Shanghai HR

Conference A G I L E O R G A N I Z AT I O N I N

D I G I TA L E R A

M E R C E R G L O B A L H R C O N F E R E N C E S

Daimler Qiao, Partner

China Vice President, China Business Leader, Career,

Mercer

1 8 S E P T E M B E R

© MERCER 2019 2

O R G A N I Z A T I O N S A R E I N T H E M I D S T O F

D I S R U P T I V E C H A N G E S

THREE FORCES OF DISRUPTION

EXPONENTIAL

TECHNOLOGIES

PERVASIVE

DIGITIZATION SPEED@

SCALE

1

These disruptive forces, combined with intense competition, are challenging traditional views and success measures of Organizations

3

2

© MERCER 2019 3

K E Y D I S R U P T O R S 1 : E X P O N E N T I A L T E C H N O L O G I E S

E X P O N E N T I A L T E C H N O L O G I E S

A U G M E N T E D &

V I R T U A L R E A L I T Y

A D D I T I V E

M A N U F A C T U R I N G

R O B O T I C S A R T I F I C I A L

I N T E L L I G E N C E I M P A C T S

H O W W O R K

G E T S D O N E

Disruptive

innovation

Hyper

productivity

Exponential technologies are already augmenting work in firms.

Accelerating ability of machines to make judgements and perform tasks that previously only humans could undertake is having a significant impact:

Colombian Airways is using AI agent to enhance

interaction with customers. It helps to achieve the

general information query, seat selection, refund

and other series of services. Carla greatly improve

customer satisfaction and reduce 40% of the call

center seats.

GEICO Insurance company is using AMAZON

Alexa to help mobile users to access policy

information and personal information. As a self-

service tool, Alexa can respond to requests about

the account details, the next billing time, and

detailed insurance policies

© MERCER 2019 4

K E Y D I S R U P T O R S 2 : P E R V A S I V E D I G I T I Z A T I O N

Massive fixed costs and

lower average costs

Efficiencies from inventory

management & resource controls

More volume at lower prices or increased margins

Increased market

share/high barriers to

entry

Large Capital investments

Efficiencies in social

networking, demand

aggregation

More platform participants, leveraged assets, larger network

Higher average value per

transaction

Increased market

share/high barriers to

entry

Technology Investments

“ L E T ’ S B U I L D A

M O A T ” “ L E T ’ S B U I L D A

N E T W O R K ”

• Power of Suppliers and Customers is

considered threatening

• Considered ‘depletive’

• Focus : Building barriers

• Power of Suppliers and Customers is

considered an asset

• Considered ‘accretive’

• Focus : Adding value to platforms

Supply side Demand

side

Digital platforms on the cloud have moved value to the marketplace

© MERCER 2019 5

K E Y D I S R U P T O R S 3 : S P E E D @ S C A L E

To meet investor expectations and market demands, companies must stay innovative – while scaling rapidly The rewards are big: in the last ten years, Tech savvy companies have become the largest in the world

B A R R I E R S T O S P E E D @ S C A L E

• For mature firms, governance frameworks can

hinder innovation and risk taking

• For fast growing firms that seek to ‘scale leap,’

there are cultural challenges in order to operate

successfully at scale

• Inability to grow inorganically has slowed the

progress of new products to market

• Inflexible operating models create regulatory

challenges and slow growth

2 0 1 9

© MERCER 2019 6

Q U E S T I O N : W H O A R E T H E R E A L A G I L E O R G A N I Z A T I O N ?

