Companies that clearly understand the talent available in-house and effectively gauge the talent available outside the organization will be better positioned to access and obtain the workforce they need—this is what we call the ‘Supply Chain of Talent’ framework.
To gain a better understanding of your Supply Chain of Talent, KellyOCG compiled this research report with the Human Capital Institute.
3. T H e s u p p ly c h a i n o f t a l e n t
14m
U.S. workers are unemployed
but there are 3.2 million unfilled
jobs across the country.
who do we
employ?
just
55 %
adopt the ‘supply chain of talent’
framework to manage the
supply and demand of talent
Satisfaction with access to talent
6% non-users
33% supply chain users
less than half
of organizations consider and analyze
the external demand for talent
35 % fail to evaluate the external
supply altogether <10%
of organizations conduct market analysis
of external supply, including a review of
workforce demographics such as age,
education level and the unemployment rate
79 % of business leaders are
not “very satisfied” with
their ability to access
talent when needed.
who will we need?
20%
of organizations in north america work
with search firms/agencies to better
understand the availability of talent.
By comparison, 39% of companies in other
regions utilize this method of research.
30%
who is available?
The frustration of those who obtain external supply
of Talent supply information rely on popular social media
is widespread networks, such as LinkedIn—which when used as
the only method of research, cannot provide a
Less than 10% holistic view of the external talent pools
of leaders outside North America
are satisfied with their access to the
right talent for the job.
who else is competing
for this talent?
3
4. The Supply Chain of Talent
Introduction
The effects of the Great Recession of 2008-2009 This understanding can be greatly informed by basic
continue to reverberate worldwide as economies Supply Chain Management principles. When applied
struggle to realize sustained growth and unemployment to the challenge of managing talent, we refer to that
rates remain high. In this sluggish recovery, a talent framework as the Supply Chain of Talent. By considering
paradox has emerged. the following four questions, business and human capital
leaders can assess where they are and where they need Teresa Carroll
More talent is available today than at nearly any
to be in talent procurement:
other time in history. A U.S. unemployment rate of 9
percent lends itself to an increasingly widespread pool • Who is employed and what are their skill set profiles?
of available talent, but continued advancements in
• What skills are needed to meet short- and long-term
technology have created a need for skills and experience
strategic objectives?
that remain in short supply. A 2010 report noted,
“There are still about 3 million job openings across the • Where are the needed skills? How will that talent be
country” and employers are struggling to find qualified identified?
people for many of those positions.”3 As a result, the
current talent supply is simply unable to meet aggregate • What other organizations are competing for this talent
organizational demand. and what are the levers of differentiation required to
attract needed talent?
To be successful and fully leverage the large talent pool
today, organizations must have a more comprehensive Companies that clearly understand the talent available
understanding of the availability and competition for in-house and clearly gauge the talent available outside
talent within given sectors, including inside and outside the organization will be better positioned to access and
their own companies. obtain the workforce needed for success.
3
Arnold, Chris (Nov. 16, 2010). To Fill Job Skills, Firm Brings Training In House. npr.org.
4
5. The Supply Chain of Talent
executive summary
It’s a paradox of our economic times: more than organizations that are satisfied tend to be those that
14 million U.S. workers are unemployed, but 3.2 million manage talent according to supply chain principles.
positions are open.1 Economists call this mismatch
“structural unemployment.” Filling skill-specific For most organizations, truly thinking about talent needs
positions has been a widespread problem for high-tech and acquisitions in a supply chain framework is a new
companies, illustrated by Microsoft’s recent plea to the idea. Just as a supply chain of raw goods and materials
Senate Judiciary Committee to allow them to “import” is managed in manufacturing, access to skill-specific
more workers to fill talent gaps.2 But organizations in talent can be effectively procured and managed using a
other sectors are scrambling to fill positions as well. talent supply chain. Both sides – the supply of talent and
Skill shortages have been reported for jobs as varied the demand for talent inside and outside the company-
as electricians, scientists, CAD/CAM (computer-aided need to be diligently managed to find the right balance
design and manufacturing), truck drivers, trades people, between open positions and the talent available to fill
and call-center workers. those roles.
