Straight Talk Book No. 10

The chemistry of talent

(New ways to think about people and work)

Straight Talk Book No. 10

The chemistry of talent

(New ways to think about people and work)

In the time it takes to read this book 728 babies will be born in India,

123 will be born in the United States, and only 19 will be born in Germany.

ContentsWinning formula? 5

This is a business problem 7

Are you ready? 8

Start here 10

Measure what matters 12

The beginning, the middles, and the end 13

No size fits all 15

Are you listening? 16

Building the 21st century workplace 18

What can you promise? 20

What can you deliver? 21

ДУмайте глобалЬно 22

Here, there, and everywhere 25

Time and space 26

Business-driven HR 29

You’re on 30

C12

H22

O11

sugar

CH3COOHvinegar

5

Winning formula?

Some of the world’s most admired companies today say they’ll lose half of their key people over the next five years.

And that’s just the tip of a very big iceberg. A broader shortage of talent looms dark on the horizon, even as new generations of workers splash into the global talent pool, loaded with expectations that can easily upend business as usual.

The good old corporate ladder is fading under the weight of change—giving way to a new corporate lattice, where talented people can

move in any direction across a widening range of options. When a company doesn’t provide the choices they need, the direction they choose could be out.

Knowing what choices to provide—and making those choices accessible—requires work in three areas: a business-focused talent strategy, the right solutions, and an infrastructure that can evolve to handle whatever comes next.

The trick, of course, is putting the right elements together in a winning combination.

For a student starting in a university today, half of what she learns in her first year will

be outdated by the time she graduates.

7

This is a business problem

Talent today is at the top of the business agenda—and not just for HR. From CEOs to CFOs to business unit leaders, executives everywhere are worried about talent. Specifically, they’re worried about their leadership benches, the scarce supply of critical employees, and how to keep and develop the people they have.

Globalization has changed the equation. Global customers, global workforces, distributed work, and more. Unfortunately, most companies have not set up their talent and HR programs to compete in a flat world.

On the other side of the spectrum, you don’t have to dig very deep in business to discover a not-so-secret truth. Tethered by short leashes to cell phones and email, the best people

today are burning their candles at both ends. Which probably isn’t all that healthy. From junior managers to senior executives, the pattern is the same. All work all the time makes Jill a crispy critter.

Technology and information are stretching the fabric of the workplace lattice in every direction. Not just what people are doing, but how and where they’re doing it, too.

Any business strategy you choose will be shaped by workforce challenges—whether you recognize it now or when it’s too late. Acquisitions, mergers, downsizing, offshoring, partnering, you name it—people are central. And unless you understand exactly how things are evolving, you’ll have a hard time getting the workforce you need.

8

In the face of the talent crunch, it’s tempting to jump right in and start fixing things—especially if you tend to prefer action to analysis. In this case, it may be better to live with uncertainty a little while longer.

That’s because too many companies simply don’t have the foundation of facts required to start creating the strategies, solutions, and infrastructure they’ll need to build the right workforce.

Before you start designing solutions, work with your business leaders to confirm their strategic priorities—and to understand what

those priorities require from critical talent. Ask them to identify the talent gaps they’re facing and explore options for closing them. Find out where they stand in succession planning—not just for leaders, but for all critical talent.

After that, you’ll want to get even more specific. You need to know exactly what it will take to create the jobs, organization, and workplaces your best people need to thrive.

If you’re looking for a framework for developing those questions, you’ve come to the right place.

Are you ready?

Take the test

Talent is on our CEO’s priority list. Really.

We’ve identified the critical workforce segments we need to achieve our business goals.

We understand how global workforce changes are affecting our talent needs.

Our approach to workforce planning is grounded in a clear understanding of our business priorities.

We use data analytics and predictive modeling as part of workforce planning, recruitment, and retention.

Our HR department works closely with business leaders. We are definitely ahead of the talent curve.

When planning workforce initiatives, we think holistically, with inputs from tax, facilities management, IT, and legal.

Our managers understand the career-life needs of critical talent, and we’re customizing our programs to meet those needs.

We’re well on the way to mastering the practice of talent dialogue.

