Driving forces affecting human resource management presentation

Examining the Driving Forces Affecting Human Resource Management

Richard N. Dettling MSHRM, PHR

Human Capital DevelopmentUniversity of Phoenix, Ft. LauderdaleSouth Florida Campus

2005 © All Rights Reserved. 2

Source: Employment Policy Foundation analysis and projections of Census/BLS and BEA data.

Millions of People

Expected Labor Force and Labor Force Demand

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

2022

2024

2026

2028

2030

0

50

100

150

200

250

Labor Needed

Labor Available

2004

2005

2006

2007

2008

140142144146148150152154

A Growing Shortage of Workers in the US: Palpable by the End of This Decade


A Flat or Shrinking Native Populationin Almost All Industrialized Countries

16%

-5%

20%16%

2%

-21%

-13%

15%

-30%

-20%

-10%

0%

10%

20%

30%

US Canada

2%

-9%

France

7%

-7%

UK Germany

-14%

-28%

Japan

-5%

-27%

Italy China

% change 2000-2020% change 2020-2050

Source: US Census Bureau International Data Base

Percent Change in Working-Age Population

2005 © All Rights Reserved.

Top Ten Countries Based on Population Size and Growth Rates (2005/2050)

4

China

Indi

a

Unite

d St

...

Indo

nesia

Brazil

Pakistan

Bangl

ades

h

Russia

Niger

ia

Japa

n0

500

1,000

1,500

2,000

2,500

3,000

1,3041,104

296 222 184 162 144 143 132 128

1,4371,628

420

308260 295

231111

258101

20502005


Source: Wikipedia , the free encyclopedia; Foreign Direct Investment

>500

100-

500

50-100

10-50

<10In billions

Foreign direct investment (FDI) -investment made to acquire lasting interest in enterprises operating outside of the economy of the investor.


Foreign direct investment (FDI %) by country

6

China

Indi

a

Unite

d St

ates

Indo

nesia

Braz

il

Pakist

an

Bang

lade

sh

Russia

Niger

ia

Japa

n-0.5

0

0.5

1

1.5

2

2.5

3

3.53.1

1.10.9

-0.1

2.3

1.7

0.8

2.1

2.9

0.1


Age of Workers

16-24 25-34 35-44 45-54 55-64 65+-20%

0%

20%

40%

60%

80%

5% 5%

-9%

18%

48%

15%

Percent Growth in U.S. Population by Age: 2000-2010

Dramatically Different Patterns of Growth by Age

1. Declining number of mid-career workers

2. Few younger workers entering

3. Rapid growth in the over-55 workforce



. . . Continuing for Our Working Lives!

Age of Workers

Percent Growth in U.S. Workforce by Age: 2000-2020

under 14 15-24 25-34 35-44 45-55 55-64 65+-20%

0%

20%

40%

60%

80%

7% 8% 7%

-10%

3%

73%

54%



A Pattern Found ‘Round the Industrialized World

Source: Demography is De$tiny, The Concours Group and Age Wave, 2003

2 0 0 5 © A l l R ig h ts R e s e rv e d . 1 1

A g e

-2 %

-1 0 %

-1 %

1 4 %

2 2 %

8 %3 %

-2 0 %

0 %

2 0 %

4 0 %

6 0 %

8 0 %

U n d e r 2 5 2 5 -3 4 3 5 -4 4 4 5 -5 4 5 5 -6 4 6 5 + T o ta l

S o u rc e : U S C e n s u s B u re a u In te rn a t io n a l D a ta B a s e

The U n ited K ingdomChange in Popu lation by Age G roup: 2 0 0 0 -2 0 1 0


-9 %

-2 4 %

1 1 %1 4 %

9 %1 3 %

1 %

-4 0 %

-2 0 %

0 %

2 0 %

4 0 %

6 0 %

8 0 %

U n d e r 2 5 2 5 -3 4 3 5 -4 4 4 5 -5 4 5 5 -6 4 6 5 + T o ta l

A g e

I ta lyChange in Popu lation by Age G roup: 2 0 0 0 -2 0 1 0



A g e

-7 %

-1 9 %

-1 1 %

2 7 %

-7 %

2 4 %

0 %

-4 0 %

-2 0 %

0 %

2 0 %

4 0 %

6 0 %

8 0 %

U n d e r 2 5 2 5 -3 4 3 5 -4 4 4 5 -5 4 5 5 -6 4 6 5 + T o ta l


G erm anyChange in Popu lation by Age G roup: 2 0 0 0 -2 0 1 0


In 2000, A Fairly “Young” World . . .