© MERCER 2019 7

Key trends in organizational structures & principles (not exhaustive)

• Strategic focus on

values

• Employee growth

mindset

13

12

Values

• Partner co-

development

• Customer

centricity

Vendors & customers

10

11

• The coaching boss

• Authority

delegation

Leadership

8

9

• Fast failing

• Continuous

reskilling

14

Processes & systems

15

• Project-based &

agile teams

• Delayering span of

control

• FlexForms

16

17

Structure

18

• Liberated

enterprise

• Distributed feedback

19

20

Governance

• Employee

customer

• Self-management

• Flexibilization in

time and place

• Skill stability

decrease

Individual worker

1

3

2

4

• Chat Ops

• Intelligent

workplace

• Transparency &

knowledge sharing

Collaboration groups

6

7

5

W E H A V E I D E N T I F I E D 2 0 T R E N D S F R O M L E A D I N G

O R G A N I Z A T I O N S

Governance model

Organizational Structure

Performance Management System

Material Incentive

Non-Material Incentive

Welfare System

Career Development System ( Career path, promotion channel )

Talent Inventory and Development

Processes

Talent Planning (Structure, Quantity, Capability

Model )

Digital platform

Company Strategy and Values

M E R C E R O R G

E F F E C T I V E N E S S

F R A M E W O R K

© MERCER 2019 8

O R G A N I Z A T I O N A L T R E N D S ( 1 / 6 ) We expect firms to conduct continuous reskilling of the workforce, enabled by

near-complete transparency

Trend evolution over the next 5-10 years, start and end of arrow symbolize our assessment of current and future position of tech/ICT players like Nokia

Processes & Systems

Case study

IMPACT

• The Twitter environment develops a pool of employees with the intellectual capabilities

to be as effective as possible as soon as possible without impacting the continuity of

team/project performance

DESCRIPTION

• Twitter deals with a fast-paced competitive environment: quick employee turnover (2-3 year

tenure), perishable revenue opportunities (contextual advertisements)

• To keep up with competition requires constant improving of algorithms and adjustments to

products

• To facilitate the creativity required, Twitter created a system based on transparency and

constant reskilling that enables rapid skills development and information exchange

• All company information (documents, calendars, company objectives) are formalized and

updated every week and available to all employees

• All employees are able to get trained on any topic relevant to Twitter’s business

• Once a week, the full staff come together for ‘tea time’ at which CEO, CTO, CFO explain

company strategy and everyone is allowed to challenge and ask questions or add

questions to an open list

• Only the top 5 executives globally have offices, with transparent glass walls, and which can

be used by employees when executives are not present

Key trends

Collaboration groups

Silo-ed

information

Enabled

transparency

We expect firms to provide (near-)complete transparency and access to company data to

workers, in order to enable better informed collaboration and quick ramp-up on projects

0% 25% 50% 75% 100%

5 Transparency & knowledge sharing

Continuous reskilling

We expect that continuous reskilling will be conducted across the entire workforce supported

by new training processes, IC systems and incentives; however, we estimate only 50% of

today’s workforce will be able to reskill, rest will be pushed out

No reskilling

of workforce

Continuous

reskilling of

workforce

15

0% 25% 50% 75% 100%

© MERCER 2019 9

O R G A N I Z A T I O N A L T R E N D S ( 2 / 6 ) We expect firms to place more strategic focus on values, also as a means to

attract and retain younger generations looking for motivations beyond profits

Case study

DESCRIPTION

• Airbnb has six core values which are incorporated in daily culture and screened for in two

“value interviews” with every candidate

• One value is ‘be a host’: employees are encouraged to anticipate needs of other, be

prepared, authentic as well as to listen and to eliminate interference for others

• Another important value is to “embrace the adventure”, meaning that Airbnb wants people to

learn, be curious and reach beyond the known

• The remaining values evolve around simplification, holistic thinking, ownership, and solution

orientation

• Regarding its reputation, Airbnb is introducing product and policy changes aimed at fighting

discrimination and prejudices among users

Key trends

values

Strategic focus on values

High level vision Strategic focus on

values

We expect that firms will strategically position their core values against competitors to attract

and retain employees (especially younger generations who reject profit as a value in itself) and

will integrate these values even with partners/subcontractors

0% 25% 50% 75% 100%

13

IMPACT

• Values represent attractive work environments for younger generations and foster a

productive collaborative environment

• Airbnb won the Glassdoor Best Places to Work 2016 award and has a high average rating

of currently 4.2/5 given by former employees, overtaking Google in 2015 as best place to

work

Trend evolution over the next 5-10 years, start and end of arrow symbolize our assessment of current and future position of tech/ICT players like Nokia

