Winning over the best in the business – a fresh look at talent management in Scandinavia
Our research shows that, to secure competitive advantage through their most capable and valuable employees, organisations should focus their talent management strategy on talent segmentation. This means identifying the different types of talent that will generate the most value for the business given the strategic direction and competitive edge of the company. In Scandinavia, however, our recent survey indicated that only 14% of businesses had begun differentiating their talent agenda to suit talented people, and that only 9% consider such differentiation to be important.
Scandinavian companies should challenge their existing approach to talent management – by becoming more business driven in their talent definitions and development and understanding ‘what talent wants’, they are more likely to achieve a significantly higher total shareholder return (TSR).
Popular assumptions about talent management in Scandinavia are frequently wrong
In our study, we bench-marked talent management initiatives in Scandinavia against a global norm group. We interviewed over 20 large corporations and institutions (based in Denmark), asking their views on the basic assumptions and principles underlying talent management, as well as the current state/maturity of the talent management initiatives they had put into practice.
This study provides some fascinating insight for Scandinavian executives. Through the interviews, we found that around 75% agree that talent management needs to be aligned with the business/market need. However, there is no supporting evidence in the data that this alignment makes a meaningful difference to TSR. It is differentiation of the employee value proposition (EVP) that makes a much more significant impact.
You need to customise what you offer to key talent
Our research showed a clear relationship between TSR and the extent to which businesses segment/personalise their EVP – defined as the balance of rewards and benefits they give employees in return for their workplace performance.
We found that there was an average TSR of -29% for companies with no EVP segmentation, whereas companies with some, or full, segmentation averaged a TSR of +37%.
This provides a strong business case and an opportunity for Scandinavian companies, both in the ‘war for talent’ and in the marketplace in general.
Our five steps to ‘give talent what talent wants’
We have worked with a wide range of companies, across many industries, and have established the following five steps for successfully segmenting the EVP:
- identify what your business needs for competitive advantage, whether operational excellence, product customisation or reliable customer service
- pinpoint the key capabilities that your organisation must develop and strengthen in order to meet this need (given the market conditions)
- agree the roles in your organisation that need to demonstrate these strategic capabilities
- identify the talent segments you need to target to secure the right capabilities
- differentiate the EVP for each talent segment.