Global Leadership Talent Management

Successful Selection of Global Leadership Talents as an Integrated Process

Jürgen Deters

• Publisher: Emerald Publishing Limited
• Year: 2017
• Print ISBN: 9781787145443
• eBook ISBN: 9781787430327
• Topic: Business
• Subtopic: Human Resource Management
• Index: Business

In times of globalization, global labor markets and increasingly diverse workforces, Global Leadership, Global Talent Management and integrated management systems belong to the most urgent issues and challenges for the next decade. Hence, it is not a surprise that Global Leadership and effective, integrated Global Talent Management have been identified as key success factors for global organizations. Global organizations see the world as one market for gaining the best global leadership talents. To recruit and retain the best global leaders and leadership talents worldwide, organizations must have effective (global) talent management procedures that are mutually supportive, internally consistent and correlate positively with economic success. 

This book illustrates integrated practices and success factors of effective Global Leadership Talent Management procedures and shows how to balance the opposing forces of global harmonization and local responsiveness. It describes how global organizations can develop an integrative conceptual framework for the (global) talent management process that sees this as an ongoing acquisition process. Acquisition connotes partnership between talent and company. Like customers, the company proactively identifies candidates for global leadership positions worldwide, attracts them and tries to hire them and win their loyalty. The onus is not solely on the applicant to impress the company. The employer also has to appear attractive to potentially interested parties and maintain that state throughout the employment experience. Globally integrated, high-quality Global Leadership Talent Management creates a long term win-win situation by gaining, retaining and providing service to global candidates and talents and by supporting the sustainable success of global organizations.

Global Leadership Selection as an Acquisition Process

The best way to predict the future is to create it.

— Peter Drucker

The outlook of lower growth in most developed markets is pushing more and more organizations and also Small and Medium-Sized Enterprises (SME) to globalize faster. To implement global strategies successfully and to be prepared for the future, global organizations need interculturally competent leaders who are able to cope with increasingly complex political, social, economic, environmental, etc. requirements and who move easily between different cultures. In addition, these intercultural competent people should — supported by corporate Human Resource (HR) practices — be motivated and qualified to accept global responsibilities.

In a volatile, uncertain, complex and ambiguous world (VUCA) the global labor markets are changing into more candidate-oriented markets. Also, in a global context, work is becoming more and more complex with increased ambiguity, more ethical dilemmas, etc. This creates a shortage of high-qualified global leadership talents. Over the past decade, employers have repeatedly reported that they have difficulties in recruiting people with the motivation and the right competencies for these global jobs. This so-called talent demand-supply gap (Stahl et al., 2007, p. 6; Tarique & Schuler, 2010, p. 126) emphasizes the importance for Multinational Enterprises (MNEs) to effectively and systematically manage their workforces in order to remain competitive, especially in a global environment (Tarique & Schuler, 2010, p. 123).

In these times of digital transformation and globalization, global labor markets and more diverse workforces, global leadership and global talent acquisition are most urgent issues and challenges for the next decade. Hence, it comes as no surprise that global leadership and effective global talent acquisition are identified as key success factors for global success (Osland, Li, & Wang, 2014a, pp. 4–5). The metaphor “war for talent” (Michaels, Handfiled-Jones, & Axelrod, 2001) indicates that organizations do compete not only with their products, but also with their access to talent. Thus, organizations must stand out from the crowd to become an employer of choice, and recruiting should use an active global sourcing strategy (McCool, 2008, p. 5) and focus on the qualification of an applicant and not on country of origin.

Finding and retaining such people is very challenging. “Having the right talent, at the right place, at the right time, and at the right price is an important global issue for every enterprise” (Briscoe, Schuler, & Tarique, 2012, p. 2001). Indeed, a majority of the organizations do not have the leaders needed to keep up with the speed of global business or are not satisfied with the quality of their global leaders (Canals, 2014, p. 487).