© MERCER 2019 10

ChatOps – Enablement of communication

In-person, traditional

virtual (email, conf.

call)

Virtual, technology-

enabled

We expect nearly all communication to be conducted via virtual techno-logies especially chat and

video replacing emails/phone calls; intelligent workplaces automatically adjusting to enable

seamless communication

0% 25% 50% 75% 100%

6

O R G A N I Z A T I O N A L T R E N D S ( 3 / 6 ) We expect firms to increasingly shift away from traditional communication

channels and employ chat conversations and video

Case study

DESCRIPTION

• Teams at IBM’s Watson and Google use ChatOps as a primary communication means with

almost no use of emails or phone calls

• The chat interface creates a single place for all contributions to a topic both in text/opinion

and content/files; if questions have to be escalated, team member easily move to video chat

in the same screen

• Having a common place for synchronous and asynchronous information allows the teams to

communicate quicker and add intelligence on top of the project chat data (e.g. automatic

calendar schedules based on recognized agreements among team members)

• “In my two years at Google, I only had one phone call and it was by accident; instead I

typically jump on 5-8 video chats per day” – Google employee in Support (internally facing)

• As a next step, IBM and Google are both developing intelligent offices that combine modular

office equipment with intelligence (e.g. collaboration areas rearrange into compartments

based on upcoming meeting calendar and number of participants)

Key trends

Collaboration groups

Trend evolution over the next 5-10 years, start and end of arrow symbolize our assessment of current and future position of tech/ICT players like Nokia

© MERCER 2019 11

Authority delegation

We expect an increase in authority being delegated to employees where leaders will

increasingly allow employees to manage themselves (e.g. via self-set targets, location and

work hours)

0% 25% 50% 75% 100%

Full authority with

manager

Independence of

employee

9

Employee customer – Tailored benefits

Standardized benefits

Individual choice

within benefit

modules

We expect the majority of benefits will become customizable to provide targeted value

propositions to segments of ‘employee-customers’

0% 25% 50% 75% 100%

3

O R G A N I Z A T I O N A L T R E N D S ( 4 / 6 ) We expect firms to increasingly treat employees like customers and place more

strategic focus on values to attract and retain talent

Trend evolution over the next 5-10 years, start and end of arrow symbolize our assessment of current and future position of tech/ICT players like Nokia

leadership

Case study

IMPACT

• Netflix was able to compete for talented workers with a technology affinity (especially

in its early days) against larger companies thanks to its set of above market average

employee benefits

• Due to its “freedom and responsibility” and “only high potential employees” approach, a

share of employees feels fear about “not doing enough” and is worried about being

fired (3.6/5 in Glassdoor rating)

DESCRIPTION

• Netflix offers highly individualized selection of compensation options, e.g. giving its

employees power over the part of stocks from the total compensation as well as unlimited

vacation days (within reason)

• Netflix’s philosophy is to hire ‘grown-ups’ who are able to make decisions in the best

interest of the firm; the firm trusts them once they decided to hire them, e.g. Netflix expense

policy is five words long: “Act in Netflix’s best interests”

• Netflix grants up to 12 months maternity and paternity leave, provides free lunches, open

working hours, health, vision and dental insurance and mobile phone discounts

Key trends

Individual worker

Note on reverse trend on work flexibilization

In our interviews, Google and Facebook indicated that they started to reduce the degree of

flexibility, due to an observed increase in team productivity and creativity through the direct

exchange. We expect in the long run, firms will provide flexibility, but reap benefits of direct

exchange through augmented reality (e.g. holographic meetings).

