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EMERGING TRENDS
    IN TALENT
   MANAGEMENT


      ©   Dr John Sullivan
          (Johns@sfsu.edu)


www.drjohnsullivan.com       1
Global reach of Dr. John Sullivan




     Work Published (43 Countries)
     Publicly Presented/Advised (27 Countries)
                                                 2
The goal for today

To show you the major strategic and functional
trends that will drive global talent management over
the next 5-10 years




                                                       3
Part I

   Let’s first look at…
12 strategic trends in TM




                            4
TM has 8 options for increasing productivity


            Buy                             Build
    Recruit regular employees        Develop internal talent


         Borrow                            Retain
    Borrow contingent labor        Retain key internal talent


           Move                 More productive
     Redeploy internal talent    Make internal talent more productive



         Release                 Use substitutes
      Weak & excess labor       (Tech, contingent, outsource, cust.)
TM trends


Strategic trend – Prioritization on TM

- “Talent Management” functions receive
  priority over other HR functions

- Why - because data demonstrates their
  increased impact on innovation, productivity
  and business results
                                                 6
Which HR functions add the most to performance?

Increasing innovation       Skills training
Productivity improvement    Compensation
Retention                   Benefits
Employer branding           Performance mgmt.
Talent acquisition          Relocation
Internal movement           Compliance
Leadership and succession   HRIT
On boarding/off boarding    HR administration
Learning & development                          7
TM trends


Strategic trend – Learn from and adapt the
usable parts from both next & best practices

- “Next practices” now frequently supplant
  best practices in order to build a competitive
  advantage


        Two comparison examples     >
                                                   8
Differentiating between best and next practices
Examples:
Recruiting
 Standard practice – recruit using newspaper ads
 Best practice – recruit using referrals
 Next practice – recruit using Facebook to generate
  referrals
Best practice sharing
 Standard – no formal process
 Best practice – a knowledge website
 Next practice – wikis and internal social networks
                                                   9
“Next practices” vs. “best practices”

                     Next
                   practices
                     1%



             Best practices
                 25%



        Standard HR practices
                65%
            Below average practices 9%


                                         10
“Next practice” firms that are ahead of the curve
Google
Microsoft
Zappos
Facebook
DaVita
Sodexo
Booz Allen
U.S. Army
Infosys
Apple
                                                11
Zappos is a “next practices” company




Some quick Zappos “next practice” examples   >
                                                 12
Zappos understands the cost of a bad hire
Even the best recruiting fails occasionally… so
Zappos offers $3,000 to anyone who agrees to quit
during their initial training… 2 - 3 % take the cash




Also
Every Zappos’s employee is on Twitter
                                                       13
Employer branding with a story book

Zappos publishes a book full of 300+ employee
written stories about what it’s like to work there
(Available on Amazon)




                                                     14
Zappos TV…




             15
Zappos pre-identifies fakers prior to the interview
Because they put such a high value on “authentic”
customer service…
they assess an applicants behavior during the
shuttle ride




          SW Air uses a similar approach            16
Zappos toga party and chug contest on YouTube




                                            17
Zappos Adidas events
Held Adidas day for it’s employees, which included a
shoe lacing competition, a float contest, a costume
contest, and a design a pair of Adidas shoes contest




                                                   18
O M G!
Any questions at this point?
TM trends


Strategic trend – Boldness becomes common

- Formerly conservative firms/organizations
  are becoming bold in Talent Management




   Three quick “best practice” examples   >
                                              20
Employee videos are powerful branding messages
                 (Yielded 1,000+ videos)




                                             21
Using a video to recruit… says innovation




J&J, Deloitte, British Navy & MITRE have used them
                                                 22
UK intelligence service cover story test
         to attract and excite
         Cover story test
          Cards in a bowl




                                           23
TM trends


Strategic trend – Innovation dominates

- Innovation and idea generation… supplant
  working hard and dependability as the
  primary goals




                                             24
Continuing on with our “value of innovators”
calculation at Google >




                                               25
The best firms quantify the $ value of top talent
(The performance differential)

One top-notch
engineer is worth                     “One great
“300 times or more…
than the average”                programmer is worth
                                      1000 good
(Google) “would                     programmers.”
rather lose an entire                              Bill Gates
incoming class of
engineering
graduates than one
exceptional
technologist”
Alan Eustace, VP of
Engineering, Google                  Quote Courtesy of AIRS     26
A billion-dollar employee?

