THE BAGEL EFFECT –
THE IMPACT OF DIGITIZATION ON
WORK AND JOBSERIC S. PELLETIER
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1. PREDICTING DIGITIZATION
Refined analysis – Oxford study
Bottleneck analysis
Value-added chain deconstruction
Data and infrastructure
Identifying hot skills
The Bagel Effect
HOW DIGITIZATION IMPACTS WORK AND JOBS – THE
BAGEL EFFECT
2. DEALING WITH DIGITIZATION
Legacy analysis
Focus on system-thinking and
collaboration
The culture war – command &
control versus The networked
organization
3. SUPPORTING THE ADAPTATION
PROCESS
Simulation engine versus old-fashioned
spreadsheets
The Human Performance Equation
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PREDICTING DIGITIZATION01
The required number of
people for the jobs that are
needed to achieve the
strategic goals efficiently
and effectively
The right composition of
workforce, in terms of
structure and purpose, in –
and outsourcing, as well as
the appropriate diversity mixSource: Ray Kurzweil; The Singularity is real
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THE FUTURE OF EMPLOYMENT: HOW SUSCEPTIBLE ARE JOBS TO
COMPUTERISATION?
BY CARL BENEDIKT FREY AND MICHAEL A. OSBORNE, SEPTEMBER 17, 2013
47% of US jobs affected
702 detailed occupations
BRUEGEL THINK-TANK - 2014
51% of German jobs affected
56% of Italian jobs affected
ING-DIBA – 2015
58% of German jobs affected
CONSENSUS THAT DIGITIZATION WILL AFFECT JOBS
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METHODOLOGY TO PREDICT THE IMPACT OF DIGITIZATION
Source: THE FUTURE OF EMPLOYMENT: HOW SUSCEPTIBLE ARE JOBS TO COMPUTERISATION?
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COLLAPSE OF THE MIDDLE
Source: THE FUTURE OF
EMPLOYMENT: HOW SUSCEPTIBLE
ARE JOBS TO COMPUTERISATION?
The distribution of Bureau of labor statistics (BLS) 2010 occupational employment over the probability of computerisation
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COLLAPSE OF THE MIDDLE – AUTO INDUSTRY
3%
69%
11%
17%
0%5%
69%
8%
17%
0%
8%
61%
8%
22%
0%0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Low cost Generalist Japanese generalist Premium Other
Vo
lum
e
Collapse of the middle - auto market share in Western Europe
2002 2009 2014
The required number of
people for the jobs that are
needed to achieve the
strategic goals efficiently
and effectively
The right composition of
workforce, in terms of
structure and purpose, in –
and outsourcing, as well as
the appropriate diversity mix
Availability of people with the
right capabilities at the right
locations, ensuring critical
mass, to meet changing
requirements
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KINGSFORD AND THE VALUE-ADDED CHAIN
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As data availability increases,
new skills are required in
areas including:
Clinical trials – life
sciences
Driver patterns – auto
Customer GPS – Taxi
Buying patterns – retail
Web searches – hedge
funds
Companies about infrastructure
are growing very quickly – they
use content but don’t create it:
DATA AND INFRASTRUCTURE
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IDENTIFYING HOT SKILLS
HR analytics allow for the
rational, market-driven,
identification of hot skills:
Heat maps in employee
surveys
Pay versus inflation reviews
Job scarcity analysis
Job description evolution
Emergence of new jobs 0% 10% 20% 30% 40% 50%
Russia
Sweden
Germany
France
Netherlands
UK
US
Mexico
Brazil
Singapore
India
China
IT AND ENGINEERING JOBS SCARCITY
Engineeringjobs
ITjobs
Source: Hay Group Internal Data and Research
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HOW UBER KILLED DANNY DEVITO BUT NOT JUDD HIRSCH
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THE BAGEL EFFECT
COGNITIVE
JOBS
TRANSACTIONAL
JOBS
SYSTEMS /
SOLUTIONS
LEADING
PEOPLE
Quick evolution of technical /
functional skills
Focus on systems / solutions –
collaboration
Providing more autonomy to
people whilst accelerating decision
cycle time
Middle-management won’t die, but
its nature will evolve considerably
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DEALING WITH DIGITIZATION02
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STRATEGIC CAPITAL BASES AND THEIR METRICS
FOOTPRINT
(MANUFACTURING
CAPCITY
DISTRIBUTION)
FINANCIAL
CAPITAL
BASE
CLIENTS PEOPLE
ROCE
ROE
CUSTOMER
RETENTION
YIELD
MANAGEMENT
?