Under 5% 5% to 12.4% 12.5% to 20% Above 20%

Source: U.S. Census Bureau

Percent of Population Age 60+ 2000


. . . Rapidly Aging by 2025

Source: U.S. Census Bureau

Under 5% 5% to 12.4% 12.5% to 20% Above 20%

Percent of Population Age 60+ 2025


Why? Dramatic Increase in Life Expectancy

1900 1950 1970 1980 1990 20001910 1920 1930 1940 1960

75

70

65

60

55

50

45

40

80

Source: U.S. Social Security Administration

Average Life Expectancy at Birth in the U.S.


The “Sudden” Boom in Life Expectancy

Source: Census Bureau, 2000

Life Expectancy at Birth: 1000 - 2000

Age

1000 1200 1400 1600 1800 1900 20000

10

20

30

40

50

60

70

80

25

30

3536

38

47

76.5


Why? Dramatic Drop in Birth Rates

Source: Age Wave

Tota

l Fer

tility

Rat

e

USUK

Fran

ce

Canad

a

Japa

n

Ger

man

yItal

y0

1

2

3

4

3.3

2.8 2.9

3.6

2.0

2.5 2.5

2.01.7 1.7 1.6

1.4 1.3 1.2

1960 2000Total Fertility Rate


Why? The Baby Boom Pattern

Source: U.S. Census

1930 1940 1950 1960 1970 1980 1990

4.5

4.0

3.5

3.0

2.5

2.0

Birth

in M

illion

s

The Boom Years: 1946-1964

Every 7 seconds, a baby boomer turns 50 in the U.S.

Source: Bureau of Labor Statistics


The Three Big Challenges for Human Resourcesabout The Emerging Workforce

Immigration • Will the U.S. encourage immigration to deal with the deficit in the workforce?

• Immigration Reform?

Outsourcing • How fast will it develop? Where?• Cheaper Labor vs. Quality and Control

Retirement • Average retirement age continues to lower while life expectancy continues to rise.

• More retirees remain active.• Will the average retirement age

change?



Workforce Poses Many Secondary Challenges Impacting Your Ability to Attract, Retain, and

Motivate the Talent You Need

• Limited in availability – Workforce growing in the U.S. by only a fraction of a percent per year through the first half of the 21st century

• Chronologically older – Individuals over 55 progressively larger proportions of the workforce: 11% in 2000; 20% in 2015; nearly one-third by 2050

• Lacking key skills – Shortages of needed talent, particularly in high skill areas, such as science and engineering disciplines

• Global – Continuing growth in off-shoring and “right shoring”• Highly diverse – Diverse in virtually every conventional dimension – race,

gender, age, religion and cultural identity – and populated by individuals with widely differing values and assumptions about work itself

• Sharing only healthcare as a core value – Unified in the U.S. only by a desire for premium health care benefits – heightened by increasing “age”

Source: Testimony by Tamara J. Erickson to the Senate Committee on Health, Education, Labor and Pensions, May 2005


Complicated by the Changing Nature of Work Further Challenging Big Corporations’ Response

• Increased interdependence of countries and cultures–Understanding the international political and economic environment, implications of job creation and transfer, immigration, and familiarity with local regulatory environments.

• Technology advancements –The need to work in remote locations, enhance security and increase operational efficiencies, will include more sophisticated, cost-effective means of global communication and self-service applications, among others. Early 20th Century U.S. Labor was cheap and technology was expensive. Now in the 21st

Century U.S. Labor is expensive and technology is cheap.• Outsourcing—transferring of a business process to an external provider• Offshoring —outsourcing of an operation to a firm with principal base of

operations outside the country• Terrorism, Safety and Security – There will be continuing concern for general

employee safety in the context of unstable countries.• Changing corporate culture – Multinationals will contribute to the expanding

definition of coworkers: they are in the next cubicle or in the next country; they are colleagues or suppliers.

Source: SHRM Special Expertise Panels 2005 Trends Report


Not a Time of Quick Reactions to Clear, Urgent Signals . . .

. . . But One of Potentially Dangerous Acceptance of Slow-Moving Trends



The Three Big Challenges 1. Impact of Immigration

"Our review of economic research finds immigrants not only help fuel the Nation's economic growth, but also have an overall

positive effect on the income of native-born workers."

