Per fo r m a n c e &

Ta l e n t M a n a g e m e n t

Performance & Talent Management

Trend Survey
2007

© 2007 Copyright BPM Forum and SuccessFactors.

Trend Survey 2007
Performance & Talent Management

INTRODUCTION
We’re in a talent crisis that is growing in intensity.
The global talent war is upon us. As organizations struggle to find, retain, motivate, and
develop their people adequately, they face an ever-dynamic talent landscape that is more
globally competitive, demanding, and expensive than ever before. Adding to the challenge
are growing numbers of aging retiree candidates, shifting business requirements, and
attractive competing job offers that keep executives and HR professionals up at night.
America’s largest 500 companies will lose 50 percent of their senior managers in the
next five years, according to RHR International. And a survey by the Society for Human
Resource Management said that 83 percent of workers were likely to search for a new job in
the coming couple of years.

But this aging of the talent base and restless workforce are just two of the forces impacting
today’s talent war. Fundamental and rapid changes in the world economy, coupled with
strong economic growth, are making it far more difficult for companies to adequately
address their need for talent and growth.

Talent Management Leaders are Making Inroads

There’s no doubt about it -- the struggle for top talent has gotten more intense this year. As
a result, more and more leading-edge companies are looking to identify, foster and develop
better peformance from within. And they’re making huge inroads towards winning the war.
The Success Stories section of the report will explore several specific examples of these
changes at work.

Survey on Trends, Challenges, Priorities, Successes

In order to study the issues affecting companies in their struggle to keep
their talent competitive, the Business Performance Management Forum and SuccessFactors
in cooperation with the Human Capital Institute conducted a survey of more than 725
performance and HR professionals. The 2007 Performance and Talent Management Trend
Survey is a year-end audit and assessment of talent management trends and trajectories for
2007. This benchmark study examines the critical issues impacting businesses in their effort
to remain competitive by acquiring, sustaining and managing talent across the enterprise.

The study clearly and compellingly demonstrates that the battle for talent is intensifying.
Executives and HR professionals from large and small companies alike overwhelmingly report
that increased competition for talent is leading to higher compensation packages, slower
time to new hires, strains on quality and customer service, and reduced business flexibility.

As a result of rising costs and time required to hire good new talent, organizations are
increasingly looking inward to train, develop, maintain and evolve their existing workforces.
In other words, talent management will be an even greater strategic imperative for business
in 2007.

© 2007 Copyright BPM Forum and SuccessFactors.


Trend Survey 2007
Performance & Talent Management

INTRODUCTION
We’re in a talent crisis that is growing in intensity.
One of the key drivers for talent management is the changing skills and competency
requirements of today’s business environment. Growing technical demands, new global
business models and growth opportunities, shifting market requirements, new management
practices – all these factors and more are intensifying the need to retrain and redeploy
executives and staff in order to keep pace with the competition. Bigger companies are
taking the lead in embracing formal talent management practices, processes and systems,
and smaller companies are further behind the curve. However, the great majority of our
survey respondents agree: talent management is now critical to better achieve business
goals, stay competitive, and be global.

But there is a long way to go. Even the most sophisticated organizations and industries are
just scratching the surface of the potential benefits of better attaining and retaining good
talent towards better outcomes. And small businesses are lagging even farther behind in
the quest to optimize their workforces. Deloitte estimates that an average company in the
U.S. spends nearly 50 times more to acquire a $100,000 professional than it spends on
training for that individual once employed.

Measurable Performance Gains – Better Financial Gains

All is not lost though – on the contrary. The benefits and implications of advanced
talent management systems and programs go beyond just producing more motivated or
better performing people. Recent research by SuccessFactors and human capital expert
Dr. Jac Fitz-enz shows that smarter human capital management leads to better financial
performance. The study showed that two-thirds of companies with stronger financial
performance manage all managers and others with their performance management
systems. And 63 percent of the high growth companies review performance more than
annually. Thus, the benefits and potential for talent management are real. The nearly
greenfield opportunities for organizations to embrace sound talent management solutions,
methodologies, and strategies are huge. Those that do it right will ultimately win the war
for talent and the land grab for global business.

Top line findings of the 2007 Performance and Talent Management Trend Survey
Launched in November of 2006, The 2007 Performance and Talent Management Trend Survey
includes online responses from 726 HR and performance professionals primarily in North
America along with perspectives from interviews of a half dozen representative corporate
executives, talent management experts, and organizational performance authorities on the
concerns, priorities, drivers and predictions in the talent management landscape.

© 2007 Copyright BPM Forum and SuccessFactors.


Trend Survey 2007
Performance & Talent Management

INTRODUCTION
We’re in a talent crisis that is growing in intensity.
Key Findings:
▶ Increasing competition for talent is universal.
98 percent of respondents say competition for talent is increasing in their industry, and
65 percent say it’s increasing to a “high” or “very high” degree.

▶ Talent costs this year are inflated.

Nearly 95 percent say the cost of acquiring and keeping talent rose in 2006, and two
thirds say to a somewhat or high degree. One executive interviewed pegged this cost
increase at 25 percent this year.

▶ Time to talent is growing, as are requirements for developing it in-house.

55 percent note higher salaries were required in their organization in 2006. And 68
percent identified the need to implement internal talent development in their companies.

▶ Talent management leaders are achieving significant benefits in a short period

of time.
Companies that have adopted advanced solutions for improving performance and talent
management have done so in as little as a month, and are reaping the benefits in the
form of dramatically reduced turnover, improved goal alignment, and better engaged
and peforming employees.

