How Companies Can Adapt their HR Practices for Volatile...
Transcript of How Companies Can Adapt their HR Practices for Volatile...
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Creating People AdvantageHow Companies Can Adapt their HR Practices for Volatile Times
Monica Wegner10 March 2011Monica Wegner10 March 2011
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CPA Europe 2007
1,355 participants
CPA World 2008
4,741 participants
CPA Europe 2009
3,348 participants
CPA World 2010
5,561 participants
4th study in the Creating People Advantageseries in conjunction with WFPMA4th study in the Creating People Advantageseries in conjunction with WFPMA
Note: WFPMA = World federation of people management associations
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Global survey—100 countries, 5,500 responses,153 interviewsGlobal survey—100 countries, 5,500 responses,153 interviews
EuropeEurope
North America/Latin AmericaNorth America/Latin America
Asia/Pacific/Australia/AfricaAsia/Pacific/Australia/Africa
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Critical topics for Australia broadly consistent with global surveyCritical topics for Australia broadly consistent with global survey
Work-lifebalance
Workforce performance measurement
Strategic workforce planning
Shared services & outsourcing HR
Restructuring the organization
Recruiting
Performancemanagementand rewards
Managing talent
Learning organization
Leadership development
Labor costs
HR processes
HR as astrategic
partner
Globalization
Flexibility
Employerbranding
Employee engagement
Diversity & inclusion
Demographics
Corporate social responsibility
Change & cultural transformation
Low
High
Futureimportance
Current capability LowHighSource: Proprietary Web survey with 5,561 responses —220 Australian responses; BCG/WFPMA analysisSource: Proprietary Web survey with 5,561 responses —220 Australian responses; BCG/WFPMA analysis
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Top ten HR projects of high-performing companies
Top ten HR projects of high-performing companies
Low-performing companies rank five HR projects lower
than high performers
Low-performing companies rank five HR projects lower
than high performers
Improving leadership development
Managing talent
Restructuring the organisation
Delivering on recruiting
Measuring workforce performance
Enhancing employee engagement
Managing labor costs
Performance management and rewards
Transforming HR into a strategic partner
Improving employer branding
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8
9
10
210-1-2-3-4-5
-4
-4
0
0
1
-5
0
2
-1
-1
543
Number of ranks different from high performer
High performing companies invest in leadership and talentHigh performing companies invest in leadership and talent
Source: Proprietary Web survey with 5,561 responses; BCG/WFPMA analysisSource: Proprietary Web survey with 5,561 responses; BCG/WFPMA analysis
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Key insightsKey insights
Grow the talent pie: best practice companies promote from within
Leadership development more than ever can be a competitive
advantage
The middle matters: engagement of middle managers still suffering
post financial crisis
HR can be a strategic catalyst to help move the business forward
Grow the talent pie: best practice companies promote from within
Leadership development more than ever can be a competitive
advantage
The middle matters: engagement of middle managers still suffering
post financial crisis
HR can be a strategic catalyst to help move the business forward
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Note: Based on two scenarios: Scenario 1: 2020 without crisis impact (long term growth path)1; Scenario 2: 2020 with crisis impact2
Source: BCG analysis
Note: Based on two scenarios: Scenario 1: 2020 without crisis impact (long term growth path)1; Scenario 2: 2020 with crisis impact2
Source: BCG analysis
Developed countries will be affected by talent shortagesDeveloped countries will be affected by talent shortages
Shortagetrend of labor1
-1.0%
-1.8% I -1.5%
-1.6% I -0.7%
-0.8% I 0.2% -1.6% I -0.5%
-3.0% I -1.6%
-3.5% I -1.6%
-1.2% I -0.2%
-1.3% I 0.1%
-1.3% I -0.1%
-1.9% I -0.7%
-3.1% I -2.1%
Limited shortage orsurplus trend of labor 1
-0.6% I 0.7%
-0.6% I 0.0%
-0.3% I 0.9%
Surplustrend of labor1
1.8%
1.3% I 1.8%
0.6% I 1.1%
1.9% I 2.1%
-1.0% I -0.1%-2.0% I -0.5%
-0.3% I 1%
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Big talent gap for top executive successorsBig talent gap for top executive successors
Respondents who assess the talent gap
for this group as critical or very critical (%)
6050403020100
40
50
50
56
