Nearly five years after the financial crisis erupted, a sustained global economic recovery remains elusive. Nothing less than a fundamental change in thinking is required to tackle the talent shortfall. http://www.ey.com/GL/en/Issues/Driving-growth/Growing-Beyond---Paradigm-Shift---Overview Our Growing Beyond program explores opportunities across expanding into new markets, finding new ways to innovate & implementing new approaches to talent. www.ey.com/growingbeyond

1. Paradigm shift
Building a new talent management model
to boost growth
November 2012

2. Introduction
► Growth is at the top of every organization’s agenda.
► Competitive advantage is hard to find.
► Talent : an untapped opportunity.
► Investment in talent often requires deep organizational changes.
► High performing companies invest more in talent management.
► It’s time for a “paradigm shift”.
Page 2 Paradigm shift

3. Agenda
► About the survey
► Survey highlights
► In search of a new talent paradigm:
1. Corporate workforces are becoming more global, but talent management is not
keeping pace.
2. Companies struggle to invest strategically in talent management
3. Measuring the effectiveness of talent management remains a challenge.
4. The skills and competencies required by future business leaders are changing.
5. Companies lack robust succession plans to identify the next generation of
leaders.
► Business implications
► Responses to business implications
► Does your talent model measure up?
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4. About the survey
The survey of 596 executives was conducted and analyzed as follows:
Survey demographics:
► 1/3 of respondents were from the Asia-Pacific region
► 1/3 from Western Europe
► 1/3 from North America
► 10% were from Latin America, the Middle East and Africa, and Eastern Europe.
► 53% percent of the respondents were CEOs, CFOs or other C-level executives.
► 44% percent of the companies surveyed reported revenues of US$1 billion or more.
Analysis:
► Compared findings from rapid-growth market and developed markets.
► Compared findings from high-performers with low-performers.
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5. Survey highlights
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6. Survey Highlights
Differences between high and low-performers
► High-performers:
► Place greater emphasis on linking pay with performance
► Provide more customized training and development
► Invest in talent management to meet the organization’s financial targets
► Choose people who can lead effectively in an international business environment
► Have a stronger pipeline of future leadership talent
► Build more robust succession plans and future leaders with diverse backgrounds
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7. Survey highlights
Differences between developed and rapid-growth markets
► Businesses in rapid-growth markets are more likely to:
► Offer variety in job descriptions and responsibilities
► Offer opportunities for employee mobility across functions
► Encourage working in different countries and offer greater freedom
to direct reports to make decisions
► Adopt an equal (less of a top-down) style of management
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8. In search of a new talent paradigm
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9. Scarcity of talent is becoming a key obstacle
to growth
► In India, the percentage of employers jumped 51% in 2011.
► 60% of organizations were experiencing a leadership shortage, an
increase of 40% from the previous year.
► 72% of respondents reported difficulty finding and keeping the high-
potential employees essential to boost their global competitiveness.
Source: Corporate Executive Board 2012 survey.
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10. Five key talent management challenges
1. Corporate workforces are becoming more global, but talent
management is not keeping pace.
2. Companies struggle to invest strategically in talent management.
3. Measuring the effectiveness of talent management remains
a challenge.
4. The skills and competencies required by future business leaders
are changing.
5. Companies lack robust succession plans to identify the next
generation of leaders.
Page 10 Paradigm shift

