Talent man best practices
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Best Practices in Talent Management Strategy Dorothy Knapp, SPHR
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Transcript of Talent man best practices
Best Practices in Talent Management Strategy
Dorothy Knapp, SPHR
Presenter
Presentation Notes
INTRODUCTORY REMARKS I am happy to have the opportunity to discuss with you a growing challenge for almost every organization in the U.S. and around the world. It is a particularly acute challenge for the HR profession: How will we attract, develop, and retain the critical leadership talent our organizations will need to succeed in an ever more competitive global economy – one that will be looking for top talent again in the post-recession economy.
©SHRM 2010 2
Today’s Agenda
• Globalization and Talent Management
• Drivers of Global Competition for Critical Talent
• Six Components of Talent Management Strategy
• Case Studies: SAS and Southwest Airlines
Best Practices in Talent Management Strategy
Presenter
Presentation Notes
I will try to help you answer that question by providing some fundamental thoughts on globalization and the drivers behind the global competition for talent that will heat up again as the world economy recovers from the deep downturn of the last two years. I will also look at the six basic components of an effective talent management strategy, and show how two major companies – Southwest Airlines and SAS – are using them to succeed.
©SHRM 2010 3
Globalization and Talent Management
The most important corporate resource over the next 20 years will be talent: smart, sophisticated businesspeople who are technologically literate, globally astute, and operationally agile. And even as the demand for talent goes up, the supply of it will go down.”
McKenzie & Company 1998 study – “The War for Talent”
Presenter
Presentation Notes
Okay, let’s look first at globalization and talent management. In 1998, a survey by McKinsey & Company of 77 companies and 6,000 executives around the world coined the term, “The War for Talent.” The McKinsey report concluded that talent had become more important than capital, strategy, or R&D and that for many companies people were the prime source of competitive advantage. More specifically, it said: “The most important corporate resource over the next 20 years will be talent: smart, sophisticated businesspeople who are technologically literate, globally astute, and operationally agile. And even as the demand for talent goes up, the supply of it will go down.” This report provided strong evidence for the case SHRM had been making well before 1998 that human capital is an organization’s most critical asset.
©SHRM 2010
New SHRM Global Research Report
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August, 2010, SHRM-EIU global survey found that C-suite executives believe their two biggest challenges in the coming 10 years will be: 1. Retaining and rewarding the best people. 2. Attracting the best people to the organization.
Talent Still Top Priority
Presenter
Presentation Notes
Let’s fast forward from 1998 to today’s post-recession economy. Given the current weak global economy and high unemployment, you might think that finding and retaining top talent would be highest priority of CEOs. In fact, an August, 2010, SHRM global survey of C-suite executives found that it is still their number one concern. The survey – Global Firms in 2020: The Next Decade of Change for Organizations and Workers -- was commissioned by SHRM and conducted by the Economist Intelligence Unit. It found that C-suite executives believe the two biggest challenges facing HR over the coming 10 years will be: ��1. Retaining and rewarding the best people.�2. Attracting the best people to the organization.
©SHRM 2010
SHRM US Poll – August 2010
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Obtaining Human Capital Top Challenge
SHRM Aug, 2010, poll - 47% said their top investment challenge is: Finding human capital and maximizing their human capital investment Recruiting and holding onto the best talent and getting the most out of people is critical
Presenter
Presentation Notes
More specifically, in the U.S., almost half – 47 percent -- of the 449 HR professionals in an August, 2010, SHRM poll indicated that the top investment challenge of their organizations over the next ten years will be: Finding human capital and maximizing their human capital investment Even in bad times, companies are obviously looking down the road and realizing that recruiting and holding onto the best talent and getting the most out of their people is the key to their success. Incidentally, the human capital challenge ranked much higher in the SHRM poll than the second place challenge – obtaining financial capital and maximizing the financial capital investment.
