Shaping Tomorrow’s Leaders

Tips to Attract Rock Stars

Employee Engagement During Times of Disruption

Maximizing Performance, Productivity, and Profitability

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®

ADP Human Capital Volume 8

A more human resource.SM

The Future of Performance Management

Marcus Buckingham

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PeopleTalent Agility is Crucial in a Volatile Job Market New people. Specialized skills. Continuous training. How agile is your business when it comes to talent?

Shaping Tomorrow’s Leaders: Use Strategic Workforce Planning to Hire Innovative Talent Why skip-level management and other fresh thinking should be on your radar when it comes to finding and cultivating tomorrow’s leaders.

The Art of War: Finding and Keeping the Best and Brightest Did you know that more than two-thirds of global employees are active or passive job candidates? That translates into both risk and opportunity — are you prepared for both?

The Future of Performance Management The list of companies abandoning traditional performance reviews seems to get longer by the day. Have you given thought to what tomorrow’s performance management will look like in your organization?

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Contents

Change The U.S. Presidential Election’s Impact on Benefits: 3 Ways to Prepare for Coming Changes A new administration and Republican Congressional majorities are likely to translate into major benefits upheaval. Don’t wait to take inventory of your current health care, retirement and executive compensation plans.

Employee Engagement During Times of Disruption While U.S. employee job satisfaction is the highest in a decade, workers based outside the states may not be feeling the love. Read why you should take a wider world view when it comes to engagement.

Financial Forecasting in a VUCA World: 3 Tips for Success The sheer velocity of change today makes financial forecasting challenging at best. Here are three tips for honing your forecasting process.

Trends Talent Acquisition Trends for 2017: Tips to Attract Rock Stars Five trends your organization must embrace to keep your recruitment efforts on the right track.

Real Stories, Real ImpactLearn how PulteGroup, Inc. is driving business impact with a strategic approach to Human Capital Management.

Want to stay in-the-know on the latest workforce

trends and insights? We have a blog (or blogs)

just for you! Check them out at adp.com/blogs

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ADP® publishes ADP Human Capital Insights magazine free of charge. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services. ADP does not give legal advice as part of its services. While every effort is made to provide current information, the laws change regularly and laws may vary depending on the state or municipality. The material is made available for informational purposes only and is not a substitute for legal advice or your professional judgment. You should review applicable law in your jurisdiction and consult experienced counsel for legal advice. The ADP logo, ADP, ADP Human Capital Insights and ADP Research Institute are registered trademarks of ADP, LLC. ADP A more human resource. is a service mark of ADP, LLC. All other trademarks and service marks are the property of their respective owners. Copyright © 2017 ADP, LLC. ALL RIGHTS RESERVED. Questions: Please call ADP at 1-800-225-5237.

Is 2017 the year you unlock your organization’s full talent potential?

From talent acquisition to performance management, your organization can make bold moves to position itself as a destination for the best talent. Talent is an exciting landscape today, and we hear often about how our clients are challenged to attract, retain and engage top employees.

With the acquisition of The Marcus Buckingham Company, an innovator in human capital management, ADP® clients can expect a more scientific approach to

employee engagement and performance. TMBC and its founder, Marcus Buckingham, are pioneers in using data and research to drive effective talent management practices, and we’re pleased to welcome TMBC to the ADP family. Look for an article by Marcus in the pages that follow, plus many more insights into the challenges and pain points of talent management:

• Preparing for what’s ahead – The 2016 U.S. election’s impact on employee benefits could be significant. In a world full of uncertainty and complexity it will require you to remain agile and informed to stay ahead of the curve.

• Attracting the best – Prospective employees have high standards, and without the right recruiting efforts you may fall behind the competition.

• Hiring the next generation of leaders – Do you have the right internal structures to hire, train and develop tomorrow’s C-suite?

• Keeping financials in check – With recent regulation changes and more on the way, only the best HCM systems can help you make the most informed decisions for your financial forecasting.

• Adapting to the “new normal” – Traditional performance management is fading fast, but the right data can improve your methods and drive performance.

We welcome your feedback at insights@adp.com, and look forward to helping you unleash your organization’s full talent potential.

We want to hear from you

Send us an email at insights@adp.com

Ed FlynnPresident, Global Enterprise Solutions

How are you transforming your business?

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Talent Agility is Crucial in a Volatile Job MarketTalent agility — or the ability to juggle workforce needs to continuously replenish organizational skills and expertise — is a vital characteristic for organizations that want to remain competitive in a tight job market. The workplace and the business world are continually changing, and businesses regularly need new skills and expertise to build or maintain success. For most organizations, that is contingent on having workers who possess the requisite skills and expertise.

