Measuring Talent

Professional talent assessment tools and services help companies find the ideal worker By Liu Xinlian

Measuring Talent

Professional talent assessment tools and services help companies find the ideal worker By Liu Xinlian

Finding the right person for the job is human resource (HR) manager Nancy Ren’s mission. Ren works for an information technology firm in Beijing, where despite the large pool of talent, filling an open position at the company has become as arduous a task for her employers.

“We usually put each candidate through three rounds of tests and interviews. But even after spending that amount of time and energy, the chances of us fi nding the right person are still relatively low,” Ren said.

Out of 10 candidates, Ren’s company is lucky if they find one who fits their needs.And sometimes, when a candidate is chosen,that person proves unsuitable for the job or falls far short of expectations.

While most Chinese companies still rely on group discussions and professional examinations to assess candidate competence,most of their advanced global counterparts are turning away from traditional searching and assessment methods in favor of talent measurement solutions in fi nding the right people for the right roles. Talent measurement gauges candidate competency by providing genuine insight into employee’s capabilities and producing objective, consistent and meaningful data for upper management.

“The world’s top 500 companies have discarded the old ways of hiring in favor of new, innovative methods,” said Louis Yang, a business psychologist.

According to a survey conducted by China International Intelligence Co. Ltd., a Shanghai-based HR service provider, almost half of China’s enterprises have yet to use talent measurement tools in recruiting—but many are looking to switch gears in the next two years and incorporate talent measurement into their hiring practices.

“Talent will play a vital role in China’s economic transformation while the country switches its investment-driven growth model to one dependent on talent,” said Fu Quan,General Manager of SHL China, a professional talent measurement solution provider headquartered in the UK.

With great market opportunities in sight,more international talent measurement providers are expanding their global footprint in China.

Market potential

Over the last fi ve years, SHL has focused its resources on the Chinese market. According to Fu, SHL doubled its staff and investment in China last year. In April, SHL expanded its main of fi ce by eight fold in Shanghai.

“These latest changes give our organization an even stronger platform to serve our customers in China,” said David Leigh, CEO of SHL.

What’s raised SHL’s con fi dence in China is the excellent performance it has achieved in the Chinese market.

“During the past three quarters, our average pro fi t witnessed an increase of 80 percent year on year,” said Fu.

China’s talent strategy provides huge growth potential for the talent assessment sector. According to the National Program for Medium- and Long-term Talent Development(2010-20), there will be 42 million business managers ready for hire by 2020. The enormous demand to develop business management talent is gradually turning talent assessment from being a branch of HR development into the mainstream.

“Assessment demand has skyrocketed for companies of all sizes in China—from stateowned enterprises (SOEs) to multinational corporations and businesses in the private sector,” said Fu.

According to Fu, SHL China’s clients were all multinationals in China three years ago. Today, 40 percent of their clients are local enterprises.

“Usually the local enterprises we serve have bigger employee hiring requirements than multinationals. That means bigger business volume,” said Fu.

China’s booming recruitment market also gives HR service providers reason to rejoice.

According to a survey conducted by global recruitment fi rm Michael Page International based in the UK, business confidence in China is high, leading to a stable recruitment market.

Among employers surveyed, there is favorable sentiment toward both domestic business conditions and hiring additional staff. Some 79 percent of employers predict business conditions will either improve or remain stable in the coming months, while 56 percent expect to boost headcount in their business.

In fact, according to SHL’s recently released annual Global Assessment Trends Report, up to 70 percent of companies worldwide are currently using assessments to inform their hiring decisions.

“If only 10 percent of China’s employers use talent measurement services, it will be an enormous market,” said Fu.

According to Fu, in 2011, employees and new hire assessments grew by 20 percent in China and indications of regional growth continue into 2012, and assessment growth rate is expected to be 42 percent in China.

JOB HUNTING:At a job fair for graduates at Peking University on March 20,about 10,000 students try their luck for 6,000 vacancies provided by more than 200 employers

“Companies the world over are clearly recognizing that people are their most important business asset, with the attraction and retention of top talent of paramount concern,”said Fu.

“While specific assessment needs vary dramatically across business sectors, one commonality exists: All companies need to fi nd the very best candidates,” he said.

Requisite of ‘going global’

China’s surging overseas investment has also brought about great business opportunities for the talent measurement industry.

Talent measurement is essential to Chinese enterprises’ global ambitions, said Fu.

“As the worldwide business landscape continues to become more fl at, increasing numbers of companies are finding they are fighting for candidates in the same talent pool. The battle for talent has never been tougher,” said Robert Morgan, Chief Customer Of fi cer of SHL.

“Assessments are proving to be the secret ingredient of accelerating positive business outcomes—giving companies the competitive edge, and putting them ahead of the pack in this ever-changing global workforce,” he said.

“While Chinese companies are launching their business ambitions of going global, it’s becoming obvious that they are not ready for talent management,” Fu said.

China’s ever-increasing overseas investments in recent years have been accompanied by huge losses. For example, in October 2011, China Rail Construction said that it had recorded 4.1 billion yuan ($634 million) in losses in its railways project in Mecca, Saudi Arabia.

Lin Shaopei, professor at the School of Mechanical Engineering at Shanghai Jiao Tong University, said many Chinese construction companies lost money overseas because they lacked experienced employees in managing projects and did not pay enough attention to cultural differences.

According to Fu, the only measurement tool for some SOEs to select its managers of overseas project is an English test paper.

“Top-tier leaders are essential to delivering business results. SHL’s manager selection solution includes measurement of multiple competencies (coaching, decision-making), team leadership capabilities, aligning people with strategy to drive business outcomes and pinpoint high-potential leadership talent,” said Fu.

Chinese corporate leadership lacks enough adaptability to address changing international situations, enough management ability to avoid market risks and an international view to meet challenges that arise from globalized projects, said Lin.

Localization efforts

SHL delivers more than 25 million assessments annually in more than 30 languages.Even so, the biggest problem for Fu in China is still making people aware of what talent measurement is.

“The majority of my job is to tell Chinese employers what talent measurement is and how effective it is while approaching local enterprises,” said Fu.

In fl uenced by their international business partners, Sino-foreign joint ventures are the most possible users of talent measurement in China. FAW-Volkswagen Automobile Co.Ltd., as the main automaker in China, has established its own talent measurement center.The company’s ability to retain talent can be attributed to its advanced talent management and measurement, said Yang.

But it is still hard for SOEs to accept talent measurement, Fu confessed.

“In China, most SOEs tend not to use it.Some of their employee recruitment was done behind closed doors,” Fu said.

Even some top companies in China boast about their high graduate recruitment.

“Quantity does not count in talent recruitment. It’s more about quality. Talent measurement not only helps employers make critical decision in recruitment, but also employee retention,” said Fu.

Although Chinese employers have a low acceptance of talent measurement, talent measurement providers like SHL are con fi dent of their commitment to the Chinese market.

To better serve its Chinese customers,SHL has spared no efforts in localization.

“We have translated our major products,including a leadership report, a motivation questionnaire, and ability tests into Chinese. It will become easier for Chinese users,” said Fu.

“Aside from translation, we need to make changes to the questions to better meet the Chinese entrepreneurship and culture. For example, one question can tell whether a person taking the test from the UK is modest or not,but it does not work when a similar test-taker is from China, so we need to change the question,” said Fu.