TALENT MANAGEMENT: A Conceptual Framework For The Construction Industry

End-Assignment Enschede (29-01-2013)

“Winning the Race for Talent in the Construction Industry. How to keep the correct players
to the correct positions? Anticipating or Designing Tomorrow?”

Abstract
The construction market constantly struggles to find the ideal balance between the
exploration and exploitation forces which affect directly the innovation capabilities of the
industry. The aforementioned issue is like trying to solve the so called Competition Policy
dilemma in a dynamic environment where construction firms collaborate and
simultaneously compete to charter, acquire and retain their brilliant minds. In particular,
graduate programs, several cycles of pre-hiring training and interviews hamper the initial
enthusiasm of candidates. If construction firms do not articulate clearly the spirit of pre-
occupation with what is the match wanted from both sides; the employer and the
employee, this demand and supply gap in all levels; industry (macro), organization (meso),
and individual (micro), will not be bridged. The purpose of this article is to provide a practical
framework linking the work abilities (Human Resources) with the insight of the construction
work environment and make interconnections with all the talent-analytics around the
pipeline. The framework selects specific change drivers and will aid to develop a
comprehensive end-to-end process illustrating the transition from poor practices to best,
and latter on to implementation challenges. Hopefully, this framework will induce academic
research on exploring applications of Complex Production Systems and High Reliability
Organizations in the work of HR professionals.

Key-words: Talent management, Construction industry, Talent analytics

Managing Human Resource Flows (194120090) UT. / M-BA
DIMITRIOS KORDAS (M-CME/s1231901)

Contents
“Winning the Race for Talent in the Construction Industry. How to keep the correct
players to the correct positions? Anticipating or Designing Tomorrow?” ............................ 1
1. Introduction .................................................................................................................. 4
2. Background ................................................................................................................... 5
2.1 Denmark-case ................................................................................................................... 5
2.2 France-case ...................................................................................................................... 5
2.3 Netherlands-case ............................................................................................................. 6
2.4 Germany-case .................................................................................................................. 6
2.4 Portugal-case ................................................................................................................... 6
3. Situation analysis .......................................................................................................... 7
4. Scenario planning ......................................................................................................... 8
5. Naming the pain ......................................................................................................... 11
6. Problem statement ..................................................................................................... 12
7. The relevance triangle ................................................................................................ 12
7.1 Strategy to create competitive advantages................................................................ 14
7.2 Strategic implications for talent ................................................................................. 15
7.3 Talent pool strategy .................................................................................................... 15
7.4 Talent Management systems ..................................................................................... 16
7.5 Talent practices .......................................................................................................... 17
8. A tool for thinking (TM Framework) ........................................................................... 19
9. Managerial implications ............................................................................................. 20
10. Further discussion ...................................................................................................... 22

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Executive Summary
Many critics have been written the last decade for the limited productivity and the low
adoption rate of innovation in the construction industry. Several conceptual models are
already developed to explain the ‘inside’ and ‘outside’ character of the construction sector
and to visualize the need for looking in and looking out in order to gain a common shared
vision amongst stakeholders (Barrett, 2005). National and European reports are structured
to evaluate the present productivity capacities and innovation capabilities of large
construction firms in order to design guidelines for the future transformation of the
industry. Today’s construction recipe must be urgently modernized to deliver the highest
customer-value by improving the construction performance, improving client and supplier
performance and procuring and managing Construction. Modernizing construction (NAO,
2001) however entails not only technical and engineering approaches to the central themes
of the industry; it leads to the need for re-designing the Human Resource departments’
working philosophy. Nowadays more than ever construction industry increases its pace to
keep up with other industries and become more competitive moving towards the targets for
improvements illustrated in the following picture.

Figure 1: Drivers for Change in Rethinking Construction (Egan, 2002)

For many years now the construction industry has lost out to other sectors in attracting the
very best people. This has been partly because of economic circumstances - boom and bust
cycles have denied the industry the opportunity to train and provide long term careers for its
workforce. The consequence is that we now have an aging workforce and too few people
entering the industry (Egan, 2002, p. 29).
This reality calls for sketching an holistic framework concerning all the Talent Management
components; as they are identified by (Lewis & Heckman, 2006), which are; strategy to
create sustainable competitive advantages, strategy implications for talent, talent pool
strategy, talent management systems, and talent practices.
The restructuring of the talent hierarchy creates new views on the need for specialist skills,
for multi-skilling, or for de-skilling. In practice the term de-skilling is probably more
accurately re-skilling. In some scenarios there may be a narrowing of the existing skill base of
some trades, but all trades are likely to need training and re-training to cope with the new
methods and materials that may emerge in the innovative scenarios, even if their use is
apparently simpler. On balance the most probable outcome appears likely to be a blend of
specialist skill, multi-skilling and re-skilling, but in any given scenario there will be a different
blend (Consulting, 2008).