▶ Most companies, though, are way behind and playing talent management
catch-up.
Though internal talent development is seen as a critical step, only slightly over half
have formal plans in place to identify, grow and retain talent. Only about a quarter have
formal talent scorecards, and only 29 percent can link talent performance to business
value creation.

▶ Small business is behind the times.

More than 80 percent of smaller companies lack any kind of talent management
scorecard, and 60 percent lack formal plans to grow and retain talent.

▶ Shock is heard round the world.

Organizations point to an increasing influence of globalization and easing of business
boundaries as having a profound effect on talent consideration. 77 percent of all survey
participants say that global factors are making a difference in their talent management

“
and acquisition strategies.

Firms are realizing that money is only one factor. Having access to training and development, as well as creating an
appropriate culture, are key. Being more flexible and adjusting to peoples’ various schedules are essential. Managers
“
need to be increasingly aware of things like this and be prepared to make adjustments accordingly.

– Paul Tiffany, Global Consultant and Senior Lecturer in Management

- Haas School of Business at UC Berkeley, BPM Forum Advisory Board Member

© 2007 Copyright BPM Forum and SuccessFactors.


t management a strategic priority in your organization?

e Total
Trend Survey 2007
Performance & Talent Management

7
KEY FINDINGS
Talent Management is Top of Mind
18
Respondents overwhelmingly said that talent management is a strategic corporate focus. There is a
growing concern and emphasis upon developing, engaging, and harnessing the potential of the company
31 talent pool to drive further growth, success, and sustainability. Three quarters of participants said that
talent management is a high or very high priority, and over one quarter gave talent management the highest
priority rating on the scale. This growing concern over organizational talent is particularly critical as a new
01 tide of challenges and dynamics rolls on to the scene.

Fig.1 On a scale of 1 to 5, to what degree is talent management a strategic priority in your organization?

5 - Very high

27.7%
5 - Very high

4 - High
27.7%
4 - High 45.6% 3 - Neutral Very high

3 - Neutral 16.3% 2 - Slightly

2 - Slightly 9.2% 1 - Not at all 45.6%

High
1 - Not at all 1.2%

0 10 20 30 40 50

“ Talent management has become a greater

strategic priority in our organization. We’re
trying to look at people from all sides of the
equation, and assess bench strengths. Filling
“
key positions that go beyond the typical talent
pool is important to us.

- Tim Toterhi, Director, Global L&D Strategies and Solutions

at Quintiles Transnational

© 2007 Copyright BPM Forum and SuccessFactors. 

 Trend Survey 2007
Performance & Talent Management

5. To what degree are the critical competencies in your organization changing or evolving?
Response Percent Response Total
KEY FINDINGS 1
Critical Talent Competencies
Not at all
Changing
2.2% 16
Dramatically
2
Intelligence and Creativity of Little Value
Slightly 9.5% 68

Organizations across the 3board are realizing that there has

been a seismic shift in theSomewhat
skills and talents40.9% 294 to
required To what degree are the critical
run their business and remain competitive. This is adding Fig.2 competencies in your organization
4
significant challenges to companies
High degree in high 42.1%
growth mode
303 changing or evolving?
that must adapt to the changing talent landscape. 88
percent of respondents stated 5 that critical competencies
are changing or evolving Very highorganization.
in their degree 5.3%And38 nearly 2.2% 5.3% Very high degree

half of participants said this change is to a high or very high

Total Respondents 719 High degree
degree. When we look at the competencies that are most
(skipped this question) 7
valued, we see that management leadership (62 percent) is
9.5%
Somewhat
the highest valued, with technical knowledge (45 percent)
and people skills (43 percent) also important. Interesting to
note that creativity and intelligence ranked at the bottom of 42.1% Slightly

ypes of competencies are most

the value valued
scale at in your
16 percent andorganization?
19.6 percent (Select top three)
respectively. 40.9%
Not at all
Response Percent Response Total
Even sales effectiveness, traditionally a critical competency
Sales effectiveness 29.9% 217
for the health of a business, ranked under 30 percent.
Operational ability 41% 297
Management Theleadership
overarching message
62.2% is451
clear: these companies must
Very high degree High degree
employ
People skills better ways 43.2% 313 cultivate a new set of skills
to find and
required in today’s dynamic global environment. Somewhat Slightly Not at all
Organizational and
project management skills 41.1% 298
Creativity 16.1% 117
Market and Fig.3 What types of competencies are most valued in your organization?
industry knowledge 36.1% 262
Intelligence 19.7% 143 Management leadership
Technical knowledge 44.8%Management
325 leadership 62.2%
Other (please specify) 6.9% 50 Management
Technical knowledge
leadership 62.2%

Technical knowledge 44.8%
pondents 725
this question) 1 People skills
43.2%
People skills

Organizational & project management skills 41.1%
Technical
Operational
ability 41.0% knowledge 44.8%
Organizational and project management
Market industry knowledge 36.1%
Sales effectiveness 29.9% PeopleOperational
skills ability
Morale 19.7% 43.2%
Intelligence 16.1% Market and industry knowledge
Creativity 6.9%
Other
Sales efectiveness

0 10 20 30 40 50 60 70 80
Intelligence

© 2007 Copyright BPM Forum and SuccessFactors. 

