MARCH 2013

THE COMPETITIVE ADVANTAGE OF EFFECTIVE

TALENT MANAGEMENT

ORGANIZATI ONAL
AGILITY
ORGANIZATI ONAL
AGILITY
PMIs
PULSE OF THE PROFESSION IN-DEPTH REPORT
PMIs Pulse of the Profession In Depth Study: Talent Management
2 PMIs Pulse of the Profession In Depth Study: Talent Management
SIGNIFICANT/GOOD ALIGNMENT US$100 Million US$2.5 Billion US$5 Billion
MODERATE/WEAK ALIGNMENT
PROJECT SIZE
US$150 Million
US$1 Billion
US$3.75 Billion
US$25 Billion
US$7.5 Billion
US$50Billion
DOLLARS AT RISK
ALIGNMENT OF TALENT MANAGEMENT
TO ORGANIZATIONAL STRATEGY
US$50
MILLION
FeWer
DOLLARS
RISKED
US$1.25
BILLION
FeWer
DOLLARS
RISKED
US$2.5
BILLION
FeWer
DOLLARS
RISKED
TALENT MANAGEMENT I S A DRI VER OF
ORGANI ZATI ONAL SUCCESS
As revealed by PMIs 2013 Pulse of the Profession
TM
, an organizations ability to meet project goals, timelines,
and budgets signifcantly impacts its ability to thrive. While the imperative to improve project management
success is evident, organizations are faced with various constraints:
A do more with less economic climate
Expanding global priorities
Necessity to enable innovation
Despite existing constraints, there are lessons that can be gleaned from high-performing organizations and
their approaches to project, program, and portfolio management. PMIs 2013 Pulse of the Profession
TM

highlights two activities that bolster organizations project success rates:
Alignment of project management to organizational strategy
Cultivating project management talent
Yet, despite the promise of project success, organizations are currently not placing adequate emphasis on
these activities. In a climate of economic uncertainty, growing global priorities, and an increasing necessity to
enable innovation, activities that support organizational success should not be overlooked.
PMIs Pulse of the Profession
TM
In-Depth Report: Talent Management explores the link between
alignment of talent management strategy to project management performance and organizational
success. It reveals that high-performing organizations are more than twice as likely than
low-performing organizations (69 percent and 31 percent) to have talent management programs aligned to
organizational strategy.
Alignment of talent management to organizational strategy has
tangible benefits, including:
Greater project success rates
Fewer dollars at risk
In particular, the reduction of risk that can be attributed to signifcant
or good alignment of talent management to organizational
strategy is eye-opening organizations that do it well risk 50%
fewer dollars on their projects.
High performing organizations are
more than twice as likely as their
low performing counterparts to align
talent management to organization
strategy a signifcant
competitive advantage.
Figure 1. Project dollars at risk in organizations by level of alignment of talent management to organizational strategy.
3 PMIs Pulse of the Profession In Depth Study: Talent Management
TODAY S ENVI RONMENT DEMANDS I MPROVED
TALENT MANAGEMENT
As reported by PMIs Project Management Talent Gap Report, between 2010 and 2020, 15.7 million new
project management roles will be created globally across seven project-intensive industries. Along with this
signifcant job growth will be a momentous growth in the economic footprint of the profession, which is slated to
grow by US$6.61 trillion. While these fgures are impressive, if organizational leadership fails to equip employees
with the skillsets required to fll future project management roles, US$344.08 billion in GDP will be at risk.
As a result, CeOs are shifting their attention to human capital and talent management activities
1
:
CEOs agree that human capital is the number one challenge globally
2
71 percent of CEOs see human capital as a key source of sustained economic
value
3
77 percent of global CEOs anticipate making changes to their talent management
strategies, with 23 percent planning major changes
4
Despite the shifted attention to human capital and talent management by their CeOs, many organizations have
already begun to experience the adverse effects of this talent gap. Inability to fll these positions has led to:
31%
Decreased product or service delivery quality
29%
Diffculty innovating effectively
27%
Cancelled or delayed key strategic initiatives
25%
Inability to achieve growth forecasts
20%
Inability to pursue a market opportunity
Three critical project management skillsets needed for
successful projects are technical project management skills,
leadership skills, and strategic and business management
skills. Two in three organizations (66 percent) found the
greatest diffculty in fnding resources with adequate technical
project management skills. However, many organizations (over
90 percent) believe that technical project management skills
and strategic and business management skills are teachable,
and as such, are likely to search for talent with good leadership
skills whose technical project management and strategic and
business management skills can be honed through training.
1
The Conference Boards CEO Challenge 2013
2
The Conference Boards CEO Challenge 2013
3
IBMs 2012 Global CEO Study
4
PwCs 16th Annual Global CEO Survey (2010)
T
E
C
H
N
I
C
A
L

