1. LEADING EDGE GLOBAL TALENT MANAGEMENT TRENDS AND PRACTICES August 29, 2013 Dr John Sullivan 1www.drjohnsullivan.com Note: Even if you cant match them, its your obligation as a professional to know where the leading edge is!

2. Topics 2 I will highlight leading-edge trends and practices in 6 TM areas 1. Making a business case 2. Recruiting 3. Development 4. Retention 5. Increasing productivity and innovation 6. Metrics Please understand that I will move fast today because Im from the Silicon Valley, where everything is fast 3. 3 Lets start with an important perspective to consider Before you conclude that the upcoming (what may seem to you to be outrageous talent management practices) are barely relevant to you Remember that you are competing for top talent in a world with remote work options And that means that there are no geographical boundary excuses, but South Africa is different excuses or we are a university excuses Because like it or not, you are literally competing for top talent against every organization in the world! 4. 4 Next lets realize that executives expect significant change! PwC 16th annual global CEO survey So you cant stay competitive if you maintain your current strategy 5. 5 Defining the leading edge for building a business case to convince leaders to focus on TM 6. 6 Highlighting the top trends in business case 1.Converting talent management metrics to show their monetary impact on organizational results (Enrollment, revenue, satisfaction or University ranking) 2.Calculating the organizational impact of each individual TM function and focusing on those with the highest impact 3.To prove TMs impact most are calculating their revenue per employee (i.e. workforce productivity) And now a few business case illustrations > 7. Do some firms have significantly higher workforce productivity? 7 This list only contains top firms IBM HP Microsoft Google Facebook Apple Among great firms what is the average percentage of workforce productivity difference between them? 8. Comparing workforce productivity results Comparing employee productivity (rev. per employee) Average $208,000 IBM $221,100 (22% above the average) HP $348,300 (66% above the average) Microsoft $808,600 (4 times the average) Google $1,014,600 (5 times the average) Facebook $1,325,000 (6 times the average) Apple $2,327,000 (11 times the average) Key learning - It takes 10 X more employees at IBM to produce the same revenue as Apple (Calculated using 7/2013 data from http:// www.wolframalpha.com/input/?i=apple+revenue+per+employee ) 8 9. Does bold TM and innovation increase profit? Dollars of profit per employee (Profit per labor $ spent is a better measure) HP -38,125 IBM $37,523 Facebook $120,600 Microsoft $213,100 Google $199,346 Apple $518,500 Key learning - it takes nearly 15X more employees at IBMto produce the same profit as Apple (Calculated using 2013data from www.wolframalpha.com ) 9 10. 10 Where should you focus your TM resources? Its clear that a great over-all TM function has a significant performance and economic impact But within talent management what particular TM actions have the highest impact? What are the 2 TM functions with the highest impact? 11. A business case requires that you identify which activities have the most impact on rev. & profit (BCG) 11Source: BCG/WFPMA - From Capability to Profitability: Realizing the Value of People Management, 2012 Which TM functions have the highest impact? 12. Mid and lower impact HR functions 12 13. 13 A business case for focusing on top performers Because of the extra cost and effort required Executives will not fund a focus on top performers and innovators unless you have calculated their performance differential %... over hiring and retaining average candidates What is the multiple of performance improvement when you replace an average performer with a top performer in the same job? 14. What is the performance differential at Apple? 14 "The secret of my success is that we have gone to exceptional lengths to hire the best people in the world boy, does it pay off." Steve Jobs The difference between the average programmer and a great one it's at least 25 15. What is the performance differential at Google? One top-notch engineer is worth 300 times or more than the average 15 Alan Eustace Senior Vice President, Engineering and Research 16. 16 Are top performers worth the effort ? The top 5% of your employees produce what percent of your total output?* 26% Key learning prioritize and focus on top performers in key jobs * http://onlinelibrary.wiley.com/doi/10.1111/j.1744-6570.2011.01239.x/full 17. You cant attract or retain top performers unless you know their key excitement factors An average worker wants these things (Homer Simpson) 1. Doing the best work of your life 2. Proud of their impact 3. Great managers 4. Opp. to innovate/ take risks 5. Learn rapidly / be challenged 6. Choice of projects 7. Make decisions 8. Implement ideas 9. Input into schedule/ location 10.Work with top co-workers Top performers want these excitement factors(Lionel Messi) 17 1. Guaranteed pay 2. Exceptional benefits 3. Security 4. Time off with pay 5. No surprises/ predictable 6. Seniority matters 7. Equal treatment 8. Minimize risk and stress 9. Work/ Life balance 18. 18 Defining the leading edge of recruiting Note: recruiting is the function that has undergone the most radical change 19. 19 Highlighting the top trends in recruiting 1. The war for talent is returning 2. Mega-aggressiveness is common 3. Recruiting is focused on key jobs 4. Using the mobile platform for communicating 5. Measuring quality of hire 6. Social media feeding into your employee referral program Lets quickly look at some employee referral trends > 20. 