Creativity

Other
 Trend Survey 2007
Performance & Talent Management

KEY FINDINGS
Talent War Intensifying
Companies See Need to Find, Develop, Engage, Measure, Keep Strong Staff in 2007
Poll participants cited a wide range of talent management hurdles on the horizon for the new year. Top
are the top talent management challenges you face for 2007? (Select up to three)
among them was the need to develop internal talent (63 percent), followed closely by talent retention and
Response Percent Response Total
turnover (60 percent) and talent acquisition (49 percent). Employee engagement and performance evaluation
Talent retention and turnover 60% 435
ranked highly as well, underscoring the need to measure the internal workforce and keep them connected.
Talent acquisition 49.4%dialogs
This is consistent with executive 358 and other survey data that point to an exacerbated struggle to find
Talent development
new employees and managers 63.3% 459 with a need to better develop existing workforces. Apparently, a
combined
Morale growing and more global work 21.7% 157
environment is creating more opportunities for exiting talent while at the
Employee engagement
same time driving a need to41.2%nurture 299
talent from within.
Productivity 17.5% 127
Compensation 19.6% 142
Performance Fig.4
evaluationWhat are the top 27.7%
talent201
management challenges you face for 2007?
Identifying/integrating
talent as a result of merger 7.3% 53 Talent development
Other (please specify) 2.3% 17
pondents 725 Talent development
63.3%
Talent
Talent
63.3%
retention and turnover
Talent retention
and turnover 60.0% development
acquisition
Talent 49.4%
Talent
Talent acquisition
Employee engagement 41.2% retention and 60.0%
evaluation
Performance 27.7% turnover
Employee engagement
Morale 21.7% Talent
acquisition 49.4%
Compensation 19.6%
Performance evaluation
Productivity 17.5%
Employee 41.2%
Identifying/integrating talent as a result of merger 7.3% engagement
Morale
Other 2.3%
Performance
Compensation27.7%
evaluation
0 10 20 30 40 50 60 70 80
Productivity

“
Identifying/integrating talent as a result o
We know there is a war for talent going on right now. The demographics we’re
faced with, that everybody’s dealing with as well, are driving a need for the
Other (please specify)
right talent management processes and leadership talent in place when certain
“
individuals retire.

- Kevin Tarrant, Vice President of Global Organizational Effectiveness at Arrow Electronics

© 2007 Copyright BPM Forum and SuccessFactors. 

 Trend Survey 2007
Performance & Talent Management

n for talent increasing in your industry?

t Response Total

1.8% 13
KEY FINDINGS
rcent
Talent Battle Takes Its Toll on Corporate America
itical competencies in your organization changing orSignificantly
Response Total
evolving? 21.9% 158

6.5% 47 Somewhat 52.9% 381

Nearly everybody (98 percent) notes that competition for talent is heating up to some degree. And 65
2.2% 16 Slightlyat a high or very
19.4%high
140 level. This talent struggle is having a marked impact
percent say that it’s increasing
27% 194
on the number of organizations that need to pay higher salaries (55 percent), search longer for staff (78%),
Not at all 5% 36
9.5% 68 and implement better internal talent development (68 percent). Many say that they need to settle for inferior
46.6% 335 employees, less flexible business
Decreasedmodels, and 0.7%poor
5 customer satisfaction. 95 percent say the cost of
acquiring and keeping talent has risen this year. And there is no sign of relief in the coming year.
40.9% 294
18.1% 130 (skipped this question) 6
To what degree is competition for talent How much has the cost of acquiring and
42.1% 303 Fig.5 increasing in your industry? Fig.6 keeping talent changed in the last year?

6.5% 1.8% 5.0% 0.7%

Very high degree Significa
gree 5.3% 38
Very high degree
0. How is increased competition for talent impacting your business? (Select Significantly
all that apply) Somewh
High degree
7 High degree Response Total
Response Percent Somewhat
18.1% 21.9%
Takes longer to
Somewhat Somewhat
Slightly 19.4%
Slighly

find talent Slightly 77.5%27.0%

554 Not at all Slightly Not at all

Not at all Decreased

Increasing salaries 54.8% 392 46.6% Not at all 52.9% Decrease

Increasing need
for recruitment
services 32.2% 230

Fig.7
Settling How is increased competition for talent impacting your business?
for lower
quality talent 18.9% 135
Takes longer to find talent

Slowing growth
8.8% 63Takes longer to find talent 77.5%
Takes longer
Increasing the need for internal tal
to find talent 77.5%

Increasing the need for internal talent development 67.8%
Increasing the need

Increasing salaries 54.8%
for internal talent Increasing salaries

Increasing need for recruitment services 32.2% Increasing
development 67.8% 485 the need for

Creating competitive adv due to better talent mgmt practices 21.0% talent 67.8%
internalIncreasing need for recruitment se
Limiting business Limiting business flexibility and expansion 19.9% development
flexibility and Sales effectiveness 18.9% Increasing
Creating competitive advantage d
expansion 19.9% 142 Intelligence 11.2% salaries 54.8%
Creativity 8.8%
Negatively affecting Limiting business flexibility and ex
customer satisfaction 11.2% 80 Other 2.8%
Settling for lower quiality talent
Creating competitive 0 10 20 30 40 50 60 70 80
advantage due to better Negatively affecting customer sati
talent management
practices
© 2007 Copyright BPM21% 150
Forum and SuccessFactors. 
Slowing growth

Other (please specify) 2.8% 20

otal Respondents 715 Other (please specify)
 Trend Survey 2007
Performance & Talent Management