P
R
O
J
E
C
T

M
A
N
A
G
E
M
E
N
T
L
E
A
D
E
R
S
H
I
P
STRATEGIC
AND BUSINESS
MANAGEMENT
Figure 2. The new triple constraint of project management
skills.
4 PMIs Pulse of the Profession In Depth Study: Talent Management
FINANCIAL BENEFIT OF ALIGNING TALENT MANAGEMENT
TO ORGANIZATIONAL STRATEGY
US$1 Billion PROJECT SIZE US$50 Billion US$25 Billion
SIGNIFICANT/
GOOD ALIGNMENT
72%
US$100 Million US$2.5 Billion US$5 Billion
MODERATE/
WEAK ALIGNMENT 58%
US$150 Million US$3.75 Billion US$7.5 Billion
DOLLARS AT RISK
ALIGNMENT OF TALENT
MANAGEMENT TO
ORGANIZATIONAL
STRATEGY
PERCENT OF
PROJECTS MEETING
ORIGINAL GOALS AND
BUSIneSS InTenT
HOW TALENT MANAGEMENT AFFECTS
ORGANI ZATI ONAL SUCCESS
INCREASED SUCCESS = REDUCED RISK
The level of talent management alignment to organizational strategy has a clear impact on the success of
projects meeting their original goals and business intent. Organizations in which talent management is aligned
to organizational strategy have an average project success rate of 72 percent, while organizations in which
talent management is not effectively aligned to organizational strategy have an average project success rate of
58 percent. The difference of 14 percentage points in project success rates equates to risking 50 percent more
project dollars when talent management is not effectively aligned with strategy.
Training and career development, recruiting, and
hiring contractors all constitute talent management
activities that can help organizations increase
project management performance. Yet, what is
crucial to talent management effcacy is its close
ties to organizational strategy. Unfortunately, only
45 percent of organizations have signifcant or
good alignment of talent management programs to
organizational strategy, indicating that 55 percent of
organizations must still take lengths to improve the
effcacy of their talent management programs (as
referenced in Figure 3).
Figure 4. Project dollars at risk decrease as the alignment of talent management to organizational strategy increases.
Figure 3. Organizations level of alignment between talent management
and organizational strategy.
10%
35%
38%
17%
SIGNIFICANT
GOOD
MODERATE
WeAk
5 PMIs Pulse of the Profession In Depth Study: Talent Management
Engaging people to deliver organizational goals
Developing high performance teams
Managing talent through change
Managing performance effectively
Developing high potential individuals
Selecting best talent for internal promotions
Succession planning
Career progression from new hire to advanced project manager
Career progression from advanced project manager to senior
project manager
Career progression from senior project manager to senior
management
Communication across disciplines
Communication across age cohorts
Identifying high potential employees
Assessing best talent to join the organization
Finding talent externally
Success with contractors
1
2
3
4
MEETING COMMON
TALENT CHALLENGES
IMPLEMENTING CAREER
PATHS
REDUCING COMMUNICATION
CHALLENGES
EFFECTIVELY FILLING OPEN
POSITIONS AND MANAGING
CONTRACTORS
?
?
ADDITIONAL ORGANIZATIONAL BENEFITS
Organizations that have successfully aligned talent management to organizational strategy reap additional
benefts they are much more likely to be successful at:
6 PMIs Pulse of the Profession In Depth Study: Talent Management
1
ARE MORE LIKELY TO HAVE VARIOUS
TALENT MANAGEMENT OFFERINGS
They are more likely to offer employees multiple forms of
talent management offering. In particular, organizations with
signifcant or good alignment are more likely to have talent
management programs around training and development.
2
ARE MORE LIKELY TO HAVE CAREER
PATHS FOR PROJECT MANAGER EMPLOYEES
They are more likely to have multiple project management
career paths: one which retains project managers and one
