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Surviving the Talent Crisis

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Speaker: Gordon Ritchie Product Evangelist, Enterprise Talent Frameworks IBM

Moderator: Kellye Whitney

Associate Editorial Director Chief Learning Officer magazine

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Kellye Whitney Associate Editorial Director Chief Learning Officer magazine

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Gordon Ritchie Product Evangelist, Enterprise Talent Frameworks IBM


© 2014 IBM Corporation

Surviving the Talent Crisis Gordon Ritchie, Product Evangelist. Smarter Workforce Talent Frameworks


IBM Smarter Workforce

Agenda

Ø  Why we don't understand what skills make up the gap. Ø  How to quantify the importance of understanding the skills gap's impact

on revenue, expenses, etc. Ø  Why it's critical to have a start and an end to be able to measure a gap. Ø  How to transform the gut feel that you have a skills gap into an objective

data source.


Do we understand what skills make up “the gap”, our skills gap?



What is the capability of the organization - the strengths and weaknesses? How many people have each competency and what is their level of mastery?

What are the areas of risk? Which people have key competencies in the organization? How can we plan for their potential departure?

Organization Capability?



What competency gaps do we have which would prevent us from meeCng our business objecCves? How will these impact each funcCon within the organizaCon?

Team competency gap analysis



How do our team managers know which employees require the greatest development? And which competencies should they target for development?

Employee competency gap analysis



How can we find out who does what in the organization so that we can put the right people on the right project?

Subject matter Expert identification



What is meant by “talent”? Ø  Aptitude or Ability? Ø  Capability or performance? Ø  Skills or Behaviours? Ø  Competency or Values? Ø  Human Capital? Ø  Education/Schooling?

What is meant by “gap”? Ø  A gap is a measure of distance

between two points. Ø  To have a gap, you need to know

A) the start point B) the end point Skill Innovation

Definition Develops new ideas and initiatives that improve the organization's performance.

Level 2: Working

Experience

Seeks new or non-traditional ideas to improve effectiveness in own area of responsibility.

Participates in efforts to develop ideas generated by team members.

Seeks applicable new ideas and approaches.

Surfaces ideas from other groups that have applicability to the team.

Helps develop implementation plans for introducing innovations to the group.

Level 3: Extensive Experience

Encourages exploration of non-traditional ideas from team members.

Seeks new or non-traditional ideas to improve effectiveness in team's area of responsibility.

Fosters a team culture that encourages exploration of non-traditional ideas.

Guides team members in the development and fulfillment of proposed innovations.

Develops change initiatives that target improvement of significant organizational capabilities.

Implements strategies for renewing or deepening change efforts.



Organizational maturity to define its skills and assess the gap

BUSINESS AREA Level 1 AWARENESS

Level 2 TACTICAL

Level 3 STRATEGIC

Level 4 CULTURAL

Processes 1-3 ad hoc 1 -5 repeatable 6-10 repeatable Many repeatable

Business Unit - Learning Basic Learning Expanded Align Learning Strategy Learning seamless in business strategy

Business Unit – Talent Mgmt Paper Basic / Digital Expanded Seamless in driving business results

Content Basic HR / Groups By Role & Level Very specific

Competencies Types: Core, Leadership, Technical?

Core / Paper Core / Digital Job Specific / Digital Comprehensive

Curriculums Basic / Paper Expanded By Role Many levels

Metrics / Testing Basic / Paper By Role By Competency Many Levels

Reporting Basic Expanded High Many Levels

SYSTEMS

Learning Mgmt System Basic: 1-2 years Expanded: 3-4 years

High: 5+ years Customized

Talent/Performance/Skills Basic / Paper Basic / Digital Expanded High

Webcasting / Collaboration Basic Expanded High Integral

Back Office Basic / Manual Expanded / Manual Basic Integration Tight Integration



Challenges defining skills

Source: Competencies, Compensation and Technology Luncheons.- 2012

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0%

Manual process

Budget Constraints

Too difficult to define

competencies

Too many jobs

Lack of executive support

And what do we mean by skills anyway?



