White Paper 2008 Competition For Talent Talent Partners

The Competition for Talent in Ireland – Local Trends and Offshoring Practices

White Paper

December 2008

Sponsored by:

The Competition for Talent in Ireland: Local Trends and Offshore Practices

Table of Contents Executive Summary ................................................................................... 3

Identifying and Attracting High Performers ................................................ 5

Retention and Turnover of High Performers ............................................ 15

Organisational Approach to Talent Management..................................... 20

Offshoring Practices in Irish-based Organisations ................................... 25

Impact of Current Economic Climate on Business ................................... 30

Methodology ............................................................................................ 34

Recommendations ................................................................................... 35

© Talent Partners 2008 www.talentpartners.ie 2


Executive Summary A total of 82 leading Irish and multinational companies took part in this year’s Competition for Talent

Survey sponsored by Talent Partners. These were drawn from a range of industry sectors, including

ICT, Banking and Financial Services, Construction and Engineering, Utilities and FMCG. Of these, 62%

of responses were from the ICT sector, and 13% from Banking and Financial Services industries – two

groups that were specifically targeted in last year’s White Paper and will again this year be presented for

the purposes of comparison where appropriate.

Identifying and Attracting High Performers

Respondents continue to experience difficulties year on year in identifying and attracting high

performers to their organisations. 90% of Irish organisations surveyed stated that it is ‘difficult’ or

‘extremely difficult’ to identify high performers, and 30% consider it to be more difficult to do so this year

than last.

The functions for which respondents find it most difficult to identify or source high performers are in

Sales, Technical/IT and Finance/Accounting roles.

There is a noted growth in the use of social and business networking sites as a means of sourcing high

performers, and there has been an increase since 2007 in the numbers of companies using specialist

executive search agencies and headhunters to source high performers.

The majority of Irish businesses confine their search for talent to the Irish marketplace, with only about

one quarter extending that search to the European marketplace.

From the employers’ perspective, role content, corporate reputation and financial package are the three

most significant factors in attracting high performers to the company.

Retention and Turnover of High Performers

Levels of turnover of high performers in 2008 have been ‘as expected’ by survey respondents, with the

loss of a high performer potentially signalling a high economic cost to the business – anywhere from

€25,000 to €400,000 per any individual high performer lost to an organisation.

Factors cited by survey respondents as contributing to the loss of high performers include lack of

internal opportunities, financial packages offered elsewhere, a perceived ‘time for change’ on the part of

the high performer, as well as the general economic climate.

Factors, in the respondents’ views, which assist in the retention of high performers, include training and

development opportunities, as well as salary and compensation package.



Organisational Approach to Talent Management

Despite the recognition of the potential cost to the business of losing a high performer, only 44% of

companies surveyed have a talent management programme or policy in place. Just over half of survey

respondents rated that their talent management programme as effective.

34% of respondents have a clearly defined policy to attract and retain high performers and 52% have a

policy or programme in place to manage high potentials within the business.

The key criteria used by survey respondents’ organisations to identify high potential individuals is

‘performance to date’, followed by ‘desire to succeed.’

Offshoring Practices in Irish-Based Organisations

32% of survey respondents currently offshore work which was previously done in Ireland. The stated

benefits to them of this activity are cost savings and availability of skilled staff, and just under half of

these companies plan to increase their offshored activities.

Of the 68% of survey respondents who do not currently offshore, 30% are actively considering this as an

immediate term business strategy (i.e. within the next 12 months).

Impact of Current Economic Climate on Business

The key areas of business activity impacted by the current economic climate, as experienced by our

survey participants are on reductions in revenue and profits, as well as reduced market opportunities.

The sector most impacted, as identified by our survey, is unsurprisingly, the Banking and Financial

Services sector.

The top three key factors for securing competitive advantage for our participating companies are people,

leadership and technology.

47% of survey respondents expected to be employing more people in their business at 31/12/2008 than

they did at 31/12/2007.



IDENTIFYING AND ATTRACTING HIGH PERFORMERS

While the Celtic Tiger economy boomed, employment levels in Ireland soared and it was to a large

extent a candidates market in recruitment terms. More recently, events at home and internationally

have seen the Western economies plunge into recession. The impact that this is having on Irish

industries, across public and private sectors, is an extreme focus on cost management, particularly in

the area of headcount. News of plant closures, industry consolidation and reduction in headcount

feature in media reporting on an almost daily basis. The 2008 Competition for Talent in Ireland survey

presents statistical evidence of the impact of these factors on the management of high performers within

Irish-based industry.

Finding High Performers

We began the survey by asking participants how difficult it is to find high performers in Ireland today.

Overall, 90% of survey participants responded that it was ‘extremely difficult’ or ‘difficult’ to do so. In

fact, over 30% of respondents reported that they perceive it is more difficult to find high performers this

year than last year. This might indicate that, despite the recession, the market is not being flooded by

high performers who find themselves out of work. One hypothesis for this might be that if an

organisation is forced to reduced headcount, high performers would be among the last to be let go.

