The war for talent: human capital challenges for professional service firms

Abstract

Professional service firms face particular human capital challenges. This study reflects on the distinctive characteristics of professional service firms through the concepts of knowledge intensity, low capital intensity and professionalized workforce. Based on in-depth interviews with 21 partners of Australian law firms, we provide empirical evidence on the war for talent challenges faced by professional service firms and in particular, law firms. The findings point to talent management challenges including reputation building and maintenance, employee autonomy, knowledge acquisition, revenue and profitability through internationalization, managing knowledge across borders, managing employee mobility, talent acquisition and retention, talent engagement, performance management and developing leadership capability. These challenges are important issues to be considered by professional service firms as they attempt to compete more effectively in global business contexts.     

Integrating global mobility and global talent management: Exploring the challenges and strategic opportunities

Although global mobility represents an important element of many multinational enterprise's (MNEs) global talent management systems, the two areas of practice have largely been decoupled in research and practice. The current paper aims to build a dialog around the integration of these two important areas of practice and illustrate how the integration of global mobility and global talent management can contribute to the success of the MNE. Human capital and social capital theories are introduced as theoretical frames for the integration of the two areas and global talent pools and routines for managing global staffing flows are introduced as key organizational routines that can maximize the contribution of global mobility to the MNE. The paper also considers challenges and opportunities for the integration of mobility and talent and outlines some directions for future study.     

Global talent management: Literature review,integrative framework,and suggestions for further research

The environment for most organizations today is global, complex, dynamic, highly competitive, and extremely volatile, and is likely to remain so for years to come. In addition to these external conditions, most organizations are also facing several global challenges including those related to: talent flow; the managing of two generations of employees, viz., older or mature workers and younger workers; and a shortage of needed competencies. One major result of these challenges for organizations is that they have to be global and that they have to be systematic in managing their human capital if they wish to have any hope of gaining and sustaining a competitive advantage in the years ahead. Many human resource practitioners and consultants (HR professionals) are now recognizing this, especially those that operate globally, the multinational enterprises. Academics are also showing a strong interest as evidenced by their work in the new area referred to as “global talent management”. In this article we review that academic work and attempt to organize that literature by creating an integrative framework for understanding and advancing further research in global talent management. To guide this research our framework highlights several selected challenges in global talent management, and several drivers of those challenges. It also highlights the potential role of IHRM activities in addressing those selected challenges. A discussion of possible criteria of global talent management effectiveness completes the framework. Hopefully this integrative framework may guide further academic research on global talent management and might also inform the work of HR professionals.     

Global talent management: A life cycle view of the interaction between human and social capital

We present a theoretical model that describes the interaction between social and human capital and the different forms that such an interaction may take – positive and negative. Extending the concepts of stocks and flows of knowledge, this model evaluates social capital flows against human capital stocks. When we compare these flows to the value of human capital, we are able to better understand how these resources can interact with each other, influence global talent development, and change over time. We discuss the implications for practices in global talent management in selecting, developing, and harnessing talent.     

The role of the corporate HR function in global talent management

We currently know little of the role of the corporate human resource (HR) function in multinational corporations regarding global talent management (GTM). GTM is explored here from two perspectives: increasing global competition for talent, and new forms of international mobility. The first considers the mechanisms of GTM, and the second, individual willingness to be mobile, especially in emerging markets, and the organizational capability needed to manage this talent. New corporate HR roles are identified which show how these issues might be addressed. We then advance our understanding of GTM theory and practice by considering the major future challenges facing corporate HR.     

Global talent management during the COVID-19 pandemic? The Gods must be crazy!

