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War For Talent In 2010 Mc Kinsey Fei2
War For Talent In 2010 Mc Kinsey Fei2
War For Talent In 2010 Mc Kinsey Fei2
War For Talent In 2010 Mc Kinsey Fei2
War For Talent In 2010 Mc Kinsey Fei2
War For Talent In 2010 Mc Kinsey Fei2
War For Talent In 2010 Mc Kinsey Fei2
War For Talent In 2010 Mc Kinsey Fei2
War For Talent In 2010 Mc Kinsey Fei2
War For Talent In 2010 Mc Kinsey Fei2
War For Talent In 2010 Mc Kinsey Fei2
War For Talent In 2010 Mc Kinsey Fei2
War For Talent In 2010 Mc Kinsey Fei2
War For Talent In 2010 Mc Kinsey Fei2
War For Talent In 2010 Mc Kinsey Fei2
War For Talent In 2010 Mc Kinsey Fei2
War For Talent In 2010 Mc Kinsey Fei2
War For Talent In 2010 Mc Kinsey Fei2
War For Talent In 2010 Mc Kinsey Fei2
War For Talent In 2010 Mc Kinsey Fei2
War For Talent In 2010 Mc Kinsey Fei2
War For Talent In 2010 Mc Kinsey Fei2
War For Talent In 2010 Mc Kinsey Fei2
War For Talent In 2010 Mc Kinsey Fei2
War For Talent In 2010 Mc Kinsey Fei2
War For Talent In 2010 Mc Kinsey Fei2
War For Talent In 2010 Mc Kinsey Fei2
War For Talent In 2010 Mc Kinsey Fei2
War For Talent In 2010 Mc Kinsey Fei2
War For Talent In 2010 Mc Kinsey Fei2
War For Talent In 2010 Mc Kinsey Fei2
War For Talent In 2010 Mc Kinsey Fei2
War For Talent In 2010 Mc Kinsey Fei2
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War For Talent In 2010 Mc Kinsey Fei2

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THE QUEST FOR TOP PERFORMER - THE SOLUTION IS HUMAN

THE QUEST FOR TOP PERFORMER - THE SOLUTION IS HUMAN

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  • 1. Talent management:transforming forces forthe next decadeMay 12, 2010
  • 2. MON-ZXT102-20100512-Talent management-EGTalent matters!Battlefield is expanding globallyStaying on top of a changingtalent landscape McKinsey & Company | 1
  • 3. MON-ZXT102-20100512-Talent management-EG Top performing talent provides substantial productivity advantages Relative productivity of average and top performers Percent Low complexity jobs1 Medium complexity jobs2 High complexity jobs3 225 185 150 2x! 100 100 100 Average Top Average Top Average Top performers performers performers performers performers performers1 Fast-food restaurant front-line workers2 Production workers in a high-tech factory3 Investment Banking AssociatesSOURCE: Harvard Business Review, Journal of Applied Psychology McKinsey & Company | 2
  • 4. MON-ZXT102-20100512-Talent management-EGTalent matters!Battlefield is expanding globallyStaying on top of a changingtalent landscape McKinsey & Company | 3
  • 5. MON-ZXT102-20100512-Talent management-EGTalent challenges Forces in western ▪ Productivity gap countries ▪ Challenging demographics McKinsey & Company | 4
  • 6. MON-ZXT102-20100512-Talent management-EG A step-change in productivity is required Contribution for every $1 of US GDP growth 1970s 2010s 80 70 30 20 Employment Labour Employment Labour growth productivity growth productivity growth 1 growth 11 As measured by GDP per workerSOURCE: Global Insight; Bureau of Labor Statistics; Bureau of Economic Analysis; McKinsey Analysis McKinsey & Company | 5
  • 7. MON-ZXT102-20100512-Talent management-EG New kinds of jobs For every 8 jobs gained in the last decade, we created 10 and lost 2 2 3 8 7 Complex Repetitive Manufacturing Total judgment, transactions & production interactions & problem solvingSOURCE: McKinsey Global Institute McKinsey & Company | 6
  • 8. MON-ZXT102-20100512-Talent management-EG Aging population National/federal government Total labor force Government’s older workforce % of employees aged 50 years and above, 2005 0 10 20 30 40 50 60 70 80 90 100 Belgium Sweden Canada United States Hungary Norway Finland Switzerland France United KingdomSOURCE: Organisation for Economic Co-operation and Development (OECD); Statistics Canada McKinsey & Company | 7