©SHRM 2010
Global Shortage of Talent
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Manpower May, 2010, Talent Shortage Survey
Technical skills +
Critical thinking skills
Presenter
Presentation Notes
The 2008-2009 worldwide recession clearly reduced the global demand for talent, as this chart from Manpower’s 2010 Talent Shortage survey shows. Manpower polled over 35,000 employers across 36 countries and territories during the first quarter of 2010. As the economy has improved this year, the shortage of talent worldwide his inched up, with 31 percent of employers having difficulty finding critical talent, versus 30 percent last year. Of course, it is still way down from 2006 and 2007 levels. Although the current global economic situation has increased the number of overall job seekers in labor markets worldwide, there is still a notable talent shortage in many countries and industry sectors. The immediate problem is not the number of potential candidates. Rather, it is a talent mismatch: There are not enough sufficiently skilled people in the right places at the right times. Simultaneously, employers are seeking ever more specific skill sets and combinations of skills – not just technical capabilities alone, but perhaps in combination with critical thinking skills or other qualities that will help drive the company forward. As a result, the “right” person for a particular job is becoming much harder to find. And the problem shows no signs of easing.
©SHRM 2010 7
Globalization – Employee Mobility
Lowered trade barriers More democratic countries Inflation rates low / steady
Low-cost telecommunications
Rising skill levels of labor More investment worldwide Growth of MNCs
Conditions right to go where best people are at the right price
Presenter
Presentation Notes
In response to this situation, many companies are exporting both high and low skill jobs to countries where labor is relatively cheap and increasingly well educated. Globalization has created the conditions for companies to go where the best people are located to fill the right jobs at the right price. Employee mobility has been driven by many factors. Trade barriers have been lowered – both bilaterally and through negotiations sponsored by the World Trade Organization. There are now more than 100 democratic countries with open-market economies today, compared with only 22 right after World War Two. Also, inflation rates in most developing countries has been relatively low and stable over the last decade, despite a spike in gasoline and food prices in 2008. Other factors include increasing access to low-cost telecommunications, increased cross-border capital flows, the growth of multinational corporations, and the rising skill level of labor in lower-wage developing countries. Companies are no longer lured into developing countries by cheap labor alone. Rather, they are lured by increasingly skilled or trainable labor and proximity to growth markets.
©SHRM 2010 8
• 1.3 billion people • Averaged 9% GDP increases for last 30 years • On track to become world’s largest economy by 2050 • Major outsourcing/manufacturing hub
China
• 1.1 billion people • At least 20% of population speaks English fluently • Preferred outsource destination for call centers and other services • Growing middle class that currently numbers 300 million
India
New Global Competitors
Presenter
Presentation Notes
Fast-developing countries like China and India have now joined the knowledge economy, and their emergence is driving the global competition for talent. Of course, both China and India felt the effects of the economic downturn, but China’s economy still grew at over eight percent in 2009, and India’s grew at slightly over six percent last year. That compares to a negative 2.9 percent in the U.S. last year and negative growth in most of the other developed countries. [Optional question – How many of you are aware that SHRM has offices in Beijing and Mumbai?]
©SHRM 2010
Looking Ahead: Economic Growth in 2010-2011
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Growth in emerging markets 3x as great as advanced countries
2011 projected China 9.6% India 8.4%
Presenter
Presentation Notes
As for 2010 and 2011, the IMF expects U.S. economic growth to be less than three percent both years with unemployment at about nine percent or more. Other developed countries, especially Japan, may grow even slower. Overall growth worldwide should be higher. This chart from June of this year shows the International Monetary Fund’s latest world economic growth estimates. It projects growth of 4.5 percent in 2010 and slightly lower -- 4.25 percent -- in 2011. As you can see from the chart, growth in the emerging markets is projected to be around three times as great as that of the advanced countries. China is expected to be the leader again among the emerging countries with growth of 10.5 percent in 2010 and 9.6 percent in 2011. India is expected to grow by.9.4 percent in 2010 and 8.4 percent in 2011.
©SHRM 2010 10
What does it Mean for HR?
