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The Future of Work: New Realities, New Opportunities, New Competencies

The Future of Work: New Realities, New Opportunities, New Competencies

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  • 1. © 2013 Towers Watson. All rights reserved. New Realities, New Opportunities, New Competencies The Future of Work Ravin Jesuthasan September 2013
  • 2. towerswatson.com © 2013 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. 1 Headlines: challenges and opportunities Talent 2021 GWS Transformative HR Generation Gap? Not when it comes to pay…it is the #1 attraction driver for all ages in the U.S. Generation Gap? Not when it comes to pay…it is the #1 attraction driver for all ages in the U.S. Structurally Unsound. Businesses are attempting to reach 21stC heights on 20thC talent and reward platforms Structurally Unsound. Businesses are attempting to reach 21stC heights on 20thC talent and reward platforms Friction Points. By 2021, a new map of talent surplus and deficits will emerge Friction Points. By 2021, a new map of talent surplus and deficits will emerge Security Minded. Whether it is attraction or retention, financial security is top of mind Security Minded. Whether it is attraction or retention, financial security is top of mind Engagement at Risk. Only 35% are highly engaged, stress is increasing and energy is flagging Engagement at Risk. Only 35% are highly engaged, stress is increasing and energy is flagging
  • 3. towerswatson.com © 2013 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. 2 Human Capital Research
  • 4. towerswatson.com © 2013 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. 3 The major themes of Global Talent 2021 Business transformation demands new skills Mobility from industrialized to emerging markets Global talent mismatches Changes in talent management strategies
  • 5. towerswatson.com © 2013 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. 4 What is driving the talent agenda? 0 10 20 30 40 50 Generational, social and cultural drivers Geopolitical trends Increasing focus on diversity Regulatory changes Sustainability and the environment Shift of market momentum to emerging markets Industry consolidation and transformation Increasing competition Changes in customer needs and behavior Labor markets shifts Globalization of markets Technological and digital change % of respondents Market shifts that will have the biggest impact on future talent requirements Source: Global Talent 2021 Study conducted by Oxford Economics and Towers Watson, 2012.
  • 6. towerswatson.com © 2013 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. 5 What strategies will most impact talent needs? 0 10 20 30 40 50 Other Outsourcing and offshoring Organizational realignment Mergers, acquisitions and alliances Downsizing and restructuring Speeding time to market Supply chain management Emerging market focus Penetrating new customer segments Process improvements Extending product and service portfolio Developing digital channels Reinventing business models Driving innovation Global expansion Improving quality and customer service Cost reduction and efficiencies % of respondents Organizational strategies that will have the biggest impact on future talent requirements Source: Global Talent 2021 Study conducted by Oxford Economics and Towers Watson, 2012.
  • 7. towerswatson.com © 2013 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. 6 Demand for talent will rise strongly over next decade 4.0 1.8 4.4 4.5 4.7 4.5 1.2 5.0 5.3 5.3 -0.5 0.6 -0.5 -0.8 -0.7 -2 -1 0 1 2 3 4 5 6 Global NA & Europe Americas Asia Pacific MEA Market for talent: Global Demand Supply Talent gap % p.a. Source: Global Talent 2021 Study conducted by Oxford Economics and Towers Watson, 2012.
  • 8. towerswatson.com © 2013 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. 7 But supply to expand even faster in emerging countries 4.5 5.2 4.6 5.3 7.3 4.6 -0.8 -2.1 0.0 -4 -2 0 2 4 6 8 Asia Pacific India China Market for talent: Asia Pacific % p.a. Demand Supply Talent gap Source: Global Talent 2021 Study conducted by Oxford Economics and Towers Watson, 2012.
  • 9. towerswatson.com © 2013 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. 8 0.5 Talent challenge greatest in developed economies 1.8 1.6 1.6 2.2 1.2 0.9 0.7 1.4 0.6 0.7 0.6 0.9 0.8 -1 0 1 1 2 2 3 NA & Europe France Germany UK U.S. Market for talent: North America and Europe % p.a. Demand Supply Talent gap Source: Global Talent 2021 Study conducted by Oxford Economics and Towers Watson, 2012.