So lets say “skills” or “competencies,” …

•  Core •  Leadership •  Functional •  Technical •  Behavioural •  Traits •  CARS •  BARS •  Proficiency levels •  Assessment

•  Time consuming •  Hard to do •  Hard to prove ROI •  No impact •  Tried it •  Tried it again, •  Done them •  Someone else did some too •  Too HR •  Not important or relevant •  Fewer = easier



We’re Aligned to the Organizational hierarchy

Functions and

Families

Core and

Leadership

Jobs and

Roles

•  Reflects strategy and culture •  Defines expectations at each level •  Enables a leadership pipeline

•  Reflects functional strategy and key skills

•  Applies to all functional incumbents and candidates

•  Reflects job-specific knowledge and skills •  Well suited for skills assessment

and development •  Applies to incumbents and candidates by

position

Getting Started

Org Strategy

Job Skills

Department Strategy



Focus efforts on the biggest area for impact

Functions and

Families

Jobs and

Roles

•  Reflects strategy and culture •  Defines expectations at each level •  Enables a leadership pipeline

•  Reflects functional strategy and key skills

•  Applies to all functional incumbents and candidates

•  Reflects job-specific knowledge and skills •  Well suited for skills assessment and

development •  Applies to incumbents and candidates by

position

PRODUCS/SERVICES/CUSTOMERS

Core and Leadership

Scale Impact Volume Turnover Repetition



“Talent Gaps” Present one of the Biggest Opportunities for HR to make a difference in your organization!

•  66% of CEOs report the absence of necessary skills is their biggest talent challenge

- PwC’s 2013 global CEO Study

•  More than 60% of companies cite “capability gaps” as one of their top talent challenges -  Bersin by Deloitte 2013

•  CEOs rate “human capital shortages” as the number one item on their priority lists for 2014

- Conference board

•  39% of CEOs say they are “barely able” or “unable” to meet the demand for talent

- Deloitte: Disrupting the CHRO

•  “Skills are the new arms race…nearly 70% of global organizations feel they lack the required skills to compete...”

- Bersin: Building a Smarter Workforce, 2013

60+% Absence of Necessary Skills


How to quantify the importance of understanding the skills gap's impact on revenue, expenses, etc.



25

WHAT ANALYSTS SAY…

“Competencies are the currency of Talent Management”, Josh Bersin, 2007 “…defines“competency management” as, “… The set of pracEces that idenEfy and opEmize the skills and competencies required to deliver on the business strategy.” The Buyers Guide to Competency Management Technology SoluEons, 2013 “Skills are the new arms race; our newest research shows that nearly 70 percent of global organizaEons feel they lack the required skills to compete..” Building a Smarter Workforce, 2013 “..the most criEcal, foundaEonal component of the roadmap is the establishment of job responsibiliEes and competencies… If those iniEal foundaEonal elements are missing, then the rest of the organizaEon’s structures are prone to inconsistency.” Integrated Talent Management: A Roadmap for Success, 2012 “… companies realize they cannot solve their skills shortages externally. To achieve compeEEve advantage, they must commit to developing the right skills internally” Corporate Learning Factbook, 2012

SHRM reported in their 2012 and 2013 Employee Job SaEsfacEon survey that recogniEon for the skills you have is the #1 employee job saEsfacEon issue, above pay, benefits, etc.



What’s keeping the leaders of your organization awake?

CEOs Report Talent Gaps will directly impact Client Success: •  66% anticipate losing business to competitors •  64% fear a loss of revenue •  53% anticipate delays in innovation •  59% face lower customer satisfaction •  87% say their employees feel more pressure/stress

- Accenture 2013 Skills and Employment Trends Survey

With a belief in training as the answer, to address Talent Gaps at all levels organizations have directly increased their L&D budgets by 11%.

-  Bersin by Deloitte



Putting it all together. Imagine who wouldn’t invest to stop these losses… (data from the Human Capital Institute)

Planning for talent: 70% of organizations have a weak pipeline; cost per day when operating without a key player: $7k Acquiring talent: Cost of a poor hire: $300K-$500K Engaging talent: Rate of efficiency at which most businesses operate because of low engagement: 30% Developing talent: Average time required for a new manager to become productive: 6 months Consider that the # of employees the average manager is multiplied by the number of people who work for them. Deploying/Assigning talent: Percentage of a company’s employees who are well-suited for their roles: 20% Retaining talent: Cost of losing a talented employee: $250K - $500K Evaluating talent: The value of a top performer is 2-4x the performance of average employees



Competency Assessments that Drive Results

Weak or limited leadership pipeline

Consistency in employee competence

Excessive first year turnover among new hires

Lack of skills to meet organizational needs

Internal challenges to address via assessments

Employee performance

Quality of hire

Employee productivity

Overall turnover

Recruiting costs

Impact of Assessments in Talent Management

Source: Aberdeen 2009 Study; Assessments in Talent Management



Two areas of cost

Cost of Defining Skills: Build vs buy Multiply the Avg HR hourly rate ($XX) X 40-80 hours per job review X # of jobs Cost of a Job Competency Profile or Library / cost of manual effort.

