Global Talent Management Concepts, Part I
This is the first part in our concept roundup series related to global talent management. Our earlier roundup looked at concepts in international compliance and employment.
Below are concepts we often bring up in talent management advisory, many of which have their own posts. They are springboards to understand global talent management and global talent mobility, and this latter statement is a good cue for the first concept:
GTM² refers to global talent management (GTM) and global talent mobility (GTM). Those experienced in strategic HRM will know these two terms at many levels means the same thing. An effective talent management strategy must utilize global mobility, while the motivation for global mobility is usually talent management.
War for Talent
"Human capital is by far the most important source of competitive advantage in the global economy." - Nobel laureate Gary Becker. "War for Talent" is a term coined by McKinsey consultants in the 1990s, and it has grown to underly modern HR at all levels including global mobility. Competitive talent management is not only a driver of change for firms but also for ecosystem builders like governments, universities, IGOs, and social partners. We can now look at decades of "macro talent management" efforts and outcomes, captured in our 3-part Index Zoo series.
First appearing in Harvard Business Review in the 1980s, "Glocalization" or "Glocal" refers to the struggles of MNCs and international joint ventures to find the optimal tradeoff between globalization and localization. This tradeoff spans matters like subsidiary support, talent decisions, mobility, compensation systems, knowledge sharing, appraisal systems, management styles, and company culture. It turns out the optimal solutions aren't straightforward. The global leadership adage of "Think global act local" is now replaced by "Think and act both globally and locally."
While "Transnational corporation" (TNC) is often used as a synonym for "Multinational corporation" (MNC), we borrow from the global HRM literature and use TNCs to refer to MNCs that have developed a type of international strategy and operation. Typically this means effective knowledge sharing across the organization; sharing top talent among subsidaries; leveraging the field of assignment types and talent expatriates (see expat overview); country-specific and situational-appropriate adjustments in appraisal, compensation, and management; a balance of independence and integration among subsidiaries; and strong performance on key employee metrics like engagement (see Company Climate below).
The OECD estimates that 1/2 of global GDP growth in the last decade was due to earnings of the tertiary educated. Talentism is a proposed economic system that might be viewed as an evolution of Capitalism. It starts with widescale investment in human capital development like education, up/re-skilling, and lifelong learning. A company's core talent metrics become viewed as equally as important as financial ones. Highly skilled professionals and researchers receive formal certification. They get access to new types of employment arrangements, global talent visas, a special tax residency status, perhaps even special entities, but they are also subject to easy hire-and-fire rules and must carry the burden of their own career development.
Hofstede et al.
While at IBM Hofstede was a pioneer in company culture comparisons at the global level. While many other company culture frameworks have come out since, notably Project GLOBE and Trompenaars and Hampden-Turner, the basic Hofstede dimensions remain relevant. In the same tradition, we use cultural dimensions in our analysis such as:
Group versus individual compensation and appraisal
Power distance versus flat hierarchy
Uncertainty avoidance versus risk taking
Internal competition versus cooperation
Seniorityism versus merit
Concrete versus diffuse work-life boundaries
Org responsibility versus individual responsibility for development
It's important to note that country-based company culture analysis paints with broad strokes and the imagined cultural differences are often overstated or unimportant. That said, global company culture "convergence" is a risky and usually incorrect assumption, it's more accurate to discuss in terms of "crossvergence" instead.
Company Climate
Company climate often triumphs company culture and refers to the level of satisfaction or engagement of a workforce at a moment in time. Engagement levels are causally tied to the productivity and financial performance of a firm as well as perhaps to the broader levels of innovation and prosperity in a country. Engagement gaps may be driven by poor company performance, poor leadership decisions, bad talent strategies, poor-fit compensation and appraisal systems, or other factors creating low morale. With a background in AI-HR, the Worldly team has worked on AI/NLP tools to engage employees and analyze company climate.
The EU champions the Flexicurity model for employment relations, with Denmark's labor system often cited as the prototype. Flexicurity recognizes that productivity and innovation is in fact tied to the ability to hire and fire skilled professionals easily. However, the "security" part means there are strong unemployment benefits under certain conditions of job loss, such as the job loss being out of control of the firm. The model also supports job transitions by use of outplacement or re-skilling if the job itself is made redundant.
EPRG Model
EPRG is a traditional MNC framework for subsidiary relationships: Ethnocentrism, Polycentrism, Regiocentrism, Geocentrism. It describes the level of centralization or decentralization among HQ, regional HQs, and subsidiaries. Briefly... Ethnocentrism strongly favors the HQ against subsidiaries and uses parent-country nationals (PCNs) at the center of talent management (See our Expat Kaleidoscope). Polycentrism empowers local subsidiaries and relies on host-country national (HCN) talent. Regiocentrism involves a few dominant regional HQs (typically North America, APAC, and Europe) which receive top talent. Finally, geocentrism gives independence to subsidiaries but enforces global standardization (a typical example being a global shipping company).
Spiral Careers
"Spiral Careers" as described in a 2011 book by Lynda Gratton is the new expectation in knowledge-based economies that professionals will change their careers many times. There's an upward "spiral" in the sense that professionals amass greater knowledge and know-how over years of professional experience and so become qualified to manage and contribute to an increasingly broader range of activities. The term is often invoked with discussion of "Boundaryless Careers," "Project Based Economies", and the generational preferences for global professional experiences.
Brain X
"Brain X" is a class of terms for talent demographic shifts, e.g. Brain drain/gain/waste/circulation. "Brain waste" refers to the inability of talent to gain meaningful career experience in a location; "Brain circulation" describes how global talent "circulates" whether through global rotations, country attraction, new global assignments, spiral careers, and the return home. Brain circulation is a well-researched phenomena that informs many governments' talent diapsora management as well as a large range of efforts by countries to court global talent.
There are many types of Self-Initiated Expats (SIEs) and overall they are an important class of skilled professionals for any global talent management strategy, perhaps ranking in sheer volume, globally, to that of company assigned expats (AEs). A firm often will use an SIE national of the firm's home country as a cheaper and less risky altnerative to an AE; they are also a particularly productive class of talent. A complete breakdown of SIEs is offered in our expat explorations post.
X Pat
"X Pat" refers to both the range of expat portmanteaus out there and the many classes of expats and expat related strategies in global talent management. Flexpats, inpats, lopats, repats, expatpreneurs, virtual-expats, SIEs (along with traditional HCN, PCN, and TCN classes of MNC assigned expats). Definitions and details are found in our expat explorations post.
This concludes Part I of our roundup of Global Talent Management concepts. In the meantime, be sure to check out some companion concept roundups on International Taxation and Global Mobility.
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