Global war for talent will heat up Business leaders to look to HR for more than transactional expertise They will look to HR for people strategies to help their companies prepare for growth HR professionals will come under increasing pressure to retain and develop their top talent
Presenter
Presentation Notes
What does all of this mean for HR? The global war for talent will heat up again as the world economy – driven by fast-growing countries like China and India – bounces back from the economic downturn. Consequently, business leaders in the U.S. and elsewhere will look to their HR teams for more than transactional expertise. They will look to HR for people strategies that will help their companies prepare the groundwork for growth as the economy recovers. HR professionals will come under increasing pressure to retain and develop the top talent that their organizations need to compete nationally and globally.
©SHRM 2010 11
“The implementation of integrated strategies or systems designed to improve processes for recruiting, developing, and retaining people with critical skills and aptitudes to meet current and future organizational needs”
What is Talent Management?
Presenter
Presentation Notes
To be successful today, HR professionals must have a talent management game plan. Before looking at the six components of this plan, let’s start by defining what we mean by the terms, “Talent Management” and “Critical Talent”. When I refer to “talent management”, I mean: “The implementation of integrated strategies or systems designed to improve processes for recruiting, developing, and retaining people with critical skills and aptitudes to meet current and future organizational needs.”
©SHRM 2010 12
“The small group of individuals who drive a disproportionate share of their company’s business performance and generate greater-than-average value for their customers and shareholders”
What is Critical Talent?
Source: Deloitte study: It’s 2008: Do You Know Where Your Talent Is?
Presenter
Presentation Notes
“Critical Talent,” is the small group of individuals who drive a disproportionate share of their company’s business performance and generate greater-than-average value for their customers and shareholders. According to the Deloitte research study – It’s 2008: Do You Know Where Your Talent Is?” – a company’s critical talent not only possesses highly developed skills and deep knowledge, but it also knows how to make things happen in the organization. These people are not necessarily the “A players” or senior executives who command the highest salaries. More often, they are employees who don’t end up in the annual report. In retailing, for instance, they might be the inventory managers who get the right goods in the right stores at the right time. In manufacturing, they include the machinists who perform precision manufacturing to Six Sigma standards. Without these people, organizations could not achieve their goals. Unfortunately, critical talent is becoming scarcer and more in demand because of the demographic and other trends I mentioned earlier.
©SHRM 2010 13
Integrated Talent Management Strategy
2-ATTRACT Critical Talent
6-RETAIN Critical Talent
1-PLAN Talent Needs
3- RECRUIT Critical Talent
4- ASSESS Critical Talent
5-DEVELOP Critical Talent
Six Components
Presenter
Presentation Notes
An integrated strategy for ensuring you can compete effectively for this critical talent includes the following six components: 1.) Planning Critical talent needs 2.) Attracting Critical Talent 3.) Identifying and Recruiting Critical Talent 4.) Assessing Critical Talent 5.) Developing Critical Talent 6.) Retaining Critical Talent
©SHRM 2010 14
The Process
• Strategic planning - analyze near/long-term business plans to understand critical talent needs
• Periodic interviews/discussions to determine timing of retirements, downsizing, and other changes
• Contingency planning using different scenarios
• Succession planning in conjunction with leadership development initiatives
• Goal is to avoid knee-jerk reactions to changing workforce needs
Plan for Critical Talent Needs Component 1
Presenter
Presentation Notes
The first and most basic of the six components is strategic planning. Simply stated, organizations need to analyze their near and longer-term business plans to better understand their critical talent needs over the next months and years. The process requires periodic interviews with senior and mid-level managers to predict the timing of retirements and possible downsizing in the most crucial workforce segments. The companies that did this type of planning before the recession were certainly better prepared for its consequences and should be in a better position make adjustments and grow in the post-recession economy. The goal of workforce planning, using different scenarios, is to avoid knee-jerk reactions to workforce needs and to be nimble enough to cope with any situation. Smart talent management planning before and even during a downturn can give an organization a competitive edge as conditions improve. Developing succession plans is also an essential part of the planning process. In the past, succession plans were primarily focused on key leadership roles, but organizations are now establishing them in conjunction with leadership development initiatives early in the process of employee career development.