People

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As a result, to stay competitive, most organizations must consistently add new people with specialized skills or continually train existing employees to develop new skills. But employees today want to work wherever and however they want, according to the ADP Research Institute® report, The Evolution of Work: The Changing Nature of the Global Workforce.1 In response, employers should look to make it easier for them to work flexibly and take international assignments, which can also fulfill younger workers’ desire to experience new and different places.

Savvy employers are constantly working to balance the changing needs of employees, along with the workforce and competencies needed by their organizations.

Rethinking TraditionIn the past, organizations would look to hire employees for the long haul, and when new skills were needed, the organization provided training. This traditional model assumes that the right employees can be found in the employer’s local area, and that employees will be interested in learning whatever skills are necessary as the business changes. However, that practice is inconsistent with the current realities of a changing workforce.

Today, technology has opened up a whole new world of potential employees with different skill sets and the ability to easily hire workers from around the world. Additionally, workers are more interested in doing work that matters to them personally and adding skills that interest them than remaining with one firm for the entire length of their career, according to The Evolution of Work report.

The Turnover ApproachBased on these new realities, today’s organizations should undertake new approaches to keeping talent agile. For some, the ideal approach is to pay employees a nice salary for their skills as long as they meet the organization’s current needs. This approach doesn’t promise job security and may require layoffs at times, but it allows businesses to hire the skills they need ad hoc. While this on-demand approach to hiring talent doesn’t necessarily build loyalty, it works for many modern workers who are uninterested in long tenures

and more interested in building their resumes and careers with various projects and experiences that matter to them.

Another approach is to maximize global mobility by seeking the right employee from anywhere in the world — or sending the right employee anywhere in the world. This can keep talent agile while allowing an employee to develop their skills in other areas of the business. This helps employers retain internal knowledge and skills and lets employees feel that they are changing their careers more often, rather than being trapped in one role.

Today, technology has opened up a whole new world of potential employees with different skill sets and the ability to easily hire workers from around the world.

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2 Tawadrous, Paul, Freelance Nation Brings More Flexible Work Options to Intel, March 2016.

The Freelancer ApproachSome organizations have found that embracing the growing workforce of contract workers can supplement their own staff with people whose skills are needed, when they’re needed. By hiring contractors or freelancers, these businesses can achieve the talent agility they need without being committed to workers as employers. They can benefit from work and skills but don’t have to worry about laying off workers when a project is complete or new skills are needed. The contract workers also benefit, as increasing numbers of people are interested in creating their own careers as self-employed workers, who move from one project or commitment to the next.

Some organizations have found ways to combine the benefits of freelance workers with the loyalty of employees. For example, Intel has an in-house program called Freelance Nation, which includes employees who have signed up to work on a project basis.2 These employees can request to work on specific projects and negotiate their own schedules. This program offers the best of both worlds — the employees still have a salary and stability, but they have the autonomy and freedom of being a freelancer. “Freedom and adaptability are at the core of Freelance Nation,” Intel notes. As a result, employees are happier and more engaged, which also benefits the organization.

HR leaders, who are willing to develop flexible approaches to talent management and provide avenues and policies for talented workers who crave agility, should be able to amass the talent their organization needs to continue to evolve and remain successful.

“ Freedom and adaptability are at the core of Freelance Nation.”

1 The Evolution of Work: The Changing Nature of the Global Workforce, ADP Research Institute, 2016.

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Shaping Tomorrow’s Leaders: Use Strategic Workforce Planning to Hire Innovative TalentFor organizations looking to hire the next generation of leaders, finding the right mix of skills, drive and interest can be a challenge. According to ADP’s Strategic Drift: How HR Prepares for Change report, hiring skilled employees and retaining them are leading HR challenges.1

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While many training programs — including MBA programs — focus on developing business skills like understanding financial management or overseeing marketing, soft skills like communication and creativity can sometimes get lost in the shuffle. To be successful in the evolving business world, tomorrow’s leaders need problem-solving and critical thinking skills.

Here are some strategies to find today’s most promising talent and help shape individuals into tomorrow’s leadership:

Embrace Skip-Level ManagementThe Wall Street Journal reports that skip-level management, which encourages workers to develop a relationship with their manager’s manager, should encourage current leaders to invest in upcoming talent.2 With this model, higher-level management is able to see beyond day-to-day performance to share more holistic feedback. Developing relationships across tiers of talent helps connect individual efforts to the larger picture, provide opportunities for honest feedback and create a space for workers to reach out when they need guidance.