Game changers are worth a lot:
 If you hire a single game changer at Google
  (where the average employee generates $1.3 million
  in revenue each year)
 And that game changer produces the expected 300
  times the average
 For every one you hire… you add over $390
  million in revenue every year
 And if the new hire stays for only two and half
  years… they will generate over $1 billion in
  revenue
                                                  27
Approaches for increasing innovation




           Some examples   >
                                       28
Examples of how other firms excite innovators
Examples of approaches that excite:
 Intel allows you to work a strategic partners

 IBM allows you to appeal a bad promotion

 Google, Genentech and 3M offer free time

 Schwab collection of “noble failures”

 GE measures managers on “imagination”

 P&G and IBM get ideas from others
                                                  29
TM trends


Strategic trend – Internal consulting center
- HR acts like a consulting center for
  increasing productivity
- It identifies barriers to productivity
- It improves best practice sharing
- It does not make decisions, it advises
  managers on risks and benefits

      A “best practice” example   >
                                               30
At Zappos, HR acts as a consultant
At Zappos…

HR doesn't decide

HR operates as "risk advisors"

We “empower the manager to make a decision”
                                        #hrhappyhour 2010




                                                            31
TM trends


Strategic trend - Metrics drive decision
making

- Decisions are made based on data and
  metrics, rather than past practices & intuition



       Three “best practice” examples    >
                                                    32
What is the success % of Perf. Management programs?

 1. The firm went back 2 years and identified that they
    had 1,019 people rated #3, “needs improvement”
 2. They calculated that they spent an average of
    $13,090 per year… on their performance
    management (training, coaching, counseling and
    manager time)
 3. They identified 2 years later… the number that
    were currently ranked as #1’s
 4. That number was       0
    Conclusion – Perf. management has a low ROI
                                                     33
What does this 15 yr. Rand study say about T&D?
If the performance level of a recent hire is rated at
50% after their 1st year… or at the 90th percentile
  Performance %




                  100
                   80
                   60
                   40
                   20


                        Years of service




their performance level will remained essentially
unchanged until year 20… when they retire
                                                    34
TM trends


Strategic trend - Learning dominates
- Google learning speed (At meetings)
- Parallel benchmarking increases learning
- Learn from other business processes (Supply
  chain, lean processes, mass customized manufacturing & pattern buying)

- Learn from other industries
- Provide integrated solutions

     A quick “best practice” example                    >
                                                                           35
Rapid learning is the top concern at Google
Google continuous learning / “Testing on the toilet”




  www.flickr.com/photos/gubatron/246489031
                                                       36
TM trends


Strategic trend - A global approach to TM

- Global TM is needed for rapid growth
- Countries share the same TM problems
- Expect increasing levels of aggressiveness
  outside of the US (UK, India, China & Auz)
- Remote work is an increasing trend

       A “best practice” example   >
                                               37
Remote work increases access to global talent

       Results Only Work Environment
                   •Pick your hours
                   •Pick where you work
                   •No in-person meetings required
The business impacts:
The cost of turnover is $102k per
 employee, ROWE teams have 3.2 % lower
 turnover ($13 million per year)
When workers switch to ROWE, their
 productivity jumps by 35%                        38
TM trends


Strategic trend – Collaboration across
functions produces a $ business impact

-   100 foot rule
-   Coffee line
-   Shared shuttle
-   Laundromat


                                         39
TM trends


Strategic trend - Agility becomes a critical
success factor

- A range of options must be provided

- Strategies must shift with the economy



                                               40
TM trends


Strategic trend – Take proactive actions

-   Seek out people management problems
-   Proactively identify and “fix” bad managers
-   Identify and re-recruit top employees
-   Proactively recruit on “bad days”



                                                  41
TM trends


Strategic trend - Technology impacts
everything

- Talent management learns when to
  recommend technology over people
- Open source has an impact
- Social networks and the mobile platform
  dominate communications
                                            42
Part II