-Council of Economic Advisers Chairman Edward P. Lazear; June 20, 2007

20

Source: The White House (2007, June 20 ) Immigration’s Economic Impact , Council of Economic Advisers, Government, retrieved from http://www.whitehouse.gov/cea/cea_immigration_062007.html



• Immigrants are a critical part of the U.S. workforce and contribute to productivity growth and technological advancement

• Foreign-born workers accounted for 15% of the U.S. labor force, and over the last decade they have accounted for about half of the growth in the labor force.

• Approximately 40% of Ph.D. scientists working in the United States were born abroad.

• Immigrants have lower crime rates than natives. Among men aged 18 to 40, immigrants are much less likely to be incarcerated than natives.

• When immigrants are added to the US labor force, they increase the economy’s total output.

21

Source: The White House (2007, June 20 ) Immigration’s Economic Impact , Council of Economic Advisers, Government, retrieved from http://www.whitehouse.gov/cea/cea_immigration_062007.html



• In 2005, illegal migrants accounted for about 5% of the civilian labor force, or 7.2 million workers out of a labor force of 148 million

• Many [illegal immigrants] are working under conditions that are appalling

• Some are paid in violations of hours laws; some are children working in jobs they shouldn't be

• The illegal immigrants will always win in jobs competition with U.S. citizens.

22

Source: U.S. Census Bureau's March 2005 Current Population Survey



Farming 24%

Cleaning 17%

Construction 14%

Food Prepara-tion 12%

Production, Installation and Repair

15%

Other 18%

Immigration’s Economic Impact

23Source: The White House (2007, June 20 ) Immigration’s Economic Impact , Council of Economic Advisers, Government, retrieved from http://www.whitehouse.gov/cea/cea_immigration_062007.html



Foreign-Born U.S. Workers by Country of Origin

Latin AmericaAfricaAsiaEuropeNorth AmericaOceania

Source: DiversityInc Magazine, September 2007, p. 14; based on information from the Cen-ter for Labor Market Studies, Northeastern University, 2005

24



52

5

26

1331

Foreign-Born U.S. Workers by Country of Origin

Latin AmericaAfricaAsiaEuropeNorth AmericaOceania

Source: DiversityInc Magazine, September 2007, p. 14; based on information from the Cen-ter for Labor Market Studies, Northeastern University, 2005

25

The U.S. foreign-born workforce grew by more than 96% from 1990 to 2005-nearly nine times the rate of growth of the native-born workforce.Sources: Migration Policy Institute; 2005 American Community Survey



1980 1990 2000 200675

80

85

90

95

100

105

U.S. WORK FORCE

Foreign-bornNative-born

26Source: DiversityInc Magazine, September 2007, p. 14; based on information from the Center for Labor Market Studies, Northeastern University, 2005


Higher Homeownership Rates (Foreign-Born vs. Native-Born)

White Black Latino Asian0

10

20

30

40

50

60

70

80

90

Foreign-born Native-born

27

Sources: DiversityInc Magazine, September 2007, p. 14; based on information from U.S. Census Bureau, 2007; Immigrants, Natives, and Homeownership, The University of Michigan, 2002

2005 © All Rights Reserved. 28Source: Migration Policy Institute, 2007,


Immigrants have driven 47% of total US work-force growth since 2000. New immigrants and their children will account for 100% of the US work-force growth between 2010 and 2030** Assumes net immigration of about one million per year. Sources: DiversityInc Magazine, September 2007, p. 14; based on information from Immigration: Shaping and Reshaping America, Population Reference Bureau, 2006

Source: Migration Policy Institute, 2007,


1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 20000

10

20

30

40

50

60

70

37.1 38.5 37.240

43.9

5155.9 57.2

52

39.937.3 38.1

30

Median Age of Foreign-Born Population for the United States: 1890 to 2000

Source: Migration Policy Institute, 2007, based on the 2000 data are from Schmidley, A. Dianne, U.S. Census Bureau, Current Population Reports, Series P23-206, Profile of the Foreign-Born Population in the United States: 2000, U.S. Government Printing Office, Washington, DC, 2001


Age Distribution of the Recently Arrived Foreign Born, 2005

0-1513%

16-2933%

30-4436%

45-5410%

55-644%

65+4%

31


Eight in 10 recently arrived foreign born in 2005 were of working age.


