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Nimble talent strategies

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Presentation on how to build a more flexible workforce.

Presentation on how to build a more flexible workforce.

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  • Jack be nimble, Jack be quick, and Jack jump over the candle stick. Ok, this is a room full of HR people – what’s the first thing you thought of when you saw this? Horseplay! Not at my company! That has workers comp written all over it. Ok, and how many of you just briefly tried to think of what workers comp code might apply here?What I want to know is how boring could life have been back then that jumping over a candlestick was worth its own rhyme? Today we regularly send people into SPACE and that doesn’t even make basic cable any more. Anyway, we’re not here to talk about Jack – we’re focused on another word in this rhyme which is Nimble. Specifically we’re going to talk about why you should have a Nimble Talent Strategy for your company, and how you can do it.
  • So what does Nimble mean? Quick. Flexible. Responsive. Agile.
  • The official definition of Nimble is “quick and light in movement or action”. So it means all of those things we just saw, and it’s a great quality for all organizations to have.So what images come to mind when you think of the word “Nimble”?
  • So about now you’re probably thinking two things: One, is this guy going to have any words in his presentation? And Two, why do I need a Nimble Workforce? So let’s talk about the second question. The first reason is that layoffs stink, and they rarely accomplish what they were intended to do, which is stop the bleeding and put the company in a stronger position. In fact the opposite tends to happen because it brings on a wide variety of other problems and costs. How many people have had to lay off employees at some point? Keep your hands up if you enjoyed it. I thought so. Second, companies need to be able to respond quickly and with precision to opportunities as they arise. How many times have you seen your company or another company not be able to respond to an opportunity because you don’t have the resources available to properly take on the new business. Or worse you do take on the new business and quality suffers because you no longer have the infrastructure to support it. Three, its good for your company. It allows you to be more efficient, you reduce the costs of being overstaffed, can respond rapidly to even small changes in your business, and increases productivity. And four, its good for your employees – morale is higher, you can attract and retain a wider variety of employees, and they can be focused on being productive rather than gossiping about the next layoff
  • I mentioned that layoffs stink, which I realize is a very high-level technical term, so let me be a little more specific. This is a list of some of the hard and soft costs associated with layoffs. This is from one of the premiere books on the subject of layoffs – Responsible Restructuring by Wayne Cascio.
  • What we just talked about are primarily short-term costs of layoffs, but an even more serious issue are the long-term ramifications. These include the significant cost of potential future leaders lost as middle level management is often impacted by downsizing. The costs associated with brand equity when you are laying off large numbers of employees – this is even more prevalent as social media magnifies negative feedback, as well as websites such as Glassdoor and Jobvent.com make it easier than ever to bash companies. Want an example of how quickly online complaints go viral and can hurt a company’s image? Go to You Tube and watch “United Breaks Guitars”, which has over 9 million views in the past year. Client relationships – rarely are the logistics of breaking the news to clients handled well, and relationships that are sometimes years or even decades old are abruptly ended. Its not unusual for a client to take the side of the employee and can even take their business with themLong-term morale can be significantly hurt by layoffs, from the remaining employees losing their colleagues and friends, to increased workload, to fear that they might be next. What oftentimes results after a layoff is an increase in voluntary (and unwanted) turnover. This can have a snowball effectAnd lastly the opportunity cost of no longer having the resources, institutional knowledge lost, and inability to scale for new business, as well as service levels suffering with existing customers. Duke University and CFO magazine conducted a study in 2009 that found almost half of executives surveyed believed their company took actions during the recession that would negatively impact their long term growth, with the most common concern being deep cuts in the workforce.
  • So let’s take a look at the model that most companies use and how that creates issues in a down cycle and subsequent upturn. Here you see the curved line is the labor actually needed to meet the business demand during and after a down turn. This is the actual labor, which has a stair step look as the company reacts slowly to the downturn with multiple layoffs, then misses the upturn and starts to recruit in bunches. On the left in red is the surplus of labor, and on the right is the shortage of necessary labor, that results in either lost opportunity or significant overtime costs to meet the demand.
  • Let’s look at a real-world example for a moment. Northwest Airlines found itself in a business downturn in 2007 and ended up laying off 100’s of pilots. Shortly afterward business picked back up and the trouble began. Northwest ended up maxing out their remaining pilots on hours and still had to cancel hundreds of flights until they were able to get their laid-off pilots back to work. All in all it cost them $10’s of millions in revenue, millions in overtime and recruiting costs, lower customer satisfaction, and increased employee turnover.