KEY FINDINGS
r company's need for new talent acquisition in 2007? (Select up to three)
nse Percent
yee departures
Rapid Corporate
Response Total Growth and Change Driving Talent Acquisition Needs
hot job market 29.1% 211
Surprisingly, traditional reasons for acquiring talent have succumbed to a new set of drivers. Things like
company growth (50 percent), evolving internal cultures (40 percent) and changing market demands (33
yal, more percent) topped the list. Much less prominent were things like employee retirement (24 percent), lagging
e-oriented workers 19.6%
loyalty (19.6 142 and poor employee performance (17 percent).
percent),

yee retirement 23.8% 172

Fig.8
equirements due to What is driving your company’s need for new talent acquisition in 2007?
aphic expansion 17.3% 125
Company growth

usiness lines 17.7% 128 Company growth 50.3%

Evolving company
culture 39.6% Company
Evolving internal culture
growth 50.3%
any growth 50.3% 364
Changing market demands 32.5%
Employee departures due to hot job market 29.1% Evolving
Changing market demands
performing company
Employee retirement
23.8% culture 39.6%
yees 17.1% 124
Less loyal, more change-oriented workers 19.6% Employee departures due to hot
Changing
New business lines 17.7%
ng internal culture 39.6% 287 market
New requirements due to geographic expansion
1 17.3% demands 32.5%
Employee retirement
Underperforming employees 17.1%
ing market demands 32.5% 235
Other 6.9% Less loyal, more change-oriented

plicable 2.6% 19 Not applicable

2.6%
New business lines
(please specify) 6.9% 50 0 10 20 30 40 50 60
New requirements due to geogra
724
n) 2

“
Underperforming employee

We need to expand our “ Other (please specify)

talent pools, and we know
our competitors will as Not applicable
well at accelerated paces.

- Kevin Tarrant, Vice President of

Global Organizational Effectiveness
at Arrow Electronics

© 2007 Copyright BPM Forum and SuccessFactors. 

pacting how you acquire and manage talent?
Total Trend Survey 2007
Performance & Talent Management

2 KEY FINDINGS
Workforces Gone Global
1
Big Business Feels the Effects
The rapid globalization of business and the expanding role of an international workforce are having a
6 significant impact on how companies acquire and manage talent. 77 percent of all survey participants say
that global factors are making a difference in their talent management and acquisition strategies, while over
a quarter say that it’s to a high or very high degree. As organizations look for new people and foster new skill
sets, they need to take into account the challenges and opportunities posed by a more global outlook.

Fig.9 On a scale of 1 to 5, how is globalization impacting how you acquire and manage talent?

Very high degree

All Companies
6.6%
pacting how you acquire and manage talent? (small buz)

Total
77% High degree

5 - Very high degree

22.9% Somewhat
3. On a scale of 1 to 5, how is globalization impacting how you acquire and manage talent? 4 - High degree
7 20.2% Global factors are
3 - Somewhat
Response Percent Response Total making a difference in
1 their Slightly
talent mgmt and 2 - Slightly
1 Not at all 16.1% 59 acquisition strategies
21.1% 29.2% Not at all
1 - Not at all
2
6 Slightly 21.3% 78

3
8 Somewhat 29.2% 107
When we look at small businesses, however, the story is different. Nearly a third of these companies said
4 globalization does not have any impact on securing and nurturing talent. And only 47 percent of small
High degree said that
businesses 22.9% 84
globalization made at least somewhat of a difference compared to over two thirds of
large companies.
5
Very high degree 10.6% 39

Total RespondentsFig.10
367 Small Businesses Fig.11
Very high degree
Large Businesses
Very high degree
(filtered out) 355 1.7%
(skipped this question) 4
High degree High degree5 - Very high degree

16.0% 16.1% 10.6% 4 - High degree

Somewhat Somewhat
32.6% 3 - Somewhat
22.9% 2 - Slightly
Slightly
21.3% Slightly

26.3% 1 - Not at all

Not at all Not at all
23.4% 29.2%

© 2007 Copyright BPM Forum and SuccessFactors. 10

 Trend Survey 2007
Performance & Talent Management

KEY FINDINGS
Most Don’t Even Measure, Much Less Manage, Talent Effectively
Not sure Despite the
5.2%
need9 for better talent development, acquisition strategies and talent management processes, two out
of three organizations don’t have a talent scorecard in place. Over 70 percent either don’t or aren’t sure how they
measure staff performance and productivity in terms of business value creation. For small business, the situation
is even worse, where 81 percent lack a talent management scorecard. These figures paint a frightening picture
of companies ill-prepared to manage a more complex talent market. The old phrase “What gets measured gets
done” is appropriate here, as effective talent optimization relies heavily on the ability to measure success.

Is there a formal talent scorecard in place at your organization?

Fig.12 All Companies Fig.13 Small Businesses

Yes
8.4%
5.2% Yes

No
No

13.8%
25.7% Not sure Not sure
Yes
No
Not sure
81.0%
65.8%

Does your organization know how to measure

Fig.14 talent performance and productivity in terms
of business value creation?
Yes

No

22.6% 28.6%
Not sure
Yes
No
Not sure
48.7%

© 2007 Copyright BPM Forum and SuccessFactors.

11
 Trend Survey 2007
Performance & Talent Management

KEY FINDINGS
tify, grow and retain talent?

Best Plans Aren’t Laid Yet

6. Does your company have formal plans in place to identify, grow and retain talent? (filtered small bus)
Response Percent Response Total
Small
Yes
No
Business Exposed
40.9% 72
50.6% 89
Not
Not only
sure do most companies
8.5% 15 not have talent management metrics in place, but a significant number (43
percent) don’t have formal plans in place to identify, grow, and retain talent. For small businesses, that ratio
Total Respondents
jumps to176nearly 60 percent – a shocking number when you consider that nearly all of the small businesses
(filtered out) 545
polled are in service-related industries where people are critical to the success of the business.
(skipped this question) 5

Does your company have formal plans in place to identify, grow and retain talent?

