Benchmarking Talent Segmentation Practices Commerce Essay

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SSTL is a joint venture company between Sistema of Russia and Shyam Group of India. In this joint venture, the majority shareholder is Sistema with a 73.71% equity stake, Shyam Group having a stake of 23.79% and the public holds the remaining 2.5% stake. Spectrum to provide mobile telephony services has been allocated to SSTL in 22 circles of the country. Presently SSTL offers voice & data services in 12 circles with Andhra Pradesh being the latest. Following are its 12 circles of operation: Rajasthan, West Bengal & Sikkim, Bihar/Jharkhand, Karnataka, Kolkata, Mumbai, Chennai, Kerala, Maharashtra/Goa, Haryana/Delhi & NCR, Tamil Nadu and Andhra Pradesh.

In this highly competitive Indian telecom sector, it is amongst the fastest growing telecom company with more than four Million voice subscribers and seventy thousand data customers in approx one year. SSTL has tied up with Mobile Tele Systems OJSC, a JSFC Sistema company of Russia, to bring the globally acclaimed telecom brand - "MTS" - to India.

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MTS was established in October 1993 by MGTS, Siemens AG, T-Mobile and several other shareholders. MTS launched its GSM services in the Moscow region in 1994. Following which it expanded on a very high pace rapidly in Russia mainly through the acquisition of smaller independent players and became the leading national mobile operator. MTS started expanding internationally in 2002 and this was done majorly through the establishment of Mobile Tele Systems LLC. In Russia, it is the largest mobile phone operator and is not only a leading Russian blue-chip company, but a truly global organization.

The MTS brand is one of the most recognized in the world.  MTS is proud to stand out as the 8th largest telecom brand in the world. Millward Brown has voted MTS as the 72nd ranked Brand among the Top 100 Brands in the world.

1.3 MTS India

MTS and Shyam Telelink Limited announced the agreement to allow Shyam Telelink to use MTS brand in India. MTS is the global telecom brand of MTS OJSC of Russia. In Dec 2008, SSTL brought the MTS brand into India under a brand license agreement with MTS OJSC.  The agreement with MTS does not include participation of SSTL for launching MTS products, operations or services in India. MTS India currently provides mobile services based on CDMA technology

MTS launched its high-speed mobile broadband service, MBlaze, in November 2009. It currently more than 70,000 customers in a very short span of time.  In April 2010, MTS launched MTS TV for MBlaze customers. MTS India is the first new mobile operator to get a pan-India start-up spectrum to start their mobile service operations in the country. It is also awarded with the "National Telecom Award" for being the most successful new Telecom Operator in India.

Last year, only MTS India of all the new entrants in the telecom sector got the licenses to use the CDMA technology. MTS targets service that is Obsolescence proof, scalable and reliable to ensure its long term growth and Customer Service is at the core of every activity undertaken.

2. ABOUT THE PROJECT

2.1 Project Title

Segmentation of Talent for MTS India- Benchmark Talent Segmentation Practices and propose a Talent Segmentation strategy for MTS India

2.2 Project Objectives

To conduct primary research by studying organizations where talent segmentation has already been done.

To find out what are the different processes which vary with different segments and get a glimpse of how these organizations have applied talent segmentation to various HR processes across the organization.

To study the telecom sector and study the position of MTS India amongst it. Also study the talent pool at MTS India.

To propose a strategy to segment the talent pool for MTS India.

To make recommendations for applying this segmentation plan to various HR processes at MTS India

2.3 Methodology

The project is divided into the following phases:

Literature Review:

Firstly I studied the existing studies in the field of talent segmentation and tried to find out exhaustive models and bases on which talent segmentation can be done.

Secondly, since there are few companies in India which have already done talent segmentation and have proper guidelines in place, so through secondary research I tried to find out which companies have already done it.

Internal Analysis:

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I took in-depth interview of HR professionals especially talent acquisition team since the company right now has around 3000 on-roll employees and people are hired as and when there is an opening. This analysis helped me analyze the talent pool of MTS India. Since most of the hiring is lateral hiring, it helped me understand the diversity in terms of various sectors from which employees were recruited and best practices helped me identify the most important basis for doing talent segmentation for MTS India.

Industry Analysis:

Then I benchmarked Talent segmentation practices across firms from various sectors to get the best practices across the industry. Also I researched about the telecom sector, major players in telecom sector, placement of MTS India amongst the whole and CDMA segment is done by me.