  • There are a wide variety of ways that you can create a more Nimble Workforce, and these are just a few. Traditional temporary staffing, outsourcing of entire functions, departments, or skillsets, Managed services which is kind of a hybrid between temp staffing and outsourcingPart-time employees allows you to quickly scale up or down 40, 50% or moreFull-time but less than 40 hours gives you more flexibility and can help reduce or avoid overtime costsTelecommuting, Job Sharing, and Hoteling all allow for fast scalability without additional infrastructure costsAnd independent contractors and consultants provide significant flexibility with minimal commitment. Just be sure you are correctly classifying them, as the Department of Labor is making this their number one enforcement target.
  • First off, part-time schedules give you significantly more flexibility than full-time. Part-time workers tend to be less dependent on hours than full-time workers, and therefore are easier to scale up or down. Second, and contrary to conventional wisdom, part-time workers many times are highly qualified and highly skilled. Students, retirees, second incomes, and stay at home parents many times want or need flexible schedules to accommodate other responsibilities. And third, studies have shown that part-time workers in many cases are more productive than their full-time counterparts.
  • First off, part-time schedules give you significantly more flexibility than full-time. Part-time workers tend to be less dependent on hours than full-time workers, and therefore are easier to scale up or down. Second, and contrary to conventional wisdom, part-time workers many times are highly qualified and highly skilled. Students, retirees, second incomes, and stay at home parents many times want or need flexible schedules to accommodate other responsibilities. And third, studies have shown that part-time workers in many cases are more productive than their full-time counterparts.
  • First off, part-time schedules give you significantly more flexibility than full-time. Part-time workers tend to be less dependent on hours than full-time workers, and therefore are easier to scale up or down. Second, and contrary to conventional wisdom, part-time workers many times are highly qualified and highly skilled. Students, retirees, second incomes, and stay at home parents many times want or need flexible schedules to accommodate other responsibilities. And third, studies have shown that part-time workers in many cases are more productive than their full-time counterparts.
  • Possibly the biggest problem companies have when it comes to workforce strategy is our antiquated definition of full-time. As you can see from the graph, the United States has the longest average workweek of our counterparts, including Japan. The problem with this is that it significantly limits our workforce flexibility. Our options are to either take on the increased costs of overtime, or to bring on another full-time employee. However, if we had an average hours worked like Germany at 27 hours, we could scale up as much as 50% without adding headcount or incurring overtime costs.
  • The Alfred P Sloan Awards are given each year for Business Excellence in Workplace Flexibility. BDO received this award in 2009 for 31 of their 37 branches throughout the US. Two of the biggest areas that they excel in are Telecommuting and Part-Time work. You can see that Telecommuting allowed them to scale up and respond to new business without incurring the costs or the time investment of new real estate. By offering part-time, BDO was able to “get really fabulous people and save costs when we don’t need a full-time person”
  • Barbara Taylor, who has the interesting title of flexibility chairperson and general counsel for BDO says “My workplace model is a business-strategy-based approach where flexibility is integrated into the business model of the organization.” Perfect! She should be up here talking.
  • So we’ve addressed a couple ways you can create a nimble workforce on the inside, but sometimes you need to be more aggressive and look to the outside. This chart shows a continuum based on the level of complexity and the amount of delegation. On the low end of both is Temporary staffing, followed by an on-site model where the staffing company manages the temporary workforce. Then you have a managed service model, which is really a hybrid of on-site and outsourcing. The managed service typically takes over a function or department and has full accountability for productivity and service level agreements, but remains at the company’s site. In the case of outsourcing, the vendor typically takes the work off-site, some times WAY off-site. Another solution not shown is a master vendor or vendor management model, in which one supplier acts as the primary vendor and manages all of the other vendors. This typically would fall between the on-site and managed service models, although the master vendor does not necessarily reside on site.
  • Here is a more detailed comparison of the four models listed on the previous page, plus 1099 or independent contractors. All of them have their pluses and minuses when it comes to scalability, how much time is needed to manage each, cost savings, and the commitment of the vendors’ employees. These of course are general characteristics, not absolutes. Much of this can be impacted by the quality of supplier you interact with, the skill level you are working with, and other variables.
  • The University of Oklahoma’s School of Business did a study and found that “Firms that increase their reliance on contingent labor by at least 10% experienced increased EBITDA over companies without a flexible workforce strategy.”
  • Ok, so now we now that a nimble workforce is good for us – now how do we get there. I’ve listed 8 simple steps you can start next week that will get you on the right track. Get buy-in – this is in the middle because it is the most critical step for you to successfully create a nimble workforce. And it is not a one-time step in the process – you need to continuously be getting buy-in from executives, managers, and employees. Review your historical staff levels – look at your lowest and highest points, as well as other spikes and valleys. Why did they occur and how did your company address the necessary changes in workforce levelsNow Evaluate your current structure – how much is full-time vs. part time. Temp usage. Outsourced or managed services. How flexible are you. If your business dropped 20% tomorrow how would you handle it. If it increased 20% what would you doNext identify opportunities for creating a more nimble workforce – What departments or positions have been most affected by business cycles? What managers would be most open to modifying their workforce structure? What solutions make the most sense? Set goals – Don’t try to make sweeping changes. Shoot for smaller but still material changes to show that it can work. Be specific – allocating a a certain % of the workforce over the next year as flexible. Determine Solutions – If you don’t currently have outside help, then your best bet is to start with internal solutions, the easiest being part-time. If you use for example temporary staffing on a regular basis, consider taking a more strategic approach. Implement solutionsMeasure the results and report successes. Get more buy-in and on to the next wave!