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1. Introduction
The Construction Industry is attached on three market categories; the residential market,
the non-residential market and the infrastructure market. Overall, for all the three market
segments, it appears that innovation will have to respond to an increasingly differentiated
ownership and usage of premises and facility services, as well as to sustainability issues and
life-cycle considerations which will become important decision-making criteria (COM, 2007).
Creating a sustainable construction industry was and will be the constant driver of change
and performance improvement shaping the shareholders’ values and affecting
Buyer/Supplier relationships. In the building industry, designing, constructing, and supplying
parties work together in constantly changing coalitions on different building projects
(O'Brien, Fischer, & Jucker, 1995). Contractors, architects, suppliers negotiate through
bilateral contracts when following the traditional building recipe.
However, the inherent complexity of the industry reflects on a high market share in the EU-
27 family as the next table presents (Table 1). The construction industry in general, plays a
key role in the EU economy (10.4% of EU GDP in 2008), in employment (7.6% of total EU
employment) and in climate change policies (buildings are currently responsible for 42% of
EU final energy consumption and produce about 35% of all greenhouse gas emissions).

Table 1. Key figures | Activity 2011

CONSTRUCTION IN EUROPE (EU-27)

Total Construction Output 9.6% of GDP 51.5% of Gross Fixed Capital
Formation
Jobs in Construction 7% of Employment 30.7% of Industrial
Employment
Total Number of Enterprises 95% of <20 workers 3.1 million enterprises
(source: European Construction Industry Federation, June 2012 Edition)

In the pursue of designing with the optimal way strategies for maximizing the performance
of the three construction submarkets several problems emerge fragmenting the flow
production process of the end-products; facilities management and maintenance of
infrastructural projects. Regulatory framework, including safety standards, design rules,
sensitive operations, and high-risk working practices constrain the adoption of innovation
and the rise of productivity.
The construction sector recently (in 2006) was recognized as a Lead Market by the European
Commission which set an agenda of transforming the construction industry in a knowledge-
based innovation platform. Lead markets aim to leverage innovation in with a high growth
potential in Europe and globally. EU industry should have the potential to develop
competitive advantage in these areas to lead global markets, while the public sector should
have the potential to significantly impact market development, whether as regulator,
customer or facilitator. Finally, lead markets should provide solutions to economic and
societal challenges in areas such as health, energy, environment or transport (COM, 2007, p.
3). Under this scope the Egan Report (2002) formulated the target group for improvement
(fig. 1) which constitutes the central concept behind the Talent Management framework
that will be constructed in the following sections.

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The end-product of this research approach is to show what has to be changed in this modern
War for Talent in order to accomplish the selected targets after a scenario planning for the
construction firm assigned. The Supply Chain Management will be the main point of view
when analyzing the case. For doing so we have to assess how the construction employment
was developed in some baseline countries, looking them as guide examples.

2. Background
Around the 1990s a new approach was adopted towards explaining the inside structure of
the industry; and that was a shift from dealing with the Construction Industry as being a
unified Sector System. Given that the fictitious company of this article is a multinational
large construction firm with over 50,000 employees and operating several European
countries, it is wise to present the general past picture in some example construction
industries.
For this reason the following national cases are used to present how the employment rates
fluctuated during the previous decade as it is seen important in making assumptions in the
proposed framework.

2.1 Denmark-case
In the 1990s, the Danish economy has moved from an initial period of stagnation and falling
employment to a period of economic boom and a return to the previous employment levels.
The lean years in the early 1990s showed an average annual economic growth of less than
0.6 percent. This development was turned around at the end of 1993 when a strong
economic recovery began. The average annual growth in GDP was 3.4 percent from 1994 to
2000 (CIB, 2004, p. 58)
What became clear through these years is that the construction employment followed the
productivity of the sector. In the 1990s, the lowest construction employment level occurred
in 1993, after which it increased slowly during the second part of the decade and made six
percent of the total workforce in 2000 (CIB, 2004).

