understanding the race for impact

Understanding the race for impact

Global talent impact study

April 2012

Talent with impact

02Understanding the race for impactGlobal talent impact study

Contents

04 Foreword

05 Executive summary

07 Performance wins

09 The race for impact

11 Measuring impact

15 The value of impact

19 Talent with immediate impact: the sprint

23 Talent with consequential impact: the relay

25 Talent with potential impact: the marathon

27 Regional Focus: Asia Pacific

29 Regional Focus: The Americas

31 Regional Focus: Europe

33 Key learnings

04

Foreword

‘Our people are our greatest asset’ is a claim many companies confidently make. Yet, atFuturestep, we frequently hear of the challenges behind understanding and quantifyingtalent. While recruiting high impact talent is a strategic imperative, what does a highcalibre candidate who will deliver impact in the short, medium and long term look like?Equally, how can the impact of talent be measured not only for the role in question, butalso through a meaningful long-term lens?

We wanted to explore these challenges in more depth and uncover the steps that can betaken by organizations to identify and measure talent with immediate, consequential andpotential impact in ways that deliver upon broader business objectives.

So, we commissioned this study of 1,589 recruitment and talent professionals in the US,UK, France, Germany, Brazil, China, Hong Kong and Australia and discovered adistinctly short term approach to recruitment. We found that organizations typicallyvalue performance above retention and measure the impact of employees within yearone. Our view is this is a reaction to recent economic turbulence and ongoinguncertainty, which has created a focus on the needs of organizations today and the roleindividuals play to deliver upon these.

We also noted a tension between the measurement of impact and its perceived value.Despite many organizations confirming that some measurement takes place, we foundthat both the board and a number of talent professionals appear to question the value ofthis practice. Something urgently needs to be done to address this and to ensure the HRfunction and senior executives not only agree on how best to measure the impact oftalent, but also the strategic value it brings to the organization.

Another takeaway was that decision quality is considered the most important factor forimmediate impact, peer and boss relationships for consequential impact and creativityfor potential impact. It’s therefore critical that organizations identify and quantify thethree levels of impact for employees to truly become the asset that businesses claimthey are.

Our findings are just the starting point for investigating these complex issues, and ourintention is for our study to initiate debate. As such, we would love to hear your views onwhat we have uncovered.

What is clear to me however, is that we are at a critical moment for talent and that ourindustry must collaborate to develop models for measurement that will enable recruitingtalent with impact to emerge as the key to unlocking long term business success.

Byrne Mulrooney, CEO Futurestep, April 2012

Understanding the race for impactGlobal talent impact study

Copyright © 2012. Korn/Ferry International/Futurestep, Inc. All rights reserved. futurestep.com

05

Executive summary

Performance winsThe performance of new hires is seen byrecruitment and talent managers globallyas the most important measure of asuccessful recruitment process. Whenasked to rank seven measures inimportance, new hire performance wasplaced first by nearly half the respondents(46%), followed by retention which claimedonly a 15% share. This reveals a clearemphasis on immediate impact and theimperative to efficiently fill the role at handcompared to longer term requirements.

Year one is make-or-breakPerformance of new hires in their first yearis seen as critically important – 76% ofrespondents’ organizations seek tomeasure the impact that the new hire hashad within year one. Worryingly, 35% ofrespondents admit that their organizationsmeasure the impact of a new hire beforethey expect recruits to have made theirgreatest impact on the business.

Bad decisions cost reputationsDecision quality – specifically, avoidingmaking bad decisions – edges ahead as thecompetency most commonly required fornew hires to make a significant impact intheir first six months. However, ifperformance measurement places toomuch focus on avoiding bad decisions,there is a risk of stifling innovation and theability of organizations to learn frommistakes.

Formal measurement is still a challengeMore than 60% of companies say theyundertake formal measurement of theimpact of new hires on their business, butonly half of those report that themethodology they have in place is widelyused in their organization. It wouldtherefore appear that while HRprofessionals can find the process ofdefining metrics to be challenging, thegreater challenge is in generating adoptionand buy-in for those metrics.

Better measurement builds engagementOf the recruitment and talent managerswho report measuring the impact of newhires, 40% also question to some extent thevalue of doing so. Addressing the concernsthey express around the feasibility andrelevance of measuring impact could bekey to building engagement with the seniorleadership and positioning HR as anincreasingly strategic function.


06

High performance is not a solitaryjourneyOver a one to three year timescale, peopleskills and relationships come to the foreas determining factors for impact andsuccess. While integrity and trust remaina fundamental price-of-admission skill forcareer success, good relationships withpeers and senior leadership were found tobe critical over the longer term forpromotions and career progression.

There is a renewed focus on creativityand strategic agilityCreativity is the competency most cited byHR professionals as being of increasedvalue in the current economic climate.Pressure to respond to the economicclimate with risk-averse behaviors andstrategies is easing. Strategic agility – acompetency shown by Lominger researchto be in high demand for more senior rolesbut in low supply among managers -continues to differentiate acceptableperformance from performance that drivespromotion and development to seniorleadership.



07

Performance wins

The performance of new hires is the most important criteriaused by HR professionals globally to measure the success of theirrecruitment processes.

Recruitment and talent managers valueindividuals who demonstrate strongperformance in their new role, especiallywithin their first year. This has leapt aheadof traditional metrics like time to hire andcost of hire in relevance to assessingsuccessful recruitment.

Respondents were asked to rank theimportance of seven criteria used tomeasure the success of recruitment.

Overall, nearly half the respondents (46%)ranked performance of new hires as themost important criteria, a findingexpressed consistently across the regionsand industry sectors.