This report summarizes the results of research Based on our analysis, we recommend three measures to
undertaken by the Human Capital Institute (HCI) improve and strengthen the talent acquisition process.
and Kelly Services to explore how Supply Chain Organizations must:
Management principles can effectively be applied • Start acting and thinking like the market for talent
to Talent Management strategy in this challenging has supply and demand competitive dynamics like
environment. Our research included a survey of 280 any other.
talent-management executives and professionals in HCI
member organizations in spring 2011. • Analyze supply and demand internally and externally.
The survey explored how organizations understand and • Focus on getting real, robust and accurate talent
source talent, as well as their satisfaction with these information — not fragmented information from
processes and results. multiple and unrelated sources that have been used in
the past.
We find that overall, only 20% of companies are fully
satisfied with their access to talent. We also find that
1
Sullivan, Brian (Oct. 10, 2011). Need Work? U.S. Has 3.2 Million Unfilled Job Openings. cnbc.com.
2
McDougall, Paul (July 29, 2011). Microsoft: Thousands of IT Jobs Go Unfilled. informationweek.com. 2011 HCI Research
5
6. The Supply Chain of Talent
Accessing Skilled Talent
Challenges Today’s Leaders
A significant body of research demonstrates the How satisfied are your business leaders with your
importance of human capital to overall business organization’s ability to access talent when needed?
performance — productivity, efficiency and the bottom
line. However, fewer than a quarter (21 percent) of our “Very Satisfied”
survey respondents say that their organization’s business
leaders are very satisfied with their ability to access 21%
talent when needed. Results for this measure and others
were examined by geography, size of company, revenue
All Others
and business sector, and they do not vary significantly by
these factors. Selected data tables may be found at the
79%
end of the report.
What can explain this lack of satisfaction among business
leaders with their ability to access talent? We believe
that companies are not thinking about their talent needs
in a comprehensive way.
6
7. The Supply Chain of Talent
The Supply Chain of Talent —
The New Talent Acquisition Strategy
A number of leaders in business and human capital The Supply Chain of Talent leverages the principles of
have argued that talent can and should be managed the Supply Chain Management and applies them to talent
way that the supply chain of raw goods and materials is management. According to Dr. Peter Cappelli of the
managed (i.e., managing for both need and uncertainty). Wharton School of Business, “An employer … would
In this view, a Supply Chain of Talent mindset and like HR to think about personnel from the perspective of
methodology has the potential to address the current money and costs, and what [would] happen if you don’t
shortcomings of the traditional methods of talent have the right people in place to do the necessary jobs.”
planning and acquisition. Thus, effectively managing supply chains is principally
about managing uncertainty and variability. “This same
Supply Chain Management argues that a network uncertainty exists inside companies. Companies rarely
of interconnected business units must be effectively know what they will be building five years out and what
managed to ensure that inventory levels are consistent skills they will need to make that happen; they also don’t
with consumer demand for them. Everything from the know if the people they have in their pipelines are going
number of raw materials to the time it takes for products to be around.”4
to be built, to where those products are distributed
and how those products are consumed, must be clearly
assessed, evaluated, and streamlined. The integration
of each of these moving processes creates a chain of
events that, when properly managed, improves the long-
term performance of an organization and the supply
chain as a whole.
4
Knowledge@Wharton “Talent on Demand: Applying Supply Chain Management to People” February 20, 2008, knowledge.wharton. upenn.edu.
7
8. The Supply Chain of Talent
The Supply Chain of Talent —
The New Talent Acquisition Strategy
In this way, an organization’s most critical supply chain A key premise of supply chain management is the
is its supply chain of talent. To effectively manage the ability to look both inward and outward at raw materials,
supply chain of talent, organizations must obtain a clear finances, services, and tools available — employing
understanding of when, where, and how their talent that information to build a strategy to create more
needs are being met. This is no small undertaking, value for both the producer and consumer. Applied to
though. “In most crises of supply and demand, we can talent strategy and acquisition, a more comprehensive
manufacture a new supply. Whether it is oil, consumer perspective on the supply and demand of talent is likely
goods or even money, ways are found to create more,” to improve access to high-quality talent. The current
Jason Averbrook explains. “However, when it comes HCI/ Kelly Services survey design allows us to examine
to individual skill sets, solving the supply and demand the degree to which organizations employ a Supply
crisis is not as simple. And without visibility into what we Chain of Talent framework, or the degree to which they
already have, what we need, and where we will need it examine the following:
in the future, it’s virtually impossible.”5
• Internal Supply — Who do we employ?