Fig.15 All Companies Fig.16 Small Businesses

Yes
7.1% Yes
8.5%
No
No

Not sure
Yes
Not sure
No
40.9%
36.2% 56.7% Not sure
50.6%

“ Most organizations are terribly unsophisticated in managing and measuring

talent against business needs. Multi-billion dollar firms know this is an issue
they need to deal with. The assessment of human beings managing people
was never really seen as important, but now it is.
“
– Paul Tiffany, Global Consultant and Senior Lecturer in Management ­­- Haas School of Business at UC Berkeley, BPM
Forum Advisory Board Member

© 2007 Copyright BPM Forum and SuccessFactors.

12
Trend Survey 2007
Performance & Talent Management

EXCERPTS FROM THE EXPERTS

As an additional method of research, the BPM

Forum and SuccessFactors conducted a series
of executive dialogs with human resources
and talent and organizational development
management executives to obtain additional
perspectives on top talent management issues.
Through a set of consistent questions, we’ve
gathered valuable additional insights regarding
the priorities, challenges, and progress in
talent acquisition and management. The

!
results from the executive dialogs revealed
that due to an intensifying competition for
talent, there are huge benefits to implementing
effective performance and talent management
solutions. In particular, executives pointed to
the following common trends.

© 2007 Copyright BPM Forum and SuccessFactors.

13
Trend Survey 2007
Performance & Talent Management

EXCERPTS FROM THE EXPERTS

1 Globalization is clearly an issue that is changing the talent

management landscape

“ Now that customers and suppliers

are demanding more global
services and distribution of
products, we need people with the
right set of skills and capabilities
to be able to manage a global
organization.
The current workforce has been
fairly narrowly trained in the
past. Project managers now
have to learn to work in a global
environment because finding
talent is now being driven by
globalization.

- Kevin Tarrant, Vice President of Global

Organizational Effectiveness at
Arrow Electronics
- Paul Tiffany, Global Consultant and Senior
Lecturer in Management­­ - Haas School
of Business at UC Berkeley, BPM Forum
Advisory Board Member
“
2 The war for talent has intensified dramatically over the last year

“ There is definitely an
increase in competition for
talent. The impact is felt
across the board at the
We know there is a war for talent going on
right now. The demographics we’re faced
with, that everybody’s dealing with as well,
are having the right talent management
executive level. processes and leadership talent in place
when certain individuals retire.
- Laura Polas, Vice President of
Marketing at the Human Capital
- Kevin Tarrant, Vice President of Global
Institute (HCI)
Organizational Effectiveness at
Arrow Electronics
“
© 2007 Copyright BPM Forum and SuccessFactors.
14
Trend Survey 2007
Performance & Talent Management

EXCERPTS FROM THE EXPERTS

3
Talent management measurement and scorecarding is critical
and on the rise

“ For talent management, there are some

tools we use. We have a balanced
scorecard in place for the company. We
work on a number of factors such as
Yes, we currently have
a talent management
scorecard, what we
call our organizational
work history, prior relevant experience, dashboard that measures
education, certification, retention risk, and six areas: growth, financials,
mobility. We also have strategic priorities, community benefits, people,
about 4-5 that everone in the organization quality, and service.We’re
is aware of. It works at the higher levels always looking for new
and then gets filtered down to everyone marketplaces for our hospital
else. We try and make sure that every to compete in and adding
employee is aware of the strategic goals new services and offerings.
of the company. Our goal is to drive - Thomas Brockbank,
results and have impact.

- Barbara Arneklev, Director of Human Resources

at Pacific Sunwear
HRIS Director, Sutter Health “
“ We have a global performance management and competency model in place to
measure both performance and skill competencies. We have regular talent reviews
and processes in place where we can identify high performance people for certain
jobs. We have developments in place now for executives and above focused on
their growth. And we also have stay interviews where in the past our HR folks would
conduct sessions with all of our directors and vice presidents and discuss issues
such as retention, growth, etc. We just developed a scorecard this week and will
be making recommendations to the executive committee. We’re looking at turnover,
especially at the level of director and above, as well as turnover for individuals who are
high retention risks.

- Kevin Tarrant, Vice President of Global Organizational Effectiveness at Arrow Electronics

“
© 2007 Copyright BPM Forum and SuccessFactors.
15
Trend Survey 2007
Performance & Talent Management

EXCERPTS FROM THE EXPERTS

4 Goal alignment is a key benefit that companies are realizing with

improved talent management

“ Our talent and organization’s

needs are aligned pretty well.
We try to focus on a few key
areas, look at key customer-
facing segments, as well as
assess what our employees
do and how well they perform.
We just had a conversation about
aligning talent and organizational goals
this week. We’re taking action now to
identify the gaps in our organization
we need to fill, as well as looking at the
future state of where our organization
needs to go and insuring we have the

- Barbara Arneklev, Director of

Human Resources at Pacific Sunwear
right talent in place to get us there.

- Kevin Tarrant, Vice President of Global

Organizational Effectiveness at Arrow Electronics
“
5
Effective on-boarding and succession planning are creating
a competitive edge

“ Our customers are getting

more strategic and metric
based in their on boarding
efforts. They’re doing
their best to develop
leaders, better handle
cross cultural boundaries,
and better assess and
identify talent.
Leadership standards are essential, which
help us to create career maps as well. It
basically helps a person get from point a to
point b. The data and information we have
on people, combined with SuccessFactors’
use of it in the Performance Succession
Development Process (PSDP), is very
helpful. Letting someone know how
they’ve developed along the way is

- Laura Polas, Vice President

of Marketing at the Human
CapitalInstitute (HCI)
essential too.