11. The challenges
Page 11 Paradigm shift

12. Challenge 1:
Corporate workforces are becoming more
global, but talent management is not
keeping pace
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13. It’s hard to find a company that isn’t global
What percentage of your organization’s workforce is based in a country other than where
the corporate headquarters are located?
Now In three years
34
24 23 22 22
17 18
10 10
9
7
4
0% 1%-20% 21%-40% 41%-60% 61%-80% 81%-100%
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14. But talent management is not keeping up
How effective is your organization at the following aspects
of performance and talent management?
Overseas workforce <40% Overseas workforce >40% All respondents
68%
60%
56% 56%
50%
46% 45%
41%
37%
Adapting talent management policies to Understanding clearly the relationship between Investing adequately in talent management to
changes in the business environment employee performance and company meet organization's financial targets
performance (e.g., revenue growth)
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15. The link between autonomy and performance
In the past three years, what changes has your organization made to the way
in which managers manage direct reports?
Now In three years
34
24
23
22 22
18
17
10 10
9
7
4
0% 0-20% 20-40% 40-60% 60-80% 80-100%
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16. Not enough opportunities for overseas
experience
Which of the following are part of your organization's strategy to manage a multicultural or
international workforce?
Low perfomers High performers
42%
Offer pension schemes, health care and other benefits
41%
39%
Encourage employees to join mentoring programs
42%
46%
Encourage flexible working
48%
47%
Create opportunities for employees to work in other countries
53%
47%
Provide customized training and development
55%
52%
Introduce greater varierty of responsibilities in job descriptions
57%
50%
Put greater emphasis on linking pay and performance
59%
58%
Create opportunities for employee mobility across functions
64%
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17. Challenge 2:
Companies struggle to invest strategically
in talent management
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18. Companies struggle to make the right
investments in talent
How effective is your organization at the following aspects
of performance and talent management?
High performers Low performers
66%
61%
56%
50%
46%
37%
Adapting talent management policies to Investing adequately in talent management to Understanding clearly the relationship between
changes in the business environment meet organization's financial targets employee performance and company
performance (e.g., revenue growth)
Page 18 Paradigm shift

19. Challenge 3:
Measuring the effectiveness of talent
management remains a challenge
Page 19 Paradigm shift

20. A focus on the wrong metrics?
Which of the following metrics do you consider to be the most important determinants of
an effective talent management program?
Low perfomers High performers
18%
Extent of skills gaps in workforce
26%
25%
Diversity of management team
31%
40%
Level of cross-functional collaboration
34%
41%
Employee productivity
38%
36%
External reputation of organization as an employer
40%
42%
Retention rates
45%
57%
Employee satisfaction
53%
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21. Challenge 4:
The skills and competencies required by
future business leaders are changing
Page 21 Paradigm shift

22. It’s the soft skills that matter most
What do you consider to be the most important attributes for potential C-level leaders of
your organization?
Low perfomers High performers
13%
Is a good risk manager
12%
27%
Has strong grasp of financials
21%
32%
Has industry expertise
30%
27%
Decisiveness
33%
37%
Can engage effectively with multiple internal and external stakeholders
33%
40%
Can command the respect of colleagues and reports
38%
37%
Can articulate and embody the values and culture of the organization
44%
37%
Can lead effectively in an international business environment
47%
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23. Challenge 5:
Companies lack robust succession plans
to identify the next generation of leaders
Page 23 Paradigm shift

24. Concerns about the next generation
of leaders
To what extent do you agree that your organization has the following aspects of
leadership development in place?
Low perfomers High performers
38%
A clear set of qualification metrics for leadership candidates
43%
36%
Future leaders with sufficiently diverse experience and backgrounds
45%
33%
Robust succession plans for key leadership roles
48%
43%
A strong pipeline of future leadership talent
54%
70%
Current crop of leaders with the right attributes and experience
78%
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25. Business implications
Page 25 Paradigm shift

26. 1. Align and integrate talent management
across the business
► Companies need to make sure that:
► They align talent management with culture, values and
strategic goals.
► They recruit and retain a workforce in a way that
supports their key objectives.
► Their HR function is embedded in the business and
serves as a partner to it.
Page 26 Paradigm shift

27. 2. Rethink approaches to international talent
► Companies need to review their approach to international mobility
and re-integration:
► Embedding mobility into their leadership and high-potential programs
► Adopting a strategic approach: overseas experience as part of long-term
leadership development programs
► Developing repatriation plans to take the executives to the next stage in their
career
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28. 3. Create the right blend between global and
local talent management
► Most companies try to standardize and globalize their talent
management practices.
► The one-size-fits-all model will not work.
► Some standardization is desirable.
► But companies need to think locally about how to attract and retain
talent.
► Companies should develop a framework that combines fixed and
flexible components.
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29. 4. Use analytics to identify talent gaps and
better understanding of workforce behavior
► Effective workforce analytics start with:
► Accurate data
► Complete data
► The ability to aggregate it
► Workforce analytics offer the opportunity to:
► Identify skills gaps
► Link talent management decisions with broader performance objectives
► Some companies are using analytics to:
► Forecast talent shortages or surpluses
► Assess how cycles will affect the availability of human capital resources
► Companies need to recognize that technology is a support
mechanism and not the solution to everything.
Page 29 Paradigm shift

