When the world economy is crumbling under the pressures of a financial downturn, the importance of talent management becomes key to HR's business mandate. While many of the world's biggest businesses are now grappling with the issue of retrenchment, working out if, how and who to let go, others are now dealing with the remaining talent " coming up with new strategies to keep them engaged, enthusiastic and productive.
Effectively managing employee expectations remains the primary concern for HR professionals. And one of the best strategies for achieving this is to provide a clear career development path for employees. At least that is the plan in place for Neptune Orient Lines (NOL). It is now paying particular attention to talent pipelines and leadership bench-strength, even as its well-publicised restructuring takes place and cost pressures in the shipping industry continue to intensify.
Goh Teik Poh, Chief HR Officer of the NOL Group, says organisations need to carefully revisit their talent management strategies in light of the new economic conditions. These initiatives should still cover all job grades and should serve primarily to generate a pipeline talent pool for well structured succession planning.
A multi-pronged approach
NOL's approach has a specific focus, but is multi-pronged at the same time, Goh shares. To begin with, NOL considers talent identification as the first element of effective talent management. The organisation ensures its leaders have all the information and tools needed to identify and deploy the best people. In addition, it has a framework that allows HR to measure leadership in action and leadership potential, using global common terms of reference.
Once employees are identified, NOL has a range of specific developmental programmes to build and groom talents. At entry level, we seek talented graduates and aim to build them into future managers and leaders through a combination of cross-functional assignments, overseas postings and tailored education programmes, he shares.
But it doesn't stop there. Beyond NOL's pipeline programmes, senior-level talent is identified through profiling assessments and an annual talent review. This takes place on a global platform, allowing the organisation to match individuals with leadership positions worldwide. Skill development is supplemented through executive education programmes at reputed business schools as well as relevant job rotations " often at the country managing director level.
Not surprisingly, the collective mindset and support for these initiatives, plus a cast iron commitment to provide its talented individuals with growth opportunities, have given NOL the desired results of a high proportion of internal promotions rather than external appointments. Our performance management system is built around key performance indicators embedded in balanced scorecards, Goh says. Our total management policies and structures are regularly reviewed to help us remain market-competitive and to reward and motivate our employees over the long term.
Key talent management initiatives
But all of these systems cannot be developed overnight. Goh says it is a continuous people management process and must begin well before any crisis strikes. NOL is therefore proud of the new talent management initiatives it rolled out during the last five years of growth.
As well as its graduate development and pipeline development programmes, NOL recently rolled out its advanced leadership programme for director-level talent. We have also introduced mentoring by professional mentors as well as the participation of senior leaders as executive mentors, Goh shares.
This is especially important in a corporate market where retention of good talent is a major concern. We operate in an extremely competitive employment landscape so a major challenge is attrition " particularly when the market is buoyant and opportunities are on offer in other sectors,, he admits.
Timely succession planning is therefore a must. NOL's process examines several hundred employees identified by their line managers and HR. From this employee pool, we choose exceptional candidates and future leaders and ensure they benefit from customised development programmes, Goh says. The process identifies key positions globally and selects at least two possible successors from within the organisation. The strategy of promoting from our own talent pool has been very successful, Goh says. We have achieved an internal hire rate of more than 80% for critical roles, compared with an industry average of 62.5%.
Still, careful planning has also been instrumental in managing compensation and benefits packages. We have worked hard on ensuring our employment value proposition is competitive and relevant, beyond just the shipping and logistics sectors, he says. This is essential because talented individuals with management and or administrative capabilities are increasingly sought after.
He points out that this scarcity of talent has required a change of mindset for NOL's HR staff " they now need to look beyond the confines of NOL's own sector for the best talent. Besides this, the organisation has also had to ensure rewards and remuneration stack up across different industry benchmarks.
Delicate future
All of that work not withstanding, NOL acknowledges it is still far from addressing all of its people challenges. Goh says the current restructure will place extra pressure on HR and he foresees talent motivation and retention as key challenges during the tough economy of 2009. In this challenging business environment, our goal is to be able to positively influence careers and have employees choose to stay and grow with our company, he says.
NOL works hard to ensure attractive educational and career development pathways are clearly defined and executed. In a global company such as ours, there is great potential for talent to move across geographies and functions. It is our job to ensure that management is aware that the benefits of appointing a talented candidate from another function or even another industry often outweigh the risks.
Taking the hard steps early
Neptune Orient Lines was one of a number of companies forced to undergo a restructure as the world business environment went into freefall late last year. The company announced a 9% cut in its workforce on November 19, with the North American division bearing the brunt of the pain. Goh Tiek Poh, Chief HR Officer, tells HRM the $33 million restructure was a vital step for the ongoing viability of the business.
"Last year, we read the signs and took early action in November when we announced a business restructuring effort," he says. " (This aimed) to place our business on a more secure footing for the future."
The continued deterioration of the international economy shows it was a good, but tough decision. As events have transpired over recent months and conditions have worsened, the actions we took have been shown to be absolutely appropriate from a business point of view. A key role in HR has been ensuring the changes are implemented in a fair and even-handed way. The long-term determinant of success is our employees, so we must continue to motivate, retain and attract the best people, he says.