© MERCER 2019 12

Disciplinary,

operational manager Mentor/coach

Coaching boss – role of manager 8

0% 25% 50% 75% 100%

We expect the increase in project-based work to lead to large portions of the workforce being

managed via ‘coaching bosses’ (who manage their workers development, while project

leaders manage the project performance)

O R G A N I Z A T I O N A L T R E N D S ( 5 / 6 )

We foresee an increasing spread of coaching bosses which serve as mentors and

guide their employees in career development despite not being on the same

projects

Case study

DESCRIPTION

• The firm’s workforce consists to two thirds of employees who work primarily project-based

with frequent short term assignments and rotations between projects

• To deal with project-based workers, the firm introduced the concept of a “coaching boss”

• A coaching boss is assigned to an employee independently of project work and focuses on

the worker’s longer term development, brings in a vision of career development rather than

micro-managing, stimulates the collective intelligence and acts as a facilitator by sharing

information

• Each employee has a “coaching boss”, who supervises up to 50 persons and meet with

their supervisees on a regular basis

Key trends

leadership

Trend evolution over the next 5-10 years, start and end of arrow symbolize our assessment of current and future position of tech/ICT players like Nokia

IMPACT

• Due to the set-up, each manager has a span of control ranging between 35 and 50 out of

which only 8-10 are direct reports and the rest does project-based work

• Individuals performance assessment is based on feedback from multiple bosses, feeding

more perspective into the employee development process

• Leaders should look to shift their skill mix towards more behavioral and leadership skills

rather than purely technical ones

Webscale

player1

© MERCER 2019 13

Fixed mid-term

product roadmap Fully agile / Test & fail

Fast Failing – product development process 14

0% 25% 50% 75% 100%

We expect a widespread adoption and incentives supporting the use of ‘Fast Failing’

techniques in product development

O R G A N I Z A T I O N A L T R E N D S ( 6 / 6 ) We expect firms to increase their self-learning capacities enabled through widely

accepting fast-failing approaches

Trend evolution over the next 5-10 years, start and end of arrow symbolize our assessment of current and future position of tech/ICT players like Nokia

Case study

IMPACT

• Employees get the chance to be independent, pursue their own goals and can also benefit

from the success of their ideas personally since their total compensation depends on their

level of goal achievement

• Excellence is promoted by encouraging ‘trial and error’ approaches within the risk aversion

limits of the company culture

• Even initiatives that were launched recently (e.g. 3 months ago) can be discontinued if

data evidence suggests poor performance in future

DESCRIPTION

• At Twitter, there are no fixed product roadmaps; instead employees are given full freedom,

but also accountability, on the kind of opportunities they want to pursue

• Twitter always works with a testing-focused approach that prioritizes new initiatives based

on performance tested on a small subset of the company extensive data lakes

• Employees compete internally for receiving budgets for their ideas

Key trends

Processes & Systems

© MERCER 2019 14

External factors influencing choices in engagement options

Pressure for cost-efficiency, productivity, flexibility and scalability Organizations are increasingly challenged by shorter demand cycles and less-predictable, rapidly changing customer requirements. Companies with a network of collaborators are better able to be flexible and scalable compared to traditional organizations. They are able to increase or decrease their size relatively quickly, and can more easily expand compared to other, less collaborative organizations

Evolution of requirement towards critical new knowledge and skills The rapidly evolving environment in which organizations operate in is intensifying. In industries where knowledge is complex, growing, and widely dispersed, the heart of innovation reaches further than the traditional organizational hierarchy

Increasing importance of incubation without cultural and geographical constraints Organizational culture can be a constraint to both innovation and R&D as perceived expectations and past ideas can limit ideas produced. Organizations are sourcing their expertise from external and divergent thinkers in order to remove this cultural bias and solve problems

Increasing demand among younger generations for a strong and positive value proposition A strategically designed talent ecosystem positively impacts an organization's overall value proposition, increasing their ability to access and attract the talent required to complete the work that needs to be done. As well as creating broad, diverse talent models that can leverage talent from almost anywhere in the world, talent ecosystems enable a more flexible, open-style of working amenable to the preferences of today’s younger, more connected workers

T A L E N T E C O S Y S T E M S – A N E W I M P E R A T I V E External developments impact organization’s choices of talent to drive innovation,

resolve complex problems and deliver timely and meaningful solutions and products

Source: Mercer Research “Talent Ecosystems , Manage critical capabilities to gain a competitive edge – Considerations for business and HR leaders”