Redesign Your Recruiting ProcessThe typical organization’s recruiting process is designed to help identify the right candidate for a specific position. But it may be less optimized for exploring overall leadership potential and critical thinking skills. For organizations that want to invest in developing the next generation of leadership, a recruiting process with that outcome in mind can help generate long-term results. Changes may include how you screen resumes, the way you write job ads and how you structure the interview and candidate evaluation process.

From long-term career progression to navigating issues in their immediate day-to-day environment, mentors help provide another perspective on the workplace.

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Foster RelationshipsMentors are different from managers. Instead of providing oversight on immediate work and productivity, a mentor helps workers develop crucial skills and a long-term plan for impact and career growth. For example, pairing a potential rising star in your sales department with a top sales manager can help them take their performance to the next level. From long-term career progression to navigating issues in their immediate day-to-day environment, mentors help provide another perspective on the workplace. Mentorships can champion close ties throughout the organization, which can increase an employee’s sense of belonging and increase retention.

Blend Outside Perspectives with Institutional KnowledgeWhen developing your recruiting plans for senior positions, consider outside talent in addition to hiring from within. Outside talent can bring fresh perspectives and new networks, while talent promoted from within has valuable knowledge of customer relations and organizational practices and values. When both kinds of expertise are represented on your leadership team, your organization’s approach to solving problems may be more balanced and successful.

Focus on Long-Term Professional Development PlanningTo develop leaders within your organization, you should also focus on long-term career planning. For example, businesses use a range of training models, executive career coaches, rotational programs

and time overseas to help promising employees gain expertise. These investments pay off as individuals reach a higher level of authority in the organization. Investing in learning management systems can help facilitate this process, as they allow HR leadership to control and shape leadership training tracks. Employees will be able to better understand their objectives within the leadership training program, and managers will have visibility into data about who is excelling and fully taking advantage of these improvement opportunities.

For example, consider the case of Marriott, an organization that has developed a number of initiatives to foster talent throughout their long history, according to ADP’s Strategic Drift report. One recent effort, called their “Talent Network,” provides staff the opportunity to work on projects from other areas of the organization. As a result of this and other initiatives, the organization’s turnover rate has dropped to just over 10 percent for management.

Use Talent Intelligence SolutionsTalent intelligence solutions are customized software programs that help enterprise talent management teams identify leadership potential. From developing a picture of the talent you have available to charting a training road map, intelligence solutions allow businesses to make real-time assessments and offer customized feedback to team members. A talent intelligence solution can also play a role in long-term planning and provide a stream of insights for managers to draw on during employee evaluations.

Many organizations are struggling with the reality that their future leaders may lack key skills like critical thinking or the diverse perspectives that are needed to lead. But developing leadership shouldn’t be a linear process. By taking a long-term approach to finding and fostering talent, it’s possible for HR to cultivate leaders by identifying potential, investing in training and mentorship and mapping out career paths. The right internal structures — like effective recruiting processes and talent intelligence systems — help scale these activities across the enterprise.

1 Strategic Drift: How HR Prepares for Change, ADP Research Institute®, 2016. 2 Gimbel, Tom, The Case for Skip Level Management, The Wall Street Journal, October 2016.

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The Art of War: Finding and Keeping the Best and BrightestAs your organization competes for the best and the brightest, remember the words of Sun Tzu: “Opportunities multiply as they are seized.” Amidst the current climate of disruption and uncertainty, 61 percent of global employees don’t believe in job security and may be looking for change.1 And that represents both a retention risk and a recruitment opportunity.

More than two-thirds of global employees (70%) are active or passive job candidates

28%

23%

47%

ACTIVELooking or engaged in the interview process

NOT LOOKINGand not open to move to a new company right now

PASSIVENot actively looking but would consider a new company if contacted

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Getting ready for battle It’s up to you to meet the changing needs of today’s top talent. Attract the best by knowing what matters to your high performers. Engage them with the right training to support their goals. And keep them by keeping your promises. A talent war victory is yours for the taking.

Do you have what it takes to attract, engage and retain?

Five factors in deciding to take a job are also the factors that drive them to stay.

by knowing what really matters

Career development

Career developmentWork hours

Work hoursWork itself

Work itself

Company reputation Company reputation

Flexibility Flexibility

with meaningful & purposeful opportunities

by delivering on your promises

ATTRACT

ENGAGE

RETAIN

73% 71% 49%of employees say their personal development goal is to grow at their current company

YET SOfeel companies miss the mark on what they want to achieve in their jobs

believe they have to leave their current job to advance their career

61% walked away from a job opportunity because it turned out to be different than expected

MONEY TALKS

ATTRACT: RETAIN:

16.1%salary increase would

entice an employee to move to a new company

BUT

44%of employees would consider a job that offered the same salary

they receive today, or less

1. 1.