Educational Attainment of the Recently Arrived Foreign Born Age 25 and Older, 2005

Less than high school

33%High school diploma/GED

23%

Some college15%

Bachelor's degree

17%

Master's or higher12%

Forty-four percent of recent immigrants to the United States in 2005 completed at least some college.

32


2005 © All Rights Reserved.5-17 18-44 45-64 65+

36

6269

81

49

29 188

1510 13 10

Spoken English Ability (Self-Reported) of the Recently Arrived Foreign Born Age 5 and Older by Age Group,

2005

Limited English proficiency Speaks English very wellSpeaks English only


33


The Three Big Challenges 2. Outsourcing

Outsourcing Overview• Subcontracting a process, such as product design or manufacturing, to a third-party company.

• Non-core business functions/Cost Center Functions

Outsourcing - Clip

34



35


Most Active Areas of Outsourcing

IT28%

Human Re-

sources16%Sales & Marketing

15%

Finance11%

Admin-istrative

9%

All others22%

Business Process Outsourcing

Source: Talent Connections, 2005

36

IT Leads as Most Active

Areas of Outsourcing



Companies Out-source Some HR

Function

Companies with $1 billion+ Annual

Revenues Are Now Considering HRO

HRO Growth from Second half of 2004 to First half of 2005

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

58%

91%

28%

How Common is HRO?

38

In next 5 years, global spending on HRO will double – from $40 billion to

$80 billion.

From 2002 to 2004, 14% increase in large

firms that would consider HRO.



Background Checks

FSA Administration

Employee Assistance/Counseling

Healthcare Benefits Administration

COBRA

0%10

%20

%30

%40

%50

%60

%70

%80

%

73%

67%

66%

60%

55%

5 Most Commonly Outsourced HR Services

39


Pension Benefits Administration

Temporary Staffing

Payroll & Software Services

Retirement Benefits Administration

Recruiting, Staffing & Search - Non-executive

Recruiting, Staffing & Search - Executives

Employee Relocation

Training and Development

Incentives

HRIS & Web-based Services

0% 20% 40% 60%

55%

54%

48%

47%

30%

29%

29%

21%

19%

15%

Other Types Outsourced HR Services

40


Employee Communication Plans

Policy Development/Implementation

Strategic Business Planning

Performance Management

0% 2% 4% 6% 8% 10%

10%

4%

4%

3%

Least Commonly Outsourced HR Services

41


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

89%85%

20%

Satisfaction?

42

Recent survey of 129 large companies representing 2 million

employees.



The Opportunity for a New Life Stage

• Twenty-plus years: post- “Empty Nest” and pre- “Old Age”• Unprecedented opportunity

For satisfaction For exploration and creation For productivity

• Reinventing Entrepreneurial Charitable Flexible

• Potential for rejuvenation of the economy?

Productive Adulthood?

Reap Rewards?

Deploy Human Capital Assets?



30

25

20

15

10

5

0

More Years Spent in “Retirement”

1900 1980 1990 20000

5

10

15

20

25

13.6

19.4

20-25

1.2

Yea

rs

Source: Age Wave, based on U.S. data


50 or Under 51-60 61-65 66-75 75 or older Never

4%

20%

25%

16%

1%

34%

At what age do you plan to retire?

Many Employees Plan Not to Retire…

Source: The New Employee/Employer Equation, The Concours Group and Age Wave, 2004


Traditional Retirement: Plummeting from the Peak of Productivity, Power, and Prestige

20s

30s

40s

50s or 60s


The Shape of Things to Come:“Down Shifting” for Continued Contribution

20s

30s

40s

50s60s

70s

80sCareer

Development

Career Deceleration



Cutting Back Has New Meaning: Cyclic Work

Working full-time Working part-time Moving back and forth between working full-time and not work-

ing

12%

39%

49%

The most popular pattern for working after “retirement” is not part-time, but moving back and

forth between periods of working and not working.