A UK-based HR director confirmed thevalue placed on new hire performance,saying: “We’re definitely keen on highimpact employees rather than merelyabove-average people… because thecurrent climate is tough and competitive.”

Retention was the next most highly rankedcriteria globally, with 15% of respondentsranking it in first place.

However, recruitment professionals inBrazil and China put far less emphasis onretention, placing it as the fifth and sixthmost important criteria respectively. Inboth regions, satisfaction of line managerswith the recruitment process was seen assecond only to new hire performance.The lesser focus on retention in theseregions may well reflect higher staffmobility in faster-growth economies.

The words of one HR Manager in the USsummarize the global perspective well:“Retention is important - it promotescontinuity and team building – butperformance on the job is critical.”


"We’re definitely keenon high impactemployees ratherthan merely above-average people,because the currentclimate is tough andcompetitive."

HR Director, UK

08

Cost of hire and time to hire are apparentlynot such important metrics for measuringsuccessful recruitment, ranking fourth andsixth respectively. This is interesting giventhat historically, these metrics have beenattractive to organizations by virtue ofbeing easy to measure at the time of hire.

Furthermore, professional recruitmentcompanies are often measured by theirclients on these criteria alone. If cost ofhire and time to hire are in fact relativelyless important, then the challenge is toadopt performance indicators with astronger link to longer term impact andoverall business success.

Some organizations, of course, are alreadydoing this.

Tim Nelson, President, Futurestep AsiaPacific commented: “At Futurestep we areincreasingly finding that leadingorganizations deploy a suite of metrics notonly to evaluate their hires, but to helpshape their whole recruitment process.Fundamentally, they’re doing this tomaximize the value they get – from theirrecruits, from their processes and fromtheir partners. We embrace this because itbrings us closer to our client’s businessobjectives and it provides us with a greatframework to demonstrate the value we’readding for that client.”

Importance of the criteria used to measure the success of the recruitment process


"Retention isimportant - itpromotes continuityand team building –but performance onthe job is critical."

HR Manager, US


09

The race for impact

For new recruits, the race is on from day one to demonstrate impact.The first year is seen as having critical importance and for newhires this requires a sprint for high impact over a short period of time.

In our study, 76% of respondents indicatedthat the impact of a new hire on theorganization was measured within the firstyear. Only 15% reported that measurementof a recruit’s impact took place after one tothree years with the organization.

HR professionals in France (22%) andthose in local government (18%) were lesslikely to measure impact within the first sixmonths. This contrasts with LatinAmerican respondents who were morelikely to measure impact in the first halfyear (53%) and Chinese talent andrecruitment managers who were morelikely to measure within the first 7-12months (also 53%).

We saw an interesting contrast to thiswhen we asked respondents when theyexpected new hires to make their greatestimpact on the business. Only 63%expected this would occur within year oneand 31% within the first one to three years.

James Mendes, Managing Director,Futurestep Asia comments: “The questionof when employees have the greatestimpact is a difficult one to answer,especially in the fast moving economies ofIndia, China and South East Asia. It’squite common that individuals are not inthe role they’re hired to do in as little astwelve months. This makes it very difficultto measure the impact they have on thecompany specific to their role, but it maybe that they can measure it to the businessoverall.”

By comparing responses to the twoquestions, we saw that 35% of HRprofessionals measure the impact of a newhire in a timeframe earlier than the one inwhich they expect new hires to have madetheir greatest contribution to the business.

These findings imply that a majority oforganizations are seeking to establish thatthey have made a good hire within the firstyear. For the recruit, it is vital to ensurethey make a demonstrable impact from dayone. For the Human Resources functionthere is not only the imperative to recruitcandidates who can quickly deliver impact,but also to ensure that support structuresare in place to enable this to happen.

William Sebra, President, FuturestepNorth America, summed up the challengefacing new hires: “Individuals must havethe ability to quickly size up theorganization and adapt their learnings andknowledge to meet the needs of theorganization. All too often we seeindividuals ‘waiting to see how things go’before jumping in which can be careerlimiting.”


The race for impact

35% of HR professionalsmeasure the impact of a newhire in a timeframe earlier thanthe one in which they expectnew hires to have made theirgreatest contribution to thebusiness.

10

There is a risk that talent and recruitmentmanagers are neglecting the measurementof impact over the longer term and theinsights that can be gained from this.A year can be a long time in business butif feedback on the recruitment process isbased on the first year alone thenopportunities may be overlooked to recruitand develop talent that can add value overtime, be promoted and potentially take onleadership roles. As we see later in thisreport, skills like creativity and strategicagility are highly valued in today’scompetitive global economy, but are alsocompetencies that are less likely to beexhibited within the first year.

Jan Mueller, Managing Director, EMEARPO Sales, Futurestep, comments: “Inevaluating new hire capability we definitelysee an emphasis on the initial phase, thisview being manifested in the famous ‘first90 days’ and six month probation periodsthat are common in many corporationsacross Western Europe. But in reality, theimpact on the organization is largely seenafter the new hires have gone through theirinduction.”

This is a complex issue and one thatsparks debate. We spoke to two talentprofessionals with contrasting views:

“The greatest impact is made in the firstone to six months when people are newand energised and then again at twelve toeighteen months when they arecomfortable in their role and continue toadd value. However, after this period,I think people make little impact." -HR Director, Financial Services, UK.