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

DISAGREE AGREE

Take two minutes to rate your company on each of these statements. “5” means you strongly agree.

Scoring 0–10 You’re missing the boat. Being unprepared may not be hurting you

now, but it will. 11–20 You’re on the way, but talent and work aren’t yet a competitive

advantage. 21–36 You’re positioned to excel when it comes to getting and keeping the

best people. 37+ We wouldn’t want to be your competitor.

GsGlobal

Sourcing

AdAccelerated

Development

G4

Generational Strategy

GmGlobal

Mobility

SocialNetworking

Sn

VirtualWorkplace

V

Mass CareerCustomization™

Mcc

RtRewards

Transformation

EvEmployee Value

Propositions

TdTalent

Dialogue

Coached Organization

Co

Strategy Catalysts

Talent Solutions Work Solutions

Infrastructure

Al

Align

An

Analyze

D

Differentiate

BaBusiness

Alignment

WpWorkforce

Planning

WiWorkforce

Intelligence

RmRisk

Management

CwsCritical

Workforce Segments

TrTalent

Roadmap

HrsHR

Strategy

TaTalent

Assessment

M

Metrics

DifferentiatingCore

T

Technology

SdHR Service

Delivery

DiDiversity &

Inclusion

O2

Orientation & Onboarding

RsRecruitment &

Staffing

LdLearning &

Development

KcKnowledge & Collaboration

PmPerformance

Management

SmSuccession

Management

WdWork

Design

CmChange

Management

ErEthics &

Responsibility

C

Communications

OdOrganization

Design

JdJob

Design

Cu

Culture

Le

Leadership

The Periodic Table of Talent

How to use this table

Use the Periodic Table of Talent to explore the elements of strategy, solutions, catalysts, and infrastructure that could be part of your overall approach to talent management.

1. Business strategy and metrics first. Make sure the needs of the business are driving your agenda. Think through how your workforce needs will change in the years ahead. What kinds of people will you need—by when—and where in the world will they come from? How will you measure progress?

2. Solutions. Every investment in solutions should tie directly back to the elements of your strategy. Some solutions will be focused on talent issues like employee recruitment or career development. Others will be focused on work issues—the what, when, where, and how of work.

3. Catalysts. Some elements have special potential to accelerate performance. These catalysts can drive differentiation more quickly than other solutions and deserve special attention.

4. Infrastructure to enable the solutions. Some of the infrastructure you need may already be in place, but you may have to upgrade your systems—and maybe even your culture. Keep improvements focused on delivering the specific solutions necessary to support the strategy.

Elements in the table can be defined as “core” or “differentiating.” Many companies will need to pursue both. Core elements support the traditional employee lifecycle. Differentiators have higher potential to drive competitive advantage.

GsGlobal

Sourcing

AdAccelerated

Development

G4

Generational Strategy

GmGlobal

Mobility

SocialNetworking

Sn

VirtualWorkplace

V

Mass CareerCustomization™

Mcc

RtRewards

Transformation

EvEmployee Value

Propositions

TdTalent

Dialogue

Coached Organization

Co

Strategy Catalysts

Talent Solutions Work Solutions

Infrastructure

Al

Align

An

Analyze

D

Differentiate

BaBusiness

Alignment

WpWorkforce

Planning

WiWorkforce

Intelligence

RmRisk

Management

CwsCritical

Workforce Segments

TrTalent

Roadmap

HrsHR

Strategy

TaTalent

Assessment

M

Metrics

DifferentiatingCore

T

Technology

SdHR Service

Delivery

DiDiversity &

Inclusion

O2

Orientation & Onboarding

RsRecruitment &

Staffing

LdLearning &

Development

KcKnowledge & Collaboration

PmPerformance

Management

SmSuccession

Management

WdWork

Design

CmChange

Management

ErEthics &

Responsibility

C

Communications

OdOrganization

Design

JdJob

Design

Cu

Culture

Le

Leadership

10

Start here

No two businesses will have identical formulas for talent, not even similar companies in the same industry. How you assemble the individual elements of your talent strategy has to reflect your business strategy.

