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10.5465/AMBPP.2019.18
EXPLORING THE INFLUENCE OF DIGITALIZATION
ON GLOBAL TALENT MANAGEMENT
VIOLETTA KHOREVA
Hanken School of Economics
Biblioteksgatan 16, 65100 Vasa, Finland
VLAD VAIMAN
School of Management
California Lutheran University
TANYA BONDAROUK
University of Twente
SARI SALOJÄRVI
Hanken School of Economics
ABSTRACT
In parallel with business developments, the scholarly conversation about digitalization of
Global Talent Management (GTM) has taken off with the focus on specific aspects of
digitalization. We move the scholarly discovery toward the empirical exploration of an impact of
digitalization on GTM, and analyze the more all-encompassing transformations of digitalization.
INTRODUCTION
While all aspects of managing local and global workforces are essential for Multinational
Enterprises (MNEs), several studies indicate that global talent management (GTM) –a subset of
international human resource management (HRM) activities to attract, develop, retain and
mobilize individuals with high levels of current and potential human capital consistent with the
strategic directions of the MNE to serve the objectives of multiple stakeholders –has become
especially significant for most organizations due to its proven importance to overall
organizational success (Collings, 2014; Collings & Isichei, 2018; Tarique & Schuler, 2018). One
of the most recent but nevertheless significant concerns and challenges around GTM, includes
the impact of digitalization on thereon (Bremen, Levanat, & Watson, 2018). We refer to the
digitalization of GTM as enabling, improving and transforming the activities and processes of
GTM by leveraging digital technologies and a broader use of digitized data, manifesting as
actionable knowledge (the conceptualization of the definitio n is explained in the subsequent
section).
Digitalization has begun to influence GTM by engaging in the processes of recruitment,
hiring, training, and development of global talent (Tarique & Schuler, 2018). For example, the
recent survey conducted by LinkedIn (2018) suggests that artificial intelligence (AI) saves time
in talent selection through sourcing, screening, analyzing applicants resumes, and scheduling
interviews simultaneously; it also reduces human error in the selection process. Digital learning
and networking digital tools have also become more accessible, and an increase in utilizing
gamification and other hedonistic learning techniques continue to emerge (Vesa, Hamari, &
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Harviainen, 2017). People analytics replaces decision-making based on anecdotal experience,
hierarchy and risk avoidance, with higher-quality decisions based on data analysis, prediction,
and experimental research (Nielsen & McCullough, 2018).
In parallel with business developments, or maybe as a consequence thereof, the scholarly
conversation on digitalization of GTM has taken off, with the focus on specific aspects of
digitalization, primarily electronic HRM, also known as e-HRM (Bondarouk, Parry, &
Furtmueller, 2017; Marler & Parry, 2016). Research on e-HRM has cumulated in knowledge not
only of its goals, effectiveness, implementation and value creation, but also of the anticipated
and non-anticipated effects of technology on HRM processes (Stone, Deadrick, Lukaszewski, &
Johnson, 2015).
At the same time, we noticed that an opportunity exists to go a step further and move the
scholarly discovery toward the empirical exploration of an impact of digitalization on GTM, to
analyze the more all-encompassing transformations of digitalization and the longer-term and
bigger-picture implications of digitalization of GTM. We argue that the real purpose of
digitalization of GTM goes far beyond cost reduction and higher speed in service delivery
(Bondarouk et al., 2017), increased value of the GTM function (Tarique & Schuler, 2018), or
improved talent performance (Stone et al., 2015). Rather, its purpose could be to disrupt the
current modes of organizing and nurturing GTM, and advance the transformation and reshaping
of GTM in future. Yet, this area is somewhat problematic and under-researched, given the
potentially far-reaching impact of digitalization on GTM.
The purpose of this study is thus to increase our theoretical and empirical understanding
of the unique and perceived importance of the Digitalization-GTM relationship, specifically from
a business and management perspective, and examine whether, and in what ways, digitalization
transforms GTM. This study advances the fields of digitalization and GTM in several ways.