“[After three years] is the point where anemployee becomes the most efficient, feelscomfortable at work and achieves the bestin terms of developing their competences.It takes time for someone to reach their fullpotential.” - HR Manager, Legal Sector,France

When impact is measured - and expected


"[After three years] isthe point where anemployee becomesthe most efficient,feels comfortable atwork and achievesthe best in terms ofdeveloping theircompetencies. Ittakes time forsomeone to reachtheir full potential."HR Manager, France


11

Measuring impact

Successfully measuring impact remains a challenge for manycompanies around the world - but doing so can create opportunities.

While we found that a majority ofbusinesses formally measure the impact ofa hire on their business, only a minorityreport that their methodology and definedmetrics enjoy widespread adoption acrossthe organization. This is an opportunity aswell as a challenge: it seems HRprofessionals can get ahead of the pack byimplementing a consistent and well-defined approach to measuring impact.

In our survey, 62% of respondents reportedthat their organizations formally measurethe impact of a hire on the business, butthere is considerable variation by region.89% of respondents in China and 85% ofrespondents in Hong Kong reported formalmeasurement, contrasting with only 47%of those in Germany and 44% in Australia.

George Hallenbeck PhD, Vice Presidentof Intellectual Property Development atKorn/Ferry suggests: “The high propensityto measure impact in Asia indicates thatspeed and data are the name of the game –Asian employers need rapid feedback inorder to make adjustments and staycompetitive in a tight, dynamic labormarket.”

By sector, Life Sciences at 46% andGovernment and Non Profit at 49% lagbehind on measuring impact compared toglobal averages. At the higher end, 68% oftalent managers at both Technology andFinancial Services firms report formallymeasuring the impact of a hire.

Mark Lee, Managing Director, EMEA RPOSolutions, Futurestep, connected thesefindings to the speed of the industriesconcerned: “Technology and FinancialServices are fast-paced, often innovativesectors that demand both organizationsand their employees to deliver quickly.By contrast, Life Sciences developmentcycles can often be measured in yearsrather than months, so success is lessdependent on the impact of new hires.”

Proportion formally measuring the impact of a hire - segmented by degree of adoption ofmeasurement methodology


"HR professionals canget ahead of the packby implementing aconsistent and well-defined approach tomeasuring impact."

12

Looking at organizational size, adoption ofa formal measurement was lowest forcompanies with 0-49 employees.

Recruitment and talent managers agreedthat this was explained by two factors –firstly that smaller organizations may lackthe resources to implement formalmeasurement, and secondly that informalassessment was more feasible at smallercompanies.

Interestingly, however, the highest rateof adoption by company size was forcompanies in the next category, with72% of companies with 50-249 employeesindicating that they formally measure theimpact of a hire.

This suggests that the need for formalmeasurement may be felt most keenly atthe point when smaller companies havegrown beyond the start-up or SME phaseand become more complex to manage.

Proportion formally measuring the impact of a hire - segmented by degree of adoption ofmeasurement methodology



13

Of the talent and recruitment managerswho undertake formal measurement, only32% say that they formally measure theimpact of hires using a widely-adoptedmethodology. A further 27% have a definedmethodology but report that it is not inwide use, and 3% have no methodology ordon’t know if they have one.

Clearly, this reveals a significant challengefor talent and recruitment managers notonly to define a methodology formeasuring the impact of a hire, but toensure widespread adoption of thosemetrics and establish a consistentapproach to measurement.

Commenting on this issue, one HRManager in the Financial Services industryin Germany said: “I think [manyorganizations] don’t want to pay formethodologies or don’t want to hire aperson to run these processes. Most of thecompanies think that they get animpression of the recruits during theirdaily working life.”

Another respondent, a French HR managerin the legal sector, commented: “In myopinion, and as far as France is concerned,it is a matter of training. In HR studies inFrance, assessment is never formalised.It’s more a matter of appreciation. We’renot taught the use of indicators and datatables in HR studies.”

Average number of competencies used to measure the impact of new hires


Measuring impact

Only 32% of respondents saythat they formally measure theimpact of hires using a widely-adopted methodology.

14

Our study also explored the metrics thatcompanies use for measuring impact.Almost half (47%) of the talentprofessionals we surveyed reported usingonly one metric, with the rest reportingusing between two and five of the metricslisted. On average, recruitment and talentmanagers are using two metrics tomeasure impact.

The widespread use of more than onemetric underlines a challenge raised byRoberto Spuri, Managing Director,Futurestep LATAM: “A single metriccannot capture impact in isolation. As aresult, many companies define a set ofcompetencies, behaviours andrequirements that may not be totallyaligned with the internal talentmanagement process. However, thisgenerates gaps and inconsistencies in themedium and long term which can lead to aprocess of measuring the impact of a newhire that is somewhat subjective.”

Of the metrics available, performance datais the most widely used, with 64% ofrespondents claiming to use this.Revenue /financial performance is the nextmost widely used metric at 46%.

Leslie Parsons, Vice President, TalentManagement, Futurestep, proposed thefollowing dynamic underlying thesefindings: “The HR function operates in awider business context, and the widerbusiness may find it easier to connect hardfinancial and performance data withbusiness objectives. This is especially trueif difficult decisions are being made andthe decision-makers are under pressure.In these situations, it can be easier torevert to financial performance.”

Metrics used to measure the impact of a new hire


"Almost half (47%)of the talentprofessionals wesurveyed reportedusing only onemetric, with the restreporting usingbetween two and fiveof the metrics listed. "


15

The value of impact

Our research shows that the value attributed to measuring impactvaries between recruitment and talent professionals, and that seniorleadership may not be fully engaged with the process.

The most sharply-felt concerns oforganizations are around setting metrics inplace that fully capture impact. Addressingthese concerns could be the key to winninggreater levels of senior buy-in.