For example, if you intend to drive growth through acquisitions, your M&A strategy should be designed to help fill talent gaps. And you’ll want to master the ability to keep critical people through the ups and downs of a merger.

Knowing which talent gaps you have to fill is a priority. If your leadership team doesn’t know what kinds of jobs you’ll have to fill three to five years from now, that’s a problem.

But make sure you’re talking to line people, too. Are they struggling to balance their lives? What are you missing that would strengthen the connections between your workforce and your company’s critical business challenges?

One key element of any effective talent strategy is to identify critical workforce segments—those high-value employees who can be especially difficult to replace. That doesn’t mean you can ignore the other segments, but you’ll want to give special attention to those who are most critical.

Strategy

CwsCritical

Workforce Segments

1

1 2 3

Impact on value chain

Dif

ficu

lty

of

rep

laci

ng

ski

lls

4 5

2

3

4

5

Reflect alignments formed where companies do not have the existing skills and cannot develop them in-house cost effectively

Specialists

Consist of highly skilled, highly trained individuals who drive a disproportionate percentage of revenue growth

Critical Workforce Segments

Reflects alternatives companies can use to meet periods of high demand for employees or the need to lower costs

Flexible Labor

Reflects the backbone of the company—people who are well trained on firm processes but whose knowledge and skills are more easily replaced

Core Workforce

Which workforce segments matter most?

12

While it’s important to have an intuitive understanding of your workforce needs, it’s even more important to back up that understanding with facts and disciplined analysis. Getting “fact-based” is a critical element of any sustainable talent strategy.

Use economic and demographic data to sharpen your knowledge about external talent markets—not just in your industry or in specific functions, but also on a regional, national, and global basis.

Upgrade your capabilities in workforce analytics and business intelligence. That means getting good at data mining, statistical analysis, and predictive modeling to understand your recruitment, retention, and deployment challenges.

Build a rigorous business case for any investment in talent—and track your return on investment continually. The benefits of talent solutions are quantifiable, with some effort. Don’t settle for anecdotal evidence or wishful thinking—and certainly don’t rely on broad industry HR benchmarking.

Measure what matters

Metrics

M

Metrics

Good, better, best

It’s tempting to rely on input metrics, which are easier to measure. But try to focus whenever possible on outputs.

Good Measure time to hire customer service representatives

Better Measure how long it takes to make new employees proficient in their jobs

Best Measure actual changes in customer satisfaction

13

It’s tempting to believe that much of the workforce drama these days is about a new generation of uppity young people who don’t know their place. If that’s what you’re thinking, you may be in for a big surprise.

Sure, the talent pool today spans four generations of workers, but in many ways they’re more alike than you’d guess. And while Gen Y workers may have started a new trend with all their demanding questions, things have moved well beyond them.

Boomers—and even retirees re-entering the workforce—want many of the same things their adult children want. Recognition and

respect. Flexibility and choices. Meaningful work. And balance—with life and with community. That means innovations in talent strategies and solutions should have the potential to span the needs of multiple segments of your workforce—no matter where they are in the world.

At the same time, you’ll have to keep the differences in mind, too. Your company may very well be a great place to start a career and raise a family, but is it also a great place to finish a career? If you can find a way to be all three, you’ll be in great shape when it comes to attracting and keeping the best talent.

The beginning, the middles, and the end

Generational strategy

Generational Strategy

G4

The average US company turns over 25 percent of its workforce each year.

15

No size fits all

The Periodic Table of Talent covers two categories of solutions, as well as catalysts that can help accelerate performance improvements in any area.

Talent solutions focus on the workforce itself. They’re all about “who.” Work solutions, on the other hand, focus on the what, when, where, and how of work.

Different elements deliver value in different ways. Some can help upgrade core capabilities, while others have more potential to drive competitive differentiation. And they can be used in many combinations. Depending on where your gaps are, a little innovation may actually be more important than a gold-plated core.

For example, a good case can often be made for investing in advanced forecasting capabilities, even if you’re not where you want to be with basic workforce planning. In fact, a commitment to innovation can have the added benefit of driving core improvements.