  • 10. towerswatson.com © 2013 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. 9 Talent friction points in ten years: Where are your future talent needs? Deficit countries Surplus countries At equilibrium Norway 0.5 Sweden 0.5 UK 0.9 France 0.7 Spain 0.2 Canada 0.9 USA 0.8 Mexico 0.1 Columbia -1.1 Argentina 0.1 Brazil -0.1 Morocco -0.8 Chile 1.0 Peru -0.6 Russia 0.1 South Korea 0.9 Japan 1.4 Philippines -0.2 Thailand 0.6 Malaysia -0.1 Indonesia -1.5 Netherlands 0.4 Germany 0.6 Poland 1.2 Czech Rep -0.8 Austria 0.4 Switzerland 0.5 Italy 0.8 Greece 0.7 Singapore 0.6 Turkey 0.7 Egypt -0.7 Saudi Arabia -0.2 United Arab Emirates -0.2 Qatar -0.6 China -0.0 India -2.1 South Africa -1.0 Bermuda -0.1 Australia 0.5 Source: Global Talent 2021 Study conducted by Oxford Economics and Towers Watson, 2012.
  • 11. towerswatson.com © 2013 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. 10 The Global Workforce Study 2012 helps us understand the drivers of attraction, retention and sustainable engagement Attraction Drivers Retention Drivers Sustainable Engagement Drivers Base pay/salary Base pay/salary Leadership Job security Career advancement opportunities Stress, Balance and Workload Career advancement opportunities Relationship with manager/supervisor Goals and Objectives Convenient work location Trust/confidence in senior leadership Supervision Opportunities to learn new skills Manage/limit work- related stress Image Drivers linked to Total Rewards
  • 12. towerswatson.com © 2013 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. 11 The current status of the global workforce 35% 22% 17% 26% Source: Towers Watson 2012 Global Workforce Study.
  • 13. towerswatson.com © 2013 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. 12 BY THE NUMBERS The value of achieving high sustainable engagement Only 15% of employees with high engagement are high retention risks compared to 64% of disengaged employees 3x High sustainable engagement companies’ operating margins are 3x higher compared to those with the lowest levels of engagement 7.3 Higher presenteeism: An average of 6.2 days lost per year for employees with high engagement vs. 13.5 days lost per year for the disengaged 49% operating margin fewer days lower retention risk
  • 14. towerswatson.com © 2013 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. 13 What does this mean for the future of the workforce?
  • 15. towerswatson.com © 2013 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. 14 A need for new skills in the future Digital Skills Agile Thinking 0% 10% 20% 30% 40% 50% 60% 70% Total Americas APAC MEA Europe Ability to consider and prepare for multiple scenarios Innovation Dealing with complexity and ambiguity Managing paradoxes, balancing opposing views Ability to see the “big picture” 0% 10% 20% 30% 40% 50% 60% 70% Total Americas APAC MEA Europe Digital business skills Ability to work virtually Understanding of corporate IT Digital design skills Ability to use social media and web 2.0 Source: Talent 2021.
  • 16. towerswatson.com © 2013 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. 15 A need for new skills in the future Interpersonal and Communication Skills Global Skills 0% 10% 20% 30% 40% 50% 60% TOTAL Americas APAC MEA Europe Co-creativity and brainstorming Relationship building (with customers, partners, government, etc.) Teaming (including virtual teaming) Collaboration Oral and written communication 0% 10% 20% 30% 40% 50% 60% TOTAL Americas APAC MEA Europe Ability to manage diverse employees Understanding international markets Ability to work in multiple overseas locations Foreign language skills Cultural sensitivity Source: Talent 2021.
  • 17. towerswatson.com © 2013 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. 16 Ready for What’s Next... Shape work Environment that engages, enables and energizes over time Think more broadly and creatively about where talent is sourced Embrace the virtual workplace and maximize mobility and flexibility Invest more heavily in retraining and reskilling (security in opportunity) Rethink and restructure how certain work is accomplished Engaging environment Talent sourcing Virtual workplace Re-skilling Rethinking work
  • 18. towerswatson.com © 2013 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. 17 What does this mean for the Future of HR?
