Battle for talent, the 'fourth world war'

Battle for talent, the 'fourth world war'

K. Basrie, The Jakarta Post, Jakarta

Helen Handfield-Jones, coauthor of The War for Talent, made a
stop in Jakarta on her tour of five major cities in Southeast
Asia to promote the 200-page book, published by Harvard Business
School Press last year.

The book is based on research with 200 senior managers from 77
companies in 1997 and 56 companies in 2000, all of which were
based in North America. The study was conducted by Canada-based
McKinsey & Company, where Handfield-Jones and the other two
writers, Ed Michaels and Beth Axelrod, work.

Even though the characteristics of the companies and the
people surveyed for the study might have significant differences
from those in Indonesia, the book will help broaden our
perspectives about what the battle for competency and success is
all about: Preventing the most talented workers from bailing out.

With the help of PT McKinsey Indonesia, we sat down with
Handfield-Jones to discuss what it takes to be a talent in
today's workplace.

What do your really mean by talents in the book?

It's really very old and inclusive about someone's capability
to do their job, it includes their inherent abilities, like
intelligence and personality. But also their skills, knowledge,
their values, all of those things.

We're talking about a highly talented person. She could be a
highly talented baseball player, and a terrible soccer player
(laughing). Or it could be terrific business leader and a
terrible journalist. So, when we're speaking about highly
talented persons, it means they've got a total set of skills,
abilities, values and mind-set. For a pharmaceutical company,
that means a great scientist, for a soccer company, it means a
great planner, for most other businesses it means the most senior
leadership.

Then, how do you precisely describe the war for talents,
particularly in the global arena nowadays?

Talents have become more important and more difficult for
companies, with four forces driving that. The first force is the
increase for knowledge workers generally -- computer programmers,
medical technicians, business people, journalists, and all of the
people who work with their mind -- instead of with their hands.

As the world shifts to an information-based economy from a
manufacturing based one, a large percentage of the jobs are now
knowledge-worker jobs. In 1900 in the U.S., for example, 17
percent of all the jobs were considered to be knowledge jobs. But
now, it's over 60 percent and it's increasing. Overall, there's
an ongoing demand for educated people.

(Christian Van Schoote from McKinsey Indonesia said that his
office had not yet carried out a study on the same issue in
Indonesia. But he firmly believed that big cities all across the
globe were obviously facing the same problem.)

The second force is that the jobs of senior managers all over
the world are more challenging than they were 10 or 15 years ago.
Many forces are requiring companies to be more innovative, higher
performing and faster to respond to change in the global economy.

And I think in the Asian context or any developing nations
where you have companies facing tighter competition than ever
before, privatization, deregulation, and the wonderful advances
of science and technology, many companies in Asia are also
thirsty for more and better business management talent.

The third is that talented businesspeople are more mobile,
more able to change companies. This is very true in the United
States. So if I don't like the company I am working for now, I
could change to another company. Plus, there's mobility across
countries. People could leave Indonesia and go to the U.S. or,
more usually, to Singapore. And European, American and Japanese
companies are looking for talents. They come in to find talents
in places like Indonesia.

And, finally, the fourth force, there's a difference here in
that some countries have demographic problems -- which you don't
have here but we do in North America -- in the form of an aging
population, where people under 45 are actually decreasing in
number. The pool for the next generation leaders is smaller and
smaller.

You don't have that problem here but your challenge here is
that in term of supply of business management talent you don't
have a very deep pool of managerial talents who have been exposed
to competition and best practices.

Do the Asian cultures, values and so on play a certain role in
the war?

Certainly they do. Cultural differences influence what
approaches are appropriate. Most of the principles in this book
are globally implacable but apply differently because of
different cultures. Let's take several examples. In Asian
cultures and also European cultures too there's a reluctance to
be frank and honest about performance, right?

What about family-owned businesses that are so common here?

That poses a challenge because again it becomes more difficult
to be honest about people. We certainly see family-owned
businesses that have overcome the problem after being objective
about performance and recruiting the most qualified people. But
in some family-owned businesses, that's difficult to do.
So, what's your suggestion to such companies we have here?

I would say to adopt the mind-set that we need capable people
to run the company and that some of them can be family members
and others not. But let's assess and promote people based on
their overall performance.

How much we can trust them certainly is a factor but also how
capable they are and how effective they are at leading the
organization. It's more about capability rather than
relationships.
Do you think that headhunters, for instance, would help solve
the problem?

They are playing important roles in North America. Many big
companies are looking for them. It's a good thing for the talent
market to become more transparent, where buyers and sellers can
match up to select the right people. The increase in headhunter-
and Internet-recruiting also fuels the mobility of people moving
from one company to another. It makes the best use of talent and
the mechanism helps talented people to find ways for the best
opportunities. It's a little bit like a free market.
In such a war, what are the best weapons for companies here in
Indonesia to avoid the nightmare of losing their gifted
employees?

I don't agree with the word nightmare, I don't (laughing).
Those kind of people moving is a trend that won't stop. What a
company should do to respond is, first, be very good in retaining
your best people so know who your very best people are and make
sure you are giving them proper promotion and compensation.

Give your people as much as you can. And in general, it's good
for companies to compete for talent. Companies should have two
things, one is that they have to realize that it's going to
happen.

(According to Van Schoote, companies willing to achieve their
goals should do all their best to retain their best employees.
But many firms don't do that and let the best go and keep the
poorer performers, who are less likely to move on.)
Any tips for employees planning to make a change?

We should look at our proper value preposition: what are the
other organizations offering you, can you really change it, what
do your talent competitors have that you don't? That's a very
strategic approach.

Is that what you call EVP (employee value preposition) in the
book?

Yes. That's the place at which we start.

What about the tactics for employers?

They should know who their best people are and find out the
reasons why the best leave. Why have we failed to retain them? So
it needs a kind of very personal and individual tactic to keep
hold of these people.

(McKinsey's research in the U.S. shows that the opportunities
available in their current offices lead talented individuals to
stay, added Van Schoote.)
Here in Indonesia the "pull" factors for people leaving their
current companies are varied, such as the weakening of the local
currency, the lack of career opportunities, a poor relationship
with the boss and the poor working environment. Your comments?

(Van Schoote, who was given the chance to reply first to the
question, insisted that although McKinsey had not done any
research here, they believed that a rupiah-based salary was not
the most determining factor. In the end, he went on, people
moving abroad will also face the same relative living cost. What
McKinsey thinks most about the critical factors are the culture
and opportunities, not the compensation.)

You cannot make a great value preposition with compensation
alone. Also you cannot attract people with money alone. But, like
a car, if you can buy one at half the price or far less than the
price it's a different story. So compensation matters but if the
difference how does this sentence end?

In many industries a decade or two ago, the difference between
the most profitable company and a not very profitable company was
structural. It could have been physical assets and plant,
structural barriers or hard, tangible assets. Now in the
information era, it's the intangible things that differentiate
between companies, such as brains, innovation and relationships.
The other thing is the supply-demand imbalance. Companies have
been looking for talent but the global supply is not enough. It
wasn't the case a decade or two ago.
But, why have you stayed with McKinsey for 11 years while you,
of course, had great chances to change?

I love working with clients, I like doing research, I helped
build the talent management practice at McKinsey, and McKinsey
gave me the opportunities to build it.

The War for Talent is available at major bookstores, including
QB World Books (Rp 358,000).