2. 2.

3. 3.

4. 4.

5. 5.

1 Global Workplace Trends Study, ADP Research Institute®, 2016

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The Future of Performance ManagementIt seems we all want to leave the past of performance management behind. GE® has scrapped its old approach to annual reviews and raises. Goldman Sachs® is discarding its nine-point performance evaluations. Morgan Stanley® is ditching its numerical ratings system. Microsoft®, Adobe®, Netflix®, Motorola®, Disney® — the list of companies abandoning traditional performance reviews is impressive.

Few will mourn those old systems. But that doesn’t mean we’re clear on what the future should look like. While some organizations are eliminating ratings altogether, others are simply introducing different kinds or cadences of ratings.

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EXAMPLE 3: CompetenciesIt’s just as bad in the other direction. Competency models were initially intended as a way to assess performance. But they sneak over into the acceleration part of the equation. We use them to define performance for our people, and link them to our learning and training content. Now something that was meant to measure your performance is guiding how we try to develop it.

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So, how do we get clear? We start by realizing that when we talk about performance management, we are talking about two distinct problems.

First, we are talking about performance assessment: how do we reliably reveal performance? This is a measurement challenge. Second, there’s the problem of performance acceleration: how do we create more or better performance? It’s a development challenge.

One stone, zero birdsAlthough “two birds, one stone” seems like a model of efficiency, in practice it is inefficient to tackle assessment and acceleration together.

Let’s consider some common examples to see why this is so:

EXAMPLE 1: OKRsSome companies have put Objectives & Key Results (OKRs) in place, thinking these will accelerate performance. Instead, these OKRs inevitably become a core part of the way we measure performance. But when people are measured by their goal completion, they will adjust those goals down to make them more achievable. OKRs, by trying to solve for both problems, solve for neither.

EXAMPLE 2: FeedbackWe use feedback to try to develop people, but it creeps into the assessment realm. We consult your bosses and peers and then we aggregate their feedback and put a number on it and use it to estimate how you performed last year — moving feedback from the acceleration bucket to the assessment bucket. The problem? When people know that their feedback is about assessment and not just acceleration, they skew their feedback.

When people know that their feedback is about assessment and not just acceleration, they skew their feedback.

The first problem: Performance assessmentThe key problem in performance assessment is that our systems are built on the assumption that people are reliable raters of other people.

Unfortunately, decades of research reveal that we are all hopelessly unreliable raters of others. The issue is something called the “idiosyncratic rater effect.” Studies show that when I rate you, as much as 60 percent of that rating reflects me, not you. And if one person is generating bad data, then adding more raters in 360-degree assessments doesn’t remove the effect; it multiplies it.

Fortunately, there are methodologically sound ways to generate data that reveal the true range in performance and potential of our people, and to do so in a way that solves for the idiosyncratic rater effect. It boils down to three steps.

First, invert the rating questions. People are reliable raters of their own intentions. So don’t ask team leaders to evaluate their employees; ask them what they would do with each employee.

Next, identify each team leader’s rating “fingerprint” and use it in an algorithm that can produce a score that neutralizes the idiosyncratic tendencies of the team leader.

Finally, weight the data. Ratings from those who have worked with you most often and most closely should count for more than those who haven’t worked with you as much.

The second problem: Performance accelerationA significant body of research — by TMBC, Gallup, and others — shows that two simple questions are the most predictable drivers of performance and engagement:

• At work, do I have the chance to do what I do best every day?

• Do I know what’s expected of me at work?

Address these two questions successfully for every employee, and you will drive performance. The best team leaders get people to say “yes” to those two questions with one ritual: frequent, one-to-one light-touch check-ins about near-term future work. It may seem overly simplistic, but our research shows that when team members and team leaders consistently do these check-ins, engagement (the precursor to performance) can rise dramatically in a matter of months.

There’s a scene in “Raiders of the Lost Ark” where Indiana Jones realizes that his enemies are missing a key piece of the puzzle pointing the way to where the Ark is buried. They only have half of the picture, and their system will never lead to success. He jubilantly exclaims, “They’re digging in the wrong place!”

Like Indy, we need to realize that we’ve been digging in the wrong place. But this realization should excite us, because it’s the first step on the road to the future.

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These are just three examples, but there are countless others, of how systems that try to solve for both assessment and acceleration at once wind up doing both badly. So, what would it look like to tackle assessment and acceleration as two separate problems?