First, in line with the recent theoretical study of Bondarouk et al. (2017), it advances the
scholarly discovery by identifying distinct types of impact of digitalization on GTM. Second, by
supporting the existence of two competing perspectives on technology (Marler & Parry, 2016),
the study explains the relationships between digitalization and GTM. Next, the study extends the
existing knowledge on how digitalization interrelates with GTM approaches applied in
companies (Collings & Mellahi, 2009; Meyers & van Woerkom, 2014).
THEORETICAL BACKGROUND
As depicted in our definition, the digitalization of GTM may involve the transformation
of previously existing activities and processes, and may also introduce new activities. Hence,
digitalization of GTM signifies a transformation from “analogue” to “digital” and to the
facilitation of new forms of activity. In addition, employing the notion of digitalization of GTM
rather than digital GTM implies this transformation is ongoing and has no clear beginning or
end, or time/place boundaries. Therefore, we approach digitalization of GTM as something
emerging and in the process of becoming, rather than something already achieved. We view
digitalization of GTM as an open and dynamic concept that mirrors an ongoing process.
In order to forecast a potential impact of digitalization on GTM and its subsystems, we
first touch upon the latest GTM discourse. McDonnell, Collings, Mellahi & Schuler (2017) noted
it is crucial that organizations have GTM systems which ensure talent gets opportunities to
develop, perform, and be highly motivated to maximize organizational outcomes. Recently, the
GTM discourse has started to shift from “attracting”, “developing”, and “retaining” talent, which
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previously have been widely used by GTM scholars and practitioners, towards more up-to-date
prevailing subsystems (Tarique & Schuler, 2018). To synchronize the discourse in GTM
literature with the latest developments in strategic HRM, it has been suggested the new
subsystems include the following three: talent acquisition and development, talent retention, and
talent mobilizing (Tarique & Schuler, 2018). These subsystems are inspired by the ability-
motivation-opportunity model of Appelbaum, Bailey, Berg & Kalleberg (2000), and the analysis
of Jiang, Lepak, Hu & Baer (2012).
Following our discussion on GTM and its subsystems, we look to explore the potential
impact of digitalization on GTM and each subsystem. Based on the logic and rationalization of
the Bondarouk et al. (2017) study on the consequences of e-HRM, we present three types of
impact of digitalization, namely transactional, relational and transformational, and argue how
they may apply to the digitalization of GTM.
The transactional benefits of e-HRM (also known as administrative and operational) are
usually associated with HR effectiveness, efficiency gains, and cost and time savings
(Bondarouk et al., 2017). In a similar way, digitalization of GTM can potentially lessen the
transactional burden of GTM and increase efficiency. For example, in the talent acquisition and
development subsystem, AI offers operational benefits by enabling résumé collection and
screening, candidate sourcing, supporting job-related marketing, ranking a candidate’s
propensity to succeed, scheduling interviews, and candidate matching. Furthermore,
digitalization can potentially lead to a more effective delivery and greater flexibility of talent
development process (Salojärvi, 2018; Stone et al., 2015). With reference to the retention and
mobilizing subsystems, digitalization can potentially streamline the performance evaluation
process, and decrease the time and effort needed to manage talent performance. In addition to
automated communication, companies populate data automatically, and use generated datasets to
control performance quality. Companies also apply internal social media, videoconferencing and
crowdsourcing to identify the reward preferences of talented employees, and develop more
effective reward systems (Fay & Nardoni, 2009; Salojärvi, 2018).
The relational benefits of e-HRM incorporate improved communication, cooperation,
relationships and HR services (Bondarouk et al., 2017). Correspondingly, in accordance with its
relational impact, digitalization of GTM can potentially move GTM to become more personal,
flexible, interactive, engaging, and decrease interpersonal distance between talented individuals.
