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New Realities, New Opportunities, New CompetenciesThe Future of Work
Ravin Jesuthasan
September 2013
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Headlines: challenges and opportunities
Talent 2021GWS
Transformative HR
Generation Gap? Not when it comes to pay…it isthe #1 attraction driver for all ages in the U.S.
Generation Gap? Not when it comes to pay…it isthe #1 attraction driver for all ages in the U.S.
Structurally Unsound. Businesses are attempting to reach 21stC heights on 20thC talent and reward platforms
Structurally Unsound. Businesses are attempting to reach 21stC heights on 20thC talent and reward platforms
Friction Points. By 2021, a new map of talent surplus and deficits will emerge
Friction Points. By 2021, a new map of talent surplus and deficits will emerge
Security Minded. Whether it is attraction or retention, financial security is top of mind
Security Minded. Whether it is attraction or retention, financial security is top of mind
Engagement at Risk. Only 35% are highly engaged, stress is increasing and energy is flagging
Engagement at Risk. Only 35% are highly engaged, stress is increasing and energy is flagging
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Human Capital Research
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The major themes of Global Talent 2021
Business transformation demands new skills
Mobility from industrialized to emerging markets
Global talent mismatches
Changes in talent management strategies
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What is driving the talent agenda?
0 10 20 30 40 50
Generational, social and cultural driversGeopolitical trends
Increasing focus on diversityRegulatory changes
Sustainability and the environmentShift of market momentum to emerging markets
Industry consolidation and transformationIncreasing competition
Changes in customer needs and behaviorLabor markets shifts
Globalization of marketsTechnological and digital change
% of respondents
Market shifts that will have the biggest impact on futuretalent requirements
Source: Global Talent 2021 Study conducted by Oxford Economics and Towers Watson, 2012.
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What strategies will most impact talent needs?
0 10 20 30 40 50
OtherOutsourcing and offshoringOrganizational realignment
Mergers, acquisitions and alliancesDownsizing and restructuring
Speeding time to marketSupply chain management
Emerging market focusPenetrating new customer segments
Process improvementsExtending product and service portfolio
Developing digital channelsReinventing business models
Driving innovationGlobal expansion
Improving quality and customer serviceCost reduction and efficiencies
% of respondents
Organizational strategies that will have the biggestimpact on future talent requirements
Source: Global Talent 2021 Study conducted by Oxford Economics and Towers Watson, 2012.
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Demand for talent will rise strongly over next decade
4.0
1.8
4.4 4.54.7
4.5
1.2
5.05.3 5.3
-0.5 0.6 -0.5 -0.8 -0.7
-2
-1
0
1
2
3
4
5
6
Global NA &Europe
Americas AsiaPacific
MEA
Market for talent: Global
Demand Supply Talent gap
% p.a.
Source: Global Talent 2021 Study conducted by Oxford Economics and Towers Watson, 2012.
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But supply to expand evenfaster in emerging countries
4.5
5.24.6
5.3 7.3
4.6
-0.8 -2.1 0.0
-4
-2
0
2
4
6
8
Asia Pacific India China
Market for talent: Asia Pacific% p.a.
Demand Supply Talent gap
Source: Global Talent 2021 Study conducted by Oxford Economics and Towers Watson, 2012.
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0.5
Talent challenge greatest in developed economies
1.8 1.6 1.62.2
1.2
0.9 0.7
1.4
0.6 0.7 0.6 0.9
0.8
-1
0
1
1
2
2
3
NA &Europe
France Germany UK U.S.
Market for talent: North America and Europe % p.a.
Demand Supply Talent gap
Source: Global Talent 2021 Study conducted by Oxford Economics and Towers Watson, 2012.
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Talent friction points in ten years:Where are your future talent needs?
Deficit countries
Surplus countriesAt equilibrium
Norway 0.5
Sweden 0.5
UK 0.9
France 0.7
Spain 0.2
Canada 0.9
USA 0.8
Mexico 0.1
Columbia -1.1
Argentina 0.1
Brazil -0.1
Morocco -0.8
Chile 1.0
Peru -0.6
Russia 0.1
South Korea 0.9
Japan 1.4
Philippines -0.2
Thailand 0.6
Malaysia -0.1
Indonesia -1.5
Netherlands 0.4
Germany 0.6
Poland 1.2
Czech Rep -0.8
Austria 0.4
Switzerland 0.5
Italy 0.8
Greece 0.7
Singapore 0.6
Turkey 0.7
Egypt -0.7
Saudi Arabia -0.2
United Arab Emirates -0.2
Qatar -0.6
China -0.0
India -2.1
South Africa -1.0
Bermuda -0.1
Australia 0.5
Source: Global Talent 2021 Study conducted by Oxford Economics and Towers Watson, 2012.
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The Global Workforce Study 2012 helps us understandthe drivers of attraction, retention and sustainable engagement
Attraction Drivers Retention Drivers Sustainable Engagement Drivers
Base pay/salary Base pay/salary Leadership
Job security Career advancement opportunities
Stress, Balance and Workload
Career advancement opportunities
Relationship with manager/supervisor Goals and Objectives
Convenient work location Trust/confidence in senior leadership Supervision
Opportunities to learn new skills
Manage/limit work-related stress Image
Drivers linked to Total Rewards
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The current status of the global workforce
35%
22%
17%
26%
Source: Towers Watson 2012 Global Workforce Study.
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BY THE NUMBERSThe value of achieving high sustainable engagement
Only 15% of employees with high engagement are high retention
risks compared to 64% of disengaged employees
3xHigh sustainable engagement
companies’ operating margins are 3x higher compared to those with the lowest levels of engagement
7.3Higher presenteeism: An average of 6.2 days lost per year for employees with high engagement vs. 13.5 days lost per year for the disengaged
49%
operating margin fewer days
lower retention risk
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What does this mean for the future of the workforce?