Another reason may be that, in uncertain economic times, high performers who in better circumstances

might consider themselves more mobile, are now staying in jobs that provide security of income, rather

than risking an uncertain future with a new employer. Just 10% of survey respondents stated that it was

‘easy’ or ‘extremely easy’ to identify high performers today.

Figure 1 How difficult is it to identify high performers for your business today? Is it extremely difficult, difficult, easy or

extremely easy?

High Performers - Degree of Difficulty in Finding

20.0%Extremely difficult

70.0%Difficult

8.8%Easy

1.3%Extremely easy

Source: Talent Partners, 2008



Looking back

When we compare the survey responses from the 2007 survey with 2008, there is little difference in

statistical terms with those stating that it is difficult to identify high performers (93% of respondents in

2007 compared with 90% in 2008).

Figure 2 2007 and 2008 responses compared. How difficult is it to identify high performers for your business today? Is it

extremely difficult, difficult, easy or extremely easy?

Difficulty in Finding High Performers (2007 - 2008)

25%

20%

68%

70%

7%

9%

0% 20% 40% 60% 80% 100%

2007

2008

Extremely difficult Difficult Easy Extremely easy

Source: Talent Partners, 2007 & 2008

However, it is interesting to note the different perceptions that exist about the difficulties in identifying

high performers now compared to 12 months ago. 25% of today’s respondents believe that it has been

easier to recruit high performing candidates in 2008 and that may be attributed to the fact that there is

greater availability of candidates due to the economic slowdown, and the cut backs and redundancies

that have followed. But over 30% of respondents believe that it is even more difficult this year than last

year to attract high performing individuals. One possible explanation for this response is that, when

times get tough high performers tend to keep their heads down and are absolutely focused on their

existing role rather than looking for new opportunities. As economic times become more difficult,

companies are more discerning in who they employ, as the requirement to see a return on investment is

critical and the hiring of a new employee is made in expectation of delivery as opposed to hope. The

reality is that they are offering remuneration packages to candidates which are the same if not less than

their previous employments. We have to ask whether today’s candidates were swept along on the

economic wave of the past and somehow acquired a falsely elevated sense of their worth in the

marketplace, and whether their salary and performance expectations are realistic in the current market

conditions?



Comparing with Previous Year

Respondents were asked to rate their perception of the difference in finding high performers in 2008

compared with the previous year. The majority of respondents (43%) felt that it was ‘the same as last

year’. Interestingly, 56% of respondents from Banking and Financial Services sector stated that the

difficulty of finding high performers was ‘the same as last year’.

Figure 3 Based on your experience, how does the situation with regard to recruiting high performers for your business today

compare with 12 months ago? Is it much more difficult, more difficult, the same as last year, easier or much easier?

Ease of Recruiting High Performers Compared with 2007

2.5%Much more diff icult

29.1%More diff icult

43.0%Same as last year

24.1%Easier

1.3%Much easier





Functional Areas for Which Hardest to Locate High Performers

Survey respondents were asked to identify those functional areas for which they found it most difficult to

identify or source high performers. The Sales (39%) and Technical / IT (21.5%) functions were reported

as most difficult, followed by Finance / Accounting (13%).

Figure 4 For which functional area does your company find the most challenging to recruit high performers?

Functional Areas - Hardest to Locate High Performers

39.2

3.8

12.7

21.5

6.3

7.6

8.9

0 20 40 60 80 10

Sales

Marketing

Finance/Accounting

Technical/IT

Research & development

General Management

Other

0




Year on Year Comparison

While there are statistical differences in the year on year numbers stated in 2007 and 2008, there is

consistency in the top three functional areas found most difficult to recruit for, namely Sales, Technical /

IT and Finance / Accounting.

Figure 5 2007 and 2008 responses compared. For which functional area does your company find the most challenging to

recruit high performers?

Functional Areas - Year on Year

2007

2007

2007

2008

2008

2008

0 10 20 30 40 50 6

Sales

Finance/Accounting

Technical/IT

0




Comparison by Industry Sector

The following figure illustrates the difference across industry sectors in locating high performers to fill

roles in these top three functional areas. Clear differences emerging between ICT and Banking and

Financial Services sectors, with 29% of ICT respondents stating difficulty in recruiting high performing

Technical/IT specialists, while 30% of Banking and Financial Services respondents stating difficulties in

recruiting high performing Finance/Accounting specialists. These are quite obvious differences, to be

expected based on the functional specialisms of these two industry sectors.

What is of more interest is that only 30% of Banking and Financial Services respondents stated difficulty

in filling Sales roles, compared with 42% of ICT respondents. It may be due to a number of factors,

including a difference in the volume of sales vacancies in the different sectors, or indeed a difference in

the approach to recruitment and/or reward for these roles across the ICT and Banking and Financial

Services sectors.