Some companies think they have to choose between improving core solutions and investing in innovation. But in the case of talent and work, both might make sense. Investments should be shaped by business imperatives, not by a generic road map. Benchmarking talent processes to an industry standard will not deliver the competitive differentiation you’re going to need.

Solutions and catalysts

D

Differentiate

16

For all the talk today about the importance of listening, few companies do it well. Especially when it comes to talent management. It’s not just about asking questions. It’s also about listening for opportunities.

When companies develop new services and products, they almost always start with listening. They take their clipboards out into the world and ask for feedback anywhere they can find it. They do real research, listening carefully for ideas that will solve a customer’s problems. They are tuned in to possibilities. They react quickly to changing environments. They invest in CRM. They are customer-centric.

But when it comes to talent and the workplace, many companies don’t even pretend to listen, let alone engage in extended conversations.

Well-managed dialogue with critical talent and business leaders is the only way to get the insights you need for strategic workforce planning. They’re the ones doing the work. They’re the ones trying to balance their lives and careers. Listen to them.

Get the facts. And analyze them.

Use multiple approaches. Surveys, coaching, •exit data, focus groups, information gathered at employee enrollment or election points, whatever it takes.

Rely on continuous feedback instead of •intermittent spot checks. Build talent dialogue into how you do business.

Ask “What if?” questions with scaled •responses so you can crunch the data more reliably. Avoid fuzzy questions that are open to a lot of interpretation.

Keep improving. Refine your questions to •build on answers already received.

Are you listening?

TdTalent

Dialogue

Talent dialogue

18

Restricted Restricted Restricted Restricted

Building the 21st century workplace

The corporate ladder has been the gold standard for personal success since organizational hierarchy was invented. But for talent today, the ladder model of career progression isn’t always a good fit.

Mass Career Customization™ (MCC) enables a corporate lattice culture, offering a customized model for building careers and developing talent.

The inspiration for MCC comes from mass product customization, an everyday part of today’s consumer marketplace. Think M&Ms®, Starbucks®, and iTunes®. Just as the option to

customize products has increased customer loyalty and profitability, MCC has the potential to increase employee satisfaction, reduce turnover costs, generate greater loyalty, and enable people to focus on accomplishing the organization’s most important work and purpose.

The MCC framework provides a structure to customize careers using a finite set of options along four interrelated career dimensions—Pace, Workload, Location/Schedule, and Role. MCC provides processes to manage these options as commonplace events rather than as one-off accommodations.

Mass Career Customization

Career years: 0–3Entered professional workforce

Career years: 4–8Changed specialty

19

Restricted Restricted Restricted Restricted

Mass CareerCustomization™

Mcc

* Corporate Lattice and Mass Career Customization are registered trademarks of Deloitte.

Career years: 9–11Personal needs

Career years: 11+Mid-career

MCC is centered on the idea that career journeys in the knowledge-driven economy will look increasingly like a sine wave of sorts, with climbing and falling phases of engagement over time.

The major business and career decisions each individual’s sine wave reflects can now be planned proactively. As a result, the conversations, the talent processes, and ultimately, the work experiences that surround these decisions prove more satisfying and productive for all involved.

Mass Career Customization

• Recognizes that careers ebb and flow over time

• Provides a more fluid structure in response

• Institutionalizes framework / process

• Allows choices

• Makes trade-offs more explicit

• Provides greater transparency

• Extends the bounds and consistency of what’s acceptable

20

What can you promise?

People in most companies want many of the same things. Recognition and respect. Flexibility and choice. Responsibility. Autonomy. Meaningful work. Balance. You know—the same things you want.

But how is an employee to know where your organization stands on delivering those things? Companies talk a lot about being great places to work, but how do you actually deliver against the expectations your people have?

Some of the most effective companies today are developing Employee Value Propositions or Employer Brands to guide their commitments to workers—just as they use the power of their brands to communicate their value to customers.

Companies may even need multiple employee value propositions given the changing expectations of their workforces. Increasingly, understanding the employer-employee bargain—from the perspective of current and future employees—can be an important focal point for talent programs.

Employee value proposition

EvEmployee Value

Propositions

What is an Employer Brand?

The package of functional, economic, and psychological benefits provided by employment and identified with the employing company.