- Thomas Brockbank, HRIS Director,

Sutter Health
“
© 2007 Copyright BPM Forum and SuccessFactors.
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EXCERPTS FROM THE EXPERTS

6 The costs for acquiring talent are rising dramatically

“ The cost of acquiring

and keeping talent
is growing. We’re
probably at a 20-25
The cost of acquiring talent is increasing...
Companies need to get more creative. People
aren’t as willing to move for ‘senior roles’
anymore. The whole relocation idea doesn’t
percent increase sit well with a lot of folks when it comes to
since last year. We’ve moving their families, but they still want to
already had to revamp feel challenged and have career advancement
our salary grades opportunities. Companies need to be a lot more
twice this year. flexible about where people are based and
how best to utilize certain skill sets. These are
- Barbara Arneklev,
Director of Human
Resources at Pacific
Sunwear
challenges we’re faced with now.

- Kevin Tarrant, Vice President of Global Organizational

Effectiveness at Arrow Electronics
“
7
Challenges in finding good staff are leading to additional emphasis
on internal development

“ We are tying our systems

[compensation, learning management,
performance management] together
to make them more effective. We
We have succession planning
annually to identify high
potentials at that time. We’re
also developing development
are also setting clear performance plans for these folks. We
goals for our employees and helping also make sure everything is
them to understand how their actions cross-functional so that all of
affect the big picture. Having the right the executives are informed.
tools in place to have those kinds of And we’re currently working on
conversations is critical.

- Tim Toterhi, Director of Global L&D Strategies

and Solutions, Quintiles Transnational
retention strategies now.

- Barbara Arneklev, Director of Human

Resources at Pacific Sunwear
“
© 2007 Copyright BPM Forum and SuccessFactors.
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CONCLUSION
A clear and compelling picture emerges from The 2007 Performance and Talent
Management Trend Survey. Without a doubt, the global war for talent is intensifying, and
those companies that are effectively competing by acquiring and developing top talent
ultimately will be the winners.

Competition for Talent Growing Even More Rapidly

In 2006, companies represented in our survey overwhelmingly experienced increased
competition and difficulty in their quest for talent. As a result, compensation for top talent
rose. It took more time to fill vacancies and new positions, and more often those positions
were ultimately filled with less qualified personnel. The talent gap impacted business
flexibility, expansion and growth. And our respondents expect more of the same in 2007.
A common tendency may be to blame this talent shortage on a strong global economy.
Indeed, business growth was a primary factor – both raising internal demand for new
people and increasing employee departures due to a hot job market. But more fundamental
changes in the economy and business landscape were also major contributors. Evolving
corporate cultures and changing market demands were both cited frequently as major
causes of the need for new talent. International business models and growth also played
a major role. Some 56 percent of respondents said globalization was impacting how their
companies managed and acquired talent.

Progressive Companies Getting Ahead in the Global Game

But wherever there is a challenge, there is also an opportunity. Better companies will
further distance themselves from the pack by out-performing the competition in attracting,
retaining and developing their talent. Indeed, 21 percent of our respondents said they
viewed the increase of competition for talent as an opportunity to create competitive
advantage through better talent management practices. As mentioned earlier in this
report, that belief is supported by other recent research by SuccessFactors and human
capital expert Dr. Jac Fitz-enz which reveals that smarter human capital management leads
to better financial performance.

© 2007 Copyright BPM Forum and SuccessFactors.

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Trend Survey 2007
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CONCLUSION
Organizations Putting More Emphasis on Effective Talent Management,
And it’s Paying Off
It’s no wonder that two-thirds of the executives participating in this study said their
organizations consider talent management to be a high or very high strategic priority.
Innovative organizations—in particular large companies—are catching on to the
talent management wave. With more advanced and sophisticated technology, tools
and processes at their disposal and the nagging need to improve talent management
practices, these leaders will not remain idle. Those that have already engaged in strategic
talent management are reaping the rewards even in the early going. With growth and
globalization expected to continue in 2007, these pioneers will lead the way to a more
productive overall international workforce and better ways to seek and sustain the available
talent in the marketplace.

“ It’s all about people and talent in our business. We’re known for our world class training and
are making use of various blended learning technologies to make it even more effective.
We provide a variety of programs to ensure our employees are ramped up quickly and work
to ensure they have the skills, resources and tools required to provide excellent customer
service. Leveraging the right balance of technology and face-to-face interaction allows us to
“
provide our employees with the skills they need today and the development opportunities
tomorrow’s challenges demand.

- Tim Toterhi, Director of Global L&D Strategies and Solutions, Quintiles Transnational

© 2007 Copyright BPM Forum and SuccessFactors.

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success stories
Winning the War for Talent

$ A number of organizations are leading

the way in implementing successful talent
management solutions and processes that
are making a huge difference in areas such
as goal alignment, succession planning,
pay for performance, employee acquisition,
retention, morale, and engagement, and
staff training and development.

Below is a snapshot of a few companies

that have made the appropriate strategic
moves to get an edge in the talent war. By
implementing organization-wide change
in a short period of time, these companies
have taken a proactive approach and seen
remarkable results.

All of these companies have recently

implemented solutions from the
Performance and Talent Management
Suite from SuccessFactors, the leader
in on-demand performance and talent
management solutions.

© 2007 Copyright BPM Forum and SuccessFactors.

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Trend Survey 2007
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success stories
Quintiles Transnational

Quintiles Transnational
Industry: Pharmaceutical services
1 Number of Employees: 17,000
Revenue: $2.3 billion
www.quintiles.com

Quintiles Transnational is powering the next generation of healthcare by providing a broad range of
professional services in drug development, information, financial partnering and commercialization
for the pharmaceutical and biotechnology industries. With 16,000 employees and offices in more than 50
countries, it is focused on providing customer-centric solutions that are the gold standard of the industry.