Certainly, the difficulty in filling Sales roles with High Performers has decreased marginally from 2007 to

2008 across all industry sectors.

Figure 6 Industry sector responses compared. For which functional area does your company find the most challenging to

recruit high performers?

Functional Areas - By Sector

39

13

22

30

30

42

9

29

0 10 20 30 40

Sales

Finance/Accounting

Technical/IT

50

Overall Banking & Financial Services ICT



Methods of Sourcing High Performers

Companies were asked how they go about sourcing high performers. New media, such as business

and social networking sites are increasingly playing a prominent part, with one third of survey

respondents stating that they use these to source high performers. However, the traditional methods,

such as employment agencies, executive search agencies and headhunters, as well as newspaper and

magazine advertisements continue to be the most used sources.

Figure 7 How do you normally go about sourcing high performers? (You may tick more than one answer)

Sourcing High Performers - Methods Used

27

63

63

48

33

0 20 40 60 80 100

Advertisement in newspapers/trade publications

Employment agencies

Executive recruiters/headhunters

Word of Mouth

Business/Social networking sites

Source : Talent Partners, 2008

Year on Year Comparison

Interestingly, when comparing the methods used to source high performers year on year, some

significant differences emerge. For example, there is an increase of over 40% in the use of ‘word of

mouth’ between 2007 and 2008. As the market contracts there is greater visibility of who is and isn’t

available and a direct approach can therefore be used, with many companies offering incentives and

internal referral schemes in order to source candidates from the contacts of their existing employees.

Similarly, while the use of traditional recruitment or employment agencies has decreased since 2007,

there is a decidedly greater increase in the use of specialist executive recruiters and headhunters. This

may be due to the more specialist services offered by executive recruiters and headhunters as distinct

from employment agencies. However, it also may be due to the fact that roles for high performers may

be filled at a more senior level in the organisation, typically the kinds of roles which are assigned to

executive recruiters and headhunters.



Figure 8 2007 and 2008 responses compared. How do you normally go about sourcing high performers? (You may tick more

than one answer)

Sourcing High Performers - Year on Year

0 20 40 60 80 100

Advertisement in newspapers/trade publications

Employment agencies

Executive recruiters/headhunters

Word of Mouth

2008 2007


Geographical Sources of High Performers

The survey then asked respondents to state where, that is, which geographies they focus on in terms of

their search for high performers. As might be expected, the majority of respondents across all industry

sectors focus their search for high performers in the Irish marketplace. Over one quarter of respondents

do search abroad, with the majority of those searching in Europe only, with significantly fewer searching

further afield.

When analysed by industry sector, of note is the fact that 90% of respondents from the Banking and

Financial Services sector confine their search for high performers to the Irish marketplace alone. This is

less so within the ICT sector. This may be due to the less geography or location specific nature of ICT

work, and the more regulated, legislative framework within which the Banking and Financial Services

companies operate here in Ireland, requiring more ‘local’ knowledge.

However, it is interesting to see the extent to which Irish organisations overall narrow their search to the

Irish marketplace, particularly as in recent years, there has been an increase in the numbers of Irish

immigrants returning from abroad, as well as significant growth in the influx of foreign migrant workers

across all sectors. In particular, one might question whether this is a useful approach to search,

considering the difficulties expressed by 90% of survey respondents in identifying high performers,

combined with the growing increase in the use of specialist executive search agencies and headhunters,

many of whom are part of international search organisations with extensive networks.



Figure 9 When recruiting high performers for your business, where is your primary geographic focus in your talent search?

Geographical Source of High Performers

90%

70%

68.80%

20%

26%

25%

13%

15%

0% 20% 40% 60% 80% 100%

Banking & FinancialServices

ICT

Overall

Irish marketplace European marketplace Worldw ide marketplace

Source : Talent Partners, 2008



Factors Attracting High Performers

Survey respondents were asked to consider those factors which they believe attract high performers to

their organisations. Overwhelmingly, ‘role content’ and ‘corporate reputation’ were named as the two

most important factors in attracting high performers. This suggests that, in order to overcome difficulties

in identifying and attracting high performers, organisations may be paying particular attention to the

presentation of both their organisation (employer branding, for example) and the quality of their role

description materials.

Figure 10 What are the key factors that attract high performing individuals to your organisation? (Please rate each option in

order of importance from Very important, important, somewhat important to unimportant)

Factors Attracting High Performers

0 1 2 3 4

Role Content

Corporate Reputation

Package

Career Progression

Calibre of People

Location

Work/Life Balance


Comparison with Candidates Perceptions

What is of interest to note, is that reward or compensation package ranked fourth out of seven possible

factors attracting high performers, at least in the perception of survey respondents, that is, those

involved in the recruitment of high performers.