Criticality of talent gapCriticality of talent gap
Emerging potentialsEmerging potentials
High potentialsHigh potentials
CEO successors
CEO successors
Top executive successors
Top executive successors
Source: Proprietary Web survey with 5,561 responses; 1,089 responses in this section; BCG/WFPMA analysisSource: Proprietary Web survey with 5,561 responses; 1,089 responses in this section; BCG/WFPMA analysis
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Female talent pools not fully leveragedFemale talent pools not fully leveraged
Makeup of talent pool (%)
80604020 1000
WomenWomen MenMen
4
38
31
42
44
50
49
61
90
Companies with ≤ 10% women in talent pool (%)Companies with ≤ 10%
women in talent pool (%)
Middle EastMiddle East
Established AsiaEstablished Asia
AfricaAfrica
Latin AmericaLatin America
EuropeEurope
Emerging AsiaEmerging Asia
PacificPacific
North AmericaNorth America
Source: Proprietary Web survey with 5,561 responses; BCG/WFPMA analysisSource: Proprietary Web survey with 5,561 responses; BCG/WFPMA analysis
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High performing companies fill executive positions internallyHigh performing companies fill executive positions internally
Internal fill rate (%)
80
60
40
20
0
13
Top managers
60
Senior middle managers
5147
Frontline managers
6360
High performing companies fill top executive positions more internallyHigh performing companies fill top executive positions more internally
Low performer
High performer
Source: Proprietary Web survey with 5,561 responses; 1,089 responses in this section; BCG/WFPMA analysisSource: Proprietary Web survey with 5,561 responses; 1,089 responses in this section; BCG/WFPMA analysis
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Chinese pharmaceutical giant required to double size within 5 years
High turnover in middle management ranks
Talent strategy devised to
• Forecast future demand for talent
• Align senior management and HR on key talent challenges
• Establish dedicated talent centre
Innovative model for talent centre
• Funding and staffing mechanisms smooth impact on business
• Targeted training sessions and coaching
Chinese pharmaceutical giant required to double size within 5 years
High turnover in middle management ranks
Talent strategy devised to
• Forecast future demand for talent
• Align senior management and HR on key talent challenges
• Establish dedicated talent centre
Innovative model for talent centre
• Funding and staffing mechanisms smooth impact on business
• Targeted training sessions and coaching
Example: Talent management best practiceExample: Talent management best practice1
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Example: Dedicated China Talent CentreExample: Dedicated China Talent Centre
Career Development
Client Talent Center, China
Strategic Sourcing Leadership Development
Sourcing
External:
- Campus
- Local business schools
Internal:
-XX Global offices Chinese returnees
Practices/Process
- On Board Plan (first 90 days)
-Job Descriptions
- Interview tools/framework
Talent Assessment
- Leadership Assessment
- Individual Dev Plan (IDP)
- Talent readiness data
talent pipeline and deployment of
talent
-Practices/Process
-Trained assessors
-Selection tools and Process
Fast Track Program(manager in 1-2 years)
Internal Screening
Leadership Programs
Level 3 (P&L)
Level 2 (manager of managers)
Level 1 (manager of individuals)
Leading in XX (mandatory)
Blended learning, 70% OTJ, 20%
feedback, 10% training
Build Culture
-Reward and recognition program
(eg to drive coaching and seeking
/ giving feedback)
- Set KPIs
Accelerate Development Expand Sourcing Engage
Fast Track Program
External search
Global Leadership Competency Model
Career Management:
Career wheel
Development on the Job:
-Job rotation (local + overseas)
-Short-term assignments
-Mentoring and coaching
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Executives identified the most important 21st century shiftsExecutives identified the most important 21st century shifts
Source: BCG Perspective – New Leadership Rules
% of participants
mentioning
contextual shift
80
60
40
20
0
29
4650
5761
71
Intensified global and local
competition
Increasing importance of multiple stakeholder
s
Faster speed of information
and innovation
Greater uncertainty
and ambiguity
Emphasis on corporate social
responsibility
Virtual teams transcending organization's boundaries
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"Lead big" and amplify influence to drive success"Lead big" and amplify influence to drive success
Note: "Direct Team" includes employees in the working group or team of a leader, including reports, peers and managers; "Extended Team" includes all other employees within the formal boundaries of the organization. Source: BCG interviews and analysis