Business Drivers Business Results / Goals

Quintiles looked at implementing talent
management solutions to:
▶ Help its sales and support force to
improve service management for its
customers by aligning customer service
goals across the entire company
▶ Automate its performance review process
with an objective, effective system
▶ Increase employee retention and
improve employee satisfaction
▶ Refocus its employee training and
development program away from just
attending courses and seminars to
driving improved performance
Quintiles was able to implement a new solution in two
and a half months to automate its performance review
system, increasing employee efficiency and reducing
turnover. Quintiles was also able to better align its
employees’ goals:
▶ In about a year, Quintiles increased its performance
review completion rate from a low of 40 percent to
97 percent compliance
▶ The company dramatically reduced the rate of
attrition among its employees, reducing turnover
from 23 percent to 16 percent
▶ Customer loyalty in four crucial areas, including
timeliness, accuracy and willingness to refer
Quintiles, all increased after implementing talent
management solutions

“ The simple change of using SuccessFactors’ Performance and Talent Management Suite is helping Quintiles transform
our organization. We’ve made devotion to customer satisfaction a core, measurable part of the company and leveraged
the Performance and Talent Management Suite as a major tool in helping us do that by aligning all of our employees
on achieving similar goals. We have reduced employee turnover throughout our organization and simplified our
employee review process, freeing up a significant portion of our managements time to concentrate on better serving
our customers.
“
- Mike Mortimor, Senior Vice President of Human Resources

© 2007 Copyright BPM Forum and SuccessFactors.

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success stories
Kimberly-Clark
“ Our goal is to improve the company’s
Kimberly-Clark
Industry: Healthcare
2 Number of Employees: 57,000
Revenue: US $16 billion
www.kimberly-clark.com
overall effectiveness so that every
business, every function, every region
and every person has maximum
impact. It’s one of the key focus areas
of our global business plan to drive
the company and get us to our goal to
be the top global leader in the health
and personal hygiene market. We rely
“
on SuccessFactors as the technology
backbone and fuel for our performance
and talent management process.
- Liz Gottung, Senior Vice President and Chief
Human Resources Officer

As the manufacturer of personal care and hygiene brands such as Huggies, Kotex and Kleenex, Kimberly-
Clark’s products are sold in more than 150 countries, reaching one billion people every day. The
company posted sales of more than $16 billion in 2005, a record in its 134-year history.

Business Drivers Business Results / Goals

Kimberly-Clark decided to adopt a
Workforce Performance Management
process and system to:
▶ Develop a new corporate culture
based on pay-for-performance
▶ Modernize its 20-year-old
performance management process
that had become decentralized,
outmoded and cumbersome
▶ Develop an effective
compensation plan to establishes
a direct link between performance
and compensation
▶ Establish clear goals across the
company and provide clarity
and alignment of objectives with
overall business goals
With a new talent management solution in place, Kimberly-
Clark gained a clear picture of its talent and performance
across its organization and was able to initiate a pay-for-
performance culture in the company:
▶ The peformance review system has been automated
across the company
▶ Employee compensation is now better linked to
performance
▶ The system helps the company to align goals across the
organization
▶ More than 20,000 workers in 65 countries in 16
different languages use the company’s new talent and
performance management system
▶ A new leadership competency model was put into place
to ensure that the cultural changes were clear, consistent
and aligned with the new business model

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success stories
Proxicom

Proxicom
Industry: Technology
3 Number of Employees: 1,000+
www.proxicom.com

Proxicom is a leading interactive services firm building enterprise-level Web sites for clients in the
automotive, financial services and healthcare industries. It provides front-end and back-end Internet
application, architecture, design and development with service-oriented architecture and Web services.

Business Drivers Business Results/Goals

Proxicom decided to adopt a Workforce
Performance Management process and
system to:
▶ Get a clear picture of the skills
and competencies of its workforce
and be able to rapidly identify
underperforming employees
With a new talent management solution in place,
Proxicom gained a clear picture of its talent and
performance, aligned goals and expectations across
the company, and established a clear, efficient
compensation and review system:
▶ Companywide implementation across its eight offices
was easy and took only 4 weeks

▶ Streamline goals and provide clear ▶ The company streamlined its performance review
objectives for the matrix-based and process, reducing the time spent on reviews by 33
geographically dispersed company percent, saving about $60,000 in the first year of use

▶ Modernize its performance review ▶ Under-performing workers were identified and

system, which consisted of an thinned out
ineffective, slow process of Word
▶ Eight offices around the country were better
documents being e-mailed back and
integrated by creating a common corporate culture
forth between employees

“
“
SuccessFactors gave us valuable insight into our workforce that we never fully had before and we were able to completely
reshape the performance and culture of our workforce, streamline our business and get rid of inconsistencies we had
between our business plan and the way we do business.

© 2007 Copyright BPM Forum and SuccessFactors.

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Trend Survey 2007
Performance & Talent Management

APPENDIX
Talent Management Maturity and Efficiencies
As the 2007 Performance and Talent Management Trend Survey confirms, organizations
overall have a long way to go in order to match talent effectiveness with the challenges and
requirements ahead.

The SuccessFactors Maturity Model©

In order to further outline the various stages companies find themselves in and some of the
best practices that are acheivable, the following is a brief discussion of the SuccessFactors
Maturity Model©.

Using SuccessFactors software can improve efficiency as well as the talent management
culture within organizations. We use a standardized framework to measure improvements.
This tool the Maturity Model© serves as a vehicle and a catalyst to put focus on important
internal parameters that can be managed in a SuccessFactors deployment.

The SuccessFactors Mature Model© enables the business effectiveness via time savings it
delivers through the efficiency gains enabled by technology:

▶ Visibility
What if you could see what everyone’s goals are and get a solid
understanding of who is performing and who is not?

▶ Scalability
What if you could use this not only in one division but in all divisions, or
even when you merge with another company?