© MERCER 2019 15

INTERNAL TALENT Internal talent will remain at the core of sourcing for the organization in many capability areas of the value chain. But it will increasingly be supplemented through other types of talent

PARTNERSHIP TALENT Sourcing through partnerships will increase in importance as industries and capability barriers blur and organizations need a much broader set of capabilities to stay competitive

FREELANCE TALENT Sourcing through freelance talent will increase as social trends like individualization impact the perception of work of many workers and large groups of the workforce will prefer to work independently

CROWDSOURCE TALENT Crowdsourcing will hugely increase, especially where the “wisdom of the crowd“ will lead to more creative, innovative and faster solutions. Technology platforms are a driver and enabler to leverage crowd skills in a productive way

CO-OPETITION Collaborating with competition will also increase in areas where (cost) efficiency is important and is driven by economies of scale as well as where there is a mutual benefit and opportunity for growth

Source: Mercer Research “Talent Ecosystems , Manage critical capabilities to gain a competitive edge – Considerations for business and HR leaders”

Challenges in management ecosystems

The management of different ecosystems need to be realized under the legal context across the geographies the organization is operating in:

• Labor law framework especially with regards to the contracting of freelance talent, e.g.: contractual and liability questions of co-employment

• Collective agreements with unions

• Employer-specific agreements

• Liability law

• Contract law especially with regards to contracting in partnerships and co-opetition

• Copy-right and IP-protection law

Organizations also need to consider and be aware of the discussion around precarious employment contracts and the impact on organizations.

In addition, an organization has to develop new change leadership capabilities to manage the external environment, focusing on building trust across internal and external resources and managing strategic risks in parallel.

T A L E N T E C O S Y S T E M S – A N E W I M P E R A T I V E

Over the next 5-10 years, organizations need to significantly change and advance their

approach to managing critical capability

© MERCER 2019 16

… L E A D I N G T O K E Y S H I F T S A T W O R K …

Jobs are no longer the organizing unit

for work; rather, there is a redistribution

of tasks between humans and

machines, depending on who is best

suited to do the job

Dancing with machines

With the rise of new technologies, we

will see the emergence of new roles

associated with the design,

development and maintenance of new

technologies

New work, new skills

The human workforce of the future will

execute tasks requiring higher cognitive

and emotive complexity, and activities

requiring the application of general

intelligence

Higher complexity of human work

….invest MORE in

disruptive projects than low performing companies.

…are 5X more likely to build a

culture of innovation across every business function.

…have 2.7X more effective

idea generation than low performing companies.

High performing companies…

Source: CB Insights, 2018 State of Innovation report, 2018

© MERCER 2019 17

… W H I C H I M P A C T T H E H U M A N W O R K F O R C E But companies aren’t ready

REDEFINING THE TALENT MODEL

RECONFIGURING PEOPLE EXPERIENCE

RELYING ON DATA & SENSITIVITY

REBALANCING GLOBAL & LOCAL

In a digital economy, access to a global

workforce creates new pressures for

culture fit and local infrastructure to

support a consistent global strategy

Understanding and valuing data is a key

part of inclusiveness in a multi-faceted

workforce.

REFRAMING WELL-BEING

Physical, mental and financial health

all contribute to well-being. Many of

these are new areas for organizations,

and raise issues around duty of care

In the future, the talent model will be

determined outside the enterprise. HR

needs to determine what role they will

play, and how they must reinvent

themselves

The digital workplace will be

characterized by human machine

teaming, on-demand workers and

greater focus on personalization and

workforce collaboration enabled by

technology.

Insights from TECH SYNTHESIS, an interactive workshop with senior business & people leaders from 30+ Technology companies based in Silicon Valley, to rethink people readiness for the future

© MERCER 2019 18

… W H I C H I M P A C T T H E H U M A N W O R K F O R C E The workforce isn’t ready, either

Disruptive tech enterprises are doing a great job of applying their technology talent in challenging roles, creating a highly productive and engaged workplace.

