Global Talent Management Isn't Just Global

Transcription

1 Research Publication Date: 22 July 2008 ID Number: G Global Talent Management Isn't Just Global Thomas Otter Global talent management projects must take into account local compliance issues or risk failure. Global HR leaders should ensure that global systems deliver local value, too. Key Findings Global talent management processes have compliance implications at a local level. Global projects tend to underestimate local compliance requirements. Not paying close enough attention to local compliance requirements can lead to project delays and low uptake. Global systems can be undermined by local shadow systems that are built to meet only local legal requirements. Recommendations Expect and plan for local compliance issues in your global talent management. Develop solutions that provide global and local value. Encourage vendors that promise global solutions to build and support compliance issues into their applications, and carefully examine their claims of global coverage. Reproduction and distribution of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Although Gartner's research may discuss legal issues related to the information technology business, Gartner does not provide legal advice or services and its research should not be construed or used as such. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The opinions expressed herein are subject to change without notice.

2 ANALYSIS Global Talent Management Isn't Just Global As organizations operate globally, the pressure to understand workforce strengths and weaknesses has intensified (see "Economy and Demographics Put Human Capital Management Into Focus"). Knowledge workers are increasingly mobile, and leading organizations have made a habit of sourcing and developing talent globally. For example, more than 35% of CEOs in the FTSE 100 are not British nationals. Recruiting, internal and external, has become increasingly global. Many firms are building highly skilled teams offshore, and managing teams of people from across the world is becoming commonplace. Line managers and HR require tools that give them visibility and control over recruitment, compensation, performance and development (see "Unlocking the Strategic Value From Talent Management Application Investments"). Vendors position their applications to process talent management on a global basis. Spotting high-potential managers in subsidiaries, encouraging global mobility and multicountry team management benefit significantly from a consistent global solution. The term "global" often is used glibly. It is easy to talk about global talent management; however, to make this sustainable, it is essential that global projects help ease local compliance burdens. If they don't, then local managers and HR will work with local solutions instead. Do not rely on vendors' claims of legal and statutory requirement support. Specify requirements for these obligations in detail, and insist that the vendor shows you how it meets them. The Plight of the Line Manager Consider a line manager with employees in four countries, which is not unusual in a global company. If the performance management applications are at a local level, then the manager must go to four different systems to evaluate the employees. Often, local processes run on different applications in different languages on different time scales and with different criteria. The demand from line managers for simplification is helping drive global talent management adoption. A consistent global process would alleviate repetition and confusion for the global manager, making the process faster and fairer, and it would form a consistent base to identify global high performers and drive succession planning. Local Compliance Isn't Just About Payroll HR legal compliance tends to be discussed in the context of payroll and core HR administration, but it can significantly affect talent management. National laws affect these processes. German workers' councils have considerable input into the performance assessment of German employees, and, in South Africa, employment equity legislation affects succession planning fundamentally. This research addresses several examples of national compliance challenges. When evaluating and deploying talent management solutions, don't make broad global assumptions. Assess local compliance issues in detail and how your talent management projects will support or impede local compliance issues. Global projects find it difficult to get long-term local support if they don't meet local compliance needs. Local HR and line managers focus on obeying local compliance demands rather than on maintaining data on a global platform. When evaluating global talent vendors, ask them how they have supported these issues in other companies. If you get blank stares, then it probably means that the local subsidiaries of these companies maintain separate local systems. It is likely that the Publication Date: 22 July 2008/ID Number: G Page 2 of 6