▶ Resilience
What if all data on performance and people is pulled from drawers and
dispersed hard drives, and placed in a single place [or: on a single platform?]
that stays when your people move?

▶ Consistency
What if you could create a consistent performance culture that transcends
language, geographical and cultural differences?

▶ Predictability
What if you could see early warnings on your Key Performance Indicators
(KPIs)? Are you driving with your eyes on your rearview mirror? You need to
see issues early to address them.

Increased efficiency means more time to focus on strategic business impact.

© 2007 Copyright BPM Forum and SuccessFactors.

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Trend Survey 2007
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APPENDIX
Technology does not solve business issues; it enables change. Sticky change is culture.
Culture can only change with strong leadership and clear visibility and accountability for

Efficiency is the Key to Drive Effectiveness

Effectiveness Best
• Accountability Practice
• Strategic issues
• 1:1 conversations
Culture and Leadership

s
es
oc

• Scalability
Resilience Efficiency
Pr

•
ss

• Consistency
ne

• Visibility
si

• Predictability
Bu

Technology

the individuals that create the culture. When best practice business processes are built into
software, you have the unique opportunity to leverage the software to drive change. In
other words, smart technology can facilitate change.

The SuccessFactors Maturity Model©

- Perception of Talent and - Great processes in place

Performance Mgmt value to - Consistent and high user
the business is great adoption
- Inconsistent and manual - Majority of time spent on
processes strategic talent management
Culture and Leadership

- Usage and time spent on

developing talent is high
Mature & Incapable Leaders

- Inconsistent and manual - Great processes in place

processes - Low adoption of usage
- Value perception from business - Low leverage to strategic
is low benefits from efficiency gain
- Little time spent on potential
developing talent - Value perception from business
is low
Leggards Process Savvy
Technology

© 2007 Copyright BPM Forum and SuccessFactors.

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Trend Survey 2007
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APPENDIX

To test the model, we worked with select customers that have used SuccessFactors’
software for an average of 2 years and 3 months. Our research found that, on average,
an improvement from 30 to 60 as measured by the SuccessFactors Efficiency Index© was
a fairly consistent shift. Further, on average we found that the culture and the attitude
towards talent management as measured by the SuccessFactors Talent Management Index©
also improved, but to a much lesser degree: it grew from 42 to 48, representing a 15
percent improvement.

Though we cannot claim causation of these improvements or the financial impact, on

average we have seen an increase of 80 percent in net income per employee in parallel with
internal improvements made.

SuccessFactors Research offers consulting services to assess your organization and to

work with you to define a prioritized and timed change agenda to drive and manage the
value from your change. This Maturity Assessment offers you the opportunity to learn from
others about what potential areas you should focus on to drive a successful deployment of
the Performance & Talent Management process within your organization.

SuccessFactors Efficiency Index© is a weighted index that measures efficiency gains from
using SuccessFactors within an organization. It consists of seven distinct questions.

SuccessFactors Talent Management Index© is a weighted index that consists of 10 distinct

questions. The index includes questions such as:

▶ Is time allocated for setting goals and managing the performance of

individual employees?

▶ Are managers accountable for developing the talent that they are
responsible for managing?

To learn more please contact us at research@successfactors.com

© 2007 Copyright BPM Forum and SuccessFactors.

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Trend Survey 2007
Performance & Talent Management

RESEARCH PARTNERS

SuccessFactors delivers performance and talent excellence, on demand. The company’s

software promotes visibility, accountability, and results, enabling organizations to eliminate
the politics that destroy motivation and impede performance. Fueled by the industry’s
highest renewal rate, SuccessFactors has grown from 300 customers and 1 million users at
the end of 2005 to close to 1,000 customers and close to 2 million users in 139 countries,
across 40 industries, in 18 languages—all while becoming easier to use everyday. The
company has almost doubled the employee base, currently employing close to 400 talented
people in 2006. Carefully designed and executed internal growth has allowed the company
to provide the same caliber of absolute excellence in execution for customers that catapulted
SuccessFactors into the product, customer and revenue leader in the performance an talent
management market space. Customers include MasterCard Worldwide, British Telecom,
Textron, Salesforce.com, Cooper Tire & Rubber Company, Volkswagen of North America,
Reebok, Pep Boys, Lancaster General Hospital and Grant Thornton. The company continues
to execute on a level of global excellence through the provision of an industry leading,
scalable and secure global hosting operation. Founded in 2001, SuccessFactors has 15
worldwide offices collaborating for strong local support of customers. For more information,
visit http://www.successfactors.com or call +1 800 809-9920.

TM

The BPM Forum helps advance the understanding of business performance management
techniques, technologies, and process in global enterprises. The Forum brings together
influential business line managers and senior executives overseeing enterprise finance,
operations, and technology functions. Nearly 1,000 companies are currently represented
as members of the BPM Forum, accounting for well over $500 billion in aggregated annual
revenues. For more information visit http://www.bpmforum.org.

The Human Capital Institute is a think tank, educator, and professional association dedicated
to the advancement of talent management practices with individuals and organizations.
HCI serves as a catalyst for innovative thinking in integrated talent strategy, acquisition,
development, engagement, management, and measurement. Through research and
collaboration, HCI programs collect original, creative ideas from a field of the brightest
thought leaders in talent management. Those ideas are then transformed into measurable,
real-world strategies that help its members attract and retain high-performing people, build
a diverse, inclusive workplace, and leverage individual and team performance throughout
the enterprise. HCI members represent a broad coalition of educators, talent managers and
executives. For more information, please visit: http://www.humancapitalinstitute.org.

© 2007 Copyright BPM Forum and SuccessFactors.

27