In particular, in terms of the talent acquisition and development subsystem, a trend towards the
use of more interactive digital technologies is a positive step towards enhancing the company’s
image as a warm and welcoming place to work. Nowadays, many talents are able to attend
virtual job fairs, develop interactive dialogues with organization members, and experience a
virtual preview of life at the organization(Sullivan, 2014). Digitalization may also involve
utilization of active learning techniques such as virtual simulators, computer-based games, and
digital role playing (Vesa et al., 2017). The increased application of mobile technologies, virtual
environments, and gamification enhances talent engagement in the learning process, and
amplifies opportunities for them to practice and receive feedback (Salojärvi, 2018). Next,
digitalization of the talent retention subsystem may support the talent performance management
process by using technology to track talent retention and performance throughout the evaluation
period, and record both formal and informal evaluations on an ongoing basis (Stone et al., 2015).
As a result of digitalization of GTM, managers may spend less time measuring talent
performance, and more on managing performance. The application of internal social platforms
can also help supervisors collect performance data on a continuous basis, and provide more
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frequent praise and feedback (Salojärvi, 2018; Stone et al., 2015). The new forms of social media
also provide opportunities for multi-source feedback from workgroup members (Stone et al.,
2015). Finally, digitalization of the talent mobilizing subsystem may motivate talent to work on
assignments that formerly required traveling, by furnishing tools for virtual communication, and
thus facilitate the speed of knowledge sharing among talent.
The transformational benefits of e-HRM are reflected in strategic re-orientation and
change management, including restructuring of HR service delivery, outsourcing and business
partnering, integration of decentralized units, and consistency of HR practices (Bondarouk et al.,
2017). In a similar vein, digitalization may potentially transform the way GTM subsystems are
managed in terms of how companies collect, store, and disseminate information about talent.
Digitalization may reduce the influence of distance in companies, so that talent can work
remotely and interact more effectively with team members across geographical boundaries
(Stone et al., 2015). It may, consequently, enable companies to make better GTM decisions
based on objective information and decision support systems (Dulebohn & Johnson, 2013). As a
result, digitalization of GTM subsystems may possess a transformational impact and potentially
provide talent with opportunities to perform better and more creatively, and facilitate their
mobility to a greater extent.
In the above sections, we have attempted to integrate the fields of digitalization and
GTM, which scholars have recently called for (Bondarouk et al., 2017; Stone et al., 2015;
Tarique & Schuler, 2018), and forecast the potential impact of digitalization on GTM and its
subsystems. In particular, we anticipated that transactional, relational and transformational types
of impact of digitalization on GTM will transform GTM and its subsystems, including talent
acquisition and development, talent retention, and talent mobilizing. What we lack, however, is a
clear picture of how companies understand, relate and respond to digitalization, and whether the
described types of impact hold true in practice. So, the next step is to explore empirically our
conceptualizations of the impact of digitalization on GTM, and see whether companies identify
this impact the same way we do.
METHODOLOGY
Given that the study explored an emerging field of practice, an explorative qualitative
research design was adopted for its flexibility and ability to capture in-depth and nuanced data on
context, meanings, processes, and effects.
The initial stage of data collection was to identify the largest Finnish companies with
corporate GTM systems in place. A total of 50 companies were viewed as potentially suitable
and contacted in person, and the 40 companies that agreed to be interviewed provided the sample
for the study.The authors sought to conduct key respondent interviews by identifying the person
most closely responsible for GTM matters within the sample companies. As a result, 40
participants were interviewed for the study.
FINDINGS
In line with our analysis, we were able to classify companies based on the way
digitalization transformed their GTM and its systems. We propose the following typology of
companies: digi-imitators, digi-masters, digi-followers, and digi-trendsetters.
10.5465/AMBPP.2019.18
DISCUSSION: OUTCOMES AND CONCLUSIONS
The rapid increase and penetration of digitalization is all around us: we buy online with
one click on eBay, maintain our social networks via Snapchat, and look for a life partner on
Match.com. Yet, the scholarly conversation on the digitalization of GTM has largely been
limited to e-HRM (Bondarouk et al., 2017; Marler & Parry, 2016).