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A need for new skills in the future
Digital Skills
Agile Thinking
0%
10%
20%
30%
40%
50%
60%
70%
Total Americas APAC MEA Europe
Ability to consider and prepare formultiple scenariosInnovation
Dealing with complexity and ambiguity
Managing paradoxes, balancingopposing viewsAbility to see the “big picture”
0%
10%
20%
30%
40%
50%
60%
70%
Total Americas APAC MEA Europe
Digital business skills
Ability to work virtually
Understanding of corporate IT
Digital design skills
Ability to use social media and web 2.0
Source: Talent 2021.
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A need for new skills in the future
Interpersonal and Communication Skills
Global Skills
0%
10%
20%
30%
40%
50%
60%
TOTAL Americas APAC MEA Europe
Co-creativity and brainstorming
Relationship building (with customers,partners, government, etc.)Teaming (including virtual teaming)
Collaboration
Oral and written communication
0%
10%
20%
30%
40%
50%
60%
TOTAL Americas APAC MEA Europe
Ability to manage diverse employees
Understanding international markets
Ability to work in multiple overseaslocationsForeign language skills
Cultural sensitivity
Source: Talent 2021.
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Ready for What’s Next...
Shape workEnvironment
thatengages,
enables andenergizesover time
Think more broadly and
creativelyabout where
talent is sourced
Embrace the virtual
workplace andmaximize mobility
and flexibility
Invest more heavily
in retraining and
reskilling (security in opportunity)
Rethink andrestructure
howcertain work
isaccomplished
Engaging environment
Talent sourcing
Virtual workplace Re-skilling Rethinking
work
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What does this mean for the Future of HR?
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A shift from delivering services toeducating, enabling and equipping business leaders
Evidence Based Change . . . A Mindset and Approach
Segmentation Integrationand Synergy OptimizationLogic-Driven
Analytics Risk Leverage
Strategically categorize workforce segments
Understand pivotal segments to advance business priorities
Manage unique segments holistically
Understand how to leverage the unique capabilities of different BUs and other organizations
Focus on “collaborative production”
Prioritize investment where returns are greatest
Enable the business to seamlessly manage the entire “continuum of work”
Identify the pivotal issues associated with getting work done and the revenue, cost and risk implications
Robust analytics to bring focus to issues and root cause
Identify and analyze risk associated with alternative talent pools
Identify the tradeoffs and the “risks worth taking”
Superior business outcomes are achieved when these principles are evident
1 2 3 4 5
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Bring the same level of rigor tohuman capital planning as you do to business planning
Are you measuring the impact of your talent decisions relative to business objectives and results?
Do you measure in single dimension or focus on the few critical linkage points?
Do you measure success through traditional metrics or the desired business outcome?
Getting the numbers right is just the beginning. The “magic” happens when measures and analysis are combined with the logic of knowing where to look for the important connections and the savvy of knowing when a story is better than a number (for example, framing a talent problem using the metaphor of a supply chain would likely motivate managers to think about it more critically)
Ensure common frameworks and mental models for analyzing issues and defining success
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The evolution of segmentation:
Granularity and sophistication have greatly evolved, allowing us to address key questions such as: What employee behaviors does the business model require, and how
can we effectively elicit those behaviors from different segments? Where does exceptional talent really make a difference versus where
does good enough suffice? What behaviors do we need to change (e.g., healthier lifestyles,
increased retirement savings) to improve program effectiveness and ROI?
Organization: Key drivers and performance expectations Pivotal versus proficiency rolesPotential
Life stagesAttitudinal
DemographicsPerformanceJob roles
Rank and File vs. Executives Employee:
Preferences, values, behaviors Lifestyles and life choices
Limited Traditional Microsegmentation: Two perspectivesEmerging
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Microsegmentation enables us to identifythe organization requirements for talent in various roles
Example: Airline Industry
Pivotal role analysis, a key element of segmentation, helps organizations determine how talent in different roles contributes to business value and where having “great” talent versus “good” talent can make a difference
Employee Performance
CustomerLoyalty
Airline Pilots
Having more higher performing airline pilots will not yield additional business value (defined as customer loyalty) to the organization
Flight Attendants
Employee Performance
CustomerLoyalty
Because airlines maintain competitive advantage by differentiating the customer experience, flight attendants are a pivotal employee segment. Higher levels of performance yield significantly greater customer loyalty
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Create integration and synergy
How to we meet our talent needs without building up cost and infrastructure How do we tap into a unique ecosystem that ensures an optimal
supply at the right cost
Transcend the typical organization construct to create integration and synergy through “collaborative production” across: Organizations Functions and Business Units
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Be prepared to deal with risk in a very different way
What’s known today and what’s is
unknown
Plan for different scenarios
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Optimize the sources of work
How to we seamlessly move work across multiple delivery platforms and employment relationships to optimize Capacity and Capability Cost Risk (and control)
How does HR exercise governance and control across these multiple relationships
Full time, onsite
Independent contractor / free agent
Full time, virtual
JV/Partner entity
Outsourced/Offshored
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Optimization
Transforming
Differentiated treatment for different areas of HR in annual budget reviews
Frequent review of HR priorities and shifting of resources and budget to them
Investments in select areas can go up and down over time with changing business priorities
Portfolio management concepts combined with workforce segment understanding
Tools and process in place to facilitate collaborative decision-making to achieve optimization beyond just buy-in
0
Increase in Indicated Results from Current Level(Percentage)
Increase in investmentfrom current level
Decrease in investmentfrom current level
Same investment with improved
resultsLower
investment, same results
10%
20%
30%
40%
Current levels of investment and
results
Increased investment and
improved results