I N C R E A S E D H U M A N M A C H I N E T E A M I N G

• Repetitive tasks will be automated

• Human workforce ‘freed up’ to carry out contextual intelligence tasks

• Ability to redistribute work crucial source of competitive advantage

# 1 Cybersecurity talent is in high demand

1M1 jobs will go unfilled this year

Address through machine application

R E A D I N E S S F O R N E W W O R K • Strong pressures on workforce to learn new skills & be redeployed in new roles

• A combination of enterprise-wide and function-specific readiness efforts required to

create new efficiencies

# 2 Kindred AI is teaching robots new tasks using human virtual-

reality “pilots.”

Machine learning (ML) capabilities are transforming

Data Scientist roles

Workplace Analytics product leverages Office 365 collaboration

data to deliver powerful new insights for enterprise

productivity

I N T E L L I G E N T W O R K P L A C E

• Digital work environment characterized by pervasive connectedness

• Adaptive interfaces and cognitive computing platforms provide real time insights and

assistance with narrow data

# 3 Collaboration tools can create

synergies and drive efficiencies across teams

© MERCER 2019 19

I N T H E N E A R F U T U R E , J O B S W I L L C H A N G E New technologies will bring new jobs

By examining skill adjacencies and technology investments, HR can support workforce readiness for new jobs

Robotics engineers develop and

maintain a wide range of robot

perception systems for reliable

detection, recognition, navigation, and

localization at scale in unknown and

dynamic environments, and design

APIs for robot platforms.

RO

BO

TIC

S

AR/VR engineers analyze, design,

develop and debug real time VR and AR

software for advanced prototypes and

user experiences, working with

designers and artists to drive new

features and solutions.

AU

GM

EN

TE

D/V

IRT

UA

L

RE

AL

ITY

AI Architects work with business

SMEs and customers to deeply

understand their business problem and

technical needs and design AI solutions

that make the best use of the

company’s existing technology

environment.

AR

TIF

ICIA

L I

NT

EL

LIG

EN

CE

Embedded Software Engineers

work with software and hardware

teams to design, develop and verify

firmware for embedded systems.

They develop design specs, software

and firmware source code, build

scripts and perform debugging tasks.

IN

TE

RN

ET

OF

TH

ING

S

© MERCER 2019 20

B U I L D I N G R E A D I N E S S F O R D I S R U P T I O N Business integration is key

ENTERPRISE READINESS

• Review existing and planned innovation investments in

business functions, understand key shifts

• Assess the human implications of established use cases

• Assess human impacts in use cases, and build skills and

redesign metrics to enable new ways of working

• Simplify people processes and policies to enable

agility in the enterprise

• Leverage collaborative technologies and machine

learning capabilities to gather and process information

• Use findings to enable the workforce to be more

productive and proficient at work

Creation of

new roles

Role/tasks requiring

re-training

Re-aligning teams &

incentives Building digital

skills Informal , transparent

work culture

Flexible org.

structures, processes

Moving forward, HR organizations need to balance their enterprise focus with business function enablement

BUSINESS FUNCTION READINESS

© MERCER 2019 21

A G E N D A F O R T R A N S F O R M A T I O N Focus areas

HR’S ROLE:

COMPETIVE ADVANTAGE

THROUGH PEOPLE

I II III

BUILD

TOMORROW’S

WORKFORCE

FOSTER AN

INNOVATION-CENTERED

ORGANIZATION

How will HR partner with

leaders to translate

business priorities into

people strategies?

What barriers must be

addressed and what

levers should you pull?

How can HR prepare

for the future of work?

© MERCER 2019 22

A G E N D A F O R T R A N S F O R M A T I O N Considerations

HR’S ROLE:

COMPETIVE

ADVANTAGE

THROUGH PEOPLE

I

III FOSTER AN

INNOVATION-

CENTERED

ORGANIZATION

W H A T T H E M O S T D I S R U P T I V E C O M P A N I E S

A R E D O I N G T O F O S T E R A C U L T U R E O F I N N O V A T I O N …

COO of the Talent

Supply Chain

Product Manager, Human

Performance

Workforce Futurist Employee Lifecycle

Experience

II

BUILD TOMORROW’S

WORKFORCE

II

C r o s s - f u n c t i o n a l

e x p e r i e n c e s

I n d i v i d u a l i z e d

C a r e e r M a n a g e m e n t

D i g i t a l t o o l s f o r “ i n t e r n a l

g i g - e c o n o m y ”