The ongoing COVID-19 pandemic has brought terrifying effects for labor markets all around the world. Just as we witness rapid changes in terms of the ways of working (working from home), we are also observing an increase in unemployment. The ways in which major corporations with international operations process their global talent management (GTM) already represents a challenge in relatively stable times and clearly, in a period of such great and sustained turbulence as current experienced, this task becomes still more difficult. Hence, our research aims to study the impact of GTM on the international performance of major companies during the COVID-19 pandemic period. To this end, we surveyed a sample of 59 large companies that act in external markets. Through recourse to multiple linear regressions, we conclude that GTM practices return positive impacts on levels of international performance. Our research returns theoretical implications in terms of the application of integrated GTM models and with the results of significant relevance to corporations operating internationally, and thus enabling them to better understand which strategic human resource management policies will return the best GTM results.     

Balancing individual and organizational goals in global talent management: A mutual-benefits perspective

Drawing from the talent management and global mobility literatures, there is simultaneous pressure to address both organizational goals to place talent internationally, and individual goals of self-initiated expatriation. This raises important questions for the future of global talent management (GTM): how might individual and organizational goals be balanced to the mutual benefit of both parties? Qualitative data from pilot studies in multinational corporations demonstrate a largely financially driven balancing act between self-initiated and organization-assigned expatriate assignments. Building primarily from psychological contract theory, this study builds propositions for future research, and explores the implications for global talent management practice.     

The Co-evolutional Advantage: Strategic Management Theory and the Eclectic Paradigm

The eclectic paradigm has been one of the leading frameworks for explaining multinational activity over the past two decades. Yet recent trends in international business pose a challenge to the explanatory power of the paradigm. Strategic management theory, with its focus on performance differences between firms, provides a useful complement to the OLI framework in understanding the activities of the modern multinational. In particular, global competition and the management of a firm's global stocks and flows of knowledge merit closer attention.The advent of global competition requires us to shift from the existing institutional perspective of comparisons of firms and markets or of foreign firms and local firms to a firm-level perspective of comparisons of the multinational firm to its global competitors. It also necessitates a focus on firm-level capabilities in knowledge management relative to competitors, the development of these capabilities involving both macro and micro co-evolutionary processes. Our arguments incorporate these changes to extend the OLI paradigm to accommodate both an economic and a strategic management perspective.     

Talent management and global competition for top talent: A co‐opetition‐based perspective

In an age of competition for top talent, lateral hiring or personnel poaching has flourished not just between rivals, but also among allies transcending across national borders. This article integrates the literature on lateral hiring and co‐opetition to develop a “novel” perspective of the co‐opetition‐based view of lateral hiring. A conceptual framework was developed to account for conditions under co‐opetition setting in different markets. Contrary to the popular belief that poaching from rivals is more beneficial, the present research demonstrates that poaching from allies may be more beneficial in mitigating the “winner's curse.” Indeed, poaching in the collaboration domain is characterized by greater access to information about the target employee before job change. Lateral hiring from allies in foreign markets can also be more beneficial given the potentially moderate stigma attached compared with those from domestic markets. The implications for firms and strategic human resource management literature are examined.     

Institutional and corporate drivers of global talent management: Evidence from the Arab Gulf region

This study analyses how talent management (TM) is molded by institutional and corporate drivers. We borrow from the vast institutional literature to understand how organizations adopt and implement TM practices within the Gulf Cooperation Council (GCC) context. This context is valuable not only because it tackles an under-researched region, but also because the type of variables found further our understanding of TM processes in non-Western contexts. Companies abide by localization rules to sustain their “legal” legitimacy, while trying to improve efficiency through actions that enhance their economic sustainability. Companies try to strike a strategic balance between local adaptation and global assimilation of their TM processes. We conclude by presenting a framework that portrays how various forces impact the TM process.     

The efficacy of talent management in international business: The case of European multinationals

The focus of this study is on the efficacy of talent management (TM) practices to the performance and operations of international businesses. There are relatively limited dedicated studies on the value and effectiveness of TM as an identifiable international practice and its contribution to international business. Anecdotal research and consultants' reports have argued for an increase in the return on investment where TM practices are aligned with the business strategy. Conceptually, human capital theory is adopted to explain investment in high potentials in addition to the resource‐based view, which help explain the development of internal sources of competitive advantage, which are rare, inimitable, nonsubstitutable, and valuable. This article builds on knowledge by qualitatively examining managerial experiences of TM practices within 17 European internationally operating businesses with employees ranging from 800 to 200,000. An exploratory qualitative approach is adopted, with semistructured interviews as the main data collection tool. Findings accentuate the significance of developing the most valuable source of competitive advantage—people. We argue that, if TM is effectively implemented can result in the development of unique competences, which can ease the burdens of cross‐border business challenges and lead to sustainable competitive advantage.     