Leader
Self
Extended team
Direct team
Government
Media
Lobbyists Environmentalists
Communities
World
Businesspartners
Customers
Suppliers
JV partnersInvestors
NGOs
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NNNN
EEEE
SSSS
WWWW
mpathisempathise
Achieve influence andauthority through network
Achieve influence andauthority through network
in & winin & win
Deliver sustainable successto company and stakeholders
Deliver sustainable successto company and stakeholders
elf-correctelf-correct
Unlearn outmodedsuccess modelsUnlearn outmodedsuccess models
Timeless
Drive to
achieve
JudgmentCourage
Integrity
Intelligence
Vision
avigateavigate
Embrace global uncertainty and chart a clear course
Embrace global uncertainty and chart a clear course
21st century leaders excel in adaptation21st century leaders excel in adaptation
Source: Interviews; Survey responses; BCG analysisSource: Interviews; Survey responses; BCG analysis
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Preparing leaders to be more adaptivePreparing leaders to be more adaptive
• Immersion in unfamiliar markets • Temporary assignments to external groups• Immersion in unfamiliar markets • Temporary assignments to external groups
• High-potential leaders "skip a chair"• Critical assignments for high-potential and late career
leaders
• High-potential leaders "skip a chair"• Critical assignments for high-potential and late career
leaders
• Mapping external top talent in key markets • Limited-authority experiences• Frequent "after-action reviews" • Quarterly talent reviews using operational templates
• Mapping external top talent in key markets • Limited-authority experiences• Frequent "after-action reviews" • Quarterly talent reviews using operational templates
Expand
horizons
Create fast
tracks
Accelerate
skills
development
Inspire to
retain
• Social causes as part of the business • Challenging assignments and experiences• Sabbaticals to pursue passion
• Social causes as part of the business • Challenging assignments and experiences• Sabbaticals to pursue passion
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Example: 21st century leadershipExample: 21st century leadership
Indra Nooyi, Chairman and CEO, Pepsico
Reflects on the leadership role during the global financial crisis
Indra Nooyi, Chairman and CEO, Pepsico
Reflects on the leadership role during the global financial crisis
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1 2 3 4 5 1 2 3 4 5 1 2 3 4 5
Engagement of middle managersstill suffering after crisisEngagement of middle managersstill suffering after crisis
Difference in engagement before and after the financial crisisDifference in engagement before and after the financial crisis
People
manager
capabilities
People
manager
capabilities3.7
RecognitionRecognition 3.5
Performance
management
Performance
management 3.3 -8%
-5%
-5%
Engagement level of top management is slightly down
Engagement level of top management is slightly down
Top managersTop managers
3.5
3.2
3.1 -14%
-14%
-10%
Middle managers are increasingly disengaged
Middle managers are increasingly disengaged
Middle managersMiddle managers
3.4
3.1
3.1 +7%
-6%
+3%
Engagement of team members has not suffered
Engagement of team members has not suffered
Team membersTeam members
Engagement 2009Engagement 2009%Change 2007–09:Change 2007–09:
Note: 1 = strongly disagree, 2 = disagree, 3 = neither disagree nor agree; 4 = agree; 5 = strongly agreeSource: Engaging for Results database; BCG/WFPMA analysisNote: 1 = strongly disagree, 2 = disagree, 3 = neither disagree nor agree; 4 = agree; 5 = strongly agreeSource: Engaging for Results database; BCG/WFPMA analysis
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The middle matters: middle managers need new roles, responsibilities, and levers The middle matters: middle managers need new roles, responsibilities, and levers
Top
mgmt
Front-line management
~ 50-200
top managers
~ 50-200
top managers
~ 7,000
middle
managers
~ 7,000
middle
managers
~ 43,000
non-managers
~ 43,000
non-managers
Illustrative company with
a workforce of 50,0001
Illustrative company with
a workforce of 50,0001
Do we have too many
management layers?
Do we have too many
management layers?
Do middle managers
have the right levers
to manage and
engage?
Do middle managers
have the right levers
to manage and
engage?
Do middle managers
have the required
leadership skills?
Do middle managers
have the required
leadership skills?
Is middle
management
actively involved in
company affairs?
Is middle
management
actively involved in
company affairs?