             A quick view…
of some best practices by functional area




                                            43
TM trends


Improving internal movement

- Proactive and targeted movement
- Project opportunities can be bid on
  (Whirlpool and Google)
- Rewards for releasing vs. hoarding talent


             Two examples   >
                                              44
Facilitated internal movement is a trend

Career mobility team – use it to proactively and
accurately place and to speed up internal movement




                                                     45
Best practices in internal movement


National Oilwell Varco offers a NFL style
draft for first year college hire rotations




                                              46
TM trends


Retention trends
- Be prepared for an upcoming turnover spike
- Identify “who” is at risk of leaving
- Prioritize people & personalize the approach
- Be proactive – ask “why do you stay?”
- Use post-exit interviews to find out “why”
- An algorithm for predicting turnover

                                                 47
TM trends


Recruiting – A centralized function

- Center of excellence model dominates
- Most sourcing, branding and referrals are
  done by a centralized group
- Enables better candidate sharing
- Global sharing of best practices

                                              48
TM trends


War for talent returns

- The power shifts back to candidates (you
  must become candidate centric)
- The candidate experience must improve
- Talent communities build relationships over
  time (Microsoft)

                                                49
TM trends


Recruiting – Referrals dominate

- #1 in both volume and quality
- Responsiveness is the key
- Over 50% of all hires is the target if you
  utilize social networks effectively


              An example    >
                                               50
Educate your employees so they can act like recruiters




                                      Source: Whirlpool   51
TM trends


Recruiting – Employer branding is essential

-   The only long-term recruiting strategy
-   Leverage your employees social networks
-   Measure & manage your negatives (glassdoor.com)
-   Be authentic in your messages


               An example    >
                                                      52
Google demonstrates “authentic messaging”




                                            53
TM trends


On and off boarding receive new attention

- Decrease time to initial productivity

- ID why they said yes… to improve

- Social media simplify managing alumni
  groups
            An example >
                                            54
Boomerangs are high quality permanent hires
              Microsoft alumni network




Also Deloitte, E&Y, Booze, McKinsey and IBM    55
TM trends


Succession planning must improve

-   Designate and pretest immediate back fills
-   Be ready for a retirement boom
-   Identify external candidates
-   Identify the “non-obvious”



                                                 56 last
Did I make you think?

 If these combined examples of “leading edge” TM
approaches… were equal to 100 points on a scale…

What point score would you give your firm today?


            www.drjohnsullivan.com
                                                   57

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Talent Management Trends and Principles