Proposing a Strategy for Talent Segmentation:

Based on the internal and external analysis I am in a process of developing a strategy for talent segmentation at MTS India.

Recommendations

Based on the all the above processes, I will recommend MTS India how to vary its various HR processes across the important segments recognized.

3. LITERATURE REVIEW

In this competitive global world, organizations have become diverse and complex. Many of them operate multiple business units around the world resulting in a need of workforces which are global, diverse and complex, too. Earlier organizations used a homogeneous approach to talent management but there were many potential disadvantages like implicit assumption that all employee groups, regardless of their function, location or business unit, bring equal value to the company and all are motivated by same kind of rewards, thus leading to need for different talent segments to be managed differently and hence talent segmentation.

Historically, organizations segmented only their executives and sales force but by segmenting talent, companies are able to reallocate resources from low-value to high-value areas to drive business success. It also helps organization to identify multi-incumbent "pivotal roles" which contribute the most to organizational effectiveness.

3.1 Segmentation

Different people have different needs, and it is rarely possible to satisfy all of them by treating them alike. Segmentation is essentially the identification of subsets of people within a group that portray similar behaviour and share similar needs. The primary objective of segmentation is how to win and retain the customers you have or want to serve.

Market segmentation is the process of splitting customers, or potential customers, in a market into different segments, within which customers share a similar level of interest and have similar set of needs.

If an organization understands that it has different customers which have different needs and thus they are willing to customize their marketing plans accordingly, then why it is that an organization does is not differentiates when it comes to their employees? Does the organization believe that all individuals in an organization are same and require same things in order to be attracted, motivated and retained? Can the organization afford to pay the same to all its employees be it a low performer or a high performer at same level?

Answer is No and thus, there is a need for 'segmentation' on how we design and implement our internal HR practices and process.

Talent Segmentation is a strategic approach followed by organizations in order to identify distinct talent segments within which employees may share a similar level of interest, needs or similar performance etc so as to apply different talent management practices to each segment.

3.2 Advantages of Segmentation:

Better serving employee needs and wants

Sustainable employee relationships

Improved Productivity

Reduce unwanted turnover

Higher Profits & Higher Market Shares

Opportunities for Growth

Reduction in Expenses

Increase the ratio of top performers to average or poor performers

Attract enough employees & reduce surplus employees

3.3 Major Bases On Which Talent Can Be Segmented Are:

3.4 Talent Segmentation Models:

3.4.1 GE-McKinsey nine-box framework:

McKinsey originated this three by three matrix in order to assess its various businesses and prioritize its investment. This three by three grid was manly developed for GE in the 1970s to help them assess the potential of its employees in business and prioritize their investment and overall strategy. Its origin lies in "Boston Box" of business or product potential of the Boston Consulting Group. On the X axis i.e. horizontal line is the performance whereas on the Y axis i.e. vertical line it is potential. Each individual or the employee is scored on a scale of 1-3 on both performance and potential. Based on the score he/she gets, he falls into any of the one category:

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Enigma

These are individuals in an organization who are totally wasted in the company. They don't perform in spite of having a high potential. This may be due to either non role fit or may be due to poor management which is not been able to utilize the potential of that individual effectively.

Dilemma

These are individuals in an organization which have average potential but show low performance. If properly motivated and given good opportunities, these people can definitely perform better.

Under performer

These are individuals in an organization who have low potential along with low performance. They don't have any scope for improvement and hence are truly called underperformers.

Growth employees

These are individuals in an organization who portray consistent high potential but their performance not up to mark. This may be due to lack of proper motivation to give their best.

Effective

These are individuals in an organization with specific talents - they show higher performance as compared to their potential.

Core employees

These are individuals in an organization that perform up to the job potential but they can always achieve higher performance if given a push.

Future leaders

These are individuals in an organization who are considered the leaders of tomorrow as they have leadership qualities. They are also considered as the best options for succession at senior positions.

High Impact Performers

These are individuals in an organization to whom if properly groomed and motivated can become the future leaders.

Trusted professionals

These are individuals in an organization who perform much higher than their potential. This may be due to some special talent they may be having.

Pivotal Roles:

Pivotal roles are those which contribute the most to organizational effectiveness. Such roles are as variable as organization's strategy.

Creators

These individuals are highly valued in an organization because they have skills that take a long time to acquire and are costly to develop and maintain.

Ambassadors

These individuals can be easily replaced and the skills that they possess are not necessarily sophisticated. But if they don't perform well in their job, the business can suffer heavy losses.