Shifting Values create Changing Motivational Factors

Respectful for Authority

Loyal to institutions

Motivated by financial rewards and security

Hierarchical

Technology as a treat

Anti-authoritarian

Idealistic

Motivated by changing the world

Competitive

Technology as a tool

Alienated

Non-traditional

Motivated by professional development

Information rich

Technology as an extension of self

Self reliant

Non-conforming

Motivated by social networks

Information overloaded

Technology dependent

Baby Boomers Gen Xers MillenialsTradionalists

Before 1946 1946-1964 1965-1978 1979-1997

http://creative.gettyimages.com/source/search/ImageEnlarge.aspx?MasterID=10157925&s=ImageDetailSearchState%7C3%7C5%7C0%7C15%7C2%7C1%7C0%7C0%7C1%7C40%7C60%7C31.0.37.32.30.10.1.7.35.11.16.39.33.41.40.9.4.6.26.28.34.36.13.24.23.22.38.18.25%7C1%7C0%7C(%2260-65+Years:60s%22+and+%22african+american:k%22+and+%22Heterosexual+Couple:Human+Relationship%22)%7C%7C1%7C0&pk=6


Core Values of Mature Workers: TraditionalistShaped by Stable Teenage Years

Character-Shaping Events

• Stock Market Crash• World War II• First manned space flight• Significant increase in

economic prosperity: home, TV, and automobile ownership

• Growth in white collar jobs

Prime life:

Reaffirmation of economic success

Red sports cars and trophy wives


Today’s Dominant Cohort: Baby BoomersPulling Away from Corporate Life


• Assassinations of idealistic leaders, Kennedy and King

• Vietnam War, with television coverage and widespread protests

• Civil Rights movement• Feminism• Watergate and Nixon’s

resignationMidlife:

Volunteer work and a search for life’s meaning

Limited engagement with “work”


The Pop Culture Cohort: GenXersPulling Away from Corporate Life

Character-Shaping Events• Iranian Hostages• Latch-key kids• Fall of the Berlin Wall and the

end of the Cold War• United States only Super Power• Challenger disaster• War on Drugs• MTV: Heavy Metal, Punk,

Grudge music• HIV/AIDS

Establishing life:

Looking to establish instant wealth

Balancing work life and personal life


The Internet Cohort: NextersReengineering Corporate Life


• Columbine School Massacre• September 11th terrorist attacks

and World Trade Center destruction

• War in Iraq and Afghanistan • Creation of the Department of

Homeland Security• The Internet, iPods, MySpace

Starting life:

Limiting the risks of corporate assemblage

Social needs are met in cyberspace


10%

46%29%

15%

Traditionalists Baby Boomers Generation X Nexters

4 Generations in the Workplace

Source: A Look at Generational Diversity: Managing the Differences; Society for Human Resource Management

54


U.S. Population 1984-2014

1984 1994 2004 20140%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

16-24

25-34

35-45

45+

55

Source: Bureau of Labor Statistics


I really care about the fate of this organiza-

tion

I am proud to tell oth-ers I am part of this

organization

I am willing to put forth more effort than ex-

pected to help the or-ganization succeed

This organization in-spires the best in me

47%

46%51%

30%

64%

58%60%

43%

Mid-Career (35-54)

Mature (55+)

% strongly/moderately agree

Lower Organizational Connection Among Mid-Careers


Time seems to pass quickly when I am at

work

I feel very passionate about my job

I often feel energized by my work

I find that my values and the organization's

are similar

36% 43%

33% 34%

61%

53%50% 49%

Mid-Career (35-54)

Mature (55+)

% strongly/moderately agree

. . . And Less Passion and Alignment of Values


Begin Now: Create a New Relationship Between Employees and Employers

• Retire “retirement” – The average American can expect twenty or more years of active, healthy life after traditional retirement. We need this talent, and must adopt a more flexible view of work to coax more to stay.

• Create bell-shaped career paths – Individuals must be able to continue to contribute to businesses in respected, although less intense ways, into their 70s, 80s and beyond.

• Encourage counterintuitive entry points – Allow individuals to begin “entry” level jobs at multiple points throughout their lives, either as a way into new careers or to gain flexible options better suited to a preferred lifestyle. Many individuals will have two and even three distinct careers throughout their lifetime.

• Design project-based, cyclical work – Already, 49% of U.S. workers who plan to work during traditional retirement years say they prefer periods of full-time work interspersed with periods of no work.

• Accommodate blended lives – Make job sharing and other part-time options widely available• Customize work arrangements – Allow flexibility based on individual needs and preferences

Source: Testimony by Tamara J. Erickson to the Senate Committee on Health, Education, Labor and Pensions, May 2005

Corporations must vary how individuals are compensated, managed, and matched with different

types of tasks

to attract and retain key talent and create higher engagement


What is Motivation?