Going “purple”: Can military jointness principles provide a key to more successful integration at the marketing-manufacturing interface?

When the colors of all the U.S. armed services’ uniforms are combined, the color purple appears; therefore, military insiders refer to inter-service operations as “purple” operations. Now a core concept, the “jointness” of U.S. military strategic response to a critical operational failure encapsulates principles and processes through which two or more armed services are best able to integrate strategies, strengths, and capabilities in ways that yield genuine synergies, despite the differences in mission and culture that naturally separate the services. The now ingrained ability of military services to “go purple” quickly has materially contributed to strategic and operational successes during the last 20 years. The internal circumstances as well as global environmental challenges faced by domestic firms, particularly at the marketing-manufacturing (M-M) interface, resonate with those faced by the U.S. military. Firms may benefit from evaluating the prospect of “going purple” at this crucial point of interface. This article integrates military-like jointness principles into an organizational framework that functions as a guide to pursuing cross-functional M-M integration more successfully. The framework also provides a methodology through which managers can determine whether and how much purple ought to be pursued.     

Exploring talent management in India: The neglected role of intrinsic rewards

The challenge of global talent management is critical to firm success. Even with the global economic slowdown of 2008 and 2009, there are continuing challenges in attracting, managing, and retaining talent, especially in the developing regions of the world where economic activity has outpaced the availability of skilled employees. To examine this situation, we develop and test a model of talent management across 28 Indian firms involving 4811 professional-level employees. The intrinsic rewards experienced are a critical element in employee retention, satisfaction with the organization, and career success. We explored four antecedents of intrinsic rewards: the social responsibility of the employer, pride in the organization, manager support, and performance management (PM). We found support for the importance of intrinsic rewards as a mediating variable, as well as for the moderating role of certain hygiene factors. Our research suggests multinational, international, and national employers may have non-pecuniary mechanisms to promote retention and employee satisfaction, even in challenging labor market environments. We conclude by proposing implications for research and global HRM practices.     

Mitigate,tolerate or relocate? Offshoring challenges,strategic imperatives and resource constraints

This paper examines key firm-level factors influencing initial strategic responses to offshoring implementation challenges. Comparative case findings indicate that firms are likely to try to mitigate challenges if they perceive to have control over their cause; if strategic objectives are diverse; and if firms have abundant resources available. By comparison, firms tolerate challenges if cost is a strategic imperative, or if resource endowments are limited. Firms relocate operations temporarily or permanently in particular if challenges are externally caused, whereby temporary relocation requires investments into flexible global infrastructures. Findings reveal critical contingencies of capability development and learning in offshoring and beyond.     

Global talent management: Shaping the careers of internationally educated talents in developing markets

In the context of globalization, country‐level actions to manage global talent (e.g., development of immigrant‐friendly policies, policies to attract back skilled diaspora, or investment in the international education of youth) have been underresearched. The aim of this article is to analyze the impact of a country‐level global talent management practice on the careers and career success of its talents in the Republic of Kazakhstan, a developing country in Central Asia. Using qualitative methods, this study introduces new dimensions of career success evaluation for internationally educated talents in developing markets: use of knowledge acquired abroad and international aspect of the job. Based on these dimensions, it develops a model of career types. The career types predict the varying degrees of talents' career success and their involvement in sharing and capitalizing on knowledge, ideas, and international experience, which may have an impact on society. The study contributes to the field of global talent management and career success by providing empirical evidence on an underresearched topic in the underresearched context of developing markets.     