3 local system will be more accurate than the global system. The prosecution risk for compliance failure generally outweighs the pressures of maintaining a global system. The "Yes, But It's All Different Here" Trap Although local issues are critical, you should not get caught in the "yes, but it's all different here in my country" trap. This is an old ploy used by countries that are remote from a company's headquarters for the purpose of being left alone to do what they want. Finding the balance is hard. The long-term answer is people who have worked in both environments and have crossborder understanding and skills. Consultants and vendors can help by providing facts and references, but, ultimately, the project requires compromises from global and local leaders. Convincing a group of HR leaders to agree on one system for a process such as performance management is challenging, because they typically want their system to become the global standard. Similarly, getting them to agree on a consistent process is difficult. There's always a need to balance local requirements with a standardized approach. Ultimately, however, it may take the personal involvement of the group HR head to make the final decisions. The HR leader must be prepared to be involved personally in the selection and design of the global system. IT organizations cannot sort out these issues on their own. In one instance, the group HR director participated personally in the performance management design sessions and became the final arbiter of the design choices. Prior to the start of a project, CIOs should explain to the management team the challenges in agreeing on a single system and the accompanying process design. Although it's crucial that the group HR director sponsor the project, sponsorship must go beyond attending steering committee meetings. Responsibility for resolving detailed issues with should rest with the group HR head. Basic Global Building Blocks At a minimum, solutions require the ability to flexibility support multiple languages, currencies and legal entities. Support levels vary from complete translation to a do-it-yourself option. Currency becomes complex for compensation processes, and you will need to easily segment your system at the national and legal-entity level. EU Data Protection Regulations You probably have addressed European Union (EU) data protection regulations in your core HR systems project, but don't ignore it in talent management, because talent management applications process sensitive personal data and fall under the provisions of the regulations. If ignored, then they may come back later and derail the whole project. Data protection law is a complex field, so involve your data protection experts early in the project, and design compliance into the solution from the beginning (see "Testing Times for HR Systems and EU Data Protection Law"). Ask vendors how they have designed data protection law into their applications. The responsibility for personal data stops with you, even if you outsource, or use a software-asservice (SaaS) vendor. Insist that the application be architected to enable country-level data segregation. For example, managers in Australia should not see the compensation records of Italian employees without a valid business reason. Several global compliance standards provide an indication of the vendor's compliance capability. Many talent management applications are offered via a SaaS delivery model. For SaaS vendors that process data outside the EU, membership in the "safe harbor" is an indication that the vendor has considered data protection law, but it is only a starting point. The U.S. Statement on Auditing Publication Date: 22 July 2008/ID Number: G Page 3 of 6

4 Standard 70 is an indicator that the vendor has a secure architecture. Focus also on International Organization for Standardization compliance. A Brief Look at Local Laws and Their Potential Effects HR should work with the IT and legal departments to draw up a comprehensive inventory of compliance requirements and risk. A good business practice is to apply a risk management methodology. This documents risks and costs more objectively, and it enables you to explain your decisions should the enterprise be reorganized. Norwegian Gender Equality Legislation Norway recently enforced legislation that boards of public companies must have at least 40% female board members. After several years of voluntary compliance failed to yield a sufficient number of female board members, publicly listed companies larger than a certain size were told to change the composition of their boards or risk dissolution. The Confederation of Norwegian Business and Industry proposed that companies facilitate a view of the private sector as an attractive place to work for women; increase the percentage of women in decision-making processes, management and boards in general; involve managers as prime movers in processes aimed at recruiting more women to executive positions and board posts; and facilitate executive responsibilities to be more easily combined with family responsibilities the balance between work and private life. Talent management processes in Norway must pay particular attention to identifying, developing and retaining high-potential women. Succession-planning applications should take gender into account when creating succession paths, scenarios and analyzing bench strength. Organizations must report on progress and plans. German Works Councils and Codetermination If you have German operations, then you should be aware of works councils and codetermination rules. Performance management data is sensitive; in the sales cycle, vendors tend to address the brighter side of performance management identifying top talent and building an aligned workforce but employee representatives tend to be concerned that these tools will be used to plan retrenchments. These representatives have the authority to stop the project if their concerns are not addressed. A performance management project at a bank was delayed by more than a year because of works council concerns about how the data would be used. If the bank had engaged earlier with the works council, then the concerns could have been built into the design, saving considerable time, money and stress. Similarly, a software company had to postpone a management development process deployment for months because the works council raised concerns that the system would track poorly performing managers. Involve the works council early in the solution design, and build links to other organizations that have similar processes. It is likely that the project will be discussed at works council management meetings, so ensure that local management is firmly behind the project. Include these meetings in your timelines, and report regularly during the project. French Gestion Prévisionnelle des Emplois et des Compétences (GPEC) Gestion Prévisionnelle des Emplois et des Compétences is loosely translated as "Planning for social cohesion." It affects companies with at least 300 employees. A provision states that every three years management must inform and consult the employee committee about the company's strategy and how this will affect employment and salaries. The act also stipulates that companies Publication Date: 22 July 2008/ID Number: G Page 4 of 6