  • Ok, so now some of you are saying “um, about this buy-in thing…”. Well here’s some more ammo for you when you have these discussions or are building your business case. (read and comment on bullets)
  • Ok, so now some of you are saying “um, about this buy-in thing…”. Well here’s some more ammo for you when you have these discussions or are building your business case. (read and comment on bullets)
  • Ok, so now some of you are saying “um, about this buy-in thing…”. Well here’s some more ammo for you when you have these discussions or are building your business case. (read and comment on bullets)
  • Ok, so now some of you are saying “um, about this buy-in thing…”. Well here’s some more ammo for you when you have these discussions or are building your business case. (read and comment on bullets)
  • Ok, so now some of you are saying “um, about this buy-in thing…”. Well here’s some more ammo for you when you have these discussions or are building your business case. (read and comment on bullets)
  • Alright, let’s go back and review the traditional workforce model. Remember we have the business decline followed by the recovery. Then we have actual labor that is reduced due to layoffs and increased with waves of hiring. This leaves a surplus at the beginning and a shortage during the recovery.
  • Now compare it to our new Nimble Workforce Model. We have a base of full-time, traditional staff, a percentage of internal flex staff such as Part-time and telecommuting, and external resources such as temp staffing, managed services, and independent contractors. As business ebbs and flows we can be much more responsive to those changes, minimizing the surpluses and shortages we used to have.
  • So to wrap up, here are some final thoughts. Get rid of the 9-5 mindset. Unless you are bound by a highly restrictive union agreement, you are most likely being restricted by expectations that were created during the industrial revolution over 200 years ago.Challenge assumptions. Don’t get caught in traditional thinking that only certain positions can be part-time, or temp, or outsourced. My sister in law is associate corporate counsel for one of the largest companies in the US, and she is part time. Nobody says that certain positions have to be full-time and others have to be part-time or temp or outsourced. Start Small and Build – Creating buy-in to significant change takes time, and the best way to get buy-in is to show people successes. What’s good for your employees is good for the company – your biggest differentiator is most likely your employees. Creating and communicating a well thought out workforce strategy is good for morale, retention, and productivity, all which translate into greater profitability for the companyAnd last, find your inner ninja or ballerina, or ice skater and start now on creating a more nimble workforce. Thank you.

Nimble talent strategies Nimble talent strategies Presentation Transcript

  • Nimble Talent Strategies for a New Economy
    By:
    Tom Erb
  • What is Nimble?
    Flexible
    Quick
    Agile
    Responsive
  • Nimble:
    Quick and light in movement or action
  • What is a Nimble Workforce?
    Strategic approach to workforce structure
    Flexible to change with your business
    Efficient – low turnover, high-capacity
    Scalable
    Responsive to Customer Demand
    Attractive to Employees
    A Competitive Advantage for your Company!
  • Why do I need a Nimble workforce?
    Layoffs Stink! (and they don’t work)
    Opportunity Only Knocks Once
    It’s Good for your Company
    It’s Good for your Employees
  • “In the new high-speed business world, organizations have to be able to deploy (and redeploy) resources at a just in time pace.Especially human resources.”
  • Layoffs Stink – The Price of Layoffs
    • Severance pay
    • Paying out accrued vacation and sick pay
    • Outplacement costs
    • Higher unemployment-insurance taxes
    • Cost of rehiring employees when business improves
    • Low morale and risk-averse survivors
    • Potential lawsuits, sabotage, or even workplace violence
    • Loss of institutional memory and knowledge
    • Diminished trust in management
    • Reduced productivity
    Wayne Cascio - Responsible Restructuring
  • Long-Term Impact
    Leadership Costs
    Brand-Equity Costs
    Client Relationships
    Employee Morale
    Voluntary Turnover
    Lost Opportunities
    Out of 542 executives surveyed, 46% said they believed their companies had taken actions during the recession that could hurt their long-term growth prospects. The most commonly cited concern:
    "deep cuts in work force"
    Duke University/
    CFO Magazine study
  • Actual Labor
    Labor Needed
    Shortage
    Surplus
    Cost of Inflexible Labor
  • Lost Opportunity
  • Nimble Workforce Options
  • Part-Time
    Only 13% are looking for full-time work
    Less dependent on set hours
    Easily scalable
    Significant flexibility
  • Part-Time
    Retirees
    Students
    Stay at home parents
    Second Incomes
    Significant flexibility
    • Attracts a highly qualified labor pool
  • Part-Time
    “Productivity of firms with a high share of part-time employed is higher than productivity of firms with a high share of full-time employed.”