• Functional—development and/or useful job-related activities

• Economic—material or monetary reward

• Psychological—feelings of purpose, belonging, or recognition

In effect, the combination of factors that differentiate you as an employer and shape the perceptions of past, current, and future employees.

— Tim Ambler and Simon Barrow, The Employer Brand

21

RewardsTransformation

Rt

What can you deliver?

People want more from work than a paycheck. Sure, they want benefits and bonuses—but there’s even more involved. They also want to learn and grow and make a difference. How you put all these elements together can have a big impact on their willingness to expend extra effort.

Yet many companies still regard their rewards programs in the context of “comp and ben”—simply as a cost of doing business. They know they spend a lot of money on rewards, but most have a difficult time linking that spending to specific results.

The key to improving your ROI on rewards involves understanding and controlling four intermediate factors that link rewards to business value: how employees perceive rewards, how these perceptions may vary by workforce segments and generations, how rewards affect behavior, and how behavioral changes affect business performance.

Unconventional? Maybe. Effective? Absolutely. And you can prove it to yourself. Put this approach to the test by applying it on a small scale, perhaps with a single business unit or department. Take things step by step, gradually discovering what rewards—in the broadest sense—your employees really want.

Rewards transformation

22

If you’re not already thinking globally when it comes to critical talent, you will be soon. And it’s going to change almost every aspect of how your company approaches recruiting. Here are five important things to keep in mind.

1. Go with the flow. Talent today is already moving across international borders in steady patterns you can capitalize on. Engineering students from India. Mid-level managers from Canada. Senior executives from the European Union. And more. Learn who’s going where— and match those trends to your near-term needs. Don’t limit yourself to recruiting in one or two countries. This is the lattice world in action. Think big.

2. Get in early. If your workforce needs a steady stream of entry-level talent, now is the time to establish partnerships with universities that have high numbers of foreign nationals. Some major universities have a growing base of young people who thrive on international opportunities. Make sure you tap into those talent pools early with effective talent dialogue.

3. Become masters of immigration. Even when you find the talent you want, getting the required documentation can be a real challenge. By some estimates, as many as a third or more of identified candidates can’t get the visas they need. Don’t wait until you’re facing a talent crunch to get great at managing immigration issues.

4. Don’t wing it. Misinformation around global talent sourcing is staggering. The only way to make sure you’re getting it right is to have people on the ground in countries that are important to you. That’s especially true when it comes to approaching candidates and negotiating compensation. Overly aggressive recruiters who don’t know local customs can do serious damage to your brand and your reputation. And in this Facebook® world, that damage can spread around the world almost instantly.

5. Technology matters. There are many areas where “good enough” technology is sufficient. Global sourcing of talent isn’t one of them. You’ll need a strong global technology platform that can be adapted to individual country needs. That means it has to be both scalable and flexible. Don’t cut corners.

Global sourcing

GsGlobal

Sourcing

„óìàéòå ãëîáàëüíî*

* “Think globally” in Russian

In the global talent marketplace, you never know what you’ll find where. When a Dutch engineer in one business unit inquires about a job opportunity with a different business unit in Australia, you want your people in Brazil to know about it—just in case. From identifying and approaching talent in new countries to structuring technology for receiving applications and tracking candidates, you’ll need a global vision that can be customized to every important geography.

Yes.Sí.

Hai.Jå.

Oui.

Global mobility can change how you approach targeted workforce segments to take advantage of different opportunities

High development value

Learning experience

Target employees:Rising stars•Employees looking for •diversity in experience and personal growth

GM approach: “Expat light”•Focus on development•Expect participants to •bear some of the burden

Strategic opportunity

Target employees:Future leaders—•“Superstars”

GM approach:“Expat plus” •Focus on development, •experience, and retentionGuaranteed future •opportunities

Low development value

Commodity job

Target employees:Volunteers•Low-cost talent•

GM approach: Minimal perks and •supportLocal transfers•“At-risk” assignment•

Skilled position

Target employees:Proven performers•Deep, specialized skill sets•

GM approach: Short-term or “local plus”•Project-based •assignmentsRapid deployment•

Low business value

High business value

25

As companies do more and more business across borders, they need the ability to move people quickly and easily. They also need leaders and employees with global experience to help run their distant operations. That’s reality in the lattice world.