Table 2. Danish construction employment in the 1990s (× 1000)
1990 1992 1994 1996 1998 2000 2002
National 2794 1792 2808 2773 2778 2786 2803
Employment
Construction 171 162 140 154 161 168 173
Employment
Construction/Total 6.1 5.8 5.0 5.7 5.8 6.0 6.2
(%)
(source: Statistics Denmark, 2003)

2.2 France-case
In France, the share of repair and maintenance is nearly a half of all construction works
because of the importance of the stock built after a Second World War. The construction
sector system is made up of four very big firms, SMEs and self-employed. The fragmentation
of the sector system allows a high flexibility in cyclical situations. The sector system is so
heterogeneous that several construction sub-systems can be analyzed. The influence of
central government on the institutional regulations remains high.

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Figure 2: Employment in the French construction sector in 2001 (CIB, 2004)

2.3 Netherlands-case
The Dutch construction industry’s capability to deliver difficult and innovative projects is
equal to that of any national construction industry worldwide. The production of the
construction industry in the Netherlands represents 11 % of the GNP. Also in terms of
employment, construction is important for the Dutch economy. Including all construction
related employment, the employment in the construction industry amounts to 9.5 % of the
total employment in the Netherlands (PSIB, 2004).

2.4 Germany-case
In 2000, the German construction industry had about 2.76 million employees, which
corresponds to 6.6 percent of the total workforce (CIB, 2004, p. 96). The construction
employment rate in 2000 was the lowest since the reunification in 1990 (see Table 2).

Table 3. Construction Employment in Total Work Force (× 1000)
1991 1994 1995 1996 1999 2000

Total workforce 40689 40583 40524 40692 41431 41769

Total unemployment 2190 3304 3194 3482 3416 3133

Total Construction 2796 3165 3227 3126 2851 2761

Employees 2536 2849 2887 2757 2453 2356
Self-employed 260 316 340 369 398 405
Construction in Total 6.9 7.8 8.0 7.7 6.9 6.6
Workforce (%)

2.4 Portugal-case
The growth in construction activity is also visible in employment. Table 4 shows data on
construction employment, total employment and the contribution of construction to total
employment. The share of construction employment in total employment reached 12.2% in
2002, one of the highest levels in the European Economic Area.

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Table 4. Portuguese construction employment in 1990s (× 1000)
1990 1992 1994 1996 1998 2000 2002
National 4466.3 4340.7 4251.1 4250.5 4863.3 5028.9 5106.5
Employment
Construction 352.6 346.2 330.8 340 3 343 1 596.4 622.3
Employment
Construction/Total 7.9 7.9 7.8 8.1 10.9 12.1 12.2
(%)

3. Situation analysis
Is it easy now however to foresee what is the hot-potato emerging in the built environment
in correlation to which is the ideal proactive talent management strategy to copy with the
potential threats? To answer somebody this question he needs to pre-think on the basis of
what happens inside the construction world.
Firstly what became prevalent, after 2008 where the crisis brought a new cadre of
transactions, negotiations, employment relations, and labor rules; is the everyday trade-off
between recession and recovery, something that both employees and employers are aware.
This new picture created a parallel thinking in HR-managers mindset, calling them to balance
the unemployment rates with the changes in labor income (Fig. 3).

Figure 3: The change in unemployment and labor income (OECD, 2012)

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The aforementioned analysis showed till now how much turbulent is the market formation
not only for the construction sector but in general the employment situation in the
construction field is too fluid to be predicted with a degree of safety.
Given now the situation inside the construction market, the main hypothesis before thinking
how to produce a holistic framework concerning the talent management strategies followed
by the large scale company is the lack of skills is the timeless problem inside the
construction world. The following graphic illustrates how current projections are perceived
in the entire EU family and it is considered to align lack of skills to age, education and
contract type.

Figure 4: The change in employment and average hours worked by age, education and type
contract (OECD, 2012)

4. Scenario planning
Scenarios are claimed to support strategic decision makers. They are especially effective in
dealing with uncertainties (Postma & Liebl, 2005). The traditional uses of scenarios and
scenario development are evaluation and selection of strategies, integration of various kinds
of future-oriented data, exploration of the future and identification of future possibilities.
More recently, scenarios aim at making managers aware of environmental uncertainties,
stretching managers’ mental models, and triggering and accelerating processes of
organizational learning (Postma & Liebl, 2005, p. 2).
In order to visualize the location of the hidden uncertainties and their impact on the
organization we need to reply or quantify the next questions. After replying them a picture
(Fig. 5) can be sketched to illustrate predictability and impact lead to the final selection of
the most high-risk case.