Time to impact/market: ROI Critical roles at 110% productivity Now vs the number of hours it would take to build before it even hits the employees. Sales = for every $10million in revenue, that’s an extra $1million. Customers = for every $10 spent that’s an extra $1 per customer Payroll = for every $1million of payroll, that’s $100,000 saved.



FOCUS ON THE JOB AT HAND

§  Develop and use quickly and update over time. §  Focus on buy-in and change management

processes. §  Make sure you get to the applications; don’t get

stuck in model development

§  Get the “big things right”; “don’t dwell on the small stuff”.

§  Apply existing materials and best practices in developing a rapid draft

§  Focus on the overall architecture

§  Key success criteria and themes.

§  Position models as prototypes for learning how to change behaviors (vs. a perfect output image).

application Integration

Iteration Launch &

Communication Implementation IBM / IBM Competency Development

80% of the effort Recommended Approach 20% of the effort

Typical Competency Development application Integration

Iteration Launch &

Communication Implementation

20% of the effort (if able to move out of development stage)

Typical Approach 80% of the effort



Job Skills Framework Investment •  $XXX,XXX one time fee / XX,XXX employees = $X.XX investment per employee. •  What is your average employee tenure? Capitalized over 3 years it’s $X.XX per employee

year •  Content investment = cost of 1 employee working full time for a year to develop this

Competency Data Development

•  Strategic decisions performed once have major impact, tactical actions performance by many people, many times have an equally major impact but can be less visible.

•  If a defined competency with behavioural descriptors of excellent performance across XXXXX people delivers a 10% increase (Aberdeen Group, Assessments 2011) in productivity for that task

•  Any internally developed output is a first Version 1 and introspective view.

Greater than the sum of the development



Applying a Job Competency Framework through your Talent Management software

•  Increase in performance by using competencies of over 10% on 15000 employees bottom line cost or contribution:

•  Sales * 10% - Project cost = ROI (i.e. improved productivity, reduced hiring costs, etc.)

Succession Planning

•  Focus hiring on competency behaviours •  1 correctly placed internal candidate, rather than an external hiring

exercise would pay for the whole investment in the competency data.

ROI Investments



OD Productivity

•  4+ months to complete current job function.

•  Using an 80% complete model, a function could be done in 3-4 weeks.

•  That accelerates employee productivity delivering a much quicker bottom line impact.

•  What is the employee cost of this time? What is the risk of using only inward looking checkpoints?

Learning and Development Strategies

•  Employee allocated 24 hours learning: $1,440 of opportunity/salary cost.

•  Across all the impacted employees, you would need to identify only 13 days per year of unnecessary training. This does not take into account any cost associated with learning, and the increased ROI.

ROI Investments


Why it's critical to have a start and an end to be able to measure a gap.



COMPETENCIES ARE THE FOUNDATION

Using a Job Competency Framework

provides a Clear, Common and Consistent

language for Talent Management.

It connects processes and enables integration across

HRIS and Talent Management investments, already made.

Functional Job & Competency Framework

Career & Succession

Planning

Learning Needs

Analysis

Risk Analysis

Recruitment & Selection

Resource Planning

Compensation

Performance Management

“Conclusion: The most successful organizations rely on a talent infrastructure that encompasses the right competencies and job profiles as a basis for integration.” Integrated Talent Management: A roadmap for success. Bersin and Associates, 2012



Organizational Talent Data

What’s your organizational capability? Who needs what learning to be more effective? How can you find your experts? How can you make the most of the talent you have?



Its Cheaper to grow, than buy.

•  How much do you spend on recruitment? •  How does that compare to the learning budget? Understand the financial

risk and effort put into buying external experience. •  Does your hiring requisition process first come to L&D to mine the talent

pool for internal candidates that can be developed? •  Partner with your hiring managers to understand the business needs.



Throwing money at a problem we haven’t defined

“Yet many don’t know where this spend is focused” Bersin by Deloitte

– In other words, organizations are throwing L&D funds at their talent gaps without actually knowing what gaps they have!

Workforce Science and experience suggests this is the WRONG approach – throwing jelly at a wall does not stick.