• Internal Demand — Who will we need?
• External Supply — Who is available?
• External Demand — Who else is competing for
this talent?
5
Averbook, Jason (June 27, 2011). The ‘New Normal’ of Talent Management. LRP Publications
8
9. The Supply Chain of Talent
The Supply Chain of Talent
Framework in Action
The majority of organizations surveyed report that they Does your organization evaluate internal supply of talent;
study their internal supply of and demand for talent project internal demand for talent; evaluate external supply of talent;
(79 and 72 percent, respectively). However, fewer than project external demand for talent?
half (47 percent) consider and analyze the external
demand for talent, and about one third (35 percent) fail External Demand
to evaluate the external supply of talent.
47%
Internal supply and demand information tends to 53%
readily accessible to organizations, while external
information is more elusive. For instance, forecasting
methods are often used within succession management External Supply
plans and inter-organizational deployment opportunities,
65%
and that data can easily speak to overall internal talent
supply and demand. Further, organizations can gather
35%
additional internal talent data as needed, tapping their Yes
succession plans, performance reviews and career
No
development plans to gauge internal talent supply
Internal Demand
and demand.
72%
28%
Internal Supply
79%
21%
9
10. The Supply Chain of Talent
The Supply Chain of Talent
Framework in Action
By contrast, evaluating the external supply of and How often does your organization use the following sources
demand for talent is considerably more difficult. Many to better understand the availability of talent in a market?
organizations do not have the tools or data needed to
Use social network sites, such as LinkedIn
obtain this information as routinely and quickly as they
30%
do for internal information. As the Figure 3 illustrates,
70%
few organizations report frequent use of any methods
for gathering information about the external talent Work with career centers at universities
supply. At most, about one-third of organizations rely 29%
71%
on the most popular sources, social networks such as
LinkedIn (30 percent) and university career centers Work with search firms/agencies
(29 percent). So, routine use of these methods certainly 20%
is not widespread. And even if it were, none of these 80%
methods employed taken alone can provide a holistic Conduct in-person events, such as open houses/orientations
view of external talent pools. 12%
88% “Frequently”
Conduct a market analysis including review of workforce demographics Less Often
such as age, education level, unemployment rate, etc. (“Occasionally” /
“Seldom” /
9% “Never”)
91%
Work with state employment agencies to identify types
of workers in their pipeline that meet your needs
9%
91%
Conduct a marketing campaign to evaluate potential workforce response/interest
6%
94%
Contact with competitors/other companies to explore workforce synergies/sharing
4%
96%
10
11. The Supply Chain of Talent
Use of Supply Chain of Talent &
Business Leader Satisfaction
Does it pay off for organizations to adopt the Supply Breakdown of Supply Chain of Talent Users & Non-Users
Chain of Talent? We find that the answer is “Yes.”
Non-Users
In order to test our assertion that the adoption
of a supply chain framework should improve an 45%
organization’s overall talent acquisition, we grouped our
survey companies into two categories: Supply Chain of
Talent Users and Non-Users. Our measure of the success Supply Chain of Talent Users
of an organization’s talent acquisition is business leaders’
55%
satisfaction with access to talent.
In this analysis, Supply Chain of Talent Users are
organizations that report evaluating both the internal
supply and demand of talent, while also assessing at
least one external measure of supply or demand (or,
at least three of the four elements deemed critical for
Supply Chain of Talent success).
We found that slightly more than half (55 percent) of
respondent organizations use the Supply Chain of
Talent, while the remaining 45 percent do not.
11
12. The Supply Chain of Talent
Use of Supply Chain of Talent &
Business Leader Satisfaction
More importantly, organizations that employ a Supply How satisfied are your business leaders with your
Chain of Talent have a significantly higher rate of organization’s ability to access talent when needed?
business leader satisfaction with access to talent.