30. 5. Take a long-term approach to
developing the next generation of leaders
► Companies should:
► Take a long-term approach to leadership development
► Extend succession planning beyond the immediate top team
► High potential programs can be valuable, but there is
a risk that they could turn into training grounds for the
competition.
► Companies must also be aware that past performance
is not always a predictor of future potential.
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31. Responses to business implications
Page 31 Paradigm shift

32. Business implications and responses
► Align talent management with company culture, values and strategic goals
1.Align and integrate ► Recruit, retain and reward employees in a way that supports key objectives
talent management ► Integrate talent management programs across the entire organization and
across the business adapt to keep pace with changes in the business environment
► Embed HR into the business, establishing a more strategic partnership with
the function
► Build mobility programs into long-term leadership development, providing
2.Rethink approaches to high-potential executives with exposure to different markets to broaden
international mobility their knowledge and appreciation of different cultures
as well as re- ► Create a multi-directional flow of talent across developed and
integration rapid-growth markets
► Include a robust repatriation plan for international assignees
3.Create the right blend ► Establish the right balance by which talent management decisions will be
of global and local made: centrally versus locally
talent management ► Think locally about how to attract and retain talent, as well as how to
position the company as an attractive place to work
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33. Business implications and responses
4.Use analytics to ► Evaluate which metrics are most effective in supporting corporate
identify talent gaps performance objectives
and gain a better ► Use data to understand where skills gaps might exist
understanding of ► Look ahead to predict availability of talent (e.g., within an industry)
workforce behavior
► Understand the link between company and employee performance
► Consider the gap between current and future leaders, focusing on
the right attributes and experience
5.Take a long-term ► Build a strong pipeline of future leadership talent
approach to ► Include succession planning that expands beyond top leadership in your
developing the next approach
generation of leaders ► Establish an effective process for choosing a new leader, defining a
set of qualification metrics for these candidates
► Consider soft skills, which may be more important than having deep
subject-matter knowledge
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34. Three key strategies for maximizing your
return on talent
► Investing in talent has a long-term outcome
Think long term ► Look beyond the short-term expense of mobility, performance management
and recognition and rewards; instead focus on the long-term investment,
such as providing critical market experience
► Move away from traditional measures, such as employee satisfaction,
productivity, engagement, collaboration and retention
Measure the right ► More effective measures include filling positions with internal candidates,
outcomes developing job-specific employee skills and competencies, assessing and
validating recruitment and selection processes, and evaluating talent
according to business-performance standards
► Align your approach with the business strategy
Adopt a disciplined ► Integrate programs across the organization
approach ► Measure results to validate business strategy execution
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35. Does your talent model measure up?
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36. Does your talent model measure up?
Three key takeaways from today’s event:
1. Think long term. Remember that investing in talent has a long-term
outcome, and it may be years before your company sees the results.
2. Measure the right outcomes. Move beyond traditional measures
such as employee satisfaction, productivity and engagement.
3. Adopt a disciplined approach. Treat talent management as a
disciplined process involving alignment, integration and
measurement.
Page 36 Paradigm shift

37. Ernst & Young
Assurance | Tax | Transactions | Advisory
About Ernst & Young
Ernst & Young is a global leader in assurance, tax,
transaction and advisory services. Worldwide, our
167,000 people are united by our shared values and an
unwavering commitment to quality. We make a
difference by helping our people, our clients and our
wider communities achieve their potential.
Ernst & Young refers to the global organization of
Growing Beyond
member firms of Ernst & Young Global Limited, each of Global growth is the business issue of today.
which is a separate legal entity. Ernst & Young Global
Limited, a UK company limited by guarantee, does not
In Growing Beyond, we’re exploring how
provide services to clients. For more information about companies can grow faster — by expanding
our organization, please visit www.ey.com. into new markets, finding new ways to
innovate and taking new approaches to
talent. It’s an ongoing program to help you
© 2012 EYGM Limited. grow beyond your expectations. Join the
All Rights Reserved. discussion at www.ey.com/growingbeyond
EYG No. EX0157
This publication contains information in summary form and is therefore
intended for general guidance only. It is not intended to be a substitute
for detailed research or the exercise of professional judgment. Neither
EYGM Limited nor any other member of the global Ernst & Young
organization can accept any responsibility for loss occasioned to any
person acting or refraining from action as a result of any material in this
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appropriate advisor.
ED None
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