©SHRM 2010 15
Targeted Branding • Project a positive corporate image
• Ideal image: GREAT company with opportunities, support,
challenging work, happy customers and employees, good pay and benefits
• SHRM research has shown that CSR programs can help project a positive image by showing a company is a “good corporate citizen”
> Financial performance > Quality of life of their employees > Local communities > Society at large
Attract Critical Talent Component 2
Presenter
Presentation Notes
Attracting talented employees to join your organization is the second key component of an integrated talent management strategy. Leveraging targeted branding to project a positive and inviting corporate image is the goal most companies try to achieve. Ideally, you want your organization to be considered a great employer where opportunities and support abound, where the work is challenging, and where employees and customers are taken care of and respected, and pay is competitive. Being a good company, though, is not enough to attract the best talent today. You must be thought of as a great company. In a few minutes, I will look at two companies that have achieved this special status and discuss how they did it. To become real talent magnets today, companies must be considered “good corporate citizens”. SHRM has found in its research that corporate social responsibility – CSR – programs are a very effective way of communicating a positive image to both potential and existing employees. CSR is usually defined as the commitment by organizations to balance their financial performance with contributions to the quality of life of their employees, their local communities, and society at large.
©SHRM 2010 16
Look Inside First
• Internal candidates – best bet!
• 2008 Equilar survey of S&P companies: CEOs hired externally cost 51% more than internal hires
• IBM and other large companies have extensive databases to identify internal job candidates
• Referral programs save time and money in identifying critical talent
Recruit/Identify Critical Talent Component 3
Presenter
Presentation Notes
Identifying and recruiting critical talent is the third component of a well-structured talent management strategy. In most organizations, the stream of passively attracted job candidates is not sufficient and must be bolstered by a new stream of candidates who are actively recruited. Of course, before looking outside of your company, be sure that you first look internally. Not only does an internal candidate already know the organization, but the cost to hire that candidate will probably be far less than an external candidate. The biggest difference may be at the CEO level. According to a 2008 survey of 1,295 S&P Index companies by executive compensation data provider, Equilar, CEOs hired externally cost significantly more than those hired from within a company. Large companies, for instance, paid external hires about 51 percent more, and mid-sized companies paid about ten percent more than internal hires. Given this well-known consideration, many large companies have developed their own very comprehensive internal databases to identify internal job candidates. IBM, for example, has an in-house resume database of 33,000 employees. Using this tool, managers who are organizing teams for new projects can search the backgrounds and skills of current IBM employees to find a good match. A robust employee referral program can also save a company valuable time and money in identifying and recruiting critical talent, both internally and externally. A well-managed system of bonuses and compensation for employee referrals is a great motivator to align employees with HR goals and to leverage employee networking contacts for the good of the entire organization.
©SHRM 2010 17
Look Outside Next
• Leverage employees: Yahoo uses high-profile employees as “Talent Magnets” to contact potential candidates
• Job-posting sites, such as Monster.com and CareerBuilder.com, are key tools to cast a wide net for job candidates
• Social networking sites, such as Linked-in and Facebook, have become fertile ground for recruiters over the last two years
• SHRM’s online job posting service allows members/non-members to post ads on job boards
Recruit/Identify Critical Talent Component 3 (cont’d)
Presenter
Presentation Notes
Employees can also support external recruiting efforts in a variety of creative ways. Yahoo, for instance, uses some of its very high-profile employees, known as “Talent Magnets,” to contact high-performing individuals outside the company and sometimes to meet with them and talk about why they should want to work a Yahoo. If it becomes necessary to cast a wider net for job candidates, job-posting web sites, such as Careerbuilder.com and Monster.com, are key recruiting tools that allow organizations to post job openings and to search a database of potential candidates who have posted their resumes. Social networking sites, such as Linked-in and Facebook, which have grown exponentially over the last few years, also provide recruiters fertile ground for identifying potential job candidates. For those of you who may be interested in posting job ads on multiple job boards with only a few clicks and a single bill, the SHRM Job Posting Service is your answer. This new service – available to both SHRM members and non-members – allows you to enter a job keyword and search for job boards and then easily post your job ad on the sites you select. More information is available on our Web site.