Non-Users
These findings confirm that organizations with a more
6%
holistic understanding of what talent they need, where
it comes from, and what factors influence it, are better
positioned to access and obtain the types of talent they 94%
truly need to be successful. Supply Chain of Talent Users
place a high value on understanding what drives the “Very satisfied”
supply and demand of talent. And those that evaluate Supply Chain of Talent Users all others
several, if not all, of the internal and external elements
of talent supply and demand yield leaders who are more 33%
satisfied with their ability to tap into talent pools.
67%
12
13. The Supply Chain of Talent
Recommendations & Conclusion
Our research uncovers that only about 20 percent of In order for organizations to improve and strengthen
business leaders are fully satisfied with the access they their talent acquisition process, we recommend
have to the talent they need. This fact is distressing the following:
alone, but even more troublesome when one considers
• Start acting and thinking like the market for talent
the current structural unemployment in the U.S. –
has supply and demand competitive dynamics like
“unfilled jobs in the midst of mass unemployment.”6
any other
A straightforward way to address the problem of • Analyze supply and demand internally and externally.
insufficient access to talent is to redefine the strategy
around talent acquisition and planning. Like a • Focus on getting real, robust, and accurate talent
manufacturing supply chain, effective talent acquisition is information — not fragmented information from
a combination of knowing what the supply and demand multiple and unrelated sources that have been used in
for talent is — both inside and outside an organization. the past.
Talent supply chain analysis is a fresh approach to talent
acquisition and planning, one that can help companies
solve the talent paradox they find themselves in — a
paradox that has led to companies with insufficient
talent bench strength.
6
Samuelson, Robert, June 20, 2011, “Why Are So Many Jobs Going Unfilled?” realclearmarkets.com.
13
14. The Supply Chain of Talent
A Closer Look: Subgroup Analysis
When we examine business leader satisfaction with How satisfied are your business leaders with your
access to talent by geography, we find that leaders organization’s ability to access talent when needed?
outside of North America are even less satisfied than By Geographic Region
their counterparts in North America are (fewer than
10 percent are fully satisfied). North America
23%
77%
Other
9%
“Very satisfied”
all others
91%
Total
21%
79%
14
15. The Supply Chain of Talent
A Closer Look: Subgroup Analysis
Interestingly, no significant differences exist among How satisfied are your business leaders with your
industries, suggesting that frustration with talent supply organization’s ability to access talent when needed?
is widespread. By Industry
Industrial Goods and Services
36%
64%
Government
25%
75%
Health Care
25%
75%
Professional Services
25% “Very satisfied”
75%
all others
Other
22%
78%
Non-Profit
17%
83%
Banking/Financial Services
14%
86%
Tech
10%
90%
15
16. The Supply Chain of Talent
A Closer Look: Subgroup Analysis
For the most part, North American organizations and How often does your organization use the following sources
those located in other regions behave similarly in to better understand the availability of talent in a market?
terms of assessing the external talent supply – with the (Percent answering “Frequently”) By Geographic Region
exception that companies outside of North America are Use social network sites, such as LinkedIn
more likely to rely on search firms. 30%
30%
33%
Overall, respondent companies report relatively limited Work with career centers at universities
considerations of the external supply of talent are 29%
29%
limited. We do find differences among industries in the 36%
particular methods used. For example, professional Work with search firms/agencies
services companies are particularly likely to rely on 20%
social networking sites such as LinkedIn, while health 18%
39%
care organizations report relatively greater consultation
Conduct in-person events, such as open houses/orientations
with college career centers. Search firms are used to a 12%
relatively low degree in the government, health care, 11% total
15%
and health-care sectors.