    Nelen, Grip, Fouarge - Does Part-Time Employment Affect Firm Productivity?
    Significant flexibility
    • Attracts a highly qualified labor pool
    • Increases Productivity
  • What is Full-Time?
    The Organization for Economic Co-Operation and Development
  • Telecommuting
    Employers can save 63% of absenteeism costs per teleworker
    Fifty-three % of teleworkers say the ability to work at home is important to their employment choice
    Telework can cut corporate real estate costs by 25% to 90%
    Possible savings in office space, per worker, can equal up to $8,000
    Teleworkers are often 20% to 25% more productive than office workers
    International Telework Association and Council
  • Hoteling
    Also referred to as “Hot Desking”
    The practice of providing office space to employees on an “as-needed” basis
    Great for remote workers, outside sales reps, and other primarily mobile employees
    Reduces overhead, increases flexibility, and reduces ramp up time for new employees
  • Job Sharing
    Two part-time employees fill one position
    Typically higher level positions
    Benefits include:
    Increased Flexibility
    Scalability
    Increased Productivity
    High Retention
    Leave Coverage
  • Alfred P. Sloan Awards for Business Excellence in Workplace Flexibility
    31 of 37 BDO offices received Sloan Awards for their strategic flexibility practices
    Telecommuting - saved real estate costs while increasing business
    Part-Time - Three- and four-day workweeks let BDO “get really fabulous people and save costs when we don’t need a full-time person”
  • “My workplace model is a business-strategy-based approach where flexibility is integrated into the business model of the organization.”
    Barbara Taylor, flexibility chairperson and general counsel for BDO
  • Outside Help
    Delegation
    Complexity
  • Contingent/Temp
    Temp, Project, Seasonal, Temp to Hire
    Benefits of using include
    Significant Flexibility
    Quick ramp up and down
    No commitment
    Savings on benefits
    Protection from workers comp, unemployment, and other employer-related liabilities
  • Outsourcing!
    The transfer of a business function to an external service provider
    Benefits include:
    Potential cost savings
    Scalability
    Service Level Agreements
    Frees up Resources
  • Managed Service
    Hybrid model between contingent staffing and outsourcing
    Based on-site rather than off-site
    Ideal for standardized, measurable tasks (i.e. call center, mailroom, help desk)
    Benefits include:
    Greater oversight and control
    Integrated with operations
    Easier to pull back in house
  • Independent Contractor (1099)
    Benefits include:
    Flexibility
    No commitment
    Potential cost savings
    Not an employee, responsible for own withholding
    Review against IRS ContractorTest and FLSA employee definition
    Explore management companies to comply with laws
  • Comparison
  • Leveraging a Flexible Workforce
    60 years without a layoff
    Workforce Strategy includes:
    15% Temporary Employees
    Managed Services
    Outsourced Non-core Functions
  • “Firms that increase their reliance on contingent labor by at least 10% experienced increased EBITDA over companies without a flexible workforce strategy.”
    University of Oklahoma School of Business Study
  • 8 Steps to a Nimble Workforce
  • Benefits of a Nimble Workforce Model
    Workforce Flexibility
    Increased Morale
    Higher Retention
    Widens Recruiting Net
    Reduces Expenses
    Improves Productivity
    Maintains Momentum
  • More Compelling Arguments for Executive Buy-In
    88% of the companies that downsized said that morale had declined
  • More Compelling Arguments for Executive Buy-In
    Only 3% of companies plan to revert to the staffing model they used before the recession
    2009 study
  • More Compelling Arguments for Executive Buy-In
    “On average, temporary workers displayed better performance relative to goals compared to their full-time counterparts.”
    • Joe Broschak,
    Assistant Professor of Organizational Behavior
  • More Compelling Arguments for Executive Buy-In
    83% of companies surveyed had achieved an ROI of over 25% on their outsourcing projects
    2009 Outsourcing Study
  • More Compelling Arguments for Executive Buy-In
    Job displacement results in a 15 to 20%
    increase in death rates during the following 20 years,
    implying a loss in life expectancy of 1.5 years
  • Actual Labor
    Labor Needed
    Shortage
    Surplus
    Traditional Workforce Model
  • Labor Needed
    External
    Resources
    Internal Flex Staff (Part-time, etc)
    Full-Time Staff
    Nimble Workforce Model
  • Some Final Thoughts
    Think Strategically
    Get rid of “9-5” Mindset
    Challenge assumptions
    Start small and build
    What’s good for employees is good for the company
  • THANK YOU!
    Tom Erb
    Phone: 614-372-5888 tomerb@tallannresources.com
    www.tallannresources.com