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Change

As a new administration takes the reins of the country, along with Republican majorities in both houses of Congress, the election’s impact on benefits could be significant. In what was a divisive election, Americans on both sides of the political spectrum responded strongly. According to a recent survey by Gallup,1 75 percent of Americans remain “surprised” by the results, approximately 40 percent are “relieved,” and 42 percent are “afraid.”

The U.S. Presidential Election’s Impact on Benefits: 3 Ways to Prepare for Coming Changes

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Just like you can’t predict each individual’s reaction to the election results, you won’t be able to foresee every possible outcome that will come out of this change in administration. You can, however, do your best to make sure your organization is prepared for the election’s impact on benefits. “Much remains to be seen with the new president and the new Congress. There will continue to be uncertainty as the U.S. political landscape continues to evolve and until we start to see new Executive Orders and legislation issued,” says Ellen Feeney, vice president, counsel, in ADP’s Global Compliance group.

To be prepared, organizations should start by taking inventory of health care plans, retirement plans and executive compensation plans.

Health Care PlansOne significant change could be the

repealing and replacing of the Affordable Care Act (ACA). While this change will certainly not occur overnight and it is not clear what exactly any replacement will include, changes could include heavier use of Health Savings Accounts (HSAs), the ability to purchase insurance across state lines and the allowance of states to manage Medicaid, according to information from DonaldJTrump.com.2

Organizations don’t have enough to go on to determine which of these changes is most likely, but they can begin the process of planning for some of them. One important task will be to confirm that your plan documents are current and being administered in accordance with plan terms. Adopting new changes to plans will be easier if your organization doesn’t have to look backward and correct current compliance issues.

Additionally, the expansion of HSAs and their tax incentives gives organizations an opportunity to plan for future benefits offerings. HSA contributions are tax favorable and the amounts contributed can roll over with tax-free growth. If HSA funds are used for nonqualified medical costs, those amounts will be taxed accordingly. Thus, HSAs give organizations another option for planning for health care expenses as well as retirement.

1. Adopting new changes to plans will be easier if your organization doesn’t have to look backward and correct current compliance issues.

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Executive Compensation Plans

Organizations would also be wise to review their current executive compensation plans. For example, there could be changes to the Dodd-Frank Act, which focuses on an array of executive compensation issues and disclosures for public businesses. Additionally, changes may impact Section 409A and 457(f), along with other executive compensation rules under Sections 162(m) and 280G.

Although a repeal of these sections seems unlikely, revisions to these sections could be significant, thus impacting executive compensation for public and nonpublic businesses. Much like health plans and retirement, organizations should take time to assess their executive compensation arrangements to confirm current compliance and make the necessary preparations to be ready to pivot as necessary.

“Uncertainty on changes that may impact HR, payroll and benefits will continue as Republicans work through the complex policy, political and practical ramifications of deciding what’s next in these areas, including the future of the ACA,” Feeney says. “Both employers and employees will be impacted by all the changes that have yet to be defined.” By conducting a comprehensive review of current compliance needs, HR leaders should be able to help their organization be prepared for the election’s impact on benefits in the short term and ready for whatever future changes may occur down the line.

3. Retirement PlansOrganizations should also examine their

retirement plan offerings because potential tax changes could affect retirement participation and the way workers plan for retirement, according to Forbes.3 In addition, state activity in the retirement plan arena could also change. Currently, both the Internal Revenue Service (IRS) and the Department of Labor (DOL) are heavily auditing retirement plans. But because it is unclear what, if any, change the new administration could bring to this process, organizations should continue to diligently check their current retirement plans — from documents to administration — to confirm compliance with applicable regulations. This should allow for more flexibility if future changes need to be adopted quickly.

2.

1 Trump Victory Surprises Americans: Four in 10 Afraid, Gallup, November 2016. 2 Healthcare Reform to Make America Great Again, DonaldJTrump.com, 2017.3 Bergman, Adam, How a Trump Presidency and Lower Taxes Affect Your Retirement Planning, Forbes, November 2016.

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Employee Engagement During Times of DisruptionEmployee job satisfaction in the United States is the highest it’s been in 10 years. According to the Society for Human Resource Management (SHRM), “88 percent of U.S. employees reported they were satisfied with their job overall, with 37 percent reporting they were very satisfied and 51 percent reporting they were somewhat satisfied.”1 There are many factors that go into employee engagement, but one reason those numbers may be so high is the relatively stable domestic economy. Organizations have been able to reintroduce benefits that were discontinued during tougher financial times, and allow for perks such as flexible schedules and remote work that may not have been available just 10 years ago.

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According to Deloitte, 22 percent of HR professionals said their organizations have a poor program to measure and improve engagement or no program at all.2 When a business is experiencing a disruption of any sort — be it a CEO stepping down, a divestiture or a failing product — systems must be in place to keep things moving. Research tools allow HR leaders to identify which factors influence their employees most, but the engagement battle doesn’t end there.