In our study, we asked those respondentswho confirmed they formally measure theimpact of new hires whether they thinkthis activity is valuable. Interestingly 40%of the talent and recruitment managers wespoke to were not convinced about thevalue of measuring the impact of a newhire on the business.

Examining the verbatim comments fromthose who were unconvinced that theprocess is valuable, two strands of opinionemerge. The first and much more commonstrand is to do with the feasibility ofmeasuring certain types of impact.

Respondents with these concerns citedissues such as the difficulty in measuring‘soft’ factors, subjectivity in measurement,inconsistency between different assessorsand a lack of trust in or difficulties withinterpreting hard metrics.

Essentially the concern is thatmeasurement leaves out some lesstangible, but important, features of impactand could therefore give a seeminglyobjective yet incomplete impression of theimpact of a recruit.

You previously stated that your company formally measures the impact of a hire; do you thinkthis measurement is valuable?


16

The second and less common opinionquestions the relevance of measurement.Some respondents see measuring impactas something that gives you informationpurely about the new hire, rather thaninformation about the recruitment process.

Other respondents cite having extremelystrong recruitment processes, to the pointthat they are skeptical that they wouldrecruit anything other than a high impactemployee in the first place.

We also asked respondents about thedriving factors for measuring the impact ofa new hire on the business. 56% ofrespondents told us that this measurementwas driven by a desire to improve theirrecruitment process and 48% ofrespondents felt that it helped to promotethe value of the process.

Pressures from elsewhere in the businesswere less significant: only 23% ofrespondents cited a board-levelrequirement for this type of measurement.Among the other reasons cited by a smallnumber of talent and recruitmentspecialists are to help improve training,to identify staff developmental needsand to monitor customer satisfaction.

What is the main driver for your company measuring the impact of a hire on the business


"Almost all CEOs willimmediately identifytheir people as theirgreatest businessasset. Nevertheless,our findings suggestthat they risk takingtheir return on thatasset for granted."Mark Lee, Managing Director EMEARPO, Futurestep


17

Respondents in technology companies andthose in Latin America were more likely tocite board-level requirements – 30% and36% respectively doing so. Nevertheless,there appears to be significant headroomfor senior leadership to take a greater levelof interest in the impact of new hires.

Mark Lee, Managing Director EMEA RPOSolutions, Futurestep, commented: “Almostall CEOs will immediately identify theirpeople as their greatest business asset.Nevertheless, our findings suggest thatthey risk taking their return on that assetfor granted, on the basis of trust in aneffective recruitment function. That trustmay be justified, but boards scrutinize theimpact of other investments and there’sclearly a case for applying this scrutiny topeople investment.”

A connection emerges between theconcerns felt about setting appropriatemetrics and levels of senior engagement.The conclusions of Lynne Nixon andAnna Penfold in a recent Korn/FerryInstitute white paper entitled ‘Growing HRinfluence in the boardroom’, suggested thatHR directors should: “Demonstrateanalytical and numerical skills to eradicateany misconceptions about HR as ‘soft’.Boards are accustomed to discussionsbased on numbers. Capitalize on thegrowing stock of technology that can helpmeasure the value of HR.”

Ken DeMeuse PhD, Vice President ofGlobal Research at Korn/Ferry, commentedon the broader context of the challenge:“HR still faces challenges in positioningthemselves as a true partner to thebusiness. One of the keys to doing this isto clearly align HR initiatives to keyelements of the organization’s strategy."


"HR still faceschallenges inpositioningthemselves as a truepartner to thebusiness. One of thekeys to doing this isto clearly align HRinitiatives to keyelements of theorganization’sstrategy."Ken De Meuse PhD, Vice Presidentof Global Research


19

Talent with immediate impact: the sprint

Immediate impact relates to finding a candidate with the rightskills who can get the job done. We found some new hires are betterplaced on their sprint towards high impact in the first year of a rolethan others.

Our findings revealed that those recruitswho display decision quality and a focuson delivery are more likely to succeed.We asked respondents which threecompetencies most affect a manager’scontribution to an organization within thefirst six months (positive framing), andwhich competencies are often missingwhen a manager fails to make an impactwithin the first six months (negativeframing). Decision quality stands out asthe competency cited most often. Anoverview of the ten most frequentlynominated competencies for bothquestions is shown below.

One UK-based HR Director in the FinancialServices sector commented: “I think alltoo often people are very nervous aboutmaking a decision and being held toaccount for that decision. I come across alot of ditherers – people who are scared tohave the conviction to say what they think.We value ownership and accountabilityvery highly and are looking for people whowill stand up and say what they think andback it up rationally."

Looking at decision quality in more depth,there is considerable variation at a regionallevel. In the first question, where theframing is positive, decision quality ranksin the top four most nominatedcompetencies for five regions.

Competencies most positively impacting the first six months


20

For Germany, however, it ranks 9th, forFrance 15th and for Brazil 23rd. When welook at the second, negatively framedquestion, not only is decision quality citedmore often but the regional results are alsomuch more consistent. Decision quality isthe most cited competency for five regions,and is in the top four for all eight regions.There is a greater degree of consensusaround the importance of decision qualityas a negative, rather than positive,indicator of impact. In other words, theconsensus is around the importance ofavoiding bad decisions.

Jan Mueller, Managing Director, EMEARPO Sales, Futurestep, suggested thatcultural factors could underpin regionaldifferences in the emphasis placed ondecision quality, commenting: "Culture hasan influence on decision making and theimportance of decision quality. Forexample research in French/Germanaerospace industry shows that Germanteam members are driving for consensuswhilst their French colleagues wereexpecting a top down decision by theleader. German companies also tend to putan emphasis on technical competence, lesson decision competence.”