  • 9. MON-ZXT102-20100512-Talent management-EG Gen Y has significantly different preferences than the generations that came before War generation Baby boomers Generation X ▪ Born < 1945 ▪ Born 1945 - 64 ▪ Born 1965 - 80 Generation Y ▪ Shaped by: ▪ Shaped by: ▪ Shaped by: ▪ Born 1980 - 95 World War II, Great Cold and Vietnam Internet, diversity, ▪ Shaped by: information Depression, etc. wars, declining trust unemployment, overflow, overzealous in government and parental parents, globalization divorce rates Approaches career in chapters Sees flexibility as a prerequisite, will of 2 - 3 years each – demands make trade-offs for better lifestyle employability, not employment Demands freedom and control, Expects quick individual development particularly regarding own career and early rewards Wants job to be meaningful and Extremely low barriers to separation to have positive effect on society combined with high confidenceSOURCE: "Managing Generation Y," Carolyn Martin; SHRM; "Millenials Rising," Neil Howe; "Managing Generation Y," Advanced Management Journal," Susan Eisner; "Next Generation Talent Management," Hewitt Associates; McKinsey & Company | 8 "Preparing for the Workforce of Tomorrow," Hewitt Associates; Project team
  • 10. MON-ZXT102-20100512-Talent management-EG The next generation is expecting a different offering from employers Graduate expectations of future place of work1 Percent of those surveyed2 Interesting work content 93 Recognition of own performance 86 Work/life balance 82 Development opportunities for own personality 81 Opportunities for further education 81 Independent work 80 Compatibility of career and family 79 Job security 73 Responsibility/management position 55 International contacts 53 High income 42 High regard/prestige of profession or position 271 Survey “Young Elite” of 1,072 students about to finish their degrees2 Persons surveyed who regarded the respective aspect as being “very important” or “important”SOURCE: Psephos; Manager Magazine; McKinsey McKinsey & Company | 9
  • 11. MON-ZXT102-20100512-Talent management-EGTalent challenges Forces in western ▪ Productivity gap countries ▪ Challenging demographics ▪ Need for top quartile talent Forces in developing ▪ Will demand for talent be countries greater than on commodities? McKinsey & Company | 10
  • 12. MON-ZXT102-20100512-Talent management-EG Old Shanghai (c. 1990) McKinsey & Company | 11Source: skylander.net
  • 13. MON-ZXT102-20100512-Talent management-EG Shanghai today McKinsey & Company | 12Source: photos4travel.com
  • 14. MON-ZXT102-20100512-Talent management-EGOld Shenzhen (c. 1980) McKinsey & Company | 13
  • 15. MON-ZXT102-20100512-Talent management-EGShenzhen today McKinsey & Company | 14
  • 16. MON-ZXT102-20100512-Talent management-EG China alone will build “one Canada” in the next 10 years Between 2010 and 2020, As a comparison, Canada China plans to build… has… 30,000 km of new rail track 46,688 km of rail track1 97 new airports 26 commercial airports2 35,000 km of new expressway 38,047 km of expressway3 100 m TEU4 of container Canada handled 4.6 m TEU4 capacity in 2008 1 Does not include parallel trackage 2 Canadas National Airport System (NAS) consists of 26 airports. In total, the country has 322 certified airports 3 Physical extent of Canadas National Highway System (NHS) 4 Twenty-foot container equivalent unitSource : “China Infrastructure Opportunities”, McKinsey, 2009; Transport Canada 2008 Report, American Association of Port Authority; Company McKinsey & | 15 McKinsey analysis
  • 17. MON-ZXT102-20100512-Talent management-EG Asia returning to its natural “half share” of the world economyShare of total world GDP (1 AD–2009 AD)GDP share, percentage Industrial revolution French Fall of Marco Polos Discovery and US Oil Roman Empire trips to Asia of America revolutions crisis100 Rest 80 of world 60 Europe Rest 40 of Asia Japan 20 China India 0 1 500 1000 1500 2009 McKinsey & Company | 16
  • 18. MON-ZXT102-20100512-Talent management-EG Talent management is an important global challenge Finding talent is a key management challenge globally… Most significant managerial challenge over next 5 years Finding talent 31 China 40 Greater competitive 22 intensity India 38 Increasing size 19 of company Other Asia 35 Increasing number 11 of markets served North America 31 Growing number of regulations 5 Europe 28SOURCE: McKinsey Global Forces Executive Opinion survey; Next Generation Talent research McKinsey & Company | 17
  • 19. MON-ZXT102-20100512-Talent management-EG Emerging markets provide access to large skilled talent pools Number of young academic professionals Thousands 33,110 50% of talent from devel- oping countries is from India and China 15,052 Developing1 Developed21 Argentina, Brazil, Bulgaria, Chile, China, Croatia, Colombia, Czech Republic, Estonia, Hungary, India, Indonesia, Latvia, Lithuania, Malaysia, Mexico, Philippines, Poland, Russia, Romania, Slovakia, Slovenia, South Africa, Thailand, Turkey, Ukraine, Venezuela, Vietnam2 Australia, Canada, Germany, Ireland, Japan, South Korea, UK, USSOURCE: Global Forces work; McKinsey Global Institute McKinsey & Company | 18
