Finding and retaining the right employees is a critical element for the success of each Multinational Enterprise (MNE). Over the last few years, the interest in the field of talent management has grown rapidly, as more and more academics, consultants and practitioners are starting to understand its impact on organisational sustainability and organisational prosperity (McDonnell, Hickey, & Gunnigle, 2011). Talent management can be broadly defined as “all organizational activities for the purpose of attracting, selecting, developing, and retaining the best employees in the most strategic roles (those roles necessary to achieve organizational strategic priorities) on a global scale” (Scullion, Collings, & Caligiuri, 2010, p. 106). At the center of talent management lies the presumption that “talent” must be identified, sustained, and allocated to important positions that are essential for the competitive advantage of the company (Boudreau & Ramstad, 2005). One of the major challenges for MNEs is to adequately identify high-potential and high-performing employees and to establish them in key positions within the MNE’s international structure (McDonnell, Hickey, & Gunnigle, 2011). Taking this into consideration, in the following work, we will focus primarily on the area of talent identification, starting with a differentiation between talent identification and talent development. Next, we will move on to an in-depth review of the existing literature on talent identification in recruiting and personnel selection. Consequently, we will briefly review the validity of the most implemented personnel selection tools. After that, we will assess the three tools currently used in your organisation. Finally, we will explore the future of talent identification and recruiting tools by taking into consideration the technological advancements in the last decade, and provide you with research-based recommendations and best-practices to increase the likelihood of finding the right employees for your organisation.
Talent Identification in Recruiting and Personnel Selection
Talent Identification vs. Talent Development
Talent management can be regarded as “a collection of typical human resource department practices...such as recruiting, selection, development and career and succession management” (Lewis & Heckman, 2006). From this definition follows that talent management can be divided into two separate categories: talent identification (i.e. the process of recruiting and selecting high potential and high performing individuals) and talent development (i.e. the process of developing and managing their talents). In terms of talent development, researchers are divided as to whether an organisation should allocate resources into further developing only exceptionally performing individuals, or whether it should do it for all individuals. Proponents of the former standpoint argue for a differentiated treatment of employees with talent, claiming that it is more economically beneficial for an organisation to only support its top employees, as they are the ones who realize the most gains in sales and profitability (Handfield-Jones, Michaels, & Axelrod, 2001). Pfeffer (2001) criticized this approach, arguing that it could lead to employee segmentation, feelings of inferiority and a fiercely competitive internal environment. Proponents of the latter standpoint advocate for an undifferentiated treatment of employees, whereby each employee receives the same amount of support and developmental opportunities. The objective of this approach is to maximize the “talent inherent in each person, one individual at a time” (Buckingham & Vosburgh, 2001).
Talent Identification in Recruiting and Personnel Selection
In the following work, the primary domain of interest will be talent identification. The journey of finding high performing individuals begins with recruiting and personnel selection. A study conducted by Deloitte (2005) in 60 different countries revealed that attracting and successfully identifying high-performing individuals was a critical success factor for an organisation. Finding competent candidates will only increase in complexity as demographic and economic circumstances have established a “war for talent” (Michaels, Handfield-Jones, & Axelrod, 2001). Recruiting can be defined as “encompassing all organizational practices and decisions that affect either the number, or types, of individuals that are willing to apply for, or to accept, a given vacancy” (Rynes, 1991, p. 429). Once the phase of recruiting is completed and a pool of qualified and diverse applicants has been established, an organization’s focus shifts to the next step - personnel selection. Researchers have established a systematic approach to selection and assessment that has remained fairly consistent over the last few decades (Smith & Robertson, 1993). The first step is to create a comprehensive analysis of the vacant job, which is used as a benchmark for defining the necessary psychological attributes an individual must possess to complete his job adequately. Subsequently, selection tools and mechanisms are designed in such a way that they screen for exactly those attributes, initially defined as essential. Lastly, the selection tools and mechanisms are validated to assess whether they have indeed accomplished their task of predicting job performance. These processes constitute the average lifecycle of talent identification (Smith & Robertson, 1993).
Validity of Recruiting Tools
Hunter and Schmidt’s (1990) novel approach to assessing the validity of personnel selection tools yielded a groundbreaking meta-analysis, which sheds light on the validity of common personnel selection methods (see Fig. 1). Cognitive ability has been identified as one of the best tools for discrimination between applicants and as one of the most accurate predictors for work-related performance (Schmidt & Hunter, 1998). Structured Interviews (d = .51) and Work Sample Test (d = .54) also display high validity scores. References (d = .26) and Years of Job Experience (d = .18), however, are only moderately indicative of future job performance, so they should be implemented with caution. There is no one tool or method that would suit each organisation, so the best way to approach the selection process is to utilize a selection of multiple high-validity tools at the same time. (Robertson & Schmidt, 2001).
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be administered in multiple ways, either by telephone (Oliphant, Hansen, & Oliphant, 2008) or by computer (Chapman & Rowe, 2002). Due to their ease of use and intuitive nature, interviews are amongst the top hiring strategies of multinational organisations (McDaniel, Whetzel, Schmidt, & Maurer, 1994). In this day and age, it is unimaginable for a candidate to get a job without some type of interview (Huffcutt & Culbertson, 2010, p. 185). Research conducted over the last few decades has concluded that structured interviews are superior to non-structured in terms of reliability, validity and predictive power (Levashina, Hartwell, Morgeson, & Campion, 2014). Structured interviews benefit from additional rigor and standardization of questions, which ultimately enhance the psychometric properties and assists the interviewer in the evaluation process (Campion, Palmer, & Campion, 1997).
Recommendations are utilized widely in the context of university admissions and employee recruitment. They are among the most commonly used tools for selection in the academic world, with a moderate amount of predictive power and validity (Kuncel, Kochevar, & Ones, 2014). New and compelling evidence has emerged, demonstrating that non-self evaluations (those made by others) are superior to self-evaluations (those made by us) and serve as particularly powerful predictors of consequent performance in the work environment (Connely & Ones, 2010). However, many researchers find recommendation letters problematic, outlying three major issues that may potentially lead to loss of predictive validity. The first issue regards the artificial positivity of the language used. Candidates demonstrate selectivity bias by selecting only those writers, who have a high likelihood of presenting them in a good light, and avoid those who may write something negative about them. This creates significant concerns amongst recruiters, as the premise for writer objectivity is not present, leading to a biased representation of the candidate (Kuncel et al., 2014). The second problem of recommendations concerns the reliability of the instrument, with an inter-rater reliability shown to be around .40 (Rim, 1976). The third problem is linked