20 Highlighting trends in employee referral programs Proven to produce the highest quality hires 50% of hires is the new program target Assigning referrals is effective (8 referrals per job) Referral cards are powerful Allowing family and friends to make referrals 20 And now a few broad recruiting trend illustrations > 21. 21 Would this be bold and aggressive recruiting? Tokbox parked a taco truck across from Yahoo HQ 22. Mobile recruiting the low tech way Zscaler drove this van for a week around their competitors neighborhood with this sign to entice Blue Coat employees 22 23. 23 Contests are on the leading edge 23 Google Code Jam contest This contest drew 36,000 participants Each solved 5 algorithmic problems including the most efficient way to whack zombies 24. 24 My Marriott Hotel video game on Facebook 25. Can you match what startups offer? Hipster offered new hires $10,000, a lifetime supply of beer, "authentic" skinny jeans, striped bowties, and a pair of Buddy Holly glasses 25 26. 26 Most organizations target college seniors Google begins recruiting in their freshmen year Also Facebook and Twitter 27. 27 Defining the leading edge of retention 28. 28 Highlighting the top trends in retention 1. Retention is about to become the main issue (SHRM) 2. Prioritize jobs and people 3. You cant keep the best forever, so consider whole life hiring 4. Personalized retention plans for key employees 5. ID bad managers the primary cause of turnover, innovation and productivity problems And now a few illustrations > 29. The retention actions of firms dont match the reasons employees leave Why employees leave 1.Better comp/benefits $ 2.Coaching programs 3.Mentoring programs 4.Tuition reimbursement $ 5.Stock options $ 6.Profit-sharing $ 7.Flexible hrs./schedule 8.Retention bonuses $ Only 2 of 6 causes are met Most common offerings 29 1.Career advancement 2.Pay/benefits $ 3.Lack of job fit 4.Management/environ 5.Flexible scheduling 6.Job security 1 of 6 is $ Sources: Gallup 2006 Sources: OI Partners 2012 30. Work flexibility improves retention Mass career customization (Deloitte) Every employee can dial up/ down their job as career aspirations & personal needs change. They can adjust: Work hours Travel demands Job responsibilities Results: Do most employees choose to dial down or dial up their career? And what is the ratio? Voluntary turnover rates of top performers choosing this option were 2x lower 30 2/3 dial up 31. Boomerang re-hires should be a goal Youre always welcome here e-card + alumni group 16% of hires 31 32. 32 Defining the leading edge of development 33. 33 Highlighting the top trends in development and learning 1. Increase organizational learning speed to match a VUCA world (Volatility, Uncertainty, Complexity and Ambiguity) 2. All level learning (not just top down) 3. Informal learning dominates 4. Proactive internal movement and job rotations 5. Using social networks and wikis to share best practices and to learn (Internal and external) 6. Simulations to assess and learn And now a few illustrations > 34. 34 Google led the way by determining that learning ability is the #1 competency Learning ability is the key determiner in deciding among candidates (along with their technical capabilities) Laszlo Bock VP of HR 35. 35 Next practice leadership development expectations Changing leader development expectations: 1. Leaders will need new adaptive competencies for the VUCA world 2. Because leaders will be needed at lower-levels many more leaders will be needed 3. Fewer will want to be permanent leaders 4. Because needs will change so quickly, super- accelerated development will be the standard 5. Entire team development will be necessary 6. There will be less on the job time to assess potential because the less experienced will need to be made into leaders 36. 36 Next practice leadership development expectations Changing leader development expectations: 8. Potential leaders must own their own and self-manage their development 9. Virtual development will be the standard 10.Development must use real problems 11.Development while on the job 12.Leadership development will have to be more data-driven An example > 37. 37 Googles project oxygen" revealed the 8 most effective management practices 1. Be a good coach hold regular one-on-ones & provide personalized constructive feedback 2. Empower your team and dont micromanage 3. Show interest in their success & personal well-being 4. Dont be a sissy; Be productive / results-oriented 5. Be a good communicator & listen to your team 6. Help your employees with career development 7. Have a clear vision and strategy for the team 8. Have key technical skills to advise the team 38. 38 Parallel benchmarking learn from everyone Keep an open mind (SW air) Learn from other functions (Supply chain & social media) Learn from parallel industries (Speed & quality) 39. 39 Facilitated internal movement is a trend Career mobility team use it to speed up internal movement and to proactively and accurately place 40. 40 Reverse mentoring is a trend Reverse mentoring is matching executives with in touch or diverse employees It keeps managers up to speed with trends It spreads inclusion It can increase the retention of younger workers Used by Cisco, HP, Ogilvy & Mather and GE 41. 41 You must assume everything will become obsolete Note that employee skills in a VUCA world will become obsolete, so you need a use by date 42. 