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PRESENTATION PRESENTATION Presentation Transcript

  • Building a Sustainable Leadership and Talent Management Strategy Craig R. Gill, Deloitte & Touche USA LLP ISE/ CHRMS Breakfast Seminar October 20, 2006
  • Agenda
    • The Talent Challenge Ahead: Beyond Demographics
    • Effective Leadership and Talent Management Strategies
    • Sustainability: Becoming Part of the Business Cycle
    • Lively Discussion and Debate
  • 1. The Talent Challenge Ahead: Beyond Demographics Assertions: Demographic shifts in the workforce are real They pose both a threat and an opportunity Sustainability lies in expanding and realizing potential
  • Demographic shifts in the workforce are real
    • We know that…
      • The Baby Boomers are aging (some of us)
      • There is lower population growth in most developed nations
      • The workforce is becoming more diverse (gender, race, national origin)
    Source: U.S. Bureau of Labor Statistics
  • Demographic shifts in the workforce are real
    • … and there is a skills gap in developed countries…
    • U.S.
      • The US Department of Education estimates that 60% of all new jobs in the 21st century will require skills that only 20% of the workforce possess 1
      • US colleges and universities will graduate only a fraction of the number of scientists and engineers that will retire through 2018 1
    • Japan and South Korea
      • Within 10 years, 26% of the Japanese population will be over 65 years old 3
      • By 2050, the percentage of the South Korean’s over the age of 60 will jump to 41% of the population from 14% today, an increase of more than 300% 4
    • Western Europe
      • By 2050, 60% of the working age population will be people over 60 2
      • Germany has seen engineering graduation rates decline by a third since 1995 2
    1 Corporate Leadership Council, Managing the Workforce Planning Process, August 2004 2 Deloitte Research 3 Corporate Leadership Council 4 Hewitt International Report, October 2003
    • … while wage inflation and attrition in emerging markets is decreasing their attractiveness as an alternative labor market…
    Demographic shifts in the workforce are real
    • China
    • Only 50% of Asian executives believe the supply of skilled labor is adequate
    • Labor force will begin to decline by 2017 1
      • Eastern Europe
      • Difficulty fielding critical talent due to cultural assimilation into the business; limited experience working in a multi-national organization; inadequate people management and communication skills 4
    • India
      • Salaries for supervisory positions rose 20% in 2005 2
      • Indian companies are increasingly focused on developing employees to drive retention as the war for talent grows increasingly competitive 3
    • China Population and Development Research Center
    • Innovation in Emerging Markets, Deloitte Research, 2006
    • “ HR Considerations For Entering The Asian Labor Market”, CLC, June 2005
    • “ Resourcing in Eastern Europe”, Feb 2004, CLC
  • Demographic shifts in the workforce are real
    • … and larger costs of social benefits compete for funding of traditional talent management programs
    • While U.S. wage growth remains flat relative to inflation other employee costs, such as health care benefits, continue to rise rapidly 1
    1 Hewitt Associates 2 Society of Human Resources Management (SHRM) 0% 2% 4% 6% 8% 10% 9.2% 9.9% U.S. Health Care Costs per Employee 2005 2006 est.
    • Top five adjustments manufacturing organizations are likely to make over the next 12 months to cover the costs of employee healthcare coverage 2 :
      • Increase expectations of employee productivity
      • Increase the costs of consumer services/products
      • Decrease other employee benefits (e.g., retirement benefits, retiree health care coverage, pension, etc.)
      • Decrease hiring of new staff
      • Decrease employee salaries/raises
  • Demographic shifts pose a threat and an opportunity
    • Threats:
      • Skilled job migrating to developing countries – public policy issues
      • Unmanaged immigration into developed countries
      • Reduction/loss of traditional pensions and paid healthcare
      • Pushing the same buttons and expecting different outcomes
    • Opportunities:
      • U.S. remains healthy, active and growing – strength in our diversity
      • Pension/healthcare portability offers a new employment deal -- from “indentured” to “free agents”
      • Impetus to innovation – SUVs or hybrids?
  • Sustainability lies in expanding and realizing potential
    • We have choices:
    • Create less, or different, work (reengineer, automate, export work)
    • Add more skilled workers (import talent)
    • Get more out of the people we’ve got (increase yield)
  • Sustainability lies in expanding and realizing potential
    • Challenges to increasing the yield:
    • Rising expectations – will this create dissatisfaction?
    • Diminished ambition – will this work against businesses?
    • What do workers want?
    • Who’s going to manage this?