  • 20. MON-ZXT102-20100512-Talent management-EG However, not all graduates are created equal Percent of candidates considered suitable for hire1 Of 100 graduates with the correct degree, how many could you employ if you had demand for all? Engineer Finance/accounting Generalist Hungary 50 50 30 Central and Czech Republic 50 40 20 Eastern Poland 50 30 15 Europe Russia 10 20 10 Malaysia 35 25 20 India 25 15 10 Asia Philippines 20 30 25 China 10 15 3 Mexico2 20 25 11 Latin America Brazil 13 13 81 Suitability rates empirically based on 83 interviews with human-resources (HR) professionals working in countries shown2 Mexico is the only country where interview results were adjusted – to 20% (from 42%) for engineers and to 25% (from 35%) for finance/accounting employees – since interview base was thinner and risk of misunderstandings highSOURCE: Interviews with HR managers, HR agencies, and heads of global-resourcing centers; McKinsey Global Institute analysis McKinsey & Company | 19
  • 21. MON-ZXT102-20100512-Talent management-EG Professional supply in China is fragmented Suitable supply of university graduates will be barely enough to meet demand of large MNCs in China Thousands; 2003-08 Total supply of Chinese 15,730 university graduates1 University graduates not suitable 14,530 to work in MNCs Total suitable supply of Chinese 1,200 university graduates Demand for additional university 750 graduates from large MNCs in China2 Fragmentations Oversupply of suitable graduates 450 reduces remaining suitable graduates Not accessible graduates due to by 86% 385 fragmentation/immobility3 Less than 0.5% of Oversupply of suitable and total graduates are 65 accessible graduates suitable and acces- sible to MNCs1 All university courses except doctors2 Enterprises with revenue over $604,000 in 2002 and employment of >1,000 FTEs; excluding employment in Hongkong-/Macao-/Taiwan- owned enterprises3 Assuming strong growth of accessibility from currently 51% to 83% in 2008 (India’s current level)SOURCE: McKinsey Global Institute labor supply database McKinsey & Company | 20
  • 22. MON-ZXT102-20100512-Talent management-EGIn which country is this located? 1. U.S. 2. India 3. China 4. Mexico 5. Germany McKinsey & Company | 21
  • 23. MON-ZXT102-20100512-Talent management-EGQuestion no. 2: aircraft engine? In which country was this engine designed? 1. U.S. 2. India 3. China 4. Mexico 5. Germany McKinsey & Company | 22
  • 24. MON-ZXT102-20100512-Talent management-EGTalent matters!Battlefield is expanding globallyStaying on top of a changingtalent landscape McKinsey & Company | 23
  • 25. MON-ZXT102-20100512-Talent management-EGAn integrated approach to talent managementImproving the talent management system 6 2 1 Strengthening Attracting and HR capabilities deploying the right people 7 5 Creating a 3 Engaging talent culture Evaluating and and connecting recognizing employees performance 4 Growing and developing leaders McKinsey & Company | 24
  • 26. MON-ZXT102-20100512-Talent management-EG 1 Leading companies tailor talent strategy to their context 1Designcomponent Central questions Possible strategic design choices How are the requisite capabilities Grow your own Hire in Recruit and obtained? integrate How are job candidates selected? Potential Job fit How does talent get deployed? Structured moves Open market What level of career guidance Guided Self-managed should be provided? development Deploy, review What types of behaviors get KKR Individual Team/group and develop rewarded? To what extent do we differentiate performance? Egalitarian Meritocratic What are the boundaries for under-achievement? Perform or go Grow or go How do we keep talent connected Formal Informal Engage and to one another? connect Tangible How do we energize our talent? Meaning benefits McKinsey & Company | 25
  • 27. MON-ZXT102-20100512-Talent management-EG 1 Four categories of benefits determine whether the best talent joins 1 and stays Great leaders ▪ Employees’ opinion of senior management ▪ Employees’ relationship with boss Great job Great company Employee ▪ Work content ▪ Culture and values ▪ Development ▪ Reputation satisfaction and opportunities ▪ Advancement ▪ Job security ▪ Lifestyle retention ▪ Impact on society ▪ Freedom and autonomy ▪ Coaching and feedback Attractive compensation ▪ Compensation – Base pay – Short-term incentive – Long-term wealth creationSOURCE: McKinsey War for Talent survey McKinsey & Company | 26