Earlier this year, Talent Partners conducted an on-line Candidate Survey, and asked candidates

themselves what were their top three criteria when choosing a new employer. For 80% of respondents,

the financial package on offer was ranked as the top reason for moving. 68% of respondents mentioned

‘role content’. 52% of candidates cited ‘opportunities to progress’ as their reason for choosing a new

employer, while this was similarly ranked the third most important factor by hiring organisations in

attracting high performers. The candidate survey did not ask about corporate reputation as a factor in

choosing a new employer.



RETENTION AND TURNOVER OF HIGH PERFORMERS

The process of identifying, attracting and recruiting high performers is only one aspect of any

organisation’s talent management strategy. As the previous section indicates, this is difficult in itself,

with differences in perception between candidates and companies as regards what candidates are

looking for in an employer. But with candidates having high expectations in terms of role content,

opportunities for progression and compensation package, the challenge to retain high performers and

manage their career development expectations is one which employers cannot afford to ignore.

During the economic boom, the mobility of high performers increased, with a corresponding impact on

employee turnover. With industry-wide restrictions on headcount imposed in recent months, this survey

asked respondents to give their views on the current situation with regard to retention and turnover of

high performers.

Expectation Regarding Turnover

First, survey respondents were asked about their expectations with regard to the levels of turnover of

high performers in their businesses – had it been ‘as expected’? For the majority of survey

respondents, the levels of turnover experienced were ‘as expected’. For 28%, in fact it was lower than

expected, perhaps indicating a note of caution among high performers of the impact of economic factors

on employment opportunities elsewhere. Of particular interest are the responses from the Banking and

Financial Services sector, where 67% of respondents stated the turnover of high performers has been

lower than expected in 2008, perhaps indicating an awareness among high performers of credit crunch

and uncertainty within the financial sector in general, and thereby a corresponding caution.

Figure 11 Has the turnover of high performers in your business this year been higher, as expected or lower than expected?

Expectation of Turnover among High Performers

27.8%Low er than expected

64.6%As expected

7.6%Higher than expected




Cost to the Business of the Loss of a High Performer

The majority of respondents (88%) agreed that the departure of a high performing individual has a

‘large’ or ‘very large’ impact on their business.

Figure 12 What impact does the departure of a high performing individual have on your business?

Impact of Departure of High Performer

Very lit t le impact1%

Lit t le impact11%

Large impact77%

Very large impact11%


Last year, when asked to quantify this impact, the average cost to the business of the loss of a high

performing individual was estimated €237,000. This year, the question was asked slightly differently,

but nonetheless, respondents indicated significant financial costs to the business associated with the

loss of a high performing individual. When asked to quantify this, 76% of respondents estimated the cost

to business to be between €25,000 and €250,000.

Within the Banking and Financial Services sector, 50% of respondents estimated the loss of a high

performer to cost their business between €75,000 and €150,000. This appears to be significantly less

than comparative figures from 2007 (where Banking and Financial Services respondents estimated an

average cost of €208,000).



Figure 13 Can you estimate the cost of losing a high performer for your business in the last 12 months?

Estimated Cost of Losing a High Performer

7%

32%

23%

21%

11%6%

<€25k €25k - 75K €75k - 150k €150k - 250K €250k - €400K €400k plus




Factors Contributing to the Loss of High Performers

Several factors were identified as being ‘key’ in accounting for the loss of high performers from

respondents’ businesses during 2008. These included lack of internal opportunities, financial packages

offered elsewhere, the economic climate, the individual’s perception that it was a time for new

challenges and downsizing of the company. Interestingly given the current global financial crisis, at the

time of survey, 56% of respondents from Banking and Financial Services reported that downsizing of the

company was ‘unimportant’ as a factor in losing high performers. However, this may be indicative of a

point in time, and it would be interesting to speculate how this factor might impact over the coming

months as we move towards speculated consolidation within this sector.

Figure 14 What do you consider to be the key factors for the loss of high performers from your business this year?

Factors for Loss of High Performers

28%

25%

10%

26%

13%

54%

56%

50%

68%

24%

18%

17%

25%

5%

41%

16%

24%

1%

1%

3%

0% 20% 40% 60% 80% 100%

Lack of internalopportunities

Financial Packages offeredelsewhere

Economic Climate

Time for new challenges

Downsizing of Company

Very Important Important Unimportant Very unimportant





Factors in Retaining High Performers If, as stated previously, the factors which encourage high performers to leave organisations include ‘a

time for new challenges’, lack of internal opportunities and financial packages offered elsewhere, we

asked survey respondents for information about their employee retention programmes. Specifically,

they were asked to rate the importance of a range of factors in their employee retention programme.