The required number of
people for the jobs that are
needed to achieve the
strategic goals efficiently
and effectively
The right composition of
workforce, in terms of
structure and purpose, in –
and outsourcing, as well as
the appropriate diversity mix
Availability of people with the
right capabilities at the right
locations, ensuring critical
mass, to meet changing
requirements
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Hiring cycle
Promotion paths
Internal Mobility
External
mobility
Retirement age
VISCOSITY
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New technologies
Bottlenecks
Competitive landscape
Regulations
TOPOGRAPHY
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LAPLACE’S DEMON – LEGACY ANALYSIS
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Understand the potential evolutions
of the shape of the workforce on the
basis of simple demand / activity
scenarios
Early identification of potential skills
shortage
Identify and test workforce “skills”
and “shape” management levers
through the motion matrix
Management through:
Attrition
Training
Career pathing
WORKFORCE LEGACY ANALYSIS
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2005 – announcements on A380 delivery delays due to
wiring – two years
Earnings shortfall of €4.8 billion
2006 – CEO Noel Forgeard resigns
2011 – Boeing 787 Dreamliner deliveries start – three
years late and $2.5 billion over budget
New supplier systems integration/outsourcing was more
complex than expected
Jan 2014 – Announcement of further delays in service
entry to H2 2015 and development cost overruns of +$1
billion
Feb 2015 – CEO Pierre Beaudoin steps down
AIRCRAFT DEVELOPMENT WOES AND COLLABORATION
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COMMAND & CONTROL VERSUS NETWORKED ORGANIZATION
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SUPPORTING THE DIGITIZATION PROCESS03
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THE FALLACY OF THE FLYING CAR
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FROM EXCEL TO SIMULATION ENGINES
“After subtracting the old rate from
the new rate, the spreadsheet divided
by their sum instead of their average,
as the modeler had intended. This
error likely had the effect of muting
volatility by a factor of two and of
lowering the VaR . . .”
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HOW WE DO IT: RAIL INFRASTRUCTURE – PLANNING
TOMORROW’S WORKFORCE
Client Issue The client is a national rail infrastructure company that needs to deliver electrification of whole rail network in next 15 years and a “Digital Railway” in next 10+ years, using mobile phone technology to replace traditional signaling.
These programmes have been significantly delayed because of lack of resources in past and the firm needs to be assured it has the workforce to deliver in the future.
What We Did Worked with leadership teams of electrification and Digital Railway to define a strategic workforce planning model for next 15 years
Modelled the effect of different workforce strategies (recruitment, development, talent management) and ways of doing the work to ensure right workforce to deliver these programmes.
Project Results
First properly validated strategic workforce plan for electrification programme ever.
Strategic resourcing analysis for the Digital Railway programme – enabling delivery of strategic goal.
“This scenario modelling of the Digital Railway is essential to successful programme resourcing and achieving the 10 year rollout target”.
Engineering Director
Business as
Usual
Automation creating an
efficiency of 25% in demand
Automation creating an
efficiency of 50% in demand
Automation creating an
efficiency of 75% in demand
supply
GAP between Supply and
Demand with 25% efficiency
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HUMAN PERFORMANCE EQUATION
EMPLOYEES
HIGHER
CORPORATE
PERFORMANCE
ALIGNMENT AGILITYTEAM &
CLIMATE
ROLES /
COMPETENCIESEFFECTIVENESS REWARDSx x x x x
+
when properly aligned
with corporate
objectives...
...with the right
attitude and the
right tools...
...when in jobs that
match their
capabilities ...
...if teamed up
and led
effectively...
... willing to
adapt…
CREATE DISCRETIONARY
EFFORT
LOWER
PEOPLE
COSTS
...and paid
smartly
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Understanding your legacy workforce (where you are now) and the degree of
strategic freedom this gives you
Dealing with hot skills
Constantly identifying where new skills are needed
Using simulation and scenario planning to predict your workforce needs in a
fast-moving environment
Creating a strong employee value proposition that balances training, long-term
employment and access to external skills
Placing a premium on system thinking and collaboration
RESPONDING TO THE BAGEL EFFECT
THE 5 RIGHTS
RIGHT SIZEThe required number of
people for the jobs that are
needed to achieve the
strategic goals efficiently
and effectively
RIGHT SHAPE
The right composition of
workforce, in terms of
structure and purpose, in –
and outsourcing, as well as
the appropriate diversity mix
Clarity about the
capabilities that are
necessary and pivotal to
bridge current gaps and
meet future goals
RIGHT SKILLS
Availability of people with the
right capabilities at the right
locations, ensuring critical
mass, to meet changing
requirements RIGHT SITE
RIGHT SPEND
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IF YOU’D LIKE TO KNOW MORE ABOUT HOW WE HELP ORGANIZATIONS
PLAN THEIR WORKFORCE, GET IN TOUCH:
GET IN TOUCH
Eric Pelletier
Global head of Strategic
Workforce Planning
Hay Group
Paul Lambert
Head of Strategic Workforce
Planning, UK & Ireland
Hay Group