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Thursday, February 3, 2011

Seeking Talent: Sustainability in business and Cosmopolitanization.

There is a new wave of change impacting the world of business: cosmopolitanization. 

Cosmopolitanization is a change process that is transforming how people think and act, as well as social structures, balances of power and influence. It is the result of the far-reaching international integration of economic activity, beyond globalization, which includes the decreased importance of the nation state, and the changing importance of nationality and ethnicity. According to researcher Jonathan Friedman, whereas in 1968 the focus in many societies was on the national, local, collective, Social(ist), homogeneous and monocultural life, where people were striving for equality (sameness), since 1998 a shift towards the post national, global, individual, Liberal, heterogeneous, multicultural society has occurred, with more hierarchy (difference) rather than less.

In his book ‘The Cosmopolitan Vision’, Professor Dr. Ulrich Beck, a sociologist at Munich University and at the London School of Economics, also points to a growing awareness of global risks and crises that are transcending boundaries, including national, cultural, industry, sector, company and personal demarcation lines. This is creating a kind of ‘Cosmopolitan empathy’, a feeling of transnational connection which opens up room for understanding and sympathy on the one side, and disgust and antipathy on the other side for suffering caused by increasing famine, global warming, terrorism, and peak oil prices. There is a sense of an international ‘community of fate’, where we recognize our global interdependencies and respond more strongly to international problems such as the South East Asian tsunami disaster, the suppression of human rights, the fall-out from the financial crises in 2007 and 2008.

What does cosmopolitanization mean for sustainable talent development and HRM?

It is becoming clear how the sociological, or the people side of doing business, is also changing worldwide as a result of cosmopolitanization. Rolf Illum-Engsig, a Doctorate in Business Administration candidate at Business School Lausanne and with many years of experience in international business, sees a clash between what "millenials" or "Gen Y" employees in the 25-35 age group need and what multinationals actually have to offer.

When pay scale doesn't cut it anymore

One aspect he describes of the cosmopolitan generation (people with about 3-5 years of work experience) is that they are not likely to be attracted to or wanting to adhere to hierarchical career paths. Even when embarking on a hierarchical career, often the motivation to do so is related to another more altruistic purpose than the career in itself. In this sense, organizations need to rethink careers as means to an end, rather than as motivational in and of themselves. In many large companies, management and HR still believe they can motivate young talent by offering an attractive pay scale and career ladder. However, the new generation has a totally different experience and set of criteria for work, and perks like pay scale and time scale do not cut it anymore.

Mirror, mirror on the wall...

According to Engsig, the discrepancy occurs because multinationals tend to be hiring according to an image of a middle class American business school graduate, which is an out of date model. Recent research by the Economist Intelligence Unit on the composition of Global Fortune-500 boards indeed shows that fully 85% are men and 70% are Caucasian. Malcolm Gladwell in Blink notes that the majority of US Fortune 500 CEOs are over 6ft tall (compared with a mere 15% in the US population) and a third are over 6" 2 (ten times more than in the general population). Most of these are educated at a top university or business school, forming a homogeneous elite. According to Engsig, managers in large multinationals tend to look for examples of what young talent 'are like' by searching inside the box; that is, staying with a comparison of what slightly older employees in other multinationals are doing, and reading business sources about other successful managers who are like themselves in order to give a role model. In this kind of corporate culture, the Economist report quips, "perhaps the greatest talent of all then is to look the part and be able to climb the greasy pole."

Diversity, sustainability and opportunity

Another problem in multinationals is that despite all the talk about on getting women on board, there's no real diversity. By contrast, many more entrepreneurs in western societies are now women rather than men. And there is a large gap between what women with commercial talent are achieving, and what corporations who stick to the traditional line, are offering them. According to the World Economic Forum Gender Gap Report 2010, the gap between women and men on economic participation and political empowerment remains wide, because there is strong salary discrimination against women, and a lack of opportunities for women to rise to positions of leadership. In most countries -- and in many multinationals -- highly talented young women who began making careers in corporations are leaving before they get to the top, in order to find their own way in business on their own terms. This includes better pay; more shared participation in childcare, more equitable distribution of labor at home, and better work-life balance for both women and men. Only in Nordic countries have new laws made it possible for parents to combine work and family, resulting in high female participation rates. Policies applied in these countries include mandatory paternal leave in combination with maternity leave, generous federally mandated parental leave benefits provided by a combination of social insurance funds and employers, tax incentives and post-maternity re-entry programs.

Cosmopolitans and competence

A third aspect that Engsig points to, is that the new cosmopolitan generation has a view on learning and personal growth that is embedded in an extrovert context (“I learn together with others for the world and me”, connected to what is happening in the world) rather than an introvert context (“I learn for me and my job”, serving only the organization). Organizations have to design learning and personal development that goes beyond the narrow milieu of a job/the organization, and enable the development of competencies beyond simple knowledge transfer or learning from specialized training or books. Want to know more? Engsig is presenting his research on this topic at the 60th annual conference of the British Sociological Association in April 2011.


Conclusions
The impact of the 'cosmopolitan' generation on HR and recruiting in large companies is becoming clearer, and needs to be addressed. Although many large companies are focusing on business as usual, all but ignoring big social movements and crises worldwide, the young generation (highly concerned about immigration, refugees, famine, water wars, distribution of power, human rights and financial collapse) has very different ideas. Their need and expectation is that the companies they work for will do something about these crises, are accountable for their actions and will help prevent problems.

Currently, not enough international companies are looking at what the young generation is looking for in an employer: environmental responsibility, social responsibility, instant feedback and gratification, freedom of action, flexibility, and transparency in how the company acts in the marketplace.  Consequence: companies are finding it harder and harder to find and keep key talent on board. If global companies continue to hire people who are like them out of sync with the rest of world, then they will keep missing opportunities to benefit from the knowledge and talent of a cosmopolitan generation, and to build a sustainable future for their business.


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