 How big could be a change in the construction employment in the upcoming years
(Fig. 5)?

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 Is there any possibility to predict the amount and the type of skills needed in the
future in specific operations (Fig. 7)?
 Would be wise to narrow down our effort of restructuring talent management
policies focusing on specific performance improvements (Fig. 8)?

Figure 5: Scenario construction, adapted from (Heijden, Bradfield, & Burt, 2002)

Figure 6: Past and forecast employment changes by economic sector (CEDEFOP, 2012, p. 23)

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Figure 7: Future job opportunities by occupation (CEDEFOP, 2012, p. 24)

Figure 8: Future job opportunities by broad level of qualifications (CEDEFOP, 2012, p. 25)

After translating the managerial meaning of Kvetan et al. (2012) research paper entitled
“Cedefop’s skills supply and demand forecast: 2011 update and reflections on the approach”
(CEDEFOP, 2012) a table with potential scenarios was constructed. The following table
illustrates the projections of figures 6 & 7 in terms of Risk Priority Numbers (RPN).

The RPN is not a measure of risk, but of risk priority (eq. 1). Thus we will apply the worst-
case scenario to the talent management framework. The RPN gives generally a model to
allocate these resources.

Equation (1): RPN = S × P × D

S: Severity (1-10 scale) = Replacement Demand (Fig. 7)
P: Probability score (1-10 scale) = Replacement Demand (Fig. 6)
D: Detectability score (1-10 scale) = Subjective determination

The values of S, D taken from the two pictures are divided by 40; the max. Value of the X-
axis.

PC = 0.80 × 0.40 × 0.04 = 0.013

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PC+ = 0.45 × 0.40 × 0.80 = 0.144
TC = 0.80 × 0.20 × 0.60 = 0.096
TC+ = 0.45 × 0.20 × 0.80 = 0.072

Table 5. Selecting scenarios
Change (C) in Construction
Professionals (P) PC: RPN=0.013 PC+: RPN=0.144
Technicians (T) TC: RPN=0.096 TC+: RPN=0.072

Summarizing this preparatory section of the article the main proposition is that the following
managerial approach will be focused on how HR-mangers have to reconsider their working
philosophy when they design organizational routines to attract, develop, retain and mobilize
the recruited highly-qualified professionals who are potentially ranked as the most crucial
human resources.

PC+
High

Low High
TC+ TC

Low

PC

Figure 9: Scenario construction and selection of PC+

5. Naming the pain
When trying to interpret what is the missing link between an effective talent management
policy and the actual acting strategy of the firm a main question was borne; in a highly
fragmented industry as the construction one, where employment data are changing
continuously which segment and why has to be selected as the most critical one?
Lack of skills was assumed as the main problem precursor. Highly skilled professionals such
as architects, contractors, supply chain specialist, procurement officers and purchasing
managers do play a vital role in the evolution and growth of construction activities.
Traditionally, however the construction sector has been dependent on the government,
which acts in various roles: client, regulator, or business-cycle manager (Voordijk, Haan, &
Joosten, 2000).

Having now defined the target group (highly qualified professionals) and the route-cause of
the problem (lack of skills), what’s remaining is to specify the firm’s operation-related
department for which the framework will be designed.
Manufacturers, contractors and architects are becoming dominant parties in the building
process. Different supply chains have to be managed as recently it is observed a significant

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turn from the traditional integrated design delivery system to a more product-specialized
contract approach.

The main problems threatening the sustainability of construction are
 The fragmented regulation
 The focus of public procurement on the lowest-bid rather than on MEAT (Most
Economically Advantageous Tender) criteria
 The training gap for delivering employees of higher adding-value and higher
organizational commitment

Aligning these three construction-related threats a clear transition can be done through the
first picture, where predictability is now selected as the main driver for our Talent
Management related framework.

In other words, the required increase of 20% in the predictability is translated in the
following three core outcomes:
 Predictability of legislation
 Procurement innovation
 Investment in training

6. Problem statement
Based on the analysis already done the problem to address this framework is reflected by
the research question asking;

“How the talent management system of a large multinational European construction firm
can become more adaptive, more proactive, and enhance predictability by increasing the
inflow and retention rate of highly skilled professional in Supply Chain operations?”