5 must implement a formal workforce plan that includes measures such as training, competencies evaluation, validation of experiences, and functional and geographical mobility. GPEC creates significant reporting demands on skills, training, competencies, job families and career paths. Solutions must track employee skills and qualifications against French industry catalogues and must support the French language. There are complex state administrative requirements on training investments. Learning management system (LMS) vendors should deliver these as standard, or they should have evidence of other companies that comply. Failure to report means fines and considerable administrative pain. South African Skills Development and Employment Equity Regulations In South Africa, several laws, including the Qualifications Authority Act and the Skills Development Levies Act, create obligations to report on skills and training development of employees. Employers must pay 1% of the payroll skills development levy. In return, employers are entitled to two types of grants: Mandatory grants: accessible on completion of a workplace skills plan and annualtraining report Discretionary grants: accessible by all employers at the discretion of the authorities to implement programs such as apprenticeships, internships, skills programs and HIV/AIDS in the workplace The Sector Education and Training Authority (SETA) maintains catalogs of certified courses and qualifications per industry sector; usually this certification is needed to claim back grants. An LMS in South Africa should track SETA certifications. More broadly, skill development systems must take these laws into account for reporting. Employment equity laws affect talent management. A succession-planning application that doesn't enable reporting and planning by ethnic group would be of limited use to a South African HR department. Recruitment applications should include data fields such as ethnicity and gender. Bottom Line It is easy to talk about global talent management; however, to make it sustainable, it's essential that global projects help ease local compliance burdens. If they don't, then local managers and HR will tend to work with local solutions instead. When selecting vendors, describe the languages required and countries in which the applications will be used, along with any country-specific requirements that are needed. Do not include a bland statement requesting support for "legal and statutory requirements" for a number of countries, because there is no standard by which this can be judged. Specify the requirements in detail. Develop this list with input from your local experts. The time spent in doing this will help prevent unwanted surprises. For reference calls that take place during in the evaluation process, don't just talk to global HR; ask to speak with a local HR person. Ask the individual how the global system helps HR and the employees. Global systems work only if they add value locally, too. RECOMMENDED READING "Magic Quadrant for E-Recruitment Software" "Unlocking the Strategic Value From Talent Management Application Investments" Publication Date: 22 July 2008/ID Number: G Page 5 of 6

6 "Economy and Demographics Put Human Capital Management Into Focus" "Testing Times for HR Systems and EU Data Protection Law" "Hype Cycle for Human Capital Management Software, 2008" REGIONAL HEADQUARTERS Corporate Headquarters 56 Top Gallant Road Stamford, CT U.S.A European Headquarters Tamesis The Glanty Egham Surrey, TW20 9AW UNITED KINGDOM Asia/Pacific Headquarters Gartner Australasia Pty. Ltd. Level 9, 141 Walker Street North Sydney New South Wales 2060 AUSTRALIA Japan Headquarters Gartner Japan Ltd. Aobadai Hills, 6F 7-7, Aobadai, 4-chome Meguro-ku, Tokyo JAPAN Latin America Headquarters Gartner do Brazil Av. das Nações Unidas, andar World Trade Center São Paulo SP BRAZIL Publication Date: 22 July 2008/ID Number: G Page 6 of 6