Recruiting for the Global Talent War
Never mind the touchy-feely stuff--international diversity is essential for companies that hope to thrive in today's economy.
By Jeffrey Pfeffer

(Business 2.0) – Managing Diversity Is a goal that causes many executives to groan. And no wonder: Noble though it might be, the diversity ideal has been marred by dreary associations with quotas and political correctness. Yet multiculturalism is about more than mere race and gender. Workers who represent different nations and regional perspectives are also important, and not just for do-gooder reasons. The recruitment, retention, and utilization of global talent has become an essential element of modern-day corporate success.

In most developed countries, including the United States, birth rates have settled below the natural replacement level. This means that when older workers retire, there may not be enough younger employees around to replace them. (That's why, on a relative basis, Canada encourages immigration at three times the level of the United States and has plans to expand it even further.) Meanwhile, in developing countries, multinationals import talent to maintain sufficient managerial expertise. Robert Gandossy of the talent and organization consulting practice at Hewitt Associates says that because of the demographic aftereffects of China's Cultural Revolution, the People's Republic has few seasoned executives older than 40--which explains why Colgate- Palmolive has about 20,000 employees in China but almost no Chinese general managers. To build a successful operation on the fast-growing mainland, Colgate has been forced to bring in world-class expats.

Talent has become an international commodity. Stephen Roach, chief economist at Morgan Stanley, argues that global markets for products and workers are becoming increasingly integrated--and competitive. As a result, a political struggle is brewing in the United States as companies seek more visas for foreign workers. This also explains why Indian software companies are hiring senior managers from the United States and western Europe as they prepare to move upmarket. Likewise, executive search firms increasingly share both candidates and job openings internationally in order to locate the best talent, no matter where it's to be found.

The global expertise provided by transnational workers must be nurtured carefully. If only by force of habit, most organizations engage in what my colleague Rosabeth Moss Kanter of Harvard calls "homosocial reproduction"; because we naturally identify with people like ourselves, it takes extra effort to hire and promote those who are different.

Subtle signals can send strong messages: I recently met a talented Latino consultant who'd worked on outsourcing projects at IBM and PricewaterhouseCoopers. But after looking at the senior management ranks of the Indian outsourcer where he once thought he'd have a promising career, he saw little likelihood that he'd go far within the company. He left the firm shortly thereafter.

Plenty of companies say they want to develop a more global perspective, yet they devalue it by neglecting to consider workers who have taken foreign assignments when it comes time to hand out promotions. Truly global companies like General Electric develop systematic review procedures to ensure that people are assessed and evaluated regardless of their national origin or current posting. Out of sight should not mean out of mind.

Employees also need to cultivate global expertise by looking for opportunities to work internationally--even if that entails a tough relocation. Next year I intend to take my own advice; while on sabbatical I plan to visit business schools in Barcelona, Copenhagen, London, and Singapore. American universities are in the intellectual capital game, after all, and they've long filled their faculties with people from all over the planet. Therein lies a lesson that clearly applies to business as well.