42 Googles continuous learning approach Testing on the Toto toilet www.flickr.com/photos/gubatron/246489031 42 43. 43 Defining the leading edge of improving employee productivity, collaboration, innovation and speed 44. 44 Highlighting the top trends in productivity 1. In a fast-moving competitive world where you must be first innovation becomes a more important contributor to organizational success than workforce productivity 2. More organizations are learning that collaboration from face-to-face interactions dramatically increases innovation 3. Speed, agility and adaptiveness are essential in VUCA world And now a few illustrations > 45. 45 Begin by realizing that productivity results from all 20 of these key factors 1. A great manager 2. Effective plans & strategies 3. Clear and prioritized goals /activities to focus the work 4. Rapid learning / sharing 5. Right rewards & engagement 6. The right employee skills 7. 2 way communications 8. Performance metrics 9. Quality team members from great hiring & retention 10.Collaboration for innovation 11.Right job placement 12.Processes are integrated 13.Information for decisions 14.The right tools/technology 15.Qualityinputs/materials 16.Enough budget/ resources 17.The work environment is designed for productivity 18.Time devoted to the task 19.Outside of work factors 20.ID & removing barriers to productivity/innovation 46. 46 Identifying barriers is a powerful tool Identify barriers to productivity Utilizing employee surveys and interviews to identify barriers can lead to a dramatic increase in productivity & innovation (200% in two months) 47. 47 Flexibility dramatically impacts productivity Results Only Work Environment Pick your hours Pick where you work No in-person meetings required The business impacts: Retention ROWE individuals have ___ lower turnover ($13 million per year at $102k per employee) When workers switch to ROWE, their productivity jumps by 35% 45% 48. 48 A personalized how to manage you plan The best way to manage me list Ask a top employee if you were made your own boss How would you change your current job & how you are managed to make the job perfect? How do you prefer to communicate? How often would you like to meet? How do you like to be recognized? What rewards have the highest impact on you? What frustrates you? Describe the key elements of your dream job? 49. 49 A motivation survey tells you what stimulates them (besides $) Ask employees in a survey to rank their motivators The types of economic rewards that motivate The types of non-monetary rewards The types of recognition that will have the most impact This enables managers to customize recognition, & promote employee satisfaction and retention 50. 50 Weak employees draw managers away from more productive tasks Slacker employees cause managers to spend nearly one day a week (17% of their working hours) dealing with them Robert Half International 2012 An example A leading-edge way to deal with weak employees > 51. 51 A unique way to fix your hiring mistakes Even the best recruiting/training fails occasionally so Zappos calculated the cost of a bad hire over several years And as a result, to get rid of potential slackers Zappos offers $4,000 to anyone who agrees to quit during their initial training 2 - 3 % take the cash ` 52. 52 Increasing collaboration, innovation and speed are critical in a fast-changing world 53. What is required to increase innovation? Google has a formula for increasing innovation 53 Innovation = Discovery + Collaboration +Fun! Source: K M World Magazine Webinar 2008 Two quick examples of Google fun > 54. Google wants going to a meeting to be fun Slides in the office (they see no compliance issues) 54Firemans pole 54 55. 55 A Google conference bike because Google wants the meeting itself to be fun 56. Is your employee commute collaborative and productive? Free shuttle up to 60 miles each way Wi-Fi equipped so they can work It increases collaboration with non-team members Google, Facebook, Apple, Yahoo & Genentech 56 57. 57 Facebooks CEO reveals the importance of speed 57 In a world thats changing so quickly youre guaranteed to fail if you dont take any risks. The riskiest thing is to take no risks Were less afraid of making mistakes than we are of losing opportunities Move fast and break things The idea is that if you never break anything, youre probably not moving fast enough 58. 58 Defining the leading edge of TM metrics 59. 59 A history of weak metrics Only 12% of CEOs are confident on the quality of Human Capital metrics 59 AICPA survey 2012 60. 60 Highlighting the top trends metrics 1. Shifting to big data driven decision-making 2. Algorithms for precision (# of interviews) 3. Real time metrics improve decision-making 4. Predictive metrics that alert (who will quit) And now a few illustrations > 61. 61 Google is the worlds only data driven TM function All people decisions are based on data & analytics "We want to bring the same level of rigor to people-decisions that we do to engineering decisions" The best thing about using data to influence managers is that its hard for them to contest it. For most people, just knowing that information causes them to change their conduct 62. 62 Google people management is data driven Google has an R&D team in Talent Management People & Innovation Lab (PiLab) It runs dozens of experiments on employees in an effort to answer questions about the best way to manage a large firm 63. 63 And finally Game over! Can you compete with this? 64. www.drjohnsullivan.com 64 Did I make you think?