Julie Griffouliere, Global Head ofMarketing Communications, Futurestep,attributes regional disparities to varyingeconomic conditions: “The findings forFrance might be related to the persistingeconomic uncertainty which highlyinfluences the competencies our clients arelooking for. They are looking for managersto be more agile leaders with commandskills and the ability to motivate others.These competencies are for them the keydrivers for company success especially inthe current economic climate.”

Responses to our qualitative interviewswere split, indicating two main reasons forthe focus on decision quality as a negativeindicator.

Competencies most negatively impacting the first six months



21

Firstly, bad decisions, or the balance ofgood to bad decisions, are relatively easyfactors for employers to observe and keeptrack of.

Secondly, they provide a salient indicationof an individual’s performance andsuitability for a role. However, a potentialdrawback of a focus on decision quality isthat making bad decisions can be aninevitable consequence of efforts toinnovate.

George Hallenbeck PhD, Vice President,Global Research at Korn/Ferry explains:“Organizations that want to create acorporate learning culture often place highvalue on making mistakes and learningfrom them. Too much emphasis onavoiding bad decisions could lead to anoverly cautious approach from new hires,to the detriment of innovation.”

An HR Manager in the Financial Servicessector in Germany also highlighted apotential problem with this focus saying:“I think sometimes hires are afraid ofmaking a decision because they are newand they don’t have a routine or aren’tself-confident.”

Rank importance of decision quality by region - positive vs. negative framing


"Too much emphasison avoiding baddecisions could leadto an overly cautiousapproach from newhires, to the detrimentof innovation.”George HallenbeckVice President, Global ResearchKorn/Ferry International


23

Talent with consequential impact: the relay

Making a difference to an organization requires integrity andpeople skills

Consequential impact represents the ideathat an individual’s contributions transitionfrom actions and decisions within their jobrole to influencing others and buildingknowledge which adds to theirorganization’s intellectual capital.Employees make a consequential impact asthey pass the baton on to others.

Considering the skills that talent andrecruitment managers see as key toconsequential impact, we askedrespondents which competencies have themost impact on a manager’s team and ontheir peers and stakeholders. In bothcontexts, motivating others and integrityand trust were seen as the two mostimportant competencies.

Ken DeMeuse PhD, Vice President ofGlobal Research at Korn/Ferry agrees withthe importance placed on thesecompetencies, commenting: “What willstall your career faster than anything are alack of people skills and integrity and trust.People can be promoted to a certain levelon the basis of their functional/technicalexpertise and then there will be a dramaticfailure without the people skills. If you canfind someone with the most desiredcompetencies and the people skills tomatch, they are your desired futureleaders.”

One respondent, an HR Director inGermany identified that issues could occureven earlier saying: “It’s really important totrust your employees. If you cannot, thehire won’t have an impact on yourbusiness. The person’s reputation isimportant; otherwise other employeeswould ignore the talent and at this pointthere won’t be any impact.”

Competencies most impacting Competencies most impacting a manager's immediate team a manager's peers and stakeholders


24

Looking at competencies that impact onthe team, the picture is reasonablyconsistent by region and sector. Motivatingothers leads across six of the eight regionssurveyed and across all sectors. Theexceptions are that organizing is rankedfirst in China and command skills firstin Brazil.

The picture is a little more mixed forimpact on peers and stakeholders.Integrity and trust leads in five regions, butpresentation skills are seen as mostimportant in France, problem solving inHong Kong and perseverance in Brazil.Across sectors, first place is held either byintegrity and trust or motivating others.The Life Sciences sector is the exception tothat picture - decision quality and drive forresults are seen as the most importantfactors.

We also asked respondents to nominatecompetencies that are often missing whenprogression is limited over a one to threeyear timeframe. The highest-rankingcompetency for this question, decisionquality, has been discussed at length in theprevious section of this report. The nexthighest-ranking competency is peerrelationships, again emphasizing theimportance of people skills andrelationships over the medium term.Learning on the fly ranks third, perhapsbecause this is a competency that isparticularly relevant in today’s dynamic butchallenging economic climate.

The database of normative informationmaintained by Lominger provides aninteresting contrast with this view of theimportance of learning on the fly. Itsuggests that learning on the fly is seen asslightly more valuable to non-managerialroles, being more relevant to both relativelyjunior and more senior executive roles.

Overall, competencies cited as missing inthe medium term are broadly different tothose which are at the fore in the first sixmonths of a manager’s tenure. Thechallenge for talent and recruitmentmanagers then is in recruiting for thesecompetencies together with those thatdeliver immediate impact.

Leslie Parsons, Vice President, TalentManagement, Futurestep, comments:“For a high potential person, their impactis probably greater later on thanimmediately. Giving them differentexperiences will allow them to makeimpact at each stage. The ultimatechallenge is to keep these people in theorganization for long enough to get theminto senior leadership positions.”

Competencies often missing when mediumterm career progression is limited



25

Talent with potential impact: the marathon

Potential impact is the additional value that talent can bring to anorganization over time, as individuals benefit from the learning anddevelopment opportunities available to them, and they are motivatedto take on greater challenges and enjoy greater successes.

The high performers who lead themarathon for impact in the longer termcan be marked as potential leaders oftomorrow.

One area of the survey which stronglyhighlighted potential impact was when weasked HR professionals about thecompetencies that are more valuable in thecurrent economic climate. Creativity wasmost frequently cited, by almost a fifth(17%) of respondents. Customer focus andstrategic agility were second and third,each mentioned by 16% of respondents.