As time passes, your employees age, new staff comes onboard and your firm grows, downsizes or parcels off — all of which affect engagement. Surveys help businesses address the present needs and wants of their staff, but these methods are far more effective when measured against benchmarks. By incorporating employee engagement measurement software into your existing HCM systems, you should be able to more completely analyze employee data and establish metrics, such as compensation scales and benefits utilization, to guide future decision-making.

Communicating During DisruptionOnce you know what motivates employees, keep the lines of communication open to prevent losing their trust. When something disrupts your

processes — such as changes in health care compliance affecting employee salaries and benefits — communication keeps your employees calm and confident knowing you’re protecting their best interests.

Successful communication involves being as transparent as possible at the earliest stage possible. Don’t let your staff guess or let rumors heighten fears. By being as transparent as possible, your organization retains control and keeps employees engaged. Once all the information is

But while the U.S. economy has remained mostly stable, other countries are experiencing economic turmoil, so you’ll want to take a more comprehensive global view of your employee satisfaction. The diversity of your workforce — generational, geographic and cultural — can make satisfaction a more complex challenge than ever before.

Organizations are shaken in times of merging, dismantling or restructuring, and all of those factors influence how engaged and loyal their employees will be. So how do you measure and address employee engagement in a time of disruption?

Identifying What Keeps Engagement HighIt’s difficult to engage your staff if you don’t know what motivates them, and that can vary depending on the demographics of your employees, the type of industry and the size of your organization. Research tools and software that give you access to data and benchmarks on employee engagement can help you identify what compels employees to be active and dedicated staff members. By plugging in information about your organization, you’ll discover the key drivers and recommended solutions for meeting your staff’s needs to keep employee engagement your number one priority.

22% of HR professionals said their organizations have a poor program to measure and improve engagement or no program at all.

22%

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disseminated, schedule follow-up group sessions, a written Q&A series and designate someone to field questions.

The ADP Research Institute® report, The Evolution of Work: The Changing Nature of the Global Workplace, indicates that social media will become the preferred collaboration method for

organizations in the future. Therefore, instead of simply pushing information at your employees, encourage them to connect with each other online by leveraging your existing internal platforms or introducing new communication systems.

Handling Engagement During a DivestitureDuring a divestiture, consider how you’re presenting information to your employees. Employers should be very clear about what a severance package would include.

For large organizations, advanced notice of a layoff is often required. Documentation on any severance packages, notices on benefits payout structures and dates of final paychecks should all be presented in an organized package for the employees who will be leaving the firm due to a divestiture. In addition, if your organization is operating both in the United States and abroad, the differing regulations and requirements for each country need to be fully considered and accounted for. You could also offer incentives for those who remain employed during a divestiture, regardless of whether they will transition out after the sales process or remain an active employee after the transition is complete.

Your employees are your most valuable investments. By understanding the benefits and perks that keep them engaged and communicating any changes in a transparent and timely manner, no matter how hard the winds of change blow, you should be able to keep your organization headed in the right direction.

Where are your employees on the Engagement Meter? Try our interactive tool today to help you drive work happiness within your organization.

When something disrupts your processes — such as changes in health care compliance affecting employee salaries and benefits — communication keeps your employees calm and confident knowing you’re protecting their best interests.

1 Employee Job Satisfaction and Engagement: Revitalizing a Changing Workforce, Society for Human Resource Management (SHRM).2 Brown, David: Melian, Veronica; Solow, Marc; Chheng, Sonny; Parker, Kathy; Culture and Engagement: The Naked Organization, Deloitte University

Press, February 2015.

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Financial Forecasting in a VUCA World: 3 Tips for Success

Financial forecasting is challenging in a world full of volatility, uncertainty, complexity and ambiguity (VUCA). Change happens fast and can disrupt our ability to keep up. Each and every passing year we see events unfold that have a major impact on the global economy and the ability of organizations to make accurate financial forecasts. With recent changes in regulations, and more coming, Human Capital Management (HCM) is among those volatile, VUCA landscapes that HR and finance leaders need to navigate.

Look Ahead, But Not Too FarAccurate forecasting can be difficult — even in a climate of relative stability — but the sheer velocity of change today makes the usefulness of any forecast problematic at best. The horizons are getting shorter and looking ahead can be nearly impossible when each of your underlying assumptions topples. Revisiting your financial forecasts in light of change can be crucial to the continuing usefulness of any financial forecast. You’ll have to change your approach from the traditional “snapshot” to a “live streaming video.”