  • 1. EMERGING TRENDS IN TALENT MANAGEMENT © Dr John Sullivan (Johns@sfsu.edu) www.drjohnsullivan.com 1
  • 2. Global reach of Dr. John Sullivan Work Published (43 Countries) Publicly Presented/Advised (27 Countries) 2
  • 3. The goal for today To show you the major strategic and functional trends that will drive global talent management over the next 5-10 years 3
  • 4. Part I Let’s first look at… 12 strategic trends in TM 4
  • 5. TM has 8 options for increasing productivity Buy Build Recruit regular employees Develop internal talent Borrow Retain Borrow contingent labor Retain key internal talent Move More productive Redeploy internal talent Make internal talent more productive Release Use substitutes Weak & excess labor (Tech, contingent, outsource, cust.)
  • 6. TM trends Strategic trend – Prioritization on TM - “Talent Management” functions receive priority over other HR functions - Why - because data demonstrates their increased impact on innovation, productivity and business results 6
  • 7. Which HR functions add the most to performance? Increasing innovation Skills training Productivity improvement Compensation Retention Benefits Employer branding Performance mgmt. Talent acquisition Relocation Internal movement Compliance Leadership and succession HRIT On boarding/off boarding HR administration Learning & development 7
  • 8. TM trends Strategic trend – Learn from and adapt the usable parts from both next & best practices - “Next practices” now frequently supplant best practices in order to build a competitive advantage Two comparison examples > 8
  • 9. Differentiating between best and next practices Examples: Recruiting  Standard practice – recruit using newspaper ads  Best practice – recruit using referrals  Next practice – recruit using Facebook to generate referrals Best practice sharing  Standard – no formal process  Best practice – a knowledge website  Next practice – wikis and internal social networks 9
  • 10. “Next practices” vs. “best practices” Next practices 1% Best practices 25% Standard HR practices 65% Below average practices 9% 10
  • 11. “Next practice” firms that are ahead of the curve Google Microsoft Zappos Facebook DaVita Sodexo Booz Allen U.S. Army Infosys Apple 11
  • 12. Zappos is a “next practices” company Some quick Zappos “next practice” examples > 12
  • 13. Zappos understands the cost of a bad hire Even the best recruiting fails occasionally… so Zappos offers $3,000 to anyone who agrees to quit during their initial training… 2 - 3 % take the cash Also Every Zappos’s employee is on Twitter 13
  • 14. Employer branding with a story book Zappos publishes a book full of 300+ employee written stories about what it’s like to work there (Available on Amazon) 14
  • 16. Zappos pre-identifies fakers prior to the interview Because they put such a high value on “authentic” customer service… they assess an applicants behavior during the shuttle ride SW Air uses a similar approach 16
  • 17. Zappos toga party and chug contest on YouTube 17
  • 18. Zappos Adidas events Held Adidas day for it’s employees, which included a shoe lacing competition, a float contest, a costume contest, and a design a pair of Adidas shoes contest 18
  • 19. O M G! Any questions at this point?
  • 20. TM trends Strategic trend – Boldness becomes common - Formerly conservative firms/organizations are becoming bold in Talent Management Three quick “best practice” examples > 20
  • 21. Employee videos are powerful branding messages (Yielded 1,000+ videos) 21
  • 22. Using a video to recruit… says innovation J&J, Deloitte, British Navy & MITRE have used them 22
  • 23. UK intelligence service cover story test to attract and excite Cover story test Cards in a bowl 23
  • 24. TM trends Strategic trend – Innovation dominates - Innovation and idea generation… supplant working hard and dependability as the primary goals 24
  • 25. Continuing on with our “value of innovators” calculation at Google > 25
  • 26. The best firms quantify the $ value of top talent (The performance differential) One top-notch engineer is worth “One great “300 times or more… than the average” programmer is worth 1000 good (Google) “would programmers.” rather lose an entire Bill Gates incoming class of engineering graduates than one exceptional technologist” Alan Eustace, VP of Engineering, Google Quote Courtesy of AIRS 26
  • 27. A billion-dollar employee? Game changers are worth a lot:  If you hire a single game changer at Google (where the average employee generates $1.3 million in revenue each year)  And that game changer produces the expected 300 times the average  For every one you hire… you add over $390 million in revenue every year  And if the new hire stays for only two and half years… they will generate over $1 billion in revenue 27
  • 28. Approaches for increasing innovation Some examples > 28
  • 29. Examples of how other firms excite innovators Examples of approaches that excite:  Intel allows you to work a strategic partners  IBM allows you to appeal a bad promotion  Google, Genentech and 3M offer free time  Schwab collection of “noble failures”  GE measures managers on “imagination”  P&G and IBM get ideas from others 29
  • 30. TM trends Strategic trend – Internal consulting center - HR acts like a consulting center for increasing productivity - It identifies barriers to productivity - It improves best practice sharing - It does not make decisions, it advises managers on risks and benefits A “best practice” example > 30