  • 19. towerswatson.com © 2013 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. 18 A shift from delivering services to educating, enabling and equipping business leaders Evidence Based Change . . . A Mindset and Approach Segmentation Integration and Synergy Optimization Logic-Driven Analytics Risk Leverage  Strategically categorize workforce segments  Understand pivotal segments to advance business priorities  Manage unique segments holistically  Understand how to leverage the unique capabilities of different BUs and other organizations  Focus on “collaborative production”  Prioritize investment where returns are greatest  Enable the business to seamlessly manage the entire “continuum of work”  Identify the pivotal issues associated with getting work done and the revenue, cost and risk implications  Robust analytics to bring focus to issues and root cause  Identify and analyze risk associated with alternative talent pools  Identify the tradeoffs and the “risks worth taking” Superior business outcomes are achieved when these principles are evident 1 2 3 4 5
  • 20. towerswatson.com © 2013 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. 19 Bring the same level of rigor to human capital planning as you do to business planning Are you measuring the impact of your talent decisions relative to business objectives and results? Do you measure in single dimension or focus on the few critical linkage points? Do you measure success through traditional metrics or the desired business outcome? Getting the numbers right is just the beginning. The “magic” happens when measures and analysis are combined with the logic of knowing where to look for the important connections and the savvy of knowing when a story is better than a number (for example, framing a talent problem using the metaphor of a supply chain would likely motivate managers to think about it more critically) Ensure common frameworks and mental models for analyzing issues and defining success
  • 21. towerswatson.com © 2013 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. 20 The evolution of segmentation: Granularity and sophistication have greatly evolved, allowing us to address key questions such as:  What employee behaviors does the business model require, and how can we effectively elicit those behaviors from different segments?  Where does exceptional talent really make a difference versus where does good enough suffice?  What behaviors do we need to change (e.g., healthier lifestyles, increased retirement savings) to improve program effectiveness and ROI? Organization:  Key drivers and performance expectations  Pivotal versus proficiency rolesPotential Life stages Attitudinal Demographics Performance Job roles Rank and File vs. Executives Employee:  Preferences, values, behaviors  Lifestyles and life choices Limited Traditional Microsegmentation: Two perspectivesEmerging
  • 22. towerswatson.com © 2013 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. 21 Microsegmentation enables us to identify the organization requirements for talent in various roles Example: Airline Industry Pivotal role analysis, a key element of segmentation, helps organizations determine how talent in different roles contributes to business value and where having “great” talent versus “good” talent can make a difference Employee Performance Customer Loyalty Airline Pilots Having more higher performing airline pilots will not yield additional business value (defined as customer loyalty) to the organization Flight Attendants Employee Performance Customer Loyalty Because airlines maintain competitive advantage by differentiating the customer experience, flight attendants are a pivotal employee segment. Higher levels of performance yield significantly greater customer loyalty
  • 23. towerswatson.com © 2013 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. 22 Create integration and synergy  How to we meet our talent needs without building up cost and infrastructure  How do we tap into a unique ecosystem that ensures an optimal supply at the right cost  Transcend the typical organization construct to create integration and synergy through “collaborative production” across:  Organizations  Functions and Business Units
  • 24. towerswatson.com © 2013 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. 23 Be prepared to deal with risk in a very different way What’s known today and what’s is unknown Plan for different scenarios
  • 25. towerswatson.com © 2013 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. 24 Optimize the sources of work  How to we seamlessly move work across multiple delivery platforms and employment relationships to optimize  Capacity and Capability  Cost  Risk (and control)  How does HR exercise governance and control across these multiple relationships Full time, onsite Independent contractor / free agent Full time, virtual JV/Partner entity Outsourced/ Offshored
  • 26. towerswatson.com © 2013 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. 25 Optimization Transforming  Differentiated treatment for different areas of HR in annual budget reviews  Frequent review of HR priorities and shifting of resources and budget to them  Investments in select areas can go up and down over time with changing business priorities  Portfolio management concepts combined with workforce segment understanding  Tools and process in place to facilitate collaborative decision- making to achieve optimization beyond just buy-in 0 Increase in Indicated Results from Current Level (Percentage) Increase in investment from current level Decrease in investment from current level Same investment with improved results Lower investment, same results 10% 20% 30% 40% Current levels of investment and results Increased investment and improved results