“A shortage of leadership talent is a major obstacle many companies face as they seek to operate on a global scale” (Farndale, Scullion, & Sparrow, 2010, p. 161). To address these challenges organizations should invest in building their in-house talent pipeline. Managing talents and hiring and retaining highly skilled and mobile talents, “which includes issues such as identifying talent pools and effectively staffing leadership positions, continues to be the most critical topic for executives” (Boston Consulting Group, 2011, p. 8). But there is a gap between rhetoric and practice in (global) talent management. Scullion and Collings call attention to the fact that while the rhetoric of maximizing the talent of individual employees as a unique source of competitive advantage for MNEs has been central to the discourse surrounding strategic Human Resource Management (HRM) in recent years, the extent to which organizations effectively manage their human talent — especially on a global scale — often fails to live up to this hype (Scullion & Collings, 2011, p. 10).

The development of global leadership competencies is essential for future success, because “it is only the possession of specific capabilities and resources that now enables firms to conceive and then implement strategies that can generate what economists describe as above-average rates of return” (Brewster & Sparrow, 2007, p. 5). HR capabilities correlate with economic performance. Organizations that have strong capabilities in HR functions — such as talent and leadership, engagement, behavior, culture management, HR strategy, planning, and analytics — show significantly better financial performance than organizations weaker in those areas (Boston Consulting Group, 2014a).

Company success, especially the successful implementation of a corporate global strategy, requires a strategy for acquiring global leaders and talents.

Strategically oriented global acquisition is a part of managing international HRM. Its goal is to select and develop talents with resources available and valuable for particular companies or unit purposes.

The challenge of global talent acquisition is effectively identifying global talents, no matter in which country they are located (Collings, 2014, p. 257). While talent identification at the headquarters may work quite well, many multinational organizations fail to identify talents located in subsidiaries, because decision-makers located at the headquarters lack accurate information about global talents (Mellahi & Collings, 2010, p. 147). In order to leverage the advantage of a global workforce, however, individuals of different nationalities should be included in the organization’s talent pools (McDonnell, Hickey, & Gunnigle, 2011, p. 176).

To hire and retain global leaders, organizations must have an effective (global) talent management, including a global talent pool. One advantage of having a culturally diverse talent pool, for example, is that it enables multinational organizations to build a culturally diverse upper management team, which is important for effectively handling the tension between global harmonization and local responsiveness (McDonnell et al., 2011, p. 180; Mellahi & Collings, 2010, p. 144). Therefore, information regarding the performance and potential of all global leadership talents need to be tracked and stored appropriately and made available to global talent managers throughout the multinational organization worldwide.

MNEs need integrated solutions and not isolated practices (Schuler, Jackson, & Tarique, 2011a, p. 31). The global talent acquisition process needs HR practices that are “mutually supportive and internally consistent with each other, while also fitting firm characteristics such as top management leadership, vision, values, strategy, size, culture and industry” (Schuler et al., 2011a, p. 31). But there is a lack of research that combines all the research findings to an integrated global talent acquisition system (Tarique & Schuler, 2010, p. 129). In fact, especially there is a lack of peer-reviewed research. Only around 100 of all 7421 publications that included the term “talent management” in their keywords were published in peer-reviewed academic journals (Dries, 2013, p. 273). Thunnissen, Boselie, and Fruytier (2013, 1747f.) report a similar picture, pointing out that most of the (global) talent management literature is consultancy or practitioner-based. Similarly, practitioner literature is mostly “best practice” oriented in that they only cite well-known global organizations that already have successfully and effectively implemented their own global talent management systems. Problematic about this approach is that its results are assumed to be universally applicable — an oversimplifying and naïve notion given the cross-national differences that MNEs encounter in different countries (Cooke, 2011, p. 132). As Stahl et al. (2007) point out, “… competitive advantage comes not primarily from designing and implementing best practices but rather from the proper internal alignment of various elements of a company’s talent management system, as well as their embeddedness in the value system of the firm, their links to business strategy, and their global coordination.”

Strategic talent acquisition is an appropriate answer to these challenges and a valuable asset for future success and for staying competitive in the labor markets worldwide. It enables MNE to effectively attract, select, develop, and retain their key players.