©SHRM 2010
Korn Ferry’s “Learning Agility”
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The ability to learn the right lessons from experience and apply those learnings to new and first time experiences
Kim E. Ruyle Lominger International: A Korn/Ferry Company [email protected]
©SHRM 2010
Those high in learning agility….
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•…are critical thinkers who examine problems carefully and make fresh connections
•…know themselves and are able to handle tough situations
•…like to experiment and can deal with the discomfort of change
•…deliver results in first‐time situations through team building and personal drive
Kim E. Ruyle, VP Product Development Lominger International: A Korn/Ferry Company [email protected]
©SHRM 2010 20
Screening Tools
• Defining characteristic of high-performing HR departments is ability to screen mountain of candidates and pick the right ones
• Screening by behavioral interviews and skills and aptitude tests can minimize hiring mistakes
• Well-applied employee selection measures improve successful candidate fits by 25% or more
• Some success by combining a relaxed, informal session to complement a formal interview
Assess Critical Talent Component 4
Presenter
Presentation Notes
The fourth component of an integrated talent management strategy is assessing critical talent. A defining characteristic of a high-performing HR department is its ability to sort expeditiously through a mountain of job candidates and to choose only those who best match the company’s technical needs, strategic goals, and corporate culture. This is no trivial task! We all are aware of that problem employee, the one who seemed to be a good fit but then turned out to be a detriment to his or her entire workgroup. If our selection procedures had been more accurate, we might have been able to avoid such a hiring mistake. Screening by behavioral interviews is a good way to minimize hiring mistakes. Skills and aptitude tests are also useful screening methods. Well-applied employee selection measures such as these, which can improve successful candidate fits by 25 percent or more, can pay off in huge savings to companies. Some companies have also found success by combining a relaxed, informal session along with a formal interviewing session with the job candidate. In an informal setting, an HR interviewer or other company employee can gain a unique view of a potential candidate’s behavior.
©SHRM 2010 21
Deloitte Study (It’s 2008: Do You Know Where Your Talent Is?)
• Effective development of critical talent means much more than
traditional education or online education
• Providing “real-life” learning that stretches employee capabilities can decrease employee churn and bolster retention efforts
• People learn the most from those they trust – bosses, subordinates, peers, and mentors
• Mentoring and coaching – with clear expectations and defined goals -- are crucial to development strategy
• Manage performance for growth and development
Develop Critical Talent Component 5
Presenter
Presentation Notes
The fifth – and perhaps the most crucial component of an integrated talent management strategy – is developing critical talent. The Deloitte study which I mentioned earlier – “It’s 2008: Do You Know Where Your Talent Is?” – points out that effective development of critical talent means more than traditional classroom or online education. Rather, it means providing the real-life learning that employees need to master a job, including the “trial-by-fire” experiences that stretch employee capabilities and the lessons they learn from peers, mentors, and others. This type of meaningful professional development can significantly decrease employee churn, bolstering a company’s retention efforts and minimizing its need for expensive and time-consuming external recruitment.
©SHRM 2010
Manage performance for growth/development
• Top performers=up to 12x productivity of average performers
• Top performers outperform the average by 40-50% • Performance management systems, as part of High
Performance Work Systems, can improve many outcome measures, such as productivity, product quality, innovative work practices, etc.
Source: Lombardo & Eichinger, The Leadership Machine – 3rd Edition
©SHRM 2010
Performance Management
•Leverages Human Capital •Aligns Efforts with Strategy •Differentiates Performance •Creates a High-Performance Culture
Kim E. Ruyle Lominger International: A Korn/Ferry Company [email protected]
©SHRM 2010 24
“Organizations…must concentrate on the things that employees care about most: developing in ways that stretch their capabilities, deploying onto work that engages their heads and hearts, and connecting to the people who will help them achieve their objectives.
By focusing on these three things, attraction and
retention largely take care of themselves.”
Develop Critical Talent Component 5 (cont’d)
Source: Deloitte study It’s 2008: Do You Know Where Your Talent Is?