  • 28. MON-ZXT102-20100512-Talent management-EG 2 BMW – targeting older workers to make more productive 2 70 small changes to the line implemented at a cost of €20,0001 Flexible Flexible Vertically magnifying Vertically magnifying adjustable lens adjustable lens tables tables Stretching Stretching exercises exercises Weight- Weight- Specially adapted Specially adapted designed designed footwear chairs footwear chairs Wood flooring 7% y-o-y prod improvements Lower absenteism Follow-up projects in Germany, Austria, and US with similar results1 Total cost €40,000 including worker timeSOURCE: Harvard Business Review; March 2010 McKinsey & Company | 27
  • 29. MON-ZXT102-20100512-Talent management-EG ALTERNATE 2 What gen-Y is looking for and how employers are responding 2 % of employers responding to surveys What employers perceive Gen-Y … and what the 15% who report they expects… have accommodated Gen-Y have done To be paid more More flexi-time options 57 74 More recognition More flexible schedules 33 61 programs Access to state-of-the To be promoted within 26 art technology a year 56 Increased 26 To have difficulty taking compensation direction 55 Access to educational 24 More vacation and programs personal time 50 Pay for cell phones, 20 bberries Access to state-of-the 37 art technology Telecommuting options 18 More vacation time 11SOURCE: McKinsey McKinsey & Company | 28
  • 30. MON-ZXT102-20100512-Talent management-EG 2 Multinationals tailor their value propositions to compete against 2 local business in China Criteria that have enabled Multinationals that have multinationals to adapted their value differentiate themselves proposition versus local companies Autonomous work environments Real decision making Additional learning opportunities Career development Housing incentives Educational benefitsSOURCE: McKinsey quarterly, 2008 Volume 1 McKinsey & Company | 29
  • 31. MON-ZXT102-20100512-Talent management-EG 3 Leading companies spend significant time in top talent reviews 3 Average time perCompany Description candidate Frequency ▪ Session C review of ▪ ~ 5 -10 mins ▪ Once annually Top 200 per BU over 1-3 days ▪ Discussion of Top 350 ▪ ~ 5 -10 mins ▪ Twice annually officers in a 3- to 5-day offsite of the Board ▪ Discussion of Top 30 ▪ ~ 15 mins ▪ Once annually in one day ▪ Discussion of top ▪ ~ 15 mins ▪ Once annually global talent subject of ▪ Similar ~quarterly dedicated Top Team reviews in functions meeting (~2-3 days) and BUs going deeper into organization The key to a successful discussion is the thorough preparation The key to a successful discussion is the thorough preparation by the meeting participants (i.e., senior executives, not HR) by the meeting participants (i.e., senior executives, not HR) McKinsey & Company | 30
  • 32. MON-ZXT102-20100512-Talent management-EG Companies are aggressively investing in building their 4 4 capabilities, but is it money well spent? Over-invested Under invested Examples of big spenders include … 100 100 Spends $1 billion Spends $500 - Leadership 16 annually on $700 million 29 employee learning annually on Industry 15 employee training Knowledge 26 programs Functional 40 Knowledge 19 Management 15 15 Other 11 14 Contribution Focus of Spends Spends $2.3 to corporate capability approximately billion annually performance building $600 million training and on- initiatives annually on boarding new employee learning employees “ Training is like advertising – you spend a “ “ lot on it knowing that only half is effective because you don’t know which half!SOURCE: McKinsey survey, January 2010 McKinsey & Company | 31
  • 33. MON-ZXT102-20100512-Talent management-EG Talent management challenges Is talent management strategy as embedded as business and financial strategy? Are you tapping into non traditional talent pools and who are vs. you competing against? Is your employee value proposition as tailored as possible to key segments (age, gender, diversity) and do you have 5 “compelling” stories? To what extent are you accelerating the development of high performers and how are you retaining them?SOURCE: McKinsey McKinsey & Company | 32

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