Let’s examine a couple of recent examples from the realm of human capital management for context. In Indonesia, where many global businesses operate, the minimum wage changes often, not just at the national level but at the provincial level, according to Forbes.1 Tax levels change too, making compliance in Indonesia an always-dynamic effort.

In the United States, the Department of Labor (DOL) issued new overtime rules last year that were due to impact some four million U.S. workers and would

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have forced employers to reclassify some workers from exempt, salaried status to nonexempt, hourly status. But just a week before the planned, December 1 implementation of the new U.S. OT rule, a federal court issued a preliminary injunction suspending the nationwide implementation of the regulation.

The point here is simple: forecasts can, and sometimes will, need to change. Having a strong, integrated Human Capital Management system in place can help you establish a firm foundation for flexibility, as you’ll need to be ever-agile in a VUCA world.

Here are three ways to solidify your forecasting process:

Forecasting risk is ever-present in the increasingly VUCA-centered business world. But if you have HCM systems you can trust to provide accurate data, structure your processes with agility in mind and always prepare for possible change, you should be able to make better, more informed decisions for your workforce and your financial forecasting.

Bake Resilience and Agility Into Your ProcessYou’ll of course, make the best forecasts you can with the information you have at the time, but be

ready to reassess. You’ll always have tough choices to make in HCM, and even the most data-driven decisions present risks. It’s no longer a matter of if you’ll need plan B, but when. For example, a Plan B might involve supplementing full-time workers with seasonal part-time employees rather than hiring additional full-timers, or starting a retraining program if the company decides to pursue a different line of business.

Whatever your plans, if you’re not integrating agility and flexibility into your HCM strategy, you’re inviting trouble.

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Let Data Inform Your ForecastsToday, trusted and complete data is the

foundation for well-informed decision-making. The rapid pace of change requires putting a higher priority on data accessibility and analytics to help guide and provide context to any key decisions. According to the ADP® report, Dealing with a VUCA World: HR’s Investment Opportunity, having integrated structures and systems in place can support the collection and analysis of your most important data.

Successful organizations are often data-driven and leverage their talent and resources with a real-time view of data. There will always be a need to align HR strategies with the business, but to do that you’ll need to look at non-HCM data, such as sales projections and project timelines, to help forecast and align HCM needs. The capacity to collect data from an HCM system that is fully integrated throughout the organization is key.

Engage in Regular Discussion

You should talk about the assumptions underlying any financial forecast. When those assumptions are proven false, which can happen overnight, your leadership team needs to get together and reassess, modifying assumptions and the overall financial forecast. Sounds time consuming, right? Yes, but it’s one of the only ways to maintain the relevancy of any financial forecast. Finance and HR leaders should partner to share HCM data and make collaborative decisions in the areas of talent and resource allocation.

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1 Shao, Heng, Minimum Wage Setting Reforms on The Horizon in Indonesia, Forbes, March 2015.

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24 ADP Human Capital Insights®

Trends

Talent Acquisition Trends for 2017: Tips to Attract Rock StarsOrganizations have always placed substantial value on talent acquisition, but the game has changed considerably over the years. According to LinkedIn, 83 percent of recruiters say that talent is the top priority at their organizations and the majority of teams plan to increase hiring volumes over the next year.1 But how do you ensure you’re able to attract top performers in your industry and stay ahead of your competition?

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Recognizing and understanding these five talent acquisition trends for 2017 should help your business keep your recruitment efforts on the right track.

Companies whose C-suite executives and leadership team use social media to communicate about their core mission, brand values and purpose are more trustworthy.

Source: Glassdoor

1. Forward ThinkingRecruiters should be able to leverage online profile data into usable intelligence and determine likely candidates. But new trends for 2017 go beyond better data analysis. They’ll also require HR departments to reach out and contact prospective employees even before a position is available. Waiting until job descriptions or salary ranges are finalized before making overtures of interest can impact success rates, especially if other organizations beat you to the punch. So developing a pipeline of potential candidates and hinting that a position will be available soon makes it possible to improve your chances of overall hiring success. Don’t just think about immediate needs in 2017, but instead design recruitment around future corporate requirements.

2. Social Media OptimizationSocial media tools such as Twitter and Facebook are on track to become even more influential in the coming year. According to a survey from Glassdoor, three-quarters of respondents “believe that companies whose C-suite executives and leadership team use social media to communicate about their core mission, brand values and purpose are more trustworthy.”2

Because of the continued proliferation of social media, it’s clear that the recruiter and candidate interaction now goes deeper than simply a job ad and response. Candidates want to believe in the organization and feel valued by potential employers, and this process can often start on social media. The organization should promote its values through social channels, and recruiters should be able to identify up-and-coming social communities that contain new job seekers. By attacking these angles from both sides, recruiters should be able to organically develop prospective relationships, leading to more fruitful interactions once active recruitment begins.