Delayer and create
larger, exciting
roles for middle
managers
D
Empower
managers to act
Accelerate
leadership skills
Leverage the power
of middle managers
E
A
L
Middle
management
Non-managers
1. Span of control of 7 used in this exampleSource: BCG/WFPMA analysis1. Span of control of 7 used in this exampleSource: BCG/WFPMA analysis
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New CEO in context of global recession
100 day plan which included organisational transformation
• Engagement survey of top 300, cascaded to over 30,000
• Reduced layers and increased spans of control (15-20% reduction)
• Role charters to clarify accountabilities
• Behaviour an integral part of performance management
• Investments in coaching, leadership and mentorship
2 years on, signs of improved engagement in upper-middle and senior
management ranks
• Higher levels of accountability
• New behaviours taking hold
New CEO in context of global recession
100 day plan which included organisational transformation
• Engagement survey of top 300, cascaded to over 30,000
• Reduced layers and increased spans of control (15-20% reduction)
• Role charters to clarify accountabilities
• Behaviour an integral part of performance management
• Investments in coaching, leadership and mentorship
2 years on, signs of improved engagement in upper-middle and senior
management ranks
• Higher levels of accountability
• New behaviours taking hold
Global airline: Empowering middle managementGlobal airline: Empowering middle management3
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Business planning and analytics rank as high priorities, but capabilities lagBusiness planning and analytics rank as high priorities, but capabilities lag
Client relationship mgmt
Policy implementation
Project management
Resource management
IT acumen
Conflict resolution
HR expertise
Contracting
Marketing
Business analytics
Business planning
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2
3
4
5
6
7
8
9
10
11
Business managers' viewranked by perceived importance
Business managers' viewranked by perceived importance
Low High Low High
1
2
3
4
5
6
7
8
9
10
11
Policy implementation
Project management
Resource management
HR professionals' viewranked by perceived importance
HR professionals' viewranked by perceived importance
Client relationship mgmt
IT acumen
Conflict resolution
HR expertise
Contracting
Marketing
Business analytics
Business planning
Importance
CapabilitySources: Proprietary Web survey with 5,561 responses, 641 responses in this section; BCG/WFPMA analysisSources: Proprietary Web survey with 5,561 responses, 641 responses in this section; BCG/WFPMA analysis
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Build HR into a strategic catalyst for the businessBuild HR into a strategic catalyst for the business
Strategic contribution
Most HRfunctions are here
Most HRfunctions are here
World class HR functions are here
World class HR functions are here
Transactional Administration, record keeping, reporting
Core functional
Performance management, staff development, measurement, comp & benefits
Transfor-mational
Culture, leadership, engagement and employer brand management;
Strategic, value-oriented
HR grounded in business strategy,anticipating needs and
proactively generating people advantage
HR grounded in business strategy,anticipating needs and
proactively generating people advantage
Source: BCGSource: BCG
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Leadership differentiators
N
E
S
W
Timeless
Drive to
achieve
JudgmentCourage
Integrity
Intelligence
Vision
avigate What is one trend that will determine your capacity/ capability?
mpathize
Who are 3 internal or external colleagues doing somethingyou can learn from?
in & win
In what ways will your HR and business colleagues benefit from their collaboration with you?
elf-correct
What is a habit you must change – now?
How to prepare yourself as a 21st century HR leader ...How to prepare yourself as a 21st century HR leader ...
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Lead big ... understand and leverage your influence wavesLead big ... understand and leverage your influence waves
Leader
HRLeader
Extended team
Direct team
Beyond?
Businesspartners
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... with confident risk taking and humility... with confident risk taking and humility
It's an exciting time to be in HR
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Topics for discussionTopics for discussion
What resonates with your experience of the last couple of years?
Are there any surprises here for you?
What are your immediate priorities for the next six months?
What resonates with your experience of the last couple of years?
Are there any surprises here for you?
What are your immediate priorities for the next six months?