7. The relevance triangle
Is the research question relevant enough to the core Human Resources issues concerning
the arenas composing the construction industry? In other words, are the interests (stakes) of
society (individuals: employees/employers and public agencies), academy (science:
institutions) and market (industry/organizations) sufficiently represented in the problem
statement?
The construction sector is characterized by demand from different sources. Not only private
demand for residential or office buildings also public infrastructure projects are of particular
importance for the market. The public sector is a major client of the construction industry
and is expected to boost further development by targeted and criteria-oriented
procurement. Moreover, regulatory frameworks, e.g. in terms of quality and environmental
standards, have substantial impact on technological direction and sector-specific R&D
activities, may induce innovation in the construction sector and shift public and private
demand to specific products and services (Loikkanen & Hyvönen, 2011, p. 88).
The major levers for change of the construction sector are the industry / client forums,
governments and procurers. The other, rather dependent focal area is the project team and
at a more abstract level “society” groupings and education and training have the potential to
make longer terms impacts (Barrett, 2005).

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Macro-level
Meso-level
(Industry)
(Firm)

Micro-level

(Individual)

Figure 10: Summary disposition of stakeholders (Barrett, 2005, p. 62)

The problem to be outlined is relevant to the industry/clients needs as clients nowadays
more than ever know how to assess and maintain long term relationships with their
suppliers. In that role the HR department of the assigned firm has to create a strategy
through which maintaining Buyer/Supplier relationships will be one of the most innovative
and fundamental competitive advantage of the internal human capital.
This condition between the industry and the Talent Management (TM) structure brings into
the light the need for designing specific skills packages and prioritizing them. If this approach
is adopted, predicting the legislative changes will constitute a central strategic implication
for talent.
The government often participates in high market-share construction projects, knows as
Public Private Partnerships (PPPs) which demand the employment of highly-educated
personnel who will be enable to understand the market dynamics and the legal agreements
among various parties formulating often Joint Ventures (JVs). Segmenting the talent pool to
be designed is a solution for the firm to differentiate from their competitors.
In the project arena, procurement is the black-box for the construction sector containing the
bulk of the mainstream talent management tools, like talent analytics, mentoring,
integrating newcomers, empowering older workers, etc.
The final stage of this five-component procedure of Talent Management (Lewis & Heckman,
2006) leads to the creation and implementation of talent practices.

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Table 6. Aligning TM stages to working (to be tested) assumptions
Talent Management (TM) Assumptions / Mediating Skills required
Component variables
Strategy to create competitive Identify firm’s mission Locus of control &
advantages Maintaining Buyer/Supplier Perception of future
relationships growth
Strategic implications for Managing firm’s positions Market dynamics
talent understanding (PPPs /
JVs)
Talent pool strategy Manage workforce portfolio Fit & Flexibility
TM Systems Enhance creativity, trust, Talent analytics
motivation, productivity,
commitment
Talent practices If the framework applied, Retaining critical
predictability targets will be knowledge (create a
achieved (+20% increase) knowledge
infrastructure) & Solving
the Age/Employment
paradox

7.1 Strategy to create competitive advantages
Dealing in a context of multilateral relations and ongoing transactions, the construction
professionals will be quickly confronted with the dynamic 4Cs character of the industry (Fig.
10). Most construction companies operate in a decentralized network of suppliers and
customers in which they acquire production capacity from external suppliers. Construction
projects can be viewed as temporary organizations among firms. The development and
management of long term Buyer/Supplier relationships at the cross-project level is therefore
difficult, as project teams and product designs change from project to project (Bemelmans,
Voordijk, Vos, & Buter, 2012).
This fact leads to consider constantly the maturity level of Buyer/Supplier relationships as it
constitutes the core integration factor between operational processes and value creation
ones. The management of Buyer / Supplier relationship embodies five aspects:

 Optimize the supply base
 Manage the supplier relationships
 Integrate suppliers into the operational processes
 Integrate suppliers into the value-creation processes
 Develop suppliers

Once all the five key-areas are combined into one employee’s competencies package then
he will be able to relocate the locus of control related to his decisions and reconsider to
which extent he acts towards the accomplishment of the strategic vision of the firm; 20%
predictability increase in logistical defects.

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Figure 11: Dynamic 4Cs model (Barrett, 2005, p. 60)

7.2 Strategic implications for talent
Prime contractors spend up to 90% of a construction project’s turnover on buying goods and
services, and thus suppliers have a large impact on project performance. Therefore, the
purchasing function management of the prime contractor has a large influence on the
overall performance: the more developed (i.e. mature or professional) this function is the
greater its positive contribution (Bemelmans & Voordijk, 2012).