Presenter
Presentation Notes
As the Delioitte study states: “Organizations…must concentrate on the things that employees care about most: developing in ways that stretch their capabilities, deploying onto work that engages their heads and hearts, and connecting to the people who will help them achieve their objectives.” “By focusing on these three things, attraction and retention largely take care of themselves.” In a few minutes, we will look at two leading companies – Southwest Airlines and SAS – that have followed this development strategy to build loyal and engaged employees who have contributed fundamentally to their positive bottom line results.
©SHRM 2010
Retain Critical Talent
Skilled employees are a premium and
will be basis for competitive advantage when economy recovers
Average cost to replace an employee
is at least 150% of the employee’s base salary, according to the Bliss-Gately “Cost-to-Replace Tool”
25
Component 6 – Saves Money
Presenter
Presentation Notes
One of the key goals of retention strategies is to avoid the time-consuming and expensive process for companies to hire workers from the outside. Skilled employees are still at a premium and will be the basis for competitive advantage when the economy recovers. The average cost to replace these skilled employees is at least 150% of their base salary, according to the Bliss-Gately Cost-to-Replace Tool.
©SHRM 2010
Retain Critical Talent
If a company with 1,000 employees and an average base salary of $50,000 lays off 100 employees -- or 10% of its workforce -- it will spend $7.5 million in addition to their salaries to replace them
These costs include lost productivity, recruitment and new hire costs, and training
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Component 6 -- Saves Money
100 Employees $75,000 $7,500,000
Presenter
Presentation Notes
To give you an idea of how these costs can escalate, consider a company with 1,000 employees and an average base salary of $50,000. If it lays off 100 employees -- or 10% of its workforce -- it will spend $7.5 million in addition to their salaries to replace them later. These costs include lost productivity, recruitment and new hire costs, and training.
©SHRM 2010 27
• Retention = process of keeping employees who add value to the organization
• To retain critical talent, provide compensation/benefits so employee feels valued
• Create corporate culture that rewards people emotionally and meets their professional expectations
• Employees value challenging work, open communication, growth opportunities, and flexible workplaces
Retain Critical Talent Component 6 -- The Basics
Presenter
Presentation Notes
Retention is the process of keeping those employees who add value to your organization. Most importantly, how do you keep your good people from looking elsewhere, especially when morale and engagement may be low following recession-related cost cutting and downsizing. First and foremost, you must work to build or rebuild a corporate culture that rewards people emotionally for their efforts and meets their professional expectations. What are these expectations? Research by the Conference Board and others has shown that employees care most about interesting and challenging work, open two-way communication, opportunities for growth and development., and flexible workplaces. Second, you must provide the employee with a large enough package of monetary remuneration and benefits such that he or she feels valued by the company. Let’s look at two companies where this type of work environment prevails.
©SHRM 2010
• Preventive Health and Wellness Benefits • Flexible Working Benefits • Family-Friendly Benefits
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Patterns in Benefit Trends SHRM 2010 Employee Benefits Research Report
©SHRM 2010
Employees rank benefits a top contributor to job satisfaction
• Strong benefits package = higher rates of employee satisfaction/retention
• Communicate value of the organization's benefits package so employees fully understand options/true value
• Use total compensation statements, benefits workshops/fairs, employee meetings and social networking tools
• Leverage existing benefits plans and improve on them by regularly reviewing plans and asking for employee feedback.
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SHRM 2010 Employee Job Satisfaction Research Report
©SHRM 2010
2010 Fortune 100 Best Companies to Work For
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SAS ranked #1 among Fortune Best Companies
Presenter
Presentation Notes
First on the list is SAS [pronounced sass], which left no doubt about its great company status by ranking number one on the 2010 Fortune 100 Best Companies to Work For list. I am happy to say that SHRM shared some of the spotlight with SAS and the other 99 best company winners in the February issue of Fortune Magazine as a result of our full-page fold-out ad .