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BackupBackup
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Planning horizon for strategic versus workforce planningPlanning horizon for strategic versus workforce planning
% of respondents
Time horizon for strategic planningTime horizon for strategic planning
Time horizon for workforce planningTime horizon for workforce planning
Time horizon often shorter for workforce planning than corporate strategyTime horizon often shorter for workforce planning than corporate strategy
Note: Values below 1% not shownSource: Proprietary Web survey with 5,561 responses; 833 responses in this section; BCG/WFPMA analysisNote: Values below 1% not shownSource: Proprietary Web survey with 5,561 responses; 833 responses in this section; BCG/WFPMA analysis
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Basic workforce models prevalent,sophisticated simulations rarely usedBasic workforce models prevalent,sophisticated simulations rarely used
Derive actions from
a supply-and-demand model: 6%3
Have a supply-and-
demand model:
9%2
Have a supply model:
15%1
(%)
47
53
57
77
39
45
47
53
70
33
36
36
42
47
62
72
Consider age of current workforce
Consider current job groups
Consider current job groups
Simulate different scenariosDerive workforce demand for the
entire company along job Simulate productivity increases
Simulate technology changes
Simulate new hires
Simulate retirement
Staff reductions
Derive workforce supply for the
entire company along job
Apprenticeship actions with
quantified goals
Recruiting actions with quantified goals
Simulate different scenarios
Simulate attrition
Qualification actions with quantified goals
1. Subgroup is asked to further specify workforce supply model 2. Subgroup is asked to further specify demand model 3. Subgroup is asked to further specify actions derived.Source: Proprietary Web survey with 5,561 responses; 883 responses in this section; BCG/WFPMA analysis
1. Subgroup is asked to further specify workforce supply model 2. Subgroup is asked to further specify demand model 3. Subgroup is asked to further specify actions derived.Source: Proprietary Web survey with 5,561 responses; 883 responses in this section; BCG/WFPMA analysis
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Example: Structured Strategic Workforce ApproachExample: Structured Strategic Workforce Approach
6Establish annual process
Define Skill Clusters
I
Planning level
Simulate workforce demand per skill cluster
Future demand
3
Workforce demand logic
Strategic scenarios
Assumptions, e.g.,• Asset strategy• Technological changes• Productivity etc
2010 2020
Simulate workforce supply per skill cluster
Future supplyCurrent workforce
Development scenarios
Assumptions, e.g.,• Attrition• Retirement• Phased retirement etc
2
Headcount
20202010
Identify gaps and costs
Gap/risk analysis
4
Costanalysis
Develop HR measures
Recruiting Targets
Training
Transfers
In-/Out-Sourcing
5
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Example: Detailed identification of capacity risksExample: Detailed identification of capacity risks
201120102009 20162015201420132012
-9%-10%-10%-10%-10%
24%21%15%9%8%
-12%-1%-2%-1%16%
-21%-20%-19%-16%-16%
-25%-17%-10%-2%8%
-64%-64%-52%-46%-45%
-62%-49%-49%-44%-30%
-3%-3%-12%-23%-30%
-6%-8%-10%-12%-15%
-31%-31%-31%-32%-23%
-4%1%3%6%9%
-31%-25%-21%-20%-18%
15%13%9%5%2%
-15%-13%-11%-9%0%
-15%-16%-20%-23%-25%
-42%-42%-33%-25%15%
-31%-24%-22%-16%-14%
-53%-29%-29%-27%-22%
-10%18%12%
16%16%8%
14%-3%-3%
3%11%10%
11%13%12%
-24%-19%-6%
-9%-9%-9%
15%19%20%
-18%-14%-9%
-23%-23%-23%
18%17%16%
-19%-18%-19%
0%5%9%
8%9%0%
12%15%15%
19%16%17%
12%13%9%
-12%16%18%
Development technician
Assembly technician
...
Mining engineer
Molding specialist
Development engineer
Machine supervisor
Specialised molder
Machine operator
Production IT expert
Technical worker
Quality supervisor
Metalworking mach. op.
Refinishing worker
Commercial clerk
Worker mech. eng.
Logistic planner
Skilled tech. worker
Qualification
Sur-
plus
Short-
fall
Demand vs. supply
Source: Project exampleSource: Project example
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• Innovation and smart business practices with a small company feel
• Mission universally known
• Company benefits drive community, interaction and efficiency
• Keeps a pulse on how employees are feeling
• Innovation and smart business practices with a small company feel
• Mission universally known
• Company benefits drive community, interaction and efficiency
• Keeps a pulse on how employees are feeling
Google: the best practice employerGoogle: the best practice employer