Talent management –Retaining and managing technical specialists in a technical career EMELIE BAEDECKE YLLNER ALEXANDRA BRUNILA Master of Science Thesis Stockholm, Sweden 2013 Talent management – Retaining and managing technical specialists in a technical career Emelie Baedecke Yllner Alexandra Brunila Master of Science Thesis ME200X 2013:31 KTH Industrial Engineering and Management Industrial Management SE-100 44 STOCKHOLM i ii Master of Science Thesis INDEK 2013:31 Talent management – Retaining and managing technical specialists in a technical career Emelie Baedecke Yllner Alexandra Brunila Approved Examiner Supervisor 2013-05-30 Kristina Nyström Martin Vendel Commissioner Contact person Anonymous Anonymous Abstract The purpose of this thesis is to investigate talent management and how companies should work with talent management in order to retain and manage technical specialists in a technical career. Talent management is found to be important for modern organizations because of the advent of the knowledge economy, new generations entering the workforce and the need for businesses to become more strategic and competitive, which implies new ways of managing human capital. Furthermore, talent management is motivated by the fact that it has been found to lead to higher corporate profits when it is connected to the corporate strategy. The research method in this thesis is qualitative, and based on a case study of an organization in Norway active in the oil and gas industry, where qualitative semi-structured interviews have been performed. Moreover, the findings are compared to a set of industrial companies located in Sweden, which are similar in size to the case company and have similar needs for technical competence. The analysis of the empirical material in conjunction with the literature leads to our suggestions that there is a need for connecting the HRM practices with the corporate strategy, that the career concept needs to be redefined, and that talent management needs to integrate HR practices. Furthermore, communities of practice are suggested as a tool for developing technical specialists and rewarding them in their work. To guide organizations in executing talent management, we propose a model based in the strategy of the firm. iii Acknowledgements We would like to thank our supervisor at KTH, Martin Vendel, Ph.D., for arranging this Master thesis project, and for his valuable input and support he has given us in completing this Master thesis. Furthermore, we would like to thank the director of HR and the HR partners at the company in the case study who helped us in finding interviewees and supported us during our visits to their company. We also thank our contact persons at the other companies who agreed to contribute to our study by letting us interview their colleagues. Moreover, we thank Håkan Svennerstål at Svennerstål & Partners for letting us attend the talent management seminar held at IFL Executive Education at Handelshögskolan in Stockholm, conducted by Charlotta Wikström. Finally, we thank all interviewees that participated in the study for their cooperation and their interesting reflections on the subject. iv Table of Contents 1 Introduction .......................................................................................................................................... 1 1.1 Background .................................................................................................................................... 3 1.2 Purpose and Research Question ................................................................................................... 3 1.3 Delimitations ................................................................................................................................. 4 1.4 Structure of the thesis ................................................................................................................... 4 2 Methodology ........................................................................................................................................ 5 2.1 Empirical material.......................................................................................................................... 5 2.1.1 Interviews ............................................................................................................................... 6 2.1.2 Informal conversations ........................................................................................................... 7 2.1.3 Company documents and other written material .................................................................. 7 2.2 Selection ........................................................................................................................................ 7 2.3 Processing the empirical material ................................................................................................. 7 2.4 Alternative methods ...................................................................................................................... 8 2.5 Ethical considerations ................................................................................................................... 8 2.6 Limitations of the method ............................................................................................................. 8 3 Review of the literature ...................................................................................................................... 11 3.1 What is talent? ............................................................................................................................ 11 3.2 Talent management .................................................................................................................... 11 3.2.1 Talent management in research .......................................................................................... 12 3.2.2 Talent management in practice ........................................................................................... 14 3.3 HR evolution: From professional to strategic partner ................................................................ 15 3.3.1 The new role of HR ............................................................................................................... 16 3.4 Strategy and talent management................................................................................................ 18 3.4.1 Attaining competitive advantage through talent management .......................................... 20 3.4.2 Identify strategic jobs ........................................................................................................... 21 3.5 Implementing a successful talent management ......................................................................... 22 3.5.1 The role of middle managers ............................................................................................... 23 3.5.2 Recruitment .......................................................................................................................... 24 3.5.3 Performance management .................................................................................................. 24 3.5.4 Career management/planning ............................................................................................. 27 3.5.5 Succession management/planning ...................................................................................... 28 3.5.6 Talent identification ............................................................................................................. 29 v 3.5.7 Talent development ............................................................................................................. 30 3.5.8 Incentives ............................................................................................................................. 33 3.5.9 How to kill talent .................................................................................................................. 33 3.5.10 Measuring the effects of talent management initiatives ................................................... 34 3.6 The new workforce ...................................................................................................................... 35 3.7 Core corporate values ................................................................................................................. 36 3.8 Critical discussion of the literature .............................................................................................. 37 3.9 Summary of the literature review ............................................................................................... 38 4 Empirical findings ............................................................................................................................... 41 4.1 Industry insights regarding talent management ......................................................................... 41 4.2 Case study .................................................................................................................................... 43 4.2.1 Case study background......................................................................................................... 43 4.2.2 Strategy ................................................................................................................................ 45 4.2.3 Conceptions of talents .........................................................................................................