©SHRM 2010
Case Study -- SAS
SAS benefits: High-quality child care at $410 a month 90% coverage of the health insurance premium Unlimited sick days Free medical center - 4 physicians and 10 nurse practitioners Free 66,000-square-foot fitness center and natatorium Lending library Summer camp for children
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#1 on 2010 Fortune 100 Best Companies to Work For List
Presenter
Presentation Notes
SAS is the world’s largest privately owned software provider. The fact that it has a turnover rate of only two percent indicates it is successfully executing the first part of the strategy I outlined and is growing its talent from within. The compelling company story that is front and center in Fortune Magazine -- one of the country’s most prestigious business publications -- confirms that its employer branding -- the second part of the strategy -- is also a total success. The fact that it has never had a layoff and has recorded 34 straight years of revenue growth and profitability since it was founded make the company story easy to tell and resonate. The long list of benefits – some of them mentioned in the Fortune article on the slide – and the low turnover and high satisfaction rate of its more than 10,000 employees worldwide make the company’s PR efforts relatively easy. Jim Goodnight, the company’s co-founder and its only CEO, is also an excellent spokesman and accustomed to cameras, as he is shown in the photo with employees at SAS headquarters.
©SHRM 2010 32
Case Study – SAS
Company philosophy: Give people experience they need – including overseas assignments – to develop professionally Turnover at SAS is 2% -- industry average is 20% Emphasis is on helping people find their niche and then coaching them to excel Detailed skills database helps SAS managers analyze potential skills gaps Dynamic models allow managers to test different workforce scenarios Dedicated “networkers” have full-time job to match managers and the skills they need
Presenter
Presentation Notes
Great benefits are only one reason that SAS turnover is two percent in an industry where the average is 20 percent. Another reason is the company’s philosophy to invest in its people for the long-term and give them the experience they need to develop professionally. Employees are often redeployed to new countries to help grow SAS business globally, and people are given frequent opportunities to work on innovative projects. SAS places a strong emphasis on intrinsic motivation, helping people find their niche and then coaching and mentoring them to excel. Behind this approach is the belief by SAS that trust and respect are the best motivators of all. Planning for critical talent needs is an important part of SAS’s talent management strategy. For instance, a key tool for project managers is a highly detailed skills database. The software helps SAS managers analyze the gap between the skills they currently have in their departments and the skills they will need in the future. Dynamic models allow them to test different scenarios. By predicting their needs, they can set out to find and develop the best people to help them shift strategies. How do they find their critical talent? Their software narrows the search and then human connections complete the process. SAS employs dedicated “networkers” whose full-time job is to connect people and ideas. These “networkers” are the key players in matching managers to the people and skills that they need, no matter where they reside in the firm.
©SHRM 2010
Case Study – Southwest Airlines
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Great Employer Branding
Presenter
Presentation Notes
Southwest Airlines is another great company to work for, as the partial list of the awards on its web site indicates. It is also a model for effective talent management strategies. The web site gives an indication of Southwest’s strong employer brand and its ability to effectively tell its story in which its employees play a large part.
©SHRM 2010 34
Case Study – Southwest Airlines
2009
•37th year of profitability •Net income $194 million •39th consecutive year w/o layoff
BEST IN CLASS
•Highest customer service ratings •Most productive work force •Lowest turnover rate (6%) in airline industry
Mission Statement: “The mission of Southwest Airlines is dedication to the highest quality of customer service delivered with a sense of warmth, friendliness, individual pride, and company spirit.”
Organization focus – positive relationships with customers and employees
Presenter
Presentation Notes
In spite of the turbulence in the airlines industry caused by higher jet fuel prices and the downturn in the U.S. economy, Southwest Airlines has been able to maintain a 37-year streak of consecutive profitability. That includes 2009 when it recorded a $99 million profit in a very difficult year. It also has a 39-year streak of job security without a layoff. Southwest has consistently earned the highest customer service ratings in the industry. It also has the most productive workforce in the U.S. airline industry, as well as one of the lowest turnover rates at 4.5 percent. . Southwest Airlines values are clearly stated in its corporate mission statement: “The mission of Southwest Airlines is dedication to the highest quality of customer service delivered with a sense of warmth, friendliness, individual pride, and company spirit.” This mission describes the company’s approach to both its workforce and to its customers. Southwest has been successful in creating an organization centered on fostering positive relationships with its employees and customers. The airline is also known for its “zany” corporate culture, and has maintained the buy-in of its employees by emphasizing a fun atmosphere. Employees obviously LUV working at Southwest, and it shows in their performance and their loyalty to the company.