The word “strategic” implies that talent acquisition and the strategic business plan are linked. Consideration must be given to strategic directions, new products and technologies, and especially “globalization” with certain requirements in flexibility, agility, or mobility. Depending on the strategy, the number and the qualifications of the employees may vary. Global talent planning and strategy implementation depends on the demands for qualifications, amount of work experience, particular skills, etc. Therefore, the requirements for global leadership talents must be strategically proven.

In fact, the term “acquisition” is deliberately used, because strategic talent acquisition is more than just recruiting. Recruiting is predominantly filling open positions and thus a subset of talent acquisition. It is more of a tactical and reactive process; the line managers have a vacancy and refer to the HR department to fill this position.

Strategic talent acquisition anticipates changes and takes a long-term view. It is not only filling positions today; it has a close link to the company strategy and will recruit today for positions that do not even exist today, but are expected to become available in the future, or are identifiable today by looking at the succession plan or the company’s HR strategy policy. Strategic talent acquisition is not assessing the fit of a candidate to a certain job but the fit to future requirements.

Moreover, in the literature, global talent management and global talent acquisition are often used simultaneously. However, acquisition underlines more the “marketing”-oriented perspective.

Taking the long-term strategic approach to talent acquisition has a huge impact on how to acquire a candidate. If the approach is purely tactical and reactive, organizations aim to find out from the prospective candidate whether he or she is qualified and interested or not. If the approach is more strategic, the intent is to go much further, and the potential candidate is to be treated like a customer that the company wants to win and retain. Therefore, the conversation between company and candidate becomes more based on relationship building and is a mutual exchange process on an egalitarian level.

Acquisition means not only recruiting and selecting. The word “acquisition” connotes partnership between candidate and company. Like customers, the company proactively identifies candidates, attracts them, and tries to gain them over and get their ongoing loyalty; and the candidates, who often have a lot of job-options, want to contribute all their energy, motivation, and competencies, when they are convinced about the company, the job, and the circumstances. “It’s not just the applicant who has to impress. The employer also has to appear attractive to potentially interested parties” (Trost, 2014, p. 13). Talent acquisition is like customer acquisition and aims to create a long-term win-win situation by gaining, retaining, and providing service to candidates and talents.

The candidate has the opportunity to explain his needs, expectations, and future career aspirations, and the talent acquisition professionals gather information to determine, if there is a potential fit in the organization.

To sustain a competitive advantage and to manage the work of people with different cultural backgrounds, global leadership talents should have high potential and the capacity to be flexible in their thinking and actions. Global leadership talents regardless of their educational background and origin are able to think strategically and cope with constantly new challenges in the future; they identify business-development opportunities and create more effective solutions for customer needs. Thus having the right and well-trained talents is a source of differentiation and competitive advantage, because people make the difference.

Integrated high-quality selection procedures and a global management staffing strategy enable global consistency among various managerial pools and foreign subsidiaries. Moreover, it is an expression of global responsibility that organizations use the same selection tools and techniques to obtain candidates who act in a global context (Sparrow, 2007).

A high-quality acquisition process can be expensive. But failure in the selection process is much more costly. For expatriates, “the typical compensation package is estimated to cost at least 2.5 times an expatriate’s salary, and a significant number of organizations indicate that the cost may be 4 to 5 times the base salary … Moreover, the costs (e.g. in lost business, preparation, and so forth) associated with the failure of an expatriate employee are extremely high and have been estimated to range between $200,000 and $1.2 million …” (Lievens, Harris, Van Kerr, & Bisqueret, 2003, p. 476).

A high-quality strategic talent acquisition approach is a holistic process, connecting and integrating the different perspectives, tasks, and responsibilities (strategic personnel planning, organizational talent forecasting, identifying and attracting talents, preselection, selection, and posthire talent issues like onboarding and retaining talents, career planning, talent pipelining). Therefore, this publication proposes an integrative conceptual framework of the talent acquisition process as a main part of an integrative global talent management concept (Stahl et al., 2012).

One process in this holistic approach is the selection process of global leadership talents. This book is primarily concerned with the selection of global leadership talents. This focus on effective selection procedures is due to the experience that no amount of training and development or performance management will make up for a poor hiring decision.