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Ready to hire in 2017? Make sure you’re prepared to think long-term. The world is changing rapidly and that means your potential employees are expecting new and different things from the recruiting process at a rapidly accelerating pace. Knowing these talent acquisition trends for 2017 should help you set the stage to attract rock star candidates this year and beyond.

4. Revitalization of Your Online PlatformIn 2017, HR leaders may need to spend more on marketing in order to create the best possible brand platform and attract top-tier candidates. While part of this initiative focuses on working closely with talent to improve their onboarding experience, that’s only the end result. In order to attract the interest of top performers, recruiters must set the stage with responsive and interactive internal recruiting platforms, which help engage prospective employees and drive up their interest in exploring opportunities.

5. Improve the Candidate ExperienceAccording to Forbes, the new year also brings a new focus on the candidate experience for those who may not receive initial job offers but could at some point down the line.3 Don’t delay on reporting an application status or letting candidates know they didn’t get the job. It can help improve their perception of the organization if you communicate honestly and then stay in touch over social media. The next time your organization has a job to advertise, these same job seekers may be the best fit. And thanks to respectful handling their first time around, they’ll likely still be interested.

3. The Value of the IndividualDesigning an individualized process means candidates feel seen and heard during the hiring process. This is especially important for Millennial candidates, who have a more pronounced desire for meaning within their jobs than any previous generation, according to the ADP Research Institute® report, The Evolution of Work: The Changing Nature of the Global Workplace.

Many organizations have adopted a coaching strategy where recruiters mentor candidates before, during and after the hiring process to ensure their values align with that of the business. This also offers a space for prospective hires to voice concerns about the workplace and have these issues addressed. This can result in a personalized experience that helps drive ongoing career growth.

1 Ignatova, Maria, New Report Reveals the Trends That Will Define Recruiting in 2017, LinkedIn, October 2016. 2 50 HR and Recruiting Statistics for 2016, Glassdoor. 3 Schawbel, Dan, 10 Workplace Trends You’ll See in 2017, Forbes, November 2016.

Challenges As the leading homebuilding company, PulteGroup, Inc. builds consumer inspired homes and communities to make lives better. With a number of disparate HR systems, they faced a challenge of efficiently tracking time and attendance across their workforce. About half of the workforce is hourly and is geographically dispersed due to the nature of the business where employees are at job sites, model homes and out looking for land. The company wanted to ensure they were providing their workforce with the right tools and processes to track their time.

The ActionPulteGroup needed a solution that could seamlessly integrate with other core HR systems to improve the visibility of employee time since many employees are not in the office on a daily basis.

The organization partnered with ADP® to address their time and labor management issues and improve the solution for their entire workforce. The ADP Time and Labor Management solution offers teletime capabilities. The workforce’s previous concern of not being at a computer to track their time was no longer an obstacle as the new system streamlined the process and empowered workers to own their own time tracking. The ADP Time and Labor Management system facilitates improved reporting and has the ability to track time and attendance information across state lines to help achieve compliance and regulations for the entire workforce.

Utilizing Time and Labor Management to Support Business Growth

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PulteGroup, Inc.

The ImpactPulteGroup increased employee productivity and accountability. Employees are able to efficiently track their time. Managers receive reminders to go into the system and review hours worked which is helping to improve overall accuracy. The ADP Time and Labor Management solution helped PulteGroup with compliance across state lines by enhancing the ability to track workforce information.

Efficiently and accurately tracking time is now a reality. The PulteGroup continues to expand upon new technologies for their workforce and is leveraging ADP’s mobile capabilities, which enables employees to focus on their core business of building consumer inspired homes and communities to make lives better.

“ It is invaluable for us to have a partner that understands our needs and comes up with the best solution for our business.”

Stacy Kruger,VP Compensation and HR Service Delivery

PulteGroup, Inc.

About PulteGroup, Inc.• One of the industry’s most versatile homebuilders able to meet the needs of multiple buyer groups and

respond to changing consumer demand• 4,500 nationwide employees across 26 states pultegroup.com

Real Stories, Real Impact

“You found the right employee.I found a purpose.”

Finding that perfect fit for a job isn’t easy, but it’s the key to building a successful team. See how insight-driven recruiting and smart talent management solutions from ADP can help your business find the perfect person for the job. Visit adp.com/hellotalent to see how we can streamline your business’s talent management and make work larger than a paycheck.

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