©SHRM 2010 35
Case Study – Southwest Airlines
Famous for its fun culture Hard work=part of the corporate culture Company has proven many times it will be there for its employees in bad times
CEO Gary Kelly: “After 35 years, we’ve never had a layoff, we’ve never had a pay cut, so there is a devotion to the people and a commitment to our people once we hire them” From Feb. 21, 2006, on SHRM-sponsored TV program, CEO Exchange
Presenter
Presentation Notes
Gary Kelly, the CEO of Southwest, explained how its employee policies have contributed to the company’s success in a February 21, 2006, interview on the SHRM-sponsored PBS television program, CEO Exchange. Although it was four years ago, the policies are identical today. He said: “At Southwest Airlines after 35 years, we’ve never had a layoff. We’ve never had a pay cut. So, there is a devotion to the people and a commitment to our people once we hire them.” Kelly went on to say: “It’s a hardworking company that’s famous for having a fun culture, but the hard work is also an important part of the culture. So can we promise that we’ll never have losses at Southwest or pay cuts? Of course not. But we have proven many times that we’re going to be there for our employees in the bad times.” Because of its employer brand as a great place to work, Southwest does not need elaborate tactics to attract good people or to retain its employee base. By taking care of critical talent and promoting a highly collaborative culture, the company has demonstrated the power and the profits that can be achieved by investing in people.
©SHRM 2010
Going Forward – Look to SHRM for Support
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Presenter
Presentation Notes
Okay, we have looked at the six components of a comprehensive talent management strategy and at two companies that are good models to follow in implementing your strategy. At this point, I want to repeat how strongly focused we are on serving you, our members. SHRM is totally committed to providing you with the information, tools, and other supporting resources that can help you and your organizations retain, develop, and recruit the talented employees you will need in the years ahead.
©SHRM 2010
SHRM online at www.shrm.org
©SHRM 2007 37
Presenter
Presentation Notes
That is why we maintain a wealth of resources for you on our Web site, and I encourage you to take even greater advantage of these tools that are available to you at www.shrm.org.
©SHRM 2010
Talent Management Toolkits
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SHRM toolkits aggregate resources, articles, links, and other practical information related to a specific HR topic
Some relevant Toolkits:
• Talent Management • Managing Flexible Work arrange- ments • Interviewing • Managing for Employee Retention • Workforce Planning • Workforce Readiness • Introduction to Staffing Management • Managing Employee Onboardiing and Assimilation Process
Presenter
Presentation Notes
SHRM toolkits are one of our particularly useful online resources you should explore. Our toolkits aggregate resources, articles, links, �and other practical information related to a specific HR topic. There are several toolkits relevant to talent management procedures and strategies, as you can see from the list on the slide. You can find these in the Tools and Templates section of our web site, and I encourage you to check them out.
©SHRM 2010
Summary -- Takeaways
• Globalization has spawned a global competition for
talent • 2008-09 recession put this competition on hold only
temporarily
• To help your organization compete as the economy recovers, develop a comprehensive six-part talent management strategy
• Emulate SAS and Southwest Airlines, and seek to
become a Great Place to Work • Look to SHRM for support
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Presenter
Presentation Notes
Okay, let me summarize the takeaways from today’s session. First, Globalization – including the rise of developing countries like China and India -- has spawned employee mobility and a global competition for talent Second, the deep recession of 2008-2009 put talent management on the back burner temporarily, but the competition for talent will heat up over the next five years as the economy recovers Third, to help your organization compete as the economy recovers, develop the comprehensive six-part talent management strategy I outlined today. Fourth, Emulate SAS and Southwest Airlines, and seek to become a Great Place to Work And, of course, look to SHRM for support for your efforts.
©SHRM 2010 40
Thank-you
Society for Human Resource Management
www.shrm.org
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