The highly-skilled professionals required by the firm have to work on the basis of developing
the most profitable and sustainable coalitions with private or public partners. For this reason
candidates must be characterized by a systemic thinking like the one in Figure 12.

Figure 12: Research framework for a designing an effective purchasing management tool
(Bemelmans & Voordijk,2012)

7.3 Talent pool strategy
Before an HR-manager thinks about the characteristics, the size, the depth and type of the
talent pool to create in this predictability-seeking organization he/she should initially define
the meaning of Strategic Human Resource Management (SHRM). Human resource
deployments and organizational activities when combined with such way to achieve growth
goals reveal the strategic direction of formulating the talent pool.

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According to (Wright & Snell, 1997) speaking in terms of SHRM, two are the central
dimensions to be explored; the fit and the flexibility.

Fit is all about the matching between the HR-practices and the strategy. First, vertical fit
involves the alignment of human resource management (HRM) practices and the strategic
management process of the firm. Second, horizontal fit implies congruence among the
various HRM practices. Achievement of horizontal fit is viewed as instrumental for efficiently
allocating human resources. Vertical fit, in turn, is viewed as directing those resources
toward the primary initiatives of the organization.

Flexibility provides organizations with the ability to modify current practices in response to
non-transient changes in the environment. Weick (1979) argues that flexibility requires
detecting changes in the environment and retaining a sufficient pool of novel actions so that
these changes can be accommodated.
Resource flexibility: refers to the extent to which a resource can be applied to a larger range
of alternative uses, the costs and difficulty of switching the use of a resource from one
alternative use to another, and the time required to switch from one use to another.
Coordination flexibility: consists of the extent to which the firm can "resynthesize" the
strategy, "reconfigure" the chain of resources, and "redeploy" the resources.
In the construction firm case, the two dimensions of SHRM are translated as the following
table shows;

Table 7. Fit & Flexibility in the a construction firm
Fit Vertical Directing production/work towards the predictability target
Horizontal Allocation of talents to appropriate positions (legislation,
procurement, training)
Flexibility Resources Tangible products easy to be reused (formal contracts, cost
forms, time planning programs)
Coordination Modular components of the supply chain (metrics, routines,
production models)

7.4 Talent Management systems
Competing in a world searching for novelty, the construction company needs to organize its
HR functions around the three strategic targets; predictability of legislation, procurement
innovation, and investment in training, having as guidelines not only on how to measure the
talent, but firstly how boost creativity, trust, motivation, productivity, and organizational
commitment is seen much more important. So before going to the Talent Analytics, simple
topics such as the interrelation between passion for work (intrinsic motivation) affecting
external motivation has to be chartered by the HR managers and thereafter to design the
social interaction process for enhancing them.
A new approach on how to design the social processes inside the firm is to align the
quadrant in which each talent is classified correlated with his personal perception on his
basic needs. Thus a prediction map of where (under which performance conditions) and
when an employee could react through a future burnout or how strong is his/her self-
esteem.

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Figure 13: Talent/Potential matrix in relation with Scharlow’s pyramid

Talent Analytics
Using sophisticated and high-tech performance monitoring systems of analyzing employee
data to enhance their personal competitive advantages are always needed. The true
evaluation of the value of human capital assets and their value-contribution calls for
complete accountability of employees. In the case of the construction firm, HR managers
need surely to calculate the optimal number o f staff member in the positions of legal
consultants (legislation predictability), procurement officers (procurement innovation) and
investment in training (productivity of Learning & Development programs). Applying talent
analytics includes six steps (Davenport, Harris, & Shapiro, 2012);

1. Human capital facts: What are the key-indicators of my organization’s health?
 Employee engagement and financial performance
2. Analytical Human Resource: Which units, departments, or employees need
attention?
 Real-time review, feedback channels, mentoring, coaching
3. Human capital investment analysis: Which actions have the greatest impact on my
business?
 Monitoring of satisfaction levels, and maintain them
4. Workforce forecasts: How do I know when to staff up or cut back?
 Scenario planning analysis, Demand & Supply analysis
5. Talent value model: Why do employees choose to stay or leave the company?
 Re-placement of employees, evaluation of positions held by poor
performers, fix out possible mismatches
6. Talent supply chain: How should the workforce needs to adapt to changes in the
business environment?
 Predict the education tends and the market demands, design job
opportunities based on the power of the existing workforce and expand the
orders’ experience into fresher’s motivation for learning and challenge.