This value placed on creativity offers aninteresting contrast with researchconducted by Korn/Ferry in 2009. Whilethat research focused on executives ratherthan the managers and professionalsexamined here, it found that “Creativityand innovation management are beingdrowned out by the play it safe, hunkerdown in a crisis, risk averse mode ofoperating.” (“Setting the Stage for Success:Building the Leadership Skills that Matter”,J Evelyn Orr and Katherine Sack)

In 2009 the world was in the grip of globaleconomic crisis. In 2012, by contrast,almost all regions have returned to GDPgrowth, albeit with varying levels ofstrength and confidence. Against thisbackdrop, it seems that talent andrecruitment professionals see a renewedrole for creativity in negotiating thecontinued uncertainty.

A Chief HR Officer in the FinancialServices sector in France agreed:"Someone creative will be able to think of‘outside the box solutions' and often forless cost, saving the business money.”

Customer focus ranked second as acompetency that enjoys increased value inthe current economic climate. An HRDirector at a professional servicescompany in Germany stressed itsimportance, saying: “In our industry, thecustomer is the king and customer focusmeans much more than just responding torequests on time or accurately. We wantour people to get very close to the clientand when they succeed at this, they bringin more revenue.”

Strategic agility is another key determinantof potential impact and career progressionand was ranked third by talent andrecruitment managers globally in terms ofhaving increased value in the currenteconomic climate.

Competencies perceived as more valuableowing to the current economic climate


26

George Hallenbeck, PhD, Vice Presidentof Intellectual Property Development,Korn/Ferry stresses the importance of thiscompetency: “Being strategic and having along-term impact go hand in hand.Individuals who possess high levels ofstrategic agility are future-oriented andpossess the skill to envision possibilitiesand create breakthroughs that are elusiveto others.”

Recruitment and talent managers also seepersonality as another key factor in longerterm career prospects. We asked ourrespondents about the competencies thatwere important for real impact over thelong term and for promotion. As withsimilar questions discussed earlier in thereport, this was asked with both a positiveframe - competencies that help a managersucceed - and a negative frame - those that,if absent, hold a manager back.

Peer relationships and boss relationshipsranked third and fourth respectively whenpositively framed, and when negativelyframed, boss relationships ranked first andpeer relationships second.

A UK-based HR Director working in theConstruction industry explained:“Likeability plays a key role in employeecareer development. Often, members ofstaff who are well liked but not as good attheir job as a less liked colleague arepromoted more quickly. It’s also importantthat staff like their bosses and colleaguesas this helps them make a really positiveimpact on the business.”

A VP of Recruitment in the FinancialServices industry in the US connectedlikability to loyalty: “You have to love yourboss. Chemistry is so important becauseyou spend so much of your time at work.At the end of the day you will find thatpeople are loyal to people. Likeability is akey factor in being a manager.”

Competencies that are most critical Competencies that are most likely for promotion and real impact to limit progression if absent



27

Regional Focus: Asia Pacific

As part of our Global Talent Impact Study 2012 we interviewed talentand recruitment professionals in China, Hong Kong and Australia.

Respondents in China put far lessemphasis on retention as an importantmeasure of successful recruitmentcompared to people we spoke to in othercountries– only 11% rank it first orsecond in importance compared to aglobal average of 35%. By contrast,Australian HR professionals place morevalue on retention, with 51% rankingretention in first or second place. HongKong, at 38%, is closer to the globalpicture.

The number of HR professionalsclaiming that they formally measure theimpact of a hire on a business, ratherthan just the efficiency of the process,varies widely in the region. In Chinaand Hong Kong the proportion isextremely high – 89% and 85%respectively, against a global average of62%. In Australia the proportion ismarkedly lower at 44%.

Recruitment and talent managers inChina use an average of 2.5 metrics tomeasure the impact of a successful hire,ahead of the global average of 2.0, withpromotional data dominating – 49%using it compared to 30% globally.Australia is quite close to the globalaverage with 1.9 metrics used onaverage. The average for Hong Kong is1.7, with data on recruiting others beingused less frequently than is seenglobally – 11% compared with 20%.


28

Immediate impact: compared to theglobal trend of decision quality as themost commonly cited competency formaking an immediate impact, talent andrecruitment professionals in Hong Kongfavored timely decision making.Australian and Chinese respondentsalso contrasted with the global picture,citing action orientation andperseverance respectively. However, inline with the international perspective,poor decision quality was mostfrequently mentioned as the biggest riskfactor for negative impact in all threeregions. In China this was followed byorganizing, in Hong Kong by integrityand trust, and in Australia by prioritysetting.

Consequential impact: motivating otherswas most frequently cited as having animpact on a manager’s immediate teamin both Australia and Hong Kong, whilein China organizing was again felt to bethe most important factor. In terms ofimpact on peers, Australia and Chinawere in agreement with several otherregions in rating integrity and trust themost important factor. However, therewas a contrast in Hong Kong whereproblem solving was named the mostimportant for impacting peers.

Potential impact: decision quality wasconsidered the most important positivefactor for influencing long term careerprogression in China and Hong Kongcompared to Australia where drive forresults was deemed the most importantfactor. In terms of potential negatives forcareer progression, peer and bossrelationships alongside decision qualitywere the top three factors across AsiaPacific. Creativity was seen as the factormost increased in value in the currenteconomic climate in both Hong Kongand China, while in Australia strategicagility and customer focus tied for firstplace.



29

Regional Focus: The Americas

As part of our Global Talent Impact Study 2012 we interviewedrecruitment and talent professionals across North and Latin Americawith a focus on the US and Brazil.