  • 31. At Zappos, HR acts as a consultant At Zappos… HR doesn't decide HR operates as "risk advisors" We “empower the manager to make a decision” #hrhappyhour 2010 31
  • 32. TM trends Strategic trend - Metrics drive decision making - Decisions are made based on data and metrics, rather than past practices & intuition Three “best practice” examples > 32
  • 33. What is the success % of Perf. Management programs? 1. The firm went back 2 years and identified that they had 1,019 people rated #3, “needs improvement” 2. They calculated that they spent an average of $13,090 per year… on their performance management (training, coaching, counseling and manager time) 3. They identified 2 years later… the number that were currently ranked as #1’s 4. That number was 0 Conclusion – Perf. management has a low ROI 33
  • 34. What does this 15 yr. Rand study say about T&D? If the performance level of a recent hire is rated at 50% after their 1st year… or at the 90th percentile Performance % 100 80 60 40 20 Years of service their performance level will remained essentially unchanged until year 20… when they retire 34
  • 35. TM trends Strategic trend - Learning dominates - Google learning speed (At meetings) - Parallel benchmarking increases learning - Learn from other business processes (Supply chain, lean processes, mass customized manufacturing & pattern buying) - Learn from other industries - Provide integrated solutions A quick “best practice” example > 35
  • 36. Rapid learning is the top concern at Google Google continuous learning / “Testing on the toilet” www.flickr.com/photos/gubatron/246489031 36
  • 37. TM trends Strategic trend - A global approach to TM - Global TM is needed for rapid growth - Countries share the same TM problems - Expect increasing levels of aggressiveness outside of the US (UK, India, China & Auz) - Remote work is an increasing trend A “best practice” example > 37
  • 38. Remote work increases access to global talent Results Only Work Environment •Pick your hours •Pick where you work •No in-person meetings required The business impacts: The cost of turnover is $102k per employee, ROWE teams have 3.2 % lower turnover ($13 million per year) When workers switch to ROWE, their productivity jumps by 35% 38
  • 39. TM trends Strategic trend – Collaboration across functions produces a $ business impact - 100 foot rule - Coffee line - Shared shuttle - Laundromat 39
  • 40. TM trends Strategic trend - Agility becomes a critical success factor - A range of options must be provided - Strategies must shift with the economy 40
  • 41. TM trends Strategic trend – Take proactive actions - Seek out people management problems - Proactively identify and “fix” bad managers - Identify and re-recruit top employees - Proactively recruit on “bad days” 41
  • 42. TM trends Strategic trend - Technology impacts everything - Talent management learns when to recommend technology over people - Open source has an impact - Social networks and the mobile platform dominate communications 42
  • 43. Part II A quick view… of some best practices by functional area 43
  • 44. TM trends Improving internal movement - Proactive and targeted movement - Project opportunities can be bid on (Whirlpool and Google) - Rewards for releasing vs. hoarding talent Two examples > 44
  • 45. Facilitated internal movement is a trend Career mobility team – use it to proactively and accurately place and to speed up internal movement 45
  • 46. Best practices in internal movement National Oilwell Varco offers a NFL style draft for first year college hire rotations 46
  • 47. TM trends Retention trends - Be prepared for an upcoming turnover spike - Identify “who” is at risk of leaving - Prioritize people & personalize the approach - Be proactive – ask “why do you stay?” - Use post-exit interviews to find out “why” - An algorithm for predicting turnover 47
  • 48. TM trends Recruiting – A centralized function - Center of excellence model dominates - Most sourcing, branding and referrals are done by a centralized group - Enables better candidate sharing - Global sharing of best practices 48
  • 49. TM trends War for talent returns - The power shifts back to candidates (you must become candidate centric) - The candidate experience must improve - Talent communities build relationships over time (Microsoft) 49
  • 50. TM trends Recruiting – Referrals dominate - #1 in both volume and quality - Responsiveness is the key - Over 50% of all hires is the target if you utilize social networks effectively An example > 50
  • 51. Educate your employees so they can act like recruiters Source: Whirlpool 51
  • 52. TM trends Recruiting – Employer branding is essential - The only long-term recruiting strategy - Leverage your employees social networks - Measure & manage your negatives (glassdoor.com) - Be authentic in your messages An example > 52
  • 54. TM trends On and off boarding receive new attention - Decrease time to initial productivity - ID why they said yes… to improve - Social media simplify managing alumni groups An example > 54
  • 55. Boomerangs are high quality permanent hires Microsoft alumni network Also Deloitte, E&Y, Booze, McKinsey and IBM 55
  • 56. TM trends Succession planning must improve - Designate and pretest immediate back fills - Be ready for a retirement boom - Identify external candidates - Identify the “non-obvious” 56 last
  • 57. Did I make you think? If these combined examples of “leading edge” TM approaches… were equal to 100 points on a scale… What point score would you give your firm today? www.drjohnsullivan.com 57