7.5 Talent practices
Proactive behavior in the organization
To efficiently mobilize the talent selected and retained the company has to build up a
Proactive Personality Scale (PPS) in the HR department. The four attributes of proactive
behavior have to be realized in practice as (Crant, 2000) had identified them are; proactive
personality, personal initiative, role breadth self-efficacy, and taking charge overlap

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conceptually. In particular, the constructs share a common behavioral domain. Each
construct considers the way in which an employee approaches and defines his or her work
role, focusing on efforts to improve things in the workplace. Thus, the conceptual
underpinnings of each construct incorporate employee changes to the work environment
(Crant, 2000, p. 443).
In the effort of developing and retaining the talented highly-skilled professional the firm has
to take also context-specific proactive measures like socialization (networking), proactive
feedback seeking, issue selling, promotion of (external) innovation to rise the champions,
career management strategies for mapping the evolution of each employee separately.

Coping with stress and burnouts
Over the past 30 years, interest in burnout, from academics and managers alike, has
increased dramatically as we have begun to understand the significant negative impact it has
on employees (Halbesleben & Buckley, 2004). Burnout was defined by Maslach (1982) as “a
syndrome of emotional exhaustion, depersonalization, and reduced personal
accomplishment that can occur among individuals who do ‘people work’ of some kind.”
The JD-R model of (Schaufeli, Bakker, & Rhenen, 2009) proved clearly that increase in Job
Demands and decrease in Resources available predicts burnout and that increase in job
Resources predicts job engagement.
Apart from the structural model’s results what is very important to notify is the obligation of
HR-management to point out exactly the job context and boundaries in order to minimize
unrealistic expectations because this misfit between the organization and the employee
often leads to burnout symptoms. In the end, the HR-managers of the construction company
is strongly recommended to use Realistic Job Interviews and Expectation Lowering
Procedures to manage recruitment, increase organizational commitment, and reduce
turnover (Halbesleben & Buckley, 2004, p. 873)

Solving the Age/Employment paradox
Several strategies have been already analyzed by academics. The main issue that will be
discussed here is how far away the construction industry (in large scale) is from increasing or
maintaining the normative commitment of older employers? It is a fact that flexible work
options, job design, mature employee training, manager training, compensation, etc are
some strategies to engage older employees on HR practices according to (Armstrong-
Stassen, 2008). However given the situation that there is a serious lack of highly and
specialized professionals in the multi-faced departments and submarkets of the construction
sector, the dominant approach on attaching older employees better and with a social,
creative way is the teaching method. I named this attitude of mentoring when an employee,
close to the retirement age is assigned to develop a beginner and bring into the pool some
new, well-selected talents. The picture below endorses the previous statement (Fig. 14).

[18]


(a) (b)

Figure 14: (a) Iv-Oil & Gas: Structural designer (23 years) / Structural design coordinator (65
years)
(b) Iv-Infra: Constructor (28 years) / Chief design engineer (54 years)

8. A tool for thinking (TM Framework)
In the construction of the Talent Management framework there are three components that
till now are not fully clarified. These are
- The visibility line: It represents the critical moment where we decompose the
problem after the scenario planning and based on the chosen less-advantageous
one we move on the analysis of the case. The term “visibility line” is borrowed from
the terminology of Project Management. It illustrates practically the start of the
actual business process while all the IT resources are mobilized to optimize the
portfolio management.
- The High Reliability Organizations (HROs): type of organizations operating on the
edge while being reliable is too critical for the societal benefits. HROs are governed
by the five attributes of mindfulness or enriched awareness.
- The Complex Production Systems (CoPS): an integrated approach of concentrating
around key-roles (System Integrators) several stakeholders and interconnecting the
system’s centre with the superstructure and infrastructure.

[19]


Figure 15: A thinking tool on designing Talent Management strategies for large construction
firms

9. Managerial implications
The last picture depicts the line of reasoning of the whole approach. Said differently, if the
HR-managers of the construction firm should put in practice the above framework they
should follow the roadmap described (Fig. 16).