Conduct a market analysis including review of workforce demographics north America
such as age, education level, unemployment rate, etc.
other
9%
9%
12%
Work with state employment agencies to identify types
of workers in their pipeline that meet your needs
9%
9%
6%
Conduct a marketing campaign to evaluate potential workforce response/interest
6%
7%
6%
Contact with competitors/ other companies to explore workforce synergies/sharing
4%
4%
6%
16
17. The Supply Chain of Talent
A Closer Look: Subgroup Analysis
How often does your organization use the following sources to better understand
the availability of talent in a market? (Percent answering “Frequently”) By Industry
Total Banking/ Govern- Health Industrial Non-Profit Prof. Tech
Financial ment Care Goods & Services
Services Services
Use social network sites, such as LinkedIn 30% 36% 7% 25% 18% 17% 54% 33%
Work with career centers at universities 29% 14% 21% 54% 9% 6% 29% 33%
Work with search firms/ agencies 20% 25% 4% 7% 36% 0% 25% 27%
Conduct in-person events, such as open houses/ orientations 12% 4% 7% 25% 0% 17% 14% 3%
Conduct a market analysis including review of 9% 4% 7% 14% 9% 0% 18% 0%
workforce demographics such as age, education
level, unemployment rate, etc.
Work with state employment agencies to identify types 9% 0% 4% 18% 9% 17% 14% 7%
of workers in their pipeline that meet your needs
Conduct a marketing campaign to evaluate 6% 0% 14% 7% 0% 0% 14% 0%
potential workforce response/interest
Contact with competitors/ other companies to 4% 4% 0% 7% 9% 6% 7% 7%
explore workforce synergies/sharing
17
18. The Supply Chain of Talent
Appendix A:
respondent demographics
Industry Industry Industry
Org’s revenue Org’s revenue Org’s revenue
Number of employees
Number of employees of employees
Number Region
Industry Organization’s revenue number of employees
Technology Technology Technology Less than $10 million Less than $10 million Less than $10 million Less than 1,000 Less than 1,000 Less than 1,000 North Amer
Professional Services Professional Services Professional Services
$10-100 million $10-100 million $10-100 million 1,000-3,000 1,000-3,000 1,000-3,000 Asia/Pacific
Government Government Government $100-500 million $100-500 million $100-500 million 3,001-5,000 3,001-5,000 3,001-5,000 Europe
Health Care Health Care Health Care $500 million-1 billion $500 million-1 billion $500 million-1 billion 5,001-10,000 5,001-10,000 5,001-10,000 Central/Sou
Non-Profit/Charity Non-Profit/Charity Non-Profit/Charity $1-10 billion $1-10 billion $1-10 billion 10,000 + 10,000 + 10,000 + Africa
Financial Services Financial Services Financial Services $10 billion + $10 billion + $10 billion + Middle East
Banking Banking Banking N/A Government or Non-Profit N/A Government or Non-Profit
N/A Government or Non-Profit
Industrial Goods and Services Industrial Goods and Services Goods and Services
Industrial
Insurance Insurance Insurance
Retail Retail Retail
Media Media Media
Construction and Materials Construction and Materials
Construction and Materials
Food and Beverage Food and Beverage Food and Beverage
Other (each <3% of total) Other (each <3% of total)
Other (each <3% of total)
18
19. The Supply Chain of Talent
Appendix A:
respondent demographics
yees Region Region Region Respondent’s Level Level
Respondent’s
Respondent’s Level Respondent’s Function
Respondent’s Function Function
Respondent’s
region respondent’s level respondent’s function
North AmericaNorth AmericaNorth America Director/Senior Director
Director/Senior Director
Director/Senior Director Human Resources Resources
Human Human Resources
Asia/Pacific Asia/Pacific Asia/Pacific Manager/Middle Manager Manager/Middle Manager
Manager/Middle Manager Operations Operations Operations
Europe Europe Europe Team Member Team MemberTeam Member Other (each <3% of(each <3% of total) <3% of total)
Other total) Other (each
Central/South Central/South America
Central/South America America Vice President/Sr. President/Sr. Vice President Vice President
Vice Vice President President/Sr.