  • 2. Effective Leadership and Talent Management Strategies Assertions: Traditional talent management is not up to the challenge A new model focuses on develop, deploy and connect Role of the “people manager” is essential Goal of leadership development is sustainability
  • Traditional talent management is not up to the challenge
    • Deficiencies
      • Minimal alignment with business strategy
      • Less effective given labor market realities
      • Does not maximize the “yield”
    Retain Develop Acquire Heavy reliance on external recruitment to meet immediate needs Driven by compensation benchmarks and surveys Largely a function of training expenditures Deploy Assignments for “A” Players
  • A new model focuses on develop, deploy, connect
    • Advantages
      • Focused on productivity of critical talent
      • Creates dividends for acquisition and retention
    3. Connect 2. Deploy 1. Develop Acquire Retain Connect Create networks and high-quality relationships that maximize performance Deploy Broaden and deepen capability through stretch assignments Develop Build capability through on-the-job learning
    • In an environment of skills shortages and limited resources, the focus must shift from managing “A” players to “A” positions
    A new model focuses on develop, deploy, connect From “A” Players To “A” Positions How do we support our most critical positions? How do we support our top performers? A Critical Workforce Segment-Based Talent Strategy
  • A new model focuses on develop, deploy, connect Building a critical workforce segment strategy: example Business Unit Strategic Plan Build new technologies Grow Asia HR, Finance, IT, Supply Chain Sales and Marketing Business Development Global Key Account Mgr Sales Analyst Strategic Support Strategic Support Technology Platform Mgr Demand Planning Mgr Critical Position Strategic Support HR Business Partner AP Analyst Critical Position Core Support
    • For Core Support Positions
      • Reduce talent investments or outsource
    • For Strategic Support Positions
      • Maintain investments and buy talent
    • For Critical Positions – regardless of level
      • Increase access to investments and build talent by feeding from strategic support positions
  • A new model focuses on develop, deploy, connect
    • Workforce planning focuses HR programs levers that will most effectively meet the business demand for critical talent
    1. Talent Demand Forecast 2. Talent Supply Forecast Driven by business plans and workforce attrition Internal and external labor market factors 4. Talent Management Programs 3. Talent Management Objectives
    • Serves to define:
      • Future business demand for critical talent
      • Opportunities presented by the external market
      • Potential to maximize existing talent
  • A new model focuses on develop, deploy, connect Workforce Planning Example: conducting workforce planning for Product Engineers FY06 FY07 FY08 Incremental Demand Trans/ Promo Out Voluntary Attrition External Hires Trans In Promo In 40 20 0 60
    • Reduce attrition
    • Increase transfers in
    • Improve productivity
    • Increase promotions
    Reduced attrition Reduced external hires Reduced attrition and productivity
    • Formal training helpful for meeting specific requirements
    • Learning is social in nature - people learn through their interactions with others, especially when tasked with real-life issues
    • People are more committed to the learning that occurs when they are “tested” in ways that matter, especially when they collaborate with or are accountable to others
    Connect Deploy Develop Capability Commitment Performance Alignment A new model focuses on develop, deploy, connect Develop: Ensuring that critical workforce segments are acquiring cutting edge skills to drive innovation
  • A new model focuses on develop, deploy, connect
    • People learn the most in jobs that stretch them to grow, tap their unique skills, and fuel their imaginations
    • The best organizations avoid pigeonholing people based on the confines of their resumes
    • They also employ formal systems to manage performance - And they offer frequent dialogue and feedback
    Deploy: Strategic deployment of critical workforce segments will enable intensified growth Capability Commitment Performance Alignment Connect Deploy Develop
  • A new model focuses on develop, deploy, connect
    • People-to-People : Cultivate high-performance networks of high-quality relationships (i.e., CoPs, knowledge management programs)
    • People-to-Purpose : Build and sustain a sense of personal and organizational mission
    • People-to-Resources : Manage knowledge, technology, tools, capital, time, and physical space to achieve professional and business goals
    Connect: Connecting talent in critical workforce segments converts knowledge into productive action Connect Deploy Develop Capability Commitment Performance Alignment
  • Role of the people manager is essential
    • Why?
    • Employee engagement/ attitudes key to performance 1
    • Employee engagement drivers are clear 2
      • Challenging and exciting work
      • Career growth
      • Learning and development opportunities
      • Good boss
    • “ Best Places to Work” highly correlated to management practices
    • Corporate Leadership Council, 2005
    • Career Systems International; Towers Perrin
  • Role of the people manager is essential
    • Evolving role of “Management”:
    • From jobs, to skills and outcomes – rethinking the nature of work
    • From managing performance, to coaching and building commitment
    • From “30 years at hard labor”, to using flexibility as a business advantage
    • Corporate Leadership Council, 2005
    • Career Systems International; Towers Perrin
  • Goal of leadership development is sustainability
    • Best practices are clear; execution is mixed:
    • Only 34% report being effective at identifying future leaders 1
    • Rigor and objectivity key in identifying and developing successors 2
    • P&L management or P&L-like work
    • Executive talent management focused on replicating high-quality leaders
    • Conference Board
    • Charan, Harvard Business Review
  • 3. Sustainability: Becoming Part of the Business Cycle Assertions: CEOs are under fire, but “getting it” Talent management is an essential part of business planning HR is growing in importance, if…
  • CEOs are under fire, but “getting it”
    • Average tenure now 3-4 years. Great job--all you have to do is:
      • Make the numbers, every quarter
      • Please the Board
      • Please everybody else
      • Have clean books (watch those stock options!)
      • Outwit the competition, everywhere
      • Find ways to keep growing
      • Not sleep
      • Stay balanced
    • How do we get sustainable talent management on their agendas?
  • Talent management is an essential part of business planning
    • Using the language and the rhythm of business:
    • SYSCO retention strategies = 10 cents per share
    • CareFirst HR in the strategy and business planning sessions
    • Thomson business planning and succession cycle
  • HR is growing in importance, if… … we envision and manage HR as a business What Business is HR In?
  • HR is growing in importance, if…
    • … we lead talent management to the next level of analytical rigor and results
    • They are beginning to “get it”
    • HR gaining access to “the table”
    • What are we going to say once we get there: talent market segmentation at Microsoft
  • In Summary
    • Talent challenge  opportunity to rethink work, value and meaning (“work” as sustainable human enterprise)
    • Talent management: hunting/gathering  farming
      • Biggest challenge: growing better “farmers”
    • HR has to take the lead in making the business case
      • Growing role of HR decision science: HR as “agronomist”
  • Your Turn… Lively Discussion and Debate Time!
  • Thank You!