Figure 15 How important are the following factors in your employee retention programme? (4 = Very important, 3 = Important, 2

= Unimportant and1 = Very Unimportant)

Factors to Retaining High Performers

0 1 2 3

Training & Development

Higher Salary

Improved Benefits Package

Fast Track to Promotions

Flexible Working Hours

International Opportunities

4


There appears to be a good ‘fit’ between factors impacting the loss of high performers and those factors

making up the organisations employee retention programme, including training and development, salary

and compensation package. This may in fact, account for why the majority of respondents to the

previous question stated that the level of turnover among high performers was ‘as expected’.


ORGANISATIONAL APPROACH TO TALENT MANAGEMENT Given the difficulties expressed year on year by survey respondents in identifying high performers, and

the very real financial impact on a business of the loss of a high performing individual, we felt it would be

useful to ask companies about their organisational approach to talent management.

Existence of Talent Management Programme

In 2007, 83% of companies surveyed indicated that they did not have a specific policy or programme in

place for attracting and retaining high performers.

Recognising this, this year we asked the question in a number of different ways in the survey. Our hope

was that, although a company may not have a comprehensive talent management programme in place

overall (or it may not refer to it as a talent management programme), that the different aspects of talent

management might be subsumed under other recruitment, retention and/or performance management

and career development programmes, particularly in relation to high performers and employees with

high potential within the organisation.

This year’s figures indicate that just over half of organisations surveyed still do not have a talent

management programme in place. However, with 44% of companies with a policy or programme on

talent management, this suggests some efforts being made by Irish-based organisations to take a

strategic approach to their high performers. Our hope is that this figure will continue to grow year on

year.

Figure 16 Do you have a talent management programme in place in your organisation?

Talent Management Programme in Place

44%56%

Yes No




Effectiveness of Organisation’s Talent Management Programme

Over half of survey respondents consider their talent management programmes to be ‘effective’ or ‘very

effective’. Conversely, just under half consider their programmes to be ‘ineffective’ or ‘very ineffective’.

It would appear from these findings that, while there has been some progress in putting talent

management programmes into place, some additional work needs to be done in maintaining these

programmes to ensure that they are structured appropriately in order to add value to the business.

The low statistic on the existence of talent management programmes may be attributed to its ‘newness’

as a concept within Irish organisations. If this is the case, then it is likely that an increase in their

effectiveness will be seen over the coming years, as the programmes get ‘bedded down’ into the

organisations, and when, with time, their potential impact can be seen and experienced.

Figure 17 How effective would you rate your company’s Talent Management Programme?

Effectiveness of Talent Management Programme

7%

48%

40%

5%

Very Effective Effective Ineffective Very Ineffective





Managing Talent by another Name

We were interested to understand how those companies who do not have a talent management

programme in place are organisationally equipped to handle the various elements which make up a

talent management strategy, such as recruitment and retention, for example, particularly with reference

to high performers. So we asked them if they had a specific policy or programme for attracting and

retaining high performers.

Figure 18 Does your company have a specific policy or programme for attracting and retaining high performers?

High Performer Policy - 2007 to 2008

34

17

66

83

0 20 40 60 80

2008

2007

100

Yes No


While the majority of respondent companies still do not have a dedicated high performer recruitment and

retention programme in place, we can see quite a change from the 2007 responses. Then only 17% of

respondents had such a programme, whereas today 34% of survey respondents have a programme for

attracting and retaining high performers – a doubling of the figures.


Managing the High Potentials in the Organisation

If we define high potentials in the organisation as those most likely to become the future leaders of the

business, it would be remiss of organisations who do not focus on any other employee, to ignore these

select few in terms of retention, identifying and creating career development opportunities for them and

actively facilitating their route to the top through strategic succession planning.

We asked survey respondents whether they have a programme in place to manage high potentials.

Just over half (52%) said that they do. However, the fact that 48% of respondent organisations do not

have such a programme in place indicates that they may in fact have to go outside the organisation for

their leadership talent. While this can be a good choice if made strategically, if it is made by accident

rather than by design, then it has the likelihood of disenfranchising existing committed talent, and of

bringing in a new leader who lacks a useful level of tacit knowledge about the organisation. Figure 19 Do you have a programme in place to manage the high potentials in your organisation?

Programme in Place to Manage High Potentials

52%48%

Yes No





Identifying High Potential Employees

Respondents were invited to select as many of the following methods as used by their organisations to

identify high potential employees. By far the most utilised method is ‘performance to date’. This

significantly exceeds academic qualifications, suggesting that while qualifications play an important role

in securing the appointment of the individual within the company, once in and on a level playing field

with peers, it is actual performance, combined with ‘desire to succeed’ which ultimately help high

potential employees become noticed within their organisations.

Figure 20 How do you identify high potential employees in your company?

