify more than 80 different cognitive, emotional, and social traits that impact job performance (see Figure 1 on page 2). By understanding traits known to achieve success in a specific role, the Mercer Match platform is able to more accurately source the best candidates for right-fit jobs. INFRASTRUCTURE Building the right Infrastructure, based on the function s maturity and business needs, is critical for enabling the effectiveness of the entire talent acquisition process. For instance, familiarity and ease of use with social networks or external providers, such as job boards, are necessary to effectively find best possible candidates. Mobile-enabled websites and interactive selection processes, such as gamification, are popular methods providing candidates with an exceptional experience and ease of access. Furthermore, technology supports big data collection and analysis, which will allow organisations to effectively track, evaluate, and improve the core talent acquisition process. To learn more, visit 6

9 GOVERNANCE Tying it all together, robust Governance will help ensure that strategy, enablers, infrastructure, and core process are effective in their ability to meet business objectives and people goals. Figure 3 gives a short overview of the four common operating models found in talent acquisition organisations today. In the market, most talent acquisition functions exist between the Divisional and Three Pillar models. Talent acquisition functions that possess higher maturity levels have been observed to employ the Specialised model, in which the role of the HR business partner is diluted and talent acquisition is fully driven by experts. Figure 3: Talent Acquisition Operating Model TAILORED DIVISIONAL THREE PILLAR SPECIALISED Tailored model blends parts of talent acquisition organisations. Corporate center defines and manages key areas of talent acquisition. Corporate HR/ Corporate TA Business Unit A Business Unit B Business Unit X Talent acquisition setup follows the typical HR Three Pillar Logic. Talent acquisition operations run by specialists with minimum involvement from business partners. CoE SSC BP Talent Acquisition BP Observed maturity levels Process split (generalised) Observed maturity levels Process split (generalised) Observed maturity levels Process split (generalised) Observed maturity levels Process split (generalised) Admin Generalists Specialists Admin Generalists Specialists Admin SSC HR Generalists/HRBP TA Specialists TA Specialists Admin TA Source: Mercer project experience and research 7

10 CASE STUDY Adapting to external economic and regulatory factors with an evolving talent acquisition structure and specialist roles Against a backdrop of a tight financial and labour market as well as governance and compliance factors, a leading global financial services company needed to review its talent acquisition model and how it delivers its services across the globe to be market competitive. Based on the review, a new service delivery model was recommended, leveraging a shift of transactional talent acquisition activities to the shared services centre and enabling the in-house talent acquisition team to focus on strategic priorities. The new service split would lead to further specialisation and the addition of new skills in areas such as employer branding, data analytics, and candidate experience management. To support new responsiblities and tasks of the talent acquisition function across all models in Figure 3, new recruiter profiles are emerging, with two archetypes that are commonly observed. The Analytical Sourcer has deep knowledge of algorithms and coding, which is applied to internal HR databases to create talent pools and success profiles, as well as for scanning external sources to find suitable candidates. Using data and analytics allows companies to better spot trends, understand interdependencies, and allow for a more effective measurement of efficiency and quality of all elements of the talent acquisition process. The Analytical Sourcer is able to translate the large volume of data into meaningful recommendations to support business decisions and the talent pipeline development process. The Candidate Relationship Manager engages prospective employees beyond the interviewing and selection process. The prevalence of social and professional networks provides greater and easier access to information, thereby broadening employment choices for talent while reshaping selection criteria for employers. These shifts create a talent-as-customer dynamic, through which organisations now have to market themselves as great employers. In this new environment, candidate relationship managers require well-developed customer service, marketing, public relations, and sales skills to ensure that candidates have a positive experience throughout the entire talent acquisition process. 8

11 WHAT DO LEADING C O M P A N I E S DO DIFFERENTLY? Leading organisations have understood that their talent acquisition role can no longer be confined to the sphere of passive administrative support after a requisition has been raised. In these organisations, talent acqusition is now involved in identifying critical roles and forecasting skills required in the midterm to long term (three to five years and longer), and generating multiple workforce scenarios to support strategic workforce planning. Furthermore, talent acquisition specialists need to think like marketing experts to engage and attract the right profiles to the organisation and engage fully with their target audience. Progressive organisations understand that such a fast-changing role cannot be measured purely in terms of cost to hire or time to fill; instead, they are giving their talent acquisition function greater flexibility to experiment with new approaches, tools, and technology to engage the right talent. Talent acquisition leaders worldwide appear to have five traits in common that ensure their success in aquiring talent despite the complex market challenges they face. Regardless of the level of maturity, organisations would do well to review their approach to each of the following five elements to take their talent acquisition function to the next level. 9