Additional ideas from academics to be explored inside the Construction Industry;

- “Organizations that move quickly to seize new opportunities compete through
flexibility and do not develop employee competencies from within. (Cappelli &
Crocker-Hefter, 2001)”
- Think twice before outsourcing for your personnel, as (Cappelli & Crocker-Hefter,
2001) has stated: “Organizations that compete through their dominance in a market
rely on organization-specific capabilities developed internally…”
- Balance and map, the HR-departments’ competencies with the business strategies
that flow from them.

[20]


Attract Talent

 Think about future staffing needs: design
positions, instead of employees (e.g.
procurement officers)
 Be sure about who recruits for your company
(hire industry related people)
 Identify and communicate what the project will
teach and why (open the agenda)
 Adjust newcomers’ expectations and learning
goals with firm’s experiences Develop Talent

 Link employees: internal networking as
collaboration-driven innovation
 Mentor employees: reverse-traditional-
anonymous-micro feedback
 Make mentoring a reciprocal relationship
 Don’t exclude inside-outsiders internal
candidates
 Give time and space for employees to react
Retain Talent

 Provide room to grow towards the strategic
direction of predictability
 Enrich the personal experiences continuously
(role games, virtual cases, external training,
create schools)
 Express satisfaction, and
A comprehensive end-to-end process reward wisely and
transparently
 Transform employee routine in a hunting for
entrepreneurship
 Challenge your top-performers
Mobilize Talent

 Share a proactive behavior vision
 Make stars part of the planning process
 Personalize as much as possible L&D programs
 Reinforce the vision: by focusing on the right
assessors, rather than on the assessment
Figure 16: End-to End process for TM technique (Fernadez-Araoz, Groysberg, & Nohria,
2009)
 Manage the A positions, manage B&C positions
 Inspire B or C performers to become A players
 Conceptualize the future framework for
attracting & retaining the Z-Generation
[21]  Consider talent pools in BRIC economies


10. Further discussion
After designing this action plan and incorporating all the stages of talent management for a
large European construction firm an ambition will be created to open the window for further
research on HRM literature and Strategic Talent Management. The first relies on the theory
of Complex Production Systems (CoPS), dealing with the question “How we can still create
some focus on our internal processes and distinguish our self as a company by recognizing
the role of HR managers like the one of Systems Integrators (Winch, 1998)?”

Figure 17: Construction as a complex system industry (Winch, 1998, p. 270)

Moving from the typical role of System Integrators (architect & contactor) it would be very
interesting to conceptualize a modern role of the HR managers. This role could be the two
faces of the same coin; the first would be the role of performance boosters and the other
the reputation builders. Is it feasible to execute some research on the following figure?

Sourcing Retention Engagement

Functionality Zone Development Assimilation

Deployment Performance Management

HR-managers as

Performance Boosters

Corporate Branding Builders

Vitality Zone
Talent Staff Talent Pool Executive Team

Line Managers

[22]


Secondly what will be outlined is the emerging importance of High Reliability Theory (HRT),
which calls for exploring deeper the question “To which extent HRM and HRD processes are
mindful in the construction industry? Is there enough systemic space and organizational
willingness to apply the five attributes of enriched awareness as (Weick, Sutcliffe, &
Obstfeld, 1999) have mapped them?” HRT, if applied, is expected to enlighten what we can
learn from B performers. A new game plan can be conceptualized for C Players as Beth
Axelrod, Helen Jones, and Ed Michaels have stated in their correspondent article in Harvard
Business Review (2012).

When people in HROs focus on failures, tendencies to simplify, current operations,
capabilities for resilience, and temptations to over structure the system, these concerns
cover a broader range of unexpected events. As shown in Figure 17, these separate concerns
are tied together by their joint capability to induce a rich awareness of discriminatory detail
and a capacity for action. We label this capability mindfulness. It is this enriched awareness,
induced by the distinctive concerns of HROs with potentials for catastrophe that facilitates
the construction, discovery, and correction of unexpected events capable of escalation.

The five processes of HRT can be the weapon against the appearance of organizational
(human capital) silos. The role of each process could be the answer in the continuous effort
for improving Coordination and Communication efficiency among internal silos (e.g. finance,
operations and quality assurance, administration).

Figure 17: A mindful infrastructure for high reliability (Weick, Sutcliffe, & Obstfeld, 1999)

The conclusion of this last paragraph is that both topics introduced in the field of HRM and
HRD will create a quite radical scope, a more lean approach enabling companies to operate
within smaller time frames, in a friendlier and more efficient HR-environment.

[23]


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TALENT MANAGEMENT: A Conceptual Framework For The Construction Industry

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