Craft Masters

These individuals ensure quality, timeliness, and cost-effectiveness of a company which are the major essential features for the proper execution of a business strategy.

Drivers

These individuals are neither crucial to the success of the organization nor hard to recruit. But they represent the majority of employees in most of the companies. Poor management of them can lead to operational problems.

Based on Criticality & Time Duration:

In this model, talent is segmented on basis of capabilities which are critical to strategy of the organization and time at which these capabilities are important i.e. long term or short term.

3.5 Segmentation Basis Important For MTS India:

Function

Level

Performance

Potential

Availability

Demographics (Gender, Location, Life cycle)

3.6 What After Talent Segmentation

Major objective of talent segmentation is to have more employee engagement and thus when key employee segments are identified, the first step is to identify top factors that drive employee engagement.

There may be some factors such as meaningful work which are important for all employees but there will be some particular factors that make the employees feel valued.

For Instance a research conducted by Hewitt Associates among high potential employees revealed that challenging work, total compensation, opportunities for advancement and good work/life balance ranked among the top factors that drive their motivation and engagement.

Initially differentiation was mainly related to compensation. However, other important areas are opportunities for development and growth, work/life balance arrangements, challenging work and more frequent communication and interaction with senior leaders.

3.7 Processes Affected:

Career Development Programs

Rewards & Recognition policy

Compensation

Work Force Planning

Work/life balance arrangements

Retention Programs

Succession Planning

4. RESEARCH

In order to understand the bases on which various organizations have segmented its talent, I conducted various telephonic interviews and also went for personal visits with HR personnel. The process is still on and interviews are being conducted daily. The first priority is to try and meet the HR professionals in person. In a case where that is not feasible, multiple telephonic interviews are conducted.

Also I researched about telecom sector, major players in telecom sector, placement of MTS India amongst the whole and CDMA segment is done by me. This was done mainly because there is mostly lateral hiring at MTS India and majority of people are recruited from telecom sector only. Also I interviewed various HR professionals at MTS India to understand the talent pool at MTS India.

4.1 Research Objectives

The purpose of this research is:

To conduct primary research by studying organizations where talent segmentation has already been done and there are proper guidelines to support it.

To find out what are the different processes which vary with different segments and get a glimpse of how these organizations have applied talent segmentation to various HR processes across the organization.

To understand the talent pool at MTS India

4.2 Research Organizations

So far, talent segmentation guidelines for following companies have been gathered.

Philips

Baxter Healthcare

Bharti Airtel

Hindustan Unilever

IBM

Mercer

Analysis of which is in the next section.

5. FINDINGS

5.1 Telecom Sector

One of the fastest growing industries in the world

Growing at a pace of approx 50% during the past few years

Very high employment rate

Number of players in the industry are increasing at a very fast pace

Rural sector poses a great opportunity

Growth rate (March' 09 - Dec' 09) for rural area is 46.8% compared to 26% for urban area

Very high growth rate (34%) for wireless users (March' 09-Dec' 09) whereas negative growth rate for wireline users

Important tool for socio-economic development for a nation

Liberal policies of government provides easy market access for telecom equipment and a fair regularly framework offers telecom services to the Indian consumers at affordable prices

(*As on 31st Dec' 09)

Divided into two sets based on number of subscribers and circles they are operating in:

5.2 Talent Pool at MTS India

More than 3000 on-roll employees and 2000 off-roll employees.

Divided into 7 main departments and 8 other departments

Main Functions:

Sales

Marketing

Network

CSD

Human Resource

Finance

IT

Other Functions:

Security

Legal

Real Estate & Administration

Corporate Communication

Computer Department

Project Office

Internal audit

Within a department, people are divided into such hierarchy

For people at Operations, Group and Division level, people are mainly hired through referrals whereas for people for Department and Functional Level are hired mainly through consultancy. A 10-12 years work-ex is preferred in both these positions.

5.3 Analysis of Benchmarking of Talent Segmentation policies of organizations covered till now

For each function, Talent segmentation of employees in most of the organization is done on basis of performance and potential.

A three by three grid should be used to segment talent.

Based on what one scores on potential and performance, he/she falls in any of the five buckets:

Top Talent

Valued Talent

Talent Under watch (Including Non Role Fit)

Incompatible Talent

Top talent are the organization's star employees in which major investment should be done to reap in maximum benefits. Talent Under watch should be nurtured and developed whereas for valued talent, organization should open more opportunities for engagement.