Our study also makes several key theoretical contributions. First, we advance the
scholarly discovery in terms of different types of impact of digitalization on GTM (Bondarouk et
al., 2017; Stone et al., 2015). We advocate a shift from transactional, relational and
transformational types of GTM impact towards functional and aspirational impacts. We borrow
Porter’s competitive strategy argument (2001) to explain the shift. According to Porter, in order
to achieve competitive advantage and thus superior performance, companies need to compete
either through operating at a lower cost than competitors or by strategic positioning, which
means doing things differently from competitors in a way that delivers unique value added.
Applied to our case, while digi-imitators and digi-masters mainly underline the functional impact
of digitalization on GTM, they also state that due to digitalization, talent perform fewer routine
duties, develop their competencies further, and have some flexibility to work remotely. Digi-
followers and digi-trendsetters focus on the aspirational impact of digitalization on GTM, and
talent aspires to use the science and data in tandem with their own capabilities to create unique
value added. Both digi-followers and digi-trendsetters emphasize that digitalization alters their
GTM subsystems through the change of corporate values and increased importance of a culture
of exploration. We therefore advocate that both digi-followers and digi-trendsetters highlight the
unrealized aspirational impact of digitalization on GTM, which departs significantly from the
functional status quo, and aims to enable companies to create unique value added.
Second, the study supports the existence of two competing perspectives identified by
Marler & Parry (2016). In particular, digi-imitators and digi-masters support the organizational
contingency perspective emerging from Woodward’s studies of technology in organizations
(Woodward, 1965). From this perspective on technology, due to greater automation of
administrative tasks and increasingly distributed access to data, employees may more effectively
focus on complex, judgment-oriented and professionally demanding tasks and responsibilities
(Marler & Parry). In tandem with this perspective, digi-imitators and digi-masters view
digitalization and GTM as separate terms. They perceive digitalization as something that takes
place “outside” GTM and is then transferred to it. Digi-imitators and digi-masters perceive
digitalization as a tool, which decreases the administrative burden and increases efficiency. In
line with this perspective, digi-imitators and digi-masters adapt to the effects of new
technological advances.
Digi-followers and digi-trendsetters support another theoretical stream of technology
literature based on the notion of moderate constructivism (Leonardi & Barley, 2008). From this
technology perspective, actors in organizations exert agency over the way in which technology is
deployed (Marler & Parry, 2016), and digi-followers and digi-trendsetters view digitalization and
GTM as intersecting domains. They recognize that digitalization operates side-by-side GTM and
is perceived as a supportive actor with a new source of value. This furnishes the talent with new
opportunities, and mobilizes them to make full use of their knowledge, skills and abilities. In line
with this perspective, digi-followers and digi-trendsetters reflect a proactive stance or perception
of digitalization of GTM, and perceive digitalization as something that talent and companies
“do” through everyday practice and social interaction (Moisander & Eriksson, 2006).
10.5465/AMBPP.2019.18
Finally, our study extends the existing knowledge on how digitalization interrelates with
GTM approaches in companies. In particular, digi-imitators and digi-masters follow a pragmatic-
exclusive GTM approach with talent rating-based systems, implementing digital advanced
programs into talent selection, talent identification, talent succession, and talent performance
subsystems. Meanwhile, digi-followers and digi-trendsetters follow a holistic-inclusive GTM
approach, skipping traditional talent rating-based systems and moving towards a more human,
holistic understanding of talent. This finding validates the conceptual study of Meyers and van
Woerkom (2014), according to which some companies advocate exclusive TM approaches
directed at a small, elitist percentage of the workforce (Collings & Mellahi, 2009), while others
favor inclusive TM approaches directed at the whole workforce (Yost & Chang, 2009). Merging
this argument with Porter’s competitive strategy (2001), we postulate that digi-imitators and
digi-masters follow a ‘traditional’ exclusive GTM approach, and add mainly technological
advancements to GTM subsystems. Digi-followers and digi-trendsetters, however, become
nimble and competitive, seeking competitive advantage and therefore superior performance by
creating a unique ecosystem where digitalization and talent are deeply interrelated and may thus
create unique value.
REFERENCES AVAILABLE FROM THE AUTHORS