Global Consistency Versus Local Responsiveness: Deutsche Telekom's Human Resource Management Strategies in Central and Eastern Europe

This article analyses the competing demands faced by Deutsche Telekom for global consistency and local responsiveness as it attempted to coordinate its human resource management strategies across its Eastern European subsidiaries. It considers the degree to which the former economic and political histories of Eastern Europe continue to influence and/or constrain multinational corporation strategies and practices in the post-2000 era. Institutional path dependency, strategic international human resource management, and international industrial relations theories are used to assist in analyzing the data. The study concludes that managerial constraints associated with the historical and economic legacies of these former socialist countries are rapidly declining, thereby allowing multinational firms to implement “Western-style” human resource management strategies. It further suggests that industrial relations institutions at the European Union level, rather than individual country level, have the greatest potential to impact on international human resource management strategies in the region. Multinational corporations should therefore engage in more-integrated strategic international human resource management and international industrial relations approaches.     

Global key account management and systems selling

Adoption of global key account management systems typically represents a response by selling companies to two inter-related structural changes in their business environment: first, the growing internationalisation of their industry and unprecedented levels of foreign competition; and second, the urgent need to retain customers of strategic importance (i.e. key accounts) against a background of centralised purchasing and supply base rationalisation. Global key account management is central to the ongoing, and often acrimonious debate captured in the slogan, “Think Global, Act Local”, suggesting serious implications for organisation structure, co-ordination/control and relationship management. Yet global key account management is under-researched and its efficacy, therefore, only partially understood. Such matters have long preoccupied executives in multi-national companies operating in industries where “systems selling” is a way of life and where practice is ahead of both theoretical development and empirical research.     

Globally distributed talent communities: A typology of innovation problems and talent characteristics

As the world moves toward the “New Normal” with borderless innovation and remote work, Multinational Enterprises (MNEs) are increasingly involved in tapping talent that is external to organizational boundaries. This study distills learnings from the use of globally distributed external talent that has been facilitated by innovation intermediaries, a development that holds significant managerial implications for the post-COVID industrial era. Moving beyond the conventional and recognized need for global talent management practices, we provide a perspective on talent management outside organizational boundaries, a topic that that has received limited attention so far. Through the lenses of open innovation and talent management, we define a typology of innovation problems on the basis of latent talent needs. We take a step further, and for each problem type, we identify the competencies that are relevant, the reward mechanisms of the intermediaries, and the extent of collaboration required with internal talent. This typology provides a basis for researchers in the talent management community to study talent acquisition and management strategies of MNEs across various contexts and various innovation needs.     

AI-enabled recruiting in the war for talent

A large body of research has well established that changes in net balances between labor supply and demand can drive competition for human capital. We propose that AI-enabled recruiting tools constitute a force that will intensify the war for talent above and beyond episodic changes in net balances. We also propose that three seismic shifts will further intensify the war for talent by increasing the value of human capital and lowering its switching costs. Lastly, we bridge human resource management and military escalation literatures and examine how three key onset conditions relative to the use of AI-enabled recruiting tools have the potential to spark an arms race for those tools. Finally, we examine the managerial implications of these dynamics so that managers prevail not just in short-term skirmishes but also in the long-term war for talent.     

Franchisor strategy and firm performance: Making the most of strategic resource investments

A key decision for entrepreneurs in many retail and service firms is whether, and how much, to use franchising. If the decision is made to franchise, the actor may assume one of two “identities” or tactics: (1) the “chain builder,” who uses a blend of company and franchised outlets, and (2) the “turnkey,” who sells business opportunities but does not own any outlets. To benefit from their chosen strategy, franchisors must put resources in place to support it. We argue that franchisors use the chain building strategy to strike a balance between standardization and innovation by building resources that foster trust and encourage knowledge sharing with franchisees. In contrast, for turnkeys, a valuable set of operational routines is the critical strategic resource. To better appreciate how franchisors choose between the chain builder and turnkey strategies, we gathered survey information from 263 franchisors. Via this data, and as described herein, we learned that franchisors perform better when they invest in resources that best support their selected strategy.