P e e r - l e d , c u r a t e d , a n d

o n - d e m a n d l e a r n i n g

© MERCER 2019 23

H R T R A N S F O R M A T I O N

F R O M T R A N S A C T I O N A L T O I N T E L L I G E N T

Personnel Management

- Help management ensure

predictability of outcomes

through the workforce

- Workers as a force of

production

- Generate productivity

- Enforce policies

- Minimize risk

Human Resources

- Deliver people services and

process-governance

- Workers as an asset

- Generate predictable

employee outcomes

- Enforce processes

- Mitigate risk

Agile HR

- Digital employee experience

- Workers as collaborators in

value creation

- Generate business results

through employee lifecycle

- Evolve people policies &

processes with digital

- Innovate with small bets,

allow for risk

- Engage talent ecosystem to

deliver business value

- Intelligent workplace

augments people processes

- Distributed people

management model

- Generate differentiated

outcomes through primary

research and innovative

programs

- Personalized talent

environment and contracts to

maximize ownership for

business outcomes

Intelligent People Strategy

© MERCER 2019 24

W H E R E T O S T A R T Y O U R J O U R N E Y ?

Depends on your organizational context

Organizations have

unique business

challenges.

Workforce, culture

capabilities &

competencies vary.

Leadership &

organization appetite

for innovation.

© MERCER 2019 25

C A S E S T U D Y 1 – B U S I N E S S P L A T F O R M

T R A N S F O R M A T I O N We see the recent transition of goldman sachs’ business platform as an act to the four trends

Change Drivers New Business PLATFORM

Regulatory changes

• Increased transparency and

reporting requirement both from

regulators and investors

Technology developments

• Growing application of new

technology for processes

automation / optimization (e.g. AI

and ML)

New entrants threats

• Non traditional financial

corporations / non-incumbents

disrupting current ecosystem

Consumer-centric focus

• Increased consumer

engagements in various

interfaces across the value chain

Effective use

of technology

• Task-driven delivery and

automation of repetitive

tasks along the entire

supply chain (e.g.

“Marcus”)

New mix

of workforce

• New composition of

workforce, with Goldman

Sachs’ staff consisting of

one-third of engineers

“Cooperative”1

partnership

• Emergence of new types

of partnership models

(Goldman Sachs’ invests

in about 100 start-ups)

Reskilling of

existing workforce

• Changing employee

skillset to deliver goals of

new business platform

KEY IMPLICATIONS TO THE WORKFORCE

PLANNING

• Expansion from Wholesale banking to Retail

banking – expansion adjacent to enhance value

capture/creation

Strategy: integrated approach

• Bundling services to provide comprehensive

packages as differentiating proposition

Business model: integrated business model

• More sophisticated and more active approach to

risk management enabled on digital data

analytics

Risk management: sophisticated risk mgmt. on

software

• Direct interaction between clients and services

provider platforms – better leverage of

partnership for complementing capabilities

Operating model: Application Programming

Interfaces

1. Cooperation & Competition; Source: Various Goldman Sachs interviews, Oliver Wyman analysis

Link to Marty Chavez (Deputy CIO of Goldman Sachs) speech: "Data, Computing, and Transformation in the Financial Industry"

© MERCER 2019 26

C A S E S T U D Y 2 – T A L E N T - C E N T R I C A C Q U I S I T I O N

M O D E L Unilever’s goal to become more digital encouraged the development of a new talent

acquisition model

Ongoing changes in customer trends have forced Unilever to invest

significant amounts in Marketing

Changes in consumer demographics

• Aging population

• Decreasing number of children per family

Changes in consumers’ behavior

• Increased awareness for sustainability & health

• Higher priority of speed in costumer experience

Increase in Branding and Marketing expenditures:

• 2008: € 5,055 M

• 2015: € 8,003 M, partly due to higher number of agencies

(~ 3,000)

…triggering Unilever’s digitalization program to:

Cost efficiency

Increase in productivity

Environmental friendly

Cultural change towards new generations

How did Unilever digitally transform the recruitment process to become

more talent-centric instead of position-centric?