Critical steps for success, Bersin by Deloitte: •  Build a “global supply chain” for

capabilities •  Identify capability gaps today and for

tomorrow •  Build a pipeline of “known gaps in the

future” to build a skills supply chain now •  Develop people to deepen their skills

where needed

BUT……. Organizations Lack the Tools to Define and Identify Talent Gaps to address Future Talent Needs

•  Corporate Learning & Development Spending Topped $130 Billion


How to transform the gut feel that you have a skills gap into an objective data source.



The IBM Talent Frameworks

• Functional area with in each industry or expertise

• 6 Job Bands for employees, management and executive matrices

• Job descriptions • Job profiles • Job responsibilities • Job focus • Compensation Market Data

Business – 36 Individual – 28 Management – 22 Leadership – 20 Functional/Technical – 1700

4 Levels of Proficiency with 21 unique behavioral descriptors for action oriented skill observation, evaluation and communication. Each competency has a suggested level of proficiency used for each role.

Competencies (2,000+) Application Accelerators •  Learning References (OJT, Web,

References, professional bodies, etc)

•  SMART Development Goals •  Coaching Tips •  Performance Feedback Writing

Assistants •  Interview Questions

Designed to engage and optimize use In context. Extends the application of the competency model to support models such as the 70/20/10.

–  Banking & Fin Services -- OEM High Tech Software –  Construction -- Insurance –  Consulting -- Manufacturing –  Education -- Media / Publishing –  Energy -- Retail –  OEM High Tech Hardware - CRM Outsource Mgmt – Pharmaceutical - Real Estate – Healthcare: Clinical/Admin

– General Corporate Functions (HR, Finance, Legal, Sales)

– Information Technology (IT) Operations

Job Families (145+)

Jobs Profiles (2,500+)

Vertical Frameworks General Competency Frameworks



The 3 phases:

Defining, Assessing and Managing your Skills Gap

Analyze Organizational Capabilities

Set Goals, Objectives and Learning

Analyze and Identify skills gaps

Validate Assessments

Assess Competencies

Map to Organization

Validate Competency Profile

Map Job Roles



Where you can apply it

Where it helps How it helps What you need

Attracting candidates

Set expectations of who will be successful in the job beyond a job description

Demonstrable behaviours of what you expect

Hiring Decisions

Smarter hiring decisions based on capability to do the job

Interview questions tied to the competency behaviours required

Onboarding Improve chance of success and retention with accelerated time to productivity

Demonstrable expectations of what good looks like

Managing Support managers development discussions with tools to improve trust and impact.

Skill focused coaching tips, SMART goals, and extended expectations for growth

Engagement Provide clear view of portable/mobile skills to engage the engageable.

Reusable competencies across roles, levels and functions to provide skills based career matrix.

Performance Management

Provide job specific performance criteria for evaluation and contribution.

Job specific competencies and expected levels of demonstrable behaviour

Development Drive up learning as its easier to find content in your LMS

Learning catalogue mapped to competencies

Compensation Planning

Understand the jobs you are matching beyond just the salary survey job title.

Match jobs based on skills, tied to excellence as performance to pay.


Conclusion



Whats keeping you up?

How can I attract and hire more people just

like my top performers?

How do I foster knowledge sharing and collaboration to drive more innovation?

How do I develop the next generation of leaders for a more global, flexible, and

diverse workforce?

How can I rapidly develop, deploy and optimize

skills and capabilities to match emerging

opportunities?

How do I know if I’m recognizing and

rewarding my employees optimally?

How can I predict what different segments of my employees need and what

actions to take to optimize business

outcomes?

How do I find real-time, hidden, game-changing

insights from data available inside and

outside my organization?

How can I bring people into the organization

so they’re productive from Day 1?

How do I gain continuous insight

into what my employees think of

the organization?

How do I know salary planning is aligned with our business strategy?



“Talent Gaps” Present one of the Biggest Talent Opportunities in your organization!

•  66% of CEOs report the absence of necessary skills is their biggest talent challenge

- PwC’s 2013 global CEO Study

•  More than 60% of companies cite “capability gaps” as one of their top talent challenges -  Bersin by Deloitte 2013

•  CEOs rate “human capital shortages” as the number one item on their priority lists for 2014

- Conference board

•  39% of CEOs say they are “barely able” or “unable” to meet the demand for talent

- Deloitte: Disrupting the CHRO

•  “Skills are the new arms race…nearly 70% of global organizations feel they lack the required skills to compete...”

- Bersin: Building a Smarter Workforce, 2013

60+% Absence of Necessary Skills


Surviving the Talent Crisis Gordon Ritchie, Product Evangelist. Smarter Workforce Talent Frameworks

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