Methods Used to Identify High Potential Employees

0 20 40 60 80 1

Academic Qualification

Performance to Date

Desire to Succeed

Client Endorsements

00



OFFSHORING PRACTICES IN IRISH-BASED ORGANISATIONS

While this survey predominantly addresses talent management practices and perceptions within the

Irish jurisdiction, the competition for talent and the competition for jobs have become global. While on

some level, it is possible though not palatable to comprehend the loss of Irish jobs due to our own,

home-grown, economic downturn, the loss of corporate investment in Ireland to other less expensive,

potentially more skilled economies is potentially more worrisome. For this reason, we dedicated a

section of this survey to offshoring, with a view to gaining an understanding of the practices and plans of

Irish-based organisations to relocate work previously (or currently) done in Ireland to other countries.

A total of 32% of respondents to our survey stated that their company currently offshore work previously

done in Ireland (although of note, only 10% of survey respondents from the Banking and Financial

Services sector stated that they offshore).

Figure 21 Does your company offshore any of its work that was previously Irish based?

Companies Offshoring Work Previously Done in Ireland

32%

68%

Yes No




Satisfaction with Level of Work Delivered Off Shore

Almost 80% of survey respondents, who do offshore work, stated that they are ‘satisfied’ or ‘very

satisfied’ with the level of work delivered for their businesses off shore.

Figure 22 If yes, how satisfied are you with the level of work delivered off shore for your business in Ireland?

Satisfaction with Level of Work Delivered Off Shore

23%

54%

19%

4%

Very satisfied Satisfied Neutral Unsatisfied





Effectiveness of Offshoring

We asked survey respondents whose companies currently off shore work to rate the effectiveness or

benefits of off shore activities in four different areas. The main factors or benefits of offshoring are

perceived by them to be: cost savings and availability of skilled staff. However, when looking at benefits

such as time savings, it is evident that 39% of respondents find offshoring ineffective. The question for

organisations deciding whether to offshore or not might be determined by setting the savings of cost of

overheads against losses sustained by potential time delays. Based on the current findings, cost

savings currently appear to outweigh time delays; however this is potentially an interesting factor to

measure on a rolling basis.

Figure 23 From your experience, how would you rate the effectiveness of offshoring in the following areas?

Effectiveness of Offshoring

48

19

15

24

48

43

62

76

4

38

19 4

0 20 40 60 80

Cost savings

Time savings

Consolidation of functions

Availability of skilled staff

100

Very Effective Effective In Effective Very Ineffective Source: Talent Partners, 2008



Plans to Increase Offshore Activities

While 42% of respondent companies who currently off shore work previously done in Ireland, indicated

an intention to increase the amount of work currently offshored, there were significant differences across

the ICT and Banking and Financial Services sectors. Those respondents from the Banking and

Financial Services sector who responded that they currently offshore work indicated that they had no

current plans to increase the amount of work offshored. This compares with ICT companies who

currently offshore, 57% of whom indicate an intention to increase the level of work offshored.

Figure 24 Do you plan to increase the amount of work you offshore?

Companies Planning to Increase Offshored Work

42

57

0

0 20 40 60 80 1

Overall

ICT

Banking and FinancialServices

00



Plans to Commence Offshore Activities

Companies who indicated that they do not currently offshore business were asked to state whether

offshoring might form part of the future plans for their business. Currently 68% of respondent

companies do not offshore any of their work outside of Ireland. Of those companies not offshoring, an

average of 30% overall are currently considering offshoring as a business strategy. However, this is

more interesting when broken down by sector, as Figure 21 below illustrates. If future work leaves

Ireland to be offshored, then that loss is most likely to come from the ICT sector.

Figure 25 Results by Sector: If you are not currently offshoring work, has your company discussed offshoring some of its future

business functions?

Companies Discussing Offshoring by Sector

30

33

12.5

70

67

87.5

0% 20% 40% 60% 80% 100%

Overall

ICT


Yes No

Source: Talent Partners 2008

While the majority of respondents across all sectors indicated that they were not currently considering

offshoring, those who are having such discussions are actively considering offshoring in the immediate

term. In effect, 30% of respondent organisations are actively considering offshoring and the greater

majority of those (60%) are considering doing so within the next 12 months.




IMPACT OF CURRENT ECONOMIC CLIMATE ON BUSINESS There is no getting away from the fact that the credit crunch, sub-prime lending, and the collapse of the

property market have led us into a recession. And there is no doubting the fact that this is having a

clear and considerable impact on Irish-based businesses across all sectors. We were interested to

know in more specific terms, what aspects of business, and to what extent, current economic forces are

impacting on the businesses who participated in our survey.

Business Activities Impacted

Survey participants were asked to identify those aspects of business affected by the current economic

climate, including impact on market opportunities, profitability and future plans regarding workforce and

investment. There are few companies in Ireland unaffected by the recent credit crunch and subsequent

recessionary downturn. Specifically, Figure 22 illustrates those areas impacted, as identified by our

survey respondents:

Figure 26 How has the economic climate of 2008 affected your business?

