LIKE OTHER ORGANIZATIONS, joint ventures care about talent. Most have an HR function, think about the value proposition for their employees, and have training and development programs. But few take advantage of what being a JV offers them when it comes to talent. In fact, while more than 70% of joint ventures have at least one secondee – an employee of one parent company who has been loaned to the JV to fill a specific role, provide a needed capability, or help the JV build skills – for many JVs and their parent companies, the collaboration when it comes to talent ends there.
This creates a missed opportunity at best, and a real issue in many cases.
To be fair, talent development is challenging for all companies. In a recent survey of CEOs, one in four said that they were unable to pursue a market opportunity, or have had to cancel or delay a strategic initiative because of talent issues. One in three said they were concerned that skill shortages have impacted their company’s ability to innovate effectively.
For joint ventures, talent development can be even more challenging. Joint ventures – especially business JVs – are often small, particularly in the first years of existence, and certainly in comparison to their parent companies. In addition, many joint ventures have limited scope, focused on a specific geography, part of the value chain, or product set. Considering the number of employees in joint ventures globally, this leaves a large segment of employees who, while they enjoy some of the additional benefits of being in a JV, also may miss out on development and growth opportunities that their peers in wholly-owned organizations take for granted.
At an individual JV level, the combination of scope and scale limitations can make it hard for joint ventures to create the opportunities for their people to develop the skills they need. In addition, these limitations may increase the cost for the JV to acquire needed skills and capabilities, and can create a weaker talent value proposition, making it harder for the venture to attract and retain promising talent. But a joint venture also has a significant advantage that many other companies do not: It is naturally linked to at least two other companies that desire to see it succeed. Based on our talent-related work over the years, and recent discussions with almost 30 executives involved in talent development in joint ventures and their parent companies, we believe there are five categories of practices involving parent company and joint venture collaboration that should be considered to ensure the venture has and develops the talent it needs.
To help simplify the problem of employee engagement in JVs, Water Street Partners has assembled a “Starter Kit” of slides to help frame the challenges and to provide a host of various solutions. This Starter Kit introduces the five key elements of a strong employee value proposition in joint ventures, analysis into why talent development is challenging in JVs, and the twenty-nine specific practices executives can implement to bolster their JV’s employee value proposition by collaborating with the parent companies.
This Insight is based on an article and research study co-authored by Water Street Partners alumnae, Michal Kisilevitz.