Vice
Africa Africa Africa C-Level (CEO, CHRO, CIO etc), Executive/President etc), Executive/President
C-Level (CEO, C-Level CIO etc), Executive/President
CHRO, (CEO, CHRO, CIO
Middle East Middle East Middle East Other Other Other
19
20. The Supply Chain of Talent
Appendix B:
works consulted
Arnold, Chris (November 16, 2010). To Fill Job Skills, Firm Brings Training In House. npr.org
Averbook, Jason (June 27, 2011). The ‘New Normal’ of Talent Management. LRP Publications
Boudreau, John W. (January 7, 2008). Supply Chain Logic for Evidence-Based Talent Management. Marshall School of Business
Burns, Susan (December 12, 2010). Planning For the Future of Talent Acquisition: Meet the Talent Broker. talentsynchronicity.com
The Center for Association Leadership (March 15, 2011). Baby Boomer Retirement and Unretirement; Talent Shortages. The Center for Association Leadership
Coombs, Bertha (March 3, 2011). Jobs Go Unfilled Despite High Unemployment. CNBC.com
Guthridge, Matthew; Komm, Asmus B; and Lawson, Emily (January 2008). Making Talent a Strategic Priority. mckinseyquarterly.com
Kelly Services Marketing Information Department (July 2009) Global Contingent Labor Workforce Trends. Kelly Services
Knowledge@Wharton (February 2008). Talent on Demand: Applying Supply Chain Management to People. knowledge.wharton.upenn.edu
McDogall, Paul (July 29, 2011). Microsoft: Thousands of IT Jobs Going Unfilled. informationweek.com
Safani, Barbara (April 18, 2011). Six Job Skills in High Demand. jobs.aol.com
Samuelson, Robert (June 20, 2011). Why Are So Many Jobs Going Unfilled? realclearmarkets.com
Sokol Ratkiewicz, K., & Krekeler Weite, A. (July 2011). Connecting the Dots: Comprehensive Career
Development as a Catalyst for Employee Engagement. Human Capital Institute
Sullivan, Brian (October 10, 2011). Need Work? U.S. Has 3.2 Million Unfilled Job Openings. cnbc.com
20
21. The Supply Chain of Talent
Definition of Key Terms
Talent External Supply of Talent
The term talent includes: The number of potential workers within a given market,
job classification or job type that are available to meet
• FTE: Full- and part-time employees who are part of
an organization’s hiring needs.
the organization’s regular, traditional workforce.
• Contract Talent: Full- and part-time workers and
Internal Demand for Talent
independent contractors who are not part of the
organization’s regular, traditional workforce, including A projection of the demand for certain skills and
freelancers, temporary help, interim executives positions a company will need in a given period of time.
and consultants.
• Outsourced services within an organization, External Demand for Talent
i.e., a help desk or tech support desk. The aggregate figures of organizations looking to
hire potential workers within a given market, job
classification or job type. If demand for certain skill-
Internal Supply of Talent
based talent is high, it will be harder to find or attract
The talent and skills of those currently employed by
this type of talent.
an organization, including FTE, Contract Talent and
Outsourced Services.
21
22. About the author
As SVP, Centers of Excellence for Kelly Services, Teresa Carroll is responsible for
leading a team that manages the brand, develops solutions for clients, and supports
Kelly’s vision of providing the world’s best workforce solutions. .
About Human Capital Institute (HCI)
The Human Capital Institute (HCI) is a catalyst for innovative new thinking in talent acquisition,
development, deployment and new economy leadership. Through research and collaboration, our global
network of more than 138,000 members develops and promotes creativity, best and next practices,
and actionable solutions in strategic talent management. Executives, practitioners, and thought leaders
representing organizations of all sizes, across public, charitable and government sectors, utilize HCI
communities, education, events and research to foster talent advantages to ensure organizational
change for competitive results. In tandem with these initiatives, HCI’s Human Capital Strategist
professional certifications and designations set the bar for expertise in talent strategy, acquisition,
development and measurement. www.hci.org
About KellyOCG
KellyOCG is the Outsourcing and Consulting Group of Fortune 500 workforce solutions provider,
Kelly Services, Inc. KellyOCG is a global leader in innovative talent management solutions in the areas
of Recruitment Process Outsourcing (RPO), Business Process Outsourcing (BPO), Contingent Workforce
Outsourcing (CWO), including Independent Contractor Solutions, Human Resources Consulting, Career
Transition and Organizational Effectiveness, and Executive Search. Further information about KellyOCG
may be found at kellyocg.com.
EXIT