Unfortunately, many businesses are discovering that their programs for managing international assignments aren’t good enough to meet their growing needs. They’ve typically focused on high-touch service for a small number of long-term relocations. That one-dimensional approach doesn’t work any more.

To step up to today’s challenges you’ll need new and improved capabilities for global mobility. That means creating customizable options to address everything from strategic assignments to commodity jobs—and all points in between. You’ll also need to make global mobility a standard operating practice that is fast, flexible, efficient, and repeatable.

Scale and speed matter. But don’t get reckless. Expanded mobility programs have to be in compliance with global regulations. And they should be fully optimized for tax efficiency.

If global operations are part of your strategy, mastering global mobility is a must.

Here, there, and everywhere

Global mobility

GmGlobal

Mobility

26

Time and space

You’ve finally found that perfect product development manager, the one you’ve wanted for years. But because of his family situation, he can’t commute to the office every day. In fact, he wants to work from home two days a week.

If your organization has embraced “anytime, anywhere” work, you can hire with confidence that he’ll hit the ground running. Otherwise, you’re probably out of luck.

To compete for critical talent, companies have to be able to support people who want to work remotely—whether from home, from a hotel room, or even from a soccer game on the other side of the globe. That means

putting in place the communications technology, the collaboration tools, and the systems to make work flow.

Yet even when things go smoothly, the virtual workplace brings challenges and complexity. Most companies have to redesign work processes to address issues like security, performance measurement, and control. This is where Mass Career Customization can come in handy.

Finally, don’t ignore culture. If you think a big change project may be required to get your talent strategy off the ground, you’re probably right.

Virtual workplace

VirtualWorkplace

V

29

HR is all about people, but talent and workforce planning go well beyond HR. Workforce planning is a business problem, and HR’s job is to deliver the infrastructure necessary to support the strategy. HR has to partner with the business to make this happen.

For HR leaders who understand this challenge, the opportunities to deliver and create value are enormous. Their organizations are ideally positioned to lead the talent agenda and jump-start planning by designing strategies, owning the metrics, conducting analyses to deliver insights, coaching business leaders, managing knowledge, and more.

Along the way, the kinds of solutions described in this book will trigger the need for upgraded infrastructure, HR strategies, and service delivery models. That likely means that HR itself will have to step up to deliver the new processes, technologies, and people required. This is especially true for innovations like Mass Career Customization and global mobility.

The best HR organizations are already taking action. They understand that there’s a growing talent shortage, yet they realize the challenges are even bigger. Just as accounting transformed to grow into finance over the past 30 years, so must HR departments transform to meet the complex talent and workplace challenges companies are facing today.

Business-driven HR

Infrastructure

30

About this bookThe Chemistry of Talent is the 10th in a series of books dedicated to helping companies improve performance. To request additional copies of this book or to order previous editions, go to deloitte.com/straighttalk.

Talk to usWe look forward to hearing from you and learning what you think about our ideas. Please contact us at chemistryoftalent@deloitte.com.

In a competitive environment where people issues are front-and-center, the demand for innovative approaches that link talent strategies to the business has never been greater. Point solutions and partial answers are simply not enough.

This book introduces the major elements you’ll need to create more complete solutions. Combining these elements effectively, however, can be tricky. It requires a fact-based approach, informed by ongoing talent dialogue.

Whatever you do, don’t start shooting from the hip. Too many companies already spend too much money on one-off talent programs that don’t add up to effective solutions.

Find the right formula and you’ll be in a position to drive competitive differentiation. By focusing on talent and work, you’ll double your options for action.

You’re on

This publication contains general information only and is based on the experiences and research of Deloitte practitioners. Deloitte is not, by means of this publication, rendering business, financial, investment, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte, its affiliates, and related entities shall not be responsible for any loss sustained by any person who relies on this publication.

About DeloitteAs used in this document, “Deloitte” means Deloitte LLP and its subsidiaries. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.

Copyright © 2008 Deloitte Development LLC. All rights reserved.