Business Activities Impacted by Economic Climate

23

44

45

26

10

22

0 20 40 60 80 10

Created more market opportunities

Reduced market opportunities

Reduced revenue/profits

Stopped/curtailed expansion plans

Increased work force

Reduced workforce

0


Not surprisingly, many areas of business were reported to be impacted by economic events. 45% of

survey respondents have noted a reduction in revenue/profits, and 44% have experienced reduced

market opportunities. On the positive side however, almost one quarter of respondents indicated that

events had created more market opportunities for them. Only 22% indicated that a reduced workforce

was likely, with 10% reporting an increase in workforce – this would seem to balance out each other and

indicate less impact overall on workforce than predicted in media. What is not possible to assess,

however, is the actual number of jobs lost, as level of reduction naturally will vary from company to

company.



Regarding curtailment or expansion plans, only 25% of companies noted an impact here. That might

indicate that for the other 75% of respondents, expansion plans are going ahead as normal. However, it

may also suggest that those other respondents do not have current plans to expand and will simply

maintain the status quo throughout the economic downturn.

Comparison by Sector

When compared industry sector by sector, the impact of the credit crunch on the Banking and Financial

Service sector is clearly evident. 80% of respondents from that sector noted a reduction in

revenue/profits in their businesses, and 70% noted reduced market opportunities.

Figure 27 Comparison by Industry Sector: How has the economic climate of 2008 affected your business?

Economic Impact by Sector

23

44

45

26

10

22

28

37

39.5

28

12

14

70

80

40

40

0 20 40 60 80

Created more marketopportunities

Reduced market opportunities

Reduced revenue/profits

Stopped/curtailed expansionplans

Increased work force

Reduced workforce

100

Overall ICT Banking and Financial Services



Key factors for a Competitive Advantage

The clear challenge facing Irish business leaders is gauging how best to compete in today’s more

straitened economic times. We asked our survey respondents to identify what, for them, are the key

factors which give their company a competitive advantage in today’s marketplace. While no-one would

discount any of the factors listed below as playing a critical role, interestingly, it was ‘people’, i.e. the

organisations workforce and talent which survey respondents identified as playing the most important

role in securing competitive advantage, followed closely by the calibre of their leadership.

Figure 28 What are the key factors that give your company a competitive advantage in today’s marketplace?

Competitive Advantage

50

53

67

49

26

35

22

21

10

27

42

36

4

3

1

0% 20% 40% 60% 80% 100%

Technology

Leadership

People

Reputation of Company

Organisation's culture

Financial Stability

Essential Important Unimportant




Expectation of Employment Levels at 31/12/2008

It would seem like a clear assumption that, if people and leaders are to play such a critical role in

securing competitive advantage, that, going forward, Irish businesses ought to be paying more attention

to their talent management behaviours and strategies. This seems particularly important, as 47% of

survey respondents stated that they expect to be employing more people in their business at 31/12/2008

than they did at 31/12/2007.

Figure 29 At the 31/12/2008, will you expect to have more employees in your business compared to 31/12/2007?

More Employees At Year End '08 Compared with '07

47

57

30

53

43

70

0% 20% 40% 60% 80% 100%

Overall

ICT


Yes No




METHODOLOGY

The 2008 White Paper is a follow on from a 2007 survey of Irish organisations on The Competition for

Talent, which was published by Talent Partners in July 2007.

The 2008 Competition for Talent survey was conducted by Talent Partners using an on-line self

completion questionnaire. A total of 27 questions (closed, rating scale and Likert scale) were used.

82 leading multinational and indigenous Irish organisations participated in the survey. These were

drawn from the ICT, Finance, Utilities, FMCG, Engineering and Construction sectors. A mixture of job

titles responded including the following:-

CEO

Financial Controller

Sales Director / Manager

Marketing Director / Manager

Human Resources Director / Manager

A total of 46 organisations from the ICT sector responded, among them many of the largest names in

the Irish software, telecoms and IT hardware industries. 10 organisations from the Banking and

Financial Services sector were represented – similar response levels to the 2007 survey. These

represent some of the major banks, financial services and insurance industries in Ireland.

Where the response rates allow, data is broken down by these two industry sectors. Responses from

the other sectors were smaller in number and so specific data is not shown for these other industry

sectors. Where possible, results from the 2007 survey are shown for comparative purposes.



Recommendations for Irish Organisations

This research paper, commissioned by Talent Partners Ltd, shows that in the current economic times,

the availability of skilled talent at employee and leadership level is critical to securing competitive

advantage in the marketplace. This combined with technology capacity and investment will be what

gives successful Irish businesses (indigenous and multinational) the competitive edge. Yet the research

also shows that 90% of participating companies still find it difficult to identify and attract high

performance talent for their organisations.

In particular, with the increasing rates of unemployment, companies will be challenged in their

recruitment and selection procedures to identify high performers with the right levels of skills and

experience who is also a good organisational fit, from among the potential flood of job seekers coming

onto the market.