Latin American respondents valueindividual performance highly as ameasure of successful recruitment, butnot to the same extent as talent andrecruitment managers globally. In Brazil,50% ranked individual performance aseither the most or second mostimportant factor for successfulrecruitment, compared to the globalpicture of 67%. This was followed byline manager satisfaction with therecruitment process, which replaced theglobal runner up of retention andclaimed a 39% share of the vote.

By contrast, the US is more consistentwith the global picture, though USrecruitment and talent professionals areless likely to cite line managersatisfaction (20% vs. 29% globally) orpromotability (13% vs. 20% globally) asimportant.

The US is in line with the 62% of globalrespondents who formally measure theimpact of a hire, compared to only 53%in Brazil. However, Brazilians are morelikely to value the measurement, with76% doing so against a global averageof 60%.

Brazil and the US are quite dissimilarwhen it comes to the number of metricsused to measure the impact ofsuccessful hiring. Talent andrecruitment professionals in LatinAmerica report an average of 1.6 metricsused against the global average of 2.0Their counterparts in the US report anaverage of 2.4 metrics used, second onlyto China, with performance andpromotions data being particularlywidely used.

Respondents in Brazil indicated greatersenior management buy-in tomeasurement, with 36% citing boardrequirements as a driver for measuringthe impact of a hire against a globalaverage of 23%.


30

Immediate impact: a startling contrastbetween North and Latin America wasfound relating to decision quality as themost important positive factor forimmediate impact. In the US this waspositioned at number one, whereas inBrazil decision quality ranked extremelylow at 23rd. In Brazil, strategic agilitywas seen as the most important factor.As a negative factor, decision qualityremained in first place in the US andclimbed to third in Brazil, more in linewith global findings. First place in Brazilwas shared by functional/technical skillsand timely decision making.

Consequential impact: respondents inBrazil named perseverance mostfrequently as the skill with the mostimpact on peers and stakeholders. USrespondents, in common with those inseveral other regions, cite integrity andtrust as the most important factor innurturing successful relationships withpeers. Command skills were most oftencited with reference to impact on themanager’s immediate team in Brazil,compared to the picture in the US wheremotivating others was considered mostimportant.

Potential impact: when asked aboutcompetencies which can inhibit longterm career progression if absent,Brazilian respondents are most likely tocite peer relationships, with bossrelationships trailing in sixth place.Conversely, US respondents are mostlikely to cite boss relationships as apotential career inhibiter, with peerrelationships ranking fourth. Customerfocus was seen as the competency mostincreased in value in the currenteconomic climate in the US, whereastime management was most frequentlycited in Brazil versus a global focus oncreativity.



31

Regional Focus: Europe

As part of our Global Talent Impact Study 2012 we surveyed talentand recruitment professionals in the UK, France and Germany.

Respondents in all three countries alignwith the global preference for individualperformance as the most importantmeasure of recruitment success. Thiswas ranked in first place by 79% ofrespondents in the UK, 73% in Franceand 72% in Germany.

German and UK talent and recruitmentprofessionals place less emphasis onpromotion prospects as a measure ofsuccessful recruitment, 9% and 13%respectively ranking it highly comparedwith 20% globally.

Cost to hire is seen as marginally lessimportant in France – 20% ranking it ashighly important compared with 27%globally.

German talent and recruitmentprofessionals are less likely to formallymeasure the impact of a hire, with 47%claiming to do so compared to a globalfigure of 62%. Their peers in the UK aresimilarly less likely to formally measureimpact which only 54% of respondentsdo. France, at 61%, is more in line withthe global figure.

Recruitment and talent managers inEurope use slightly fewer metrics, onaverage, to measure the impact of a hire.We found that 1.9 were used in the UK,1.8 in Germany and 1.7 in Franceagainst a global figure of 2.0Respondents in France are particularlyunlikely to use retention data with only11% claiming to do so compared with35% in the study overall.


32

Immediate impact: decision quality wasseen to be the most important positivefactor in the UK in line with globalfindings, whereas command skillsranking first in Germany. In France,standing alone was most often cited as akey factor, a competency that alsoranked third in Germany but only 20thglobally. In terms of negative factors,customer focus was seen to have thebiggest impact risk in France,functional/technical skills in Germanyand decision quality in the UK.

Consequential impact: integrity andtrust were deemed to have the greatestimpact on peers by respondents in theUK and Germany, but was placed fifthby respondents in France who ranked itbehind presentation skills, commandskills, motivating others and decisionquality. There was consensus among allthree regions however that motivatingothers is the most important factor forimpacting peers and stakeholders.

Potential impact: for long term careersuccess, French and German talentmanagers agreed decision quality isimperative, whereas drive for resultscame first in the UK. Motivating othersranked highest among Germanrespondents as a competency which hashigher value in the current economicclimate but French and UK recruitmentand talent professionals disagreed,placing customer focus and drive forresults in first place respectively.



33

Key learnings

One of the sharpest findings to come out ofour survey was the importance thatorganizations place on new hires makingan immediate impact. Individualperformance is measured within a newhire’s first year which places significantpressure on candidates to perform from dayone. While this focus helps ensure therecruitment process successfully fills therole with a competent candidate, it lacks astrategic approach that identities andquantifies the three levels of impact. As aresult, the long term value a recruit candeliver to the business is frequentlyoverlooked, reflected by a third ofrespondents (35%) admitting they oftenmeasure impact before candidates have theopportunity to deliver the greatest impactto the business.

Crucially, our study confirmed that theemployee journey can be a divergent one.To succeed, candidates will need todemonstrate the different competenciesrequired at each stage of impact. In theshort term, decision quality is key but overtime relationships and creativity willunlock success.