Which impacts were achieved?

Improved candidate experience

• > 80% of positive candidates’ feedback

Decreased marketing expenditure

• > 3% decrease in 2016, down to € 7,731 M

Optimized recruiting time

• > 50,000 hours saved by candidates

• 75% time shrink in recruiting by Unilever

Optimized candidates selection

• offer rates increase from 63% to 80%

• raise in acceptance rate from 64% to 82%

Note: Improvements measured from July 2016 to June 2017

Sources: “The reasons behind Unilever’s Marketing Cuts” – Marketing Weeks, “Unilever to halve is creative agencies as it doubles down on efficiency savings” – Campaign, The statistics Portal, HireVue, “Consumer-goods giant

Unilever has been hiring employees using brain games and artificial intelligence” - Business Insider UK, OW IC

Link to video on new

recruiting process:

Unilever's Digital

Recruitment Process

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C A S E S T U D Y 3 – W O R K F O R C E R E S K I L L I N G The introduction of a massively scaled software infrastructure required AT&T to retrain its

employees

Increase in speed and efficiency (from

2015 to 2016)

- 40% shorter product-development

cycle

+32% accelerated time to revenue

1.8 M individual courses taken

1,101 nanodegrees in progress

> 140,000 workers actively engaged in

re-education

Strong employee uptake1

IMPACT ACHIEVED

New talent management approach

• Identification of skill gaps for new roles

• Simplification of role structures to encourage

jobs mobility and interchangeable skills

• Upgraded talent practices

– Simplified performance metrics

– Higher performance expectations

– Redesigned compensation plans

Implementation of reskilling tools

• Provision of career planning tools

• Learning tools offered via online channel

– Online platform

– Technology workshops

– Online certification options

• Partnership with Udacity and Georgia Tech

University

WORKFORCE 2020 ACTIONS

• Strategic shift towards computer-based

software systems fosters new tech roles

PURPOSE & ASPIRATION

Not obsolete

by 2023

Obsolete

by 2023

2013

Org

• Employees retraining aiming at

– Prevention of large-scale layoffs and

rehiring

– Development of perpetual learning culture

– Agile organization

Link to HBR article on AT&T’s workforce strategy: AT&T’s Talent Overhaul

1. Data per May 2016; Source: “Talent management – AT&T’s Talent Overhaul”, Harvard Business Review (October 2016); “Can AT&T retrain 100,000 people?”, Fortune (March 2017)

140 K

240 K

100 K

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C A S E S T U D Y 4 – T A L E N T P O O L M A N A G E M E N T Ikea manages a large part of its freelancer pool through its own labor marketplace

company taskrabbit

Ikea’s internal workforce business types

• Stores / retail

• Product development

• Purchasing

• Distribution / Warehouse

• Support function (e.g. IT, communication, IKEA indirect materials & services,

HR, finance, customer service)

Freelancer pool for after-sales service

Sourcing platform

• IKEA’s owned company TaskRabbit (acquired in 2017)

• Labor marketplace company linking freelance workers with jobs (160,000

independent workers in US & UK)

• Taskers undergo background checks before start and are further reviewed based

on customer feedbacks

IKEA’s service solution

• IKEA’s customers book assemblies directly through TaskRabbit

• Service offered at a cheaper price compared to standard IKEA delivery and

assembly service

Benefits for IKEA

• Access to a flexible and affordable after-sales service solutions to meet the

needs of today’s customer

• Positive contribution to the customer journey

EXTERNTAL

WORKFORCE

*

INTERNAL

WORKFOR

CE

*IKEA partly works

with freelancer on-

demand in other

areas (e.g. design)

Link to NY times article on IKEA’s acquisition: Ikea Enters ‘Gig Economy’

Source: Press releases, Wall Street Journal

© MERCER 2019 29