Our survey also shows that the majority of participating companies do not have a talent management

programme in place. Nor do they have an effective programme to attract and retain high performers.

Yet, as with our 2007 findings, the cost of losing a high performer from the business continues to be

significant. Some of our survey respondents rated this cost at over €400,000 based on the loss of one

high performer alone.

Added to this is the recognition that companies, within the information and communications technologies

sector in particular, are and will increase the practice of offshoring work previously undertaken in

Ireland. With compensation package playing a strong role in attracting and retaining high performers,

companies will be challenged to maintain cost competitiveness while, in parallel, securing the

appointment and retention of high performers. The one factor which will help them in this will be the

provision of a clear line of sight for high performing candidates and employees, of their career

opportunities within the organisation, both from the perspective of existing job content and future path

for development within the organisation.

Our stated position and our core recommendation continues to be based in our belief that an effective

Talent Management strategy ought to be put in place, streamlined and integrated with business

strategy, with clear methods for identifying and matching candidates for significant roles within the

business, as well as tried and tested methods to manage employees’ career expectations within the

business, in line with business needs.

While responsibility for the management of talent within the enterprise tends to titularly rest with the

training and development and/or the human resources function, their ability to respond to the needs of

the business requires an integrated cross-functional approach to managing the acquisition and

maintenance of talent right across the organisation. This requires commitment from all levels of

leadership across the business.

The following are the recommendations of Talent Partners based on the research we have carried out.




Practical Tip 1 – Implement a Talent Management Strategy within the organisation with clearly

defined ownership at senior level within the business.

Practical Tip 2 – Clarify with your operational management the role requirements and

specifications for critical vacancies. Work closely with your internal and external recruitment

partners to match strategies with role requirements, including approach to advertising,

employer branding and job and candidate match.

Practical Tip 3 – Brief all interviewers, internal and external, on the importance of consistency

of message around role, career progression opportunities and organisation culture, to ensure

best fit with candidates.

Practical Tip 4 – Identify the key roles within your business and the key performers in your

organisation who are capable of filling these roles. Benchmark the experience and potential of

this “talent pool” against internal career opportunities with the company and grow and develop

it through training and professional development, both internally and externally.

Practical Tip 5 – Clarify your needs in terms of skills and experience of high potentials and

communicate these to your ‘talent pool’ on a regular basis, providing them with opportunities to

develop, and feedback on their performance in line with their progression within the company.

Practical Tip 6 – Work closely with high performers in the business who may not become future

leaders, but who are technical specialists and who can deliver at an operational level within the

business. Consider ways to enhance the technical aspects of their roles in order to maintain

their sense of challenge, interest and opportunity within the organisation.

Practical Tip 7 – Partner with an external recruiter to gain a deeper understanding of the

external market. This will also allow you to benchmark your internal talent against external

market talent and make better hiring decisions. Your external recruitment partner should be

seen as an extension of your company and your talent scout in the marketplace. It should be

communicating a consistent message about your company and “employer brand” to potential

hires and keeping you informed of key external market talent.

Practical Tip 8 – Consider widening your search for talent to the international marketplace as a

means of securing the best talent.

Practical Tip 9 – Create an “Employer of Choice” value around your company. Position your

organisation as the company to work for in your specific niche. Get your internal “talent pool” to

support this positioning.

Practical Tip 10 - The Company needs to share its goals and visions with this "talent pool" and

create a clear line of sight between employee performance and corporate success. A

compelling employee engagement programme, backed up by clear and consistent messages,

will ensure the strategy will be delivered successfully.


About Talent Partners & MRINetwork Worldwide

Talent Partners, founded in Dublin in 2003, is led by Stephen Kennedy who

has over 10 years experience within the executive search field. Working at

both a national and international level for both clients and candidates, their

extensive knowledge of their industry sector allows them to operate in a highly

specialised manner for clients predominantly within the IT, Telecoms and

Financial Services sectors. Talent Partners were recently awarded for being

one of the fastest growing offices within the MRI Worldwide Network in 2006.

MRINetwork comprises over 1,000 offices and 3,500 search professionals in

more than 35 countries specialising in mid to upper management/technical

positions and offering a full range of customisable solutions including

permanent placement, contract (interim) recruitment, advertised selection and

recruitment outsourcing.

External Publication of Talent Partners information and data – Any Talent Partners information that is to be used in

advertising, press releases, or promotional materials requires prior written approval from the appropriate Talent

Partners Director. A draft of the proposed document should accompany any such request. Talent Partners reserves

the right to deny approval of external usage for any reason.

For further information regarding this document please contact:

Stephen Kennedy

Tel: +353 (1) 8397070

© Copyright 2008 Talent Partners Ltd. Reproduction without written permission is completely forbidden.


Documents

White Paper 2008 Competition For Talent Talent Partners