which elevates those with business acumen to higher levels
of the organization.
3
HAVE INTEGRATED TALENT MANAGEMENT
ACROSS THE ORGANIZATION
They are more likely to integrate Talent Management across
their organization using various methods, including performance
management, learning and training, leadership development,
and recognition rewards.
4
MEASURE TALENT MANAGEMENT
OUTCOMES
They are more likely to measure both fnancial and non-
fnancial Talent Management outcomes that affect an
organizations ability to remain strategically aligned with
organizational goals and values.
TRAIN IN
SOFT SKILLS
INTEGRATE
TALENT MANAGEMENT
ACROSS ORGANIZATION
SENIOR PROJECT
MANAGER TO
SENIOR MANAGEMENT
MAKE TRAINING A
PRIORITY
PERFORMANCE
MANAGEMENT
neW HIre TO
ADVANCED PROJECT
MANAGER
EVOLVE TALENT
PROGRAM
LEARNING AND
TRAINING
ADVANCED PROJECT
MANAGER TO SENIOR
PROJECT MANAGER
85%
62%
94%
84%
66%
83%
73%
61%
77%
69%
10%
64%
66%
49%
62%
54%
44%
46%
100%
100%
100% 50%
50%
50% 0%
0%
0%
SUCCESSFUL
SIGNIFICANT/GOOD ALIGNMENT MODERATE/WEAK ALIGNMENT
SIGNIFICANT/GOOD ALIGNMENT MODERATE/WEAK ALIGNMENT
SIGNIFICANT/GOOD ALIGNMENT MODERATE/WEAK ALIGNMENT
UNSUCCESSFUL
REVENUE/
PrOFIT GrOWTH
STAFF TURNOVER/
ATTRITION
EMPLOYEE
SATISFACTION/
ENGAGEMENT
EMPLOYEE
RETENTION
75%
75%
66%
58%
60%
45%
45%
35%
100% 50% 0%
ORGANI ZATI ONS WI TH EFFECTI VE ALI GNMENT OF TALENT
MANAGEMENT TO ORGANI ZATI ONAL STRATEGY CONDUCT
TALENT MANAGEMENT DI FFERENTLY
Organizations with signifcant or good alignment of talent management to organizational strategy
are much more likely than other organizations to have key talent management practices in place:
7 PMIs Pulse of the Profession In Depth Study: Talent Management
THE WAY FORWARD
Despite the job growth in the project management profession, a gap still exists in the number of professionals
fully prepared to lead and manage projects. This talent gap is negatively impacting the growth and proftability of
organizations. Quality, innovation, strategic projects, and market opportunities have all been adversely affected
by that talent scarcity.
To ensure success, organizations need to both recruit smartly and align their people strategically.
An effective approach organizations can take is recruiting potential project managers with strong leadership skills
whose technical skills and strategic and business management skills can be enhanced through training.
Most would agree that smart investments are
those that are aligned with the organizations
strategies. However, few organizations have
signifcant alignment of their talent management
programs to organizational strategy. High-
performing organizations understand the value
of aligning talent management to organizational
strategy and are already realizing these
benefts:
Greater project success rates
Fewer project dollars at risk
Organizations with strong alignment of their talent management programs to strategy are focusing their
efforts on:
Prioritizing and evolving talent management offerings
Clearly defning career paths
Integrating talent management programs across the organization
Measuring talent-related outcomes
ABOUT PMI S PULSE OF THE PROFESSION
TM
IN-DEPTH
REPORT: TALENT MANAGEMENT
PMIs Pulse of the Profession
TM
In-Depth Report: Talent Management research was conducted in January
2013 among 277 project, program, and portfolio management directors, managers, and practitioners who make
or strongly infuence hiring decisions for project, program and portfolio managers for their organization or who
design and/or administer their organizations talent management program.
Aligning talent management to organizational strategy may create the
competitive advantage required to sustain and grow an organization.
Figure 4. Factors contributing to the competitive advantage of talent management.
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