12 1. Greater role in strategic workforce planning 2. Nurturing talent pools through a proactive approach 3. Building a candidatefocused process Leading talent acquisition functions are increasingly playing a more strategic role in the workforce planning process by proactively engaging with the business and using their talent market expertise (for example, determining availability of critical roles and skill sets). As such, the talent acquisition function is able to play a more constructive role in aligning business and people strategies enabling effective ways of examining sourcing and pipeline strategies. As a result, a holistic understanding of the talent challenges in critical workforce segments is ensured, providing insights into build, buy, and borrow strategies to address them. For best-in-class talent acquisition functions, finding candidates is not a reactive process. Instead, recruiters continuously manage relationships with talent to build a robust talent pipeline, allowing the business to fill positions quicker and with better candidates. Externally, they move away from traditional job boards and focus on social networks to identify and initiate contact with potential candidates. Internally, they develop new frameworks that provide greater transparency of existing skills and actively create opportunities for current employees (for example, through internal talent marketplaces or talent scouts. Talent acqusition leaders recognise the need to develop a strong value proposition with a defined employer brand that will essentially attract the right talent to the company. Furthermore, the candidates need to be provided with an end-to-end core process that is accessible, fast, easy, engaging, and personal from the application until well beyond day 1. This candidate-oriented process ensures that the bestfit candidates will decide to work for the organisation, and it will also enable these individuals to quickly become effective organisational members with high satisfaction, commitment, and performance. 10

13 HARNESSING THE POWER OF PREDICTIVE ANALYTICS FOR TALENT ACQUISITION 4. Taking a data-driven approach Talent acquisition champions tackle workforce issues by leveraging (big) data and analytics. They constantly collect, analyse, and interpret data to add value via their recruitment process in terms of improvement and effectiveness. This data-driven approach allows them to better inform decisions and actions across all recruitment activities, as well as provide feedback into people and business goals (for example, finding the most effective sourcing channels and identifying predictive selection criteria and methods). 5. Placing an emphasis on technology for the best outcome Finally, having access to integrated systems and leveraging the right technology to enable the delivery of the entire recruitment process are seen as key differentiators of strategic talent acquisition functions. On both ends, candidates and employees alike expect the organisation to keep pace with upcoming technology, infrastructure, and networking trends, bringing insights, transparency, and increased connectivity to the workplace. From relying on human instinct to the use of screening and assessment tools to crowd sourcing and machinelearning algorithms, the world of talent acquisition has come a long way. Leading organisations are employing data-driven approaches to identify the traits and attributes of highperforming employees, with machine-learning algorithms being utilised to effectively screen through millions of profiles to identify them. Early adopters are harnessing the power of social networks to gain access to large pools of talent. They also make use of innovative approaches such as gamification and on-the-job simulations that allow them to assess talent while providing them with an engaging experience. 11

14 AUTHORS Hanning Kruse Senior Consultant, Mercer Germany Hanning is a senior consultant with Mercer s Talent business and based in Frankfurt. He is passionate about analysis and design of HR strategies and processes with a keen focus on the changing talent acquisition landscape. Hanning can be contacted at hanning.kruse@mercer.com. Bhavana Chauhan Senior Consultant, Mercer Singapore bhavana.chauhan@mercer.com Bhavana is a senior consultant with Mercer s Growth Markets HR Transformation and Workforce Analytics Center of Excellence based in Singapore. She is passionate about delivering solutions that allow HR to be strategic and hence add value to the business. Bhavana can be contacted at bhavana.chauhan@mercer.com Joann Lee Consultant, Mercer Germany jo.ann.lee@mercer.com This point of view paper was developed with inputs from the following experts: Dieter Kern (Germany) Partner dieter.kern@mercer.com Dion Groeneweg (Singapore) Partner dion.groeneweg@mercer.com Barbara Marder (North America) Senior Partner barbara.marder@mercer.com Ephraim Spehrer-Patrick (Australia) Principal ephraim.spehrer@mercer.com Joann is a consultant with Mercer s Talent business and based in Munich. Her recent experiences include the design and implementation of a global recruitment strategy, as well as analysis and development of recruitment tools. Joann can be contacted at jo.ann.lee@mercer.com 12

15 ABOUT MERCER At Mercer, we make a difference in the lives of more than 110 million people every day by advancing their health, wealth, and careers. We re in the business of creating more secure and rewarding futures for our clients and their employees whether we re designing affordable health plans, assuring income for retirement, or aligning workers with workforce needs. Using analysis and insights as catalysts for change, we anticipate and understand the individual impact of business decisions, now and in the future. We see people s current and future needs through a lens of innovation, and our holistic view, specialized expertise, and deep analytical rigor underpin each and every idea and solution we offer. For more than 70 years, we ve turned our insights into actions, enabling people around the globe to live, work, and retire well. At Mercer, we say we Make Tomorrow, Today. Mercer LLC and its separately incorporated operating entities around the world are part of Marsh & McLennan Companies, a publicly held company (ticker symbol: MMC) listed on the New York, Chicago, and London stock exchanges. 13

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