We also unearthed the challenges thatorganizations face when they measure thesuccess of the recruitment process. Theperformance of the individual was thestand-out indicator for success, and yetthis is a quality commonly attributed toimmediate impact. As such, it comes aslittle surprise that more than one metric istypically adopted to measure impact. Thechallenge this raises is how to develop anddeploy a set of metrics which captureimpact in a full and meaningful way.Respondents’ apprehension about thevalue of measurement reflects theiruncertainty about which metrics to assessand when, which is amplified by theboard’s apparent apathy towardsmeasuring the impact of a new hire.

There is a no one-size-fits-all solution toidentifying the metrics for measurement,but we recommend that clearer, long termmeasures to assess the value of impact areidentified in order to achieve executivelevel buy-in. They should be informed bythe bespoke requirements and objectives ofthe organization in the short, medium andlong term and framed around the corecompetencies aligned to the stages ofimpact identified within this report.

By placing the three stages of impact at theheart of the measurement process,recruitment and talent professionals willdevelop meaningful metrics to assessemployees against both in the short andlong term and be given the tools to identifythe onboarding and developmenttechniques to maximize their impact atevery stage. Helping employees to growand deliver tangible results holds the keyto retaining staff, proving the strategicimperative of the HR function.

At Futurestep, we are working with ourclients to identify different measures totrack the three levels of impact, helpingorganizations identify the measures mostrelevant to them based on the culture oftheir organization and providing tailoredhigh impact recruitment solutions.

For more information, visitwww.futurestep.com.



35

About the research

Futurestep conducted online surveys with a sample of 1,589 recruitment and talentprofessionals in the US, UK, France, Germany, Brazil, China, Hong Kong andAustralia. Those surveyed ranged from HR and talent managers, to CHRO and HRDsand represented a diverse array of organizations across industry sectors, from SMEswith 1-49 employees up to corporations with 50,000+ employees.

The fieldwork was conducted by Research Now, an independent research company, inaccordance with the ICC/ESOMAR Code on Market and Social Research.Respondents were visitors to Futurestep websites or members of Research Now’sglobal business panel. Surveying took place between February 21 and March 9 2012.Data analysis was carried out by The Analytics Hub, an independent statistical firm.Follow-up qualitative telephone interviews were conducted with 15 surveyrespondents who had agreed to be re-contacted. These took place between March 26and March 30 2012.

About Futurestep

Futurestep is the global industry leader in high-impact recruitment solutions;offering fully customized, flexible strategies to help organizations meet specificworkforce needs.

Futurestep’s clients turn to them for proven expertise, a global process andinfrastructure, proprietary competency models, innovative sourcing strategies, and aunique approach to measure and optimize business impact.

As a Korn/Ferry Company, Futurestep can meet a variety of workforce requirements;from RPO and project recruitment, to single search and consulting, our solutionsapply a truly world-class capability to deliver talent with impact, providing theexperience and global reach to identify, attract and retain the people who drivebusiness success. To learn more, visit www.futurestep.com.

About Korn/Ferry International

Korn/Ferry International, with a presence throughout the Americas, Asia Pacific,Europe, the Middle East and Africa, is a premier global provider of talent managementsolutions.

Based in Los Angeles, the firm delivers an array of solutions that help clients toattract, engage, develop, and retain their talent.

Visit www.kornferry.com for more information on the Korn/Ferry International familyof companies, and www.kornferryinstitute.com for thought leadership, intellectualproperty and research.


36

About Korn/Ferry powered by Lominger

Korn/Ferry International, the premier provider of talent management solutions,acquired Lominger in 2006. The Lominger suite of research-based, experience-tested,and internationally recognized methodologies are core to Korn/Ferry’s suite of serviceofferings and capabilities and can be customized to fit any organization’s culture oroperating style.

Lominger was founded in 1991 by Michael M. Lombardo, Ed.D. and Robert W.Eichinger, Ph.D. The Lominger competency framework has been used extensively inthis research. In developing the questionnaire, we selected 26 competencies that havebeen shown as being most related to performance in managerial roles on the basis ofKorn/Ferry validation studies. Our sample of HR professionals then gave their viewson the importance of those competencies in a variety of contexts, as discussedthroughout the body of the report.

The framework of competencies developed by Lominger has been used extensively inthis research. In developing the questionnaire, 26 competencies that have been shownas being most related to performance in managerial roles on the basis of Lomingervalidation studies were selected. A cross section of talent and recruitmentprofessionals then gave their views on the importance of those competencies in avariety of contexts, as discussed throughout the body of the report.

About the Korn/Ferry Institute

The Korn/Ferry Institute generates forward-thinking research and viewpoints thatilluminate how talent advances business strategy.

Since its founding in 2008, the Institute has published scores of articles, studies andbooks that explore global best practices in organizational leadership and humancapital development.


ABOUT FUTURESTEP

Futurestep is the global industry leader in high-impact recruitment solutions; offering fullycustomized, flexible strategies to help organizationsmeet specific workforce needs.

Futurestep’s clients turn to them for proven expertise,a global process and infrastructure, proprietarycompetency models, innovative sourcing strategies,and a unique approach to measure and optimizebusiness impact.

As a Korn/Ferry Company, Futurestep can meet avariety of workforce requirements; from RPO andproject recruitment, to single search and consulting,our solutions apply a truly world-class capability todeliver talent with impact, providing the experienceand global reach to identify, attract and retain thepeople who drive business success.

To learn more, visit www.futurestep.com

Talent with impact

understanding the race for impact

Documents

impact of talent

high impact talent

consequential impact

measurement of impact

impact of employees

impact oftalent

measure talent

sprint23 talent