There is research on the selection of “international assignees” or “expatriates,” who are employees, who move from subsidiary to subsidiary or from headquarters to subsidiary and vice versa, to establish common quality standards and procedures, common corporate identity and culture, building global relationships, etc. But with respect to acquiring in-house global leaders and global leadership talents there is relatively little research, especially on designing a high-quality, comprehensive selection system that is considered fair to predict global leadership success domestically and internationally.

The main goals of this book are to explore the following:

• – How can an in-house high-quality global leadership talent selection process be created and used across different countries and cultures and at the same time recognize cultural and country-specific particularities?
• – What effective practices can be used by organizations to select the right global leadership talents?
• – How can a company gain acceptance for global talent selection procedures across countries and cultures?
• – What are practical applications and recommendations from current research for designing a high-quality selection system for global leadership talents?

Although we have a great homogenization and often standardization of processes in global companies, it is very difficult to create a “best practice” in selecting employees for all countries and cultures, because they differ widely in history, culture, and tradition, law systems, etc. “To expect different countries to operate similarly seems simple-minded at best” (Harris, 2008, p. 3).

However, to select global leadership talents for a global talent pool, it is necessary to implement quality standards. This book analyzes current literature on global leadership, global management and selection of global leaders, and global leadership talents. The purpose is to develop guidelines for high-quality and successful processes of global leadership talent selection.

Global Leadership Talent Selection and Global Leadership

What Makes a Global Leader?

In the literature, we find numerous definitions of leadership. The definitions vary from guiding and directing groups and people with different backgrounds and needs to the ability to inspire motivation in others to move toward a desirable vision. Yukl (2006, p. 8) defines leadership as an influencing process to bring others to a mutual understanding and consensus on what and in which manner something needs to be accomplished, while also promoting efforts of achieving shared goals. With reference to social scientists and management scholars representing 56 countries from around the world, in a GLOBE-Study, leadership is defined as “the ability of an individual to influence, motivate, and enable others to contribute towards effectiveness and success of the organization of which they are members” (House, Hanges, Javidan, & Gupta, 2004). This definition considers that organizations do not exist as an end in themselves, but they have to reach goals. Therefore, leadership is a process of influencing the attitudes and the behavior of individuals and groups/teams, to get things done and reach organizational goals. The definition of leadership is the starting point for identifying the elements of effective leadership, and the definition and description of leadership in terms of competencies is very important, because the evaluation of recruiting processes refers to the issue: How can we measure the success and the job performance of a (global) leader?

The main success factor of a leader is to perform and to achieve positive organizational results; and in a global context, the efficacy and effectiveness of a global leader also refers to achieving goals and to ensure future success of the organization.

Mendenhall and Bird (2013, p. 168) argue that complexity is an important aspect of globalization. They state that “complexity involves the dynamic interplay between four drivers: multiplicity, interdependence, ambiguity, and flux.” Multiplicity, as the first driver, immediately invokes a sense of quantity, because global leaders have a much higher number of stakeholders to deal with, in comparison to someone working in a purely domestic setting. In addition, the issues they are asked to face are much more diverse, since they can differ according to the economic and political situation, as well as the prevailing culture of the country they are acting in. The second characteristic, interdependence, conveys how boundaries have seemingly disappeared over time and no business can work in isolation or expect only bilateral relationships without overlapping interactions with other players. To remain competitive, many companies choose to pursue strategic alliances, joint ventures, or even mergers.

Another characteristic of complexity is ambiguity, which is a partial result of, and intensi...

Table of contents

• Cover
• Title Page
• 1 Global Leadership Selection as an Acquisition Process
• 2 Global Leadership Talent Selection and Global Leadership
• 3 Harmonization and Guidelines in the Global Talent Acquisition Process
• 4 Quality Standards in Personnel Selection
• 5 High-Quality Personnel Selection as a Holistic Process
• 6 Organizational Effectiveness and Efficiency in the Global Leadership Talent Acquisition Process
• 7 Conclusion
• Bibliography
• Index