• Are excited and enthused about what you’re doing• Resist distractions• Tend to forget about time or place• Ponder current challenges even when you’re not directly

involved in the activity• Invest your free time (discretionary effort )• Identify with the activity• Invite others in (emotional contagion)

You know you are motivated when you . . .

Source: Re.sults Project EMP: Excelling at Employee Engagement, The Concours Group, 2004

Flowas defined by

Mihaly Csikszentmihalyi, former Chairman of the University of Chicago

Department of Psychology


Productivity

Employee Motivation

Why? A Growing Body of Research Links Motivation to Productivity

Enhanced Desirable Discretionary Behaviors

Innovation– Insight and intuition– Originality and inspiration– Judgment– Humor

Collaboration– Offered input– Leadership– Friendship

Correlation to Outcomes

Higher share price – Fortune “100 Best Companies To Work For” list outperformed the S&P 500

Higher return on assets – Korean firms with higher organizational commitment had a higher return on assets

Lower mortality – U.S. hospitals with higher nurse retention have lower mortality

Source: Re.sults Project EMP: Excelling at Employee Engagement, The Concours Group, 2004, based on the work of Dr. Jeffrey Pfeffer, Stanford University

Improvement in Traditional HR Metrics

Retention rates, Acceptance rates Customer Satisfaction

Emotional contagion of employees in customer-facing roles

Reduced CostsInvestments focused only on those aspects of the employee “deal” that matter most


Source: Re.sults Project EMP: Excelling at Employee Engagement, The Concours Group, 2004

How? There Are No Universal “Best Practices” for Enhancing Motivation

• Companies with highly motivated employees each do very different things!

• But within each, the elements of the employee experience seem to make sense: The individual’s personality: Tapping into their needs and

values The Organizational fit: Corporation’s values mesh with

Individual’s needs The human resource’s retention practices The specific roles and tasks: Profile Matching The day-to-day work environment: colleagues, first-line

managersSignificant diversity . . . but somehow internally aligned . . .


• “Customer satisfaction is the second priority. The first is employee satisfaction.” Chairman and CEO Patrick Flood

• HomeBanc Mortgage Corporation defines its mission as showing employees how work can give them a sense of purpose and mission

• Corporate philosophy based on the writings of Robert Greenleaf, an essayist and teacher who defined the "servant-leader" as a person who wants to serve first, before aspiring to leadership

• Our role is helping “people exchange ordinary living for an extraordinary life. To me, a job is too small to fill up a person’s spirit. I want to help them find purpose in what they do, see the bigger picture of what we’re trying to accomplish as an organization.” Chief People Officer, Dwight Reighard

• "You have to realize that when your associates are happy, your customers are happy." Barbara Aiken, a vice president in the Office of People and Culture

Corporate Activism: Encouraging Employees to Lead Better Lives

A Corporate Philosophy Embedded in an Employer Brand Recruiting based on cultural fit, associate emergency fund, extensive training and standards

. . . A Better Way Home


• From its launch in 1999, created a reservations “call center” based entirely in employees’ homes

• Employees have unlimited shift-trading privileges and participate in self-scheduling and a combination of full and part-time schedules

• Results: a 30% boost in agent productivity, 38% increase in service levels, and a 50% decrease in manager workload per agent

• Reservationists “are the people who are the least compensated in the company, but generate its revenue and interface with the customers more than anyone else except the flight attendants. We cannot afford to pay them huge salaries, so let’s make them happier, let’s let them work from their homes. We train them, send them home, and they are happy.”

—Founder David Neeleman

Clear Choice:Flexibility Rules

Calling HomeUsing flexible, at home work arrangements – finding extraordinary levels of engagement


Are You Relating to the Meaningful Diversity of the Changing Workforce?


Productivity

Motivation

“Organizational Fit” – The Challenge of Motivation

“Fit”

With what?

Segmentation –

On what basis?

Customization –

Of which components?

Flexibility –

In which dimensions?


What is “Fit”?

Identifying “Fit”

Employees fit with Organizations

Organizations fit with Employees

“While many forces can operate to move a company toward ever higher levels of

workforce homogeneity, some firms explicitly seek “non–right types” in an attempt to effect organization change and to take advantage of workforce diversity”. (Dreher & Doughtery,

2001, Chpt 3. pg 6.)


Identifying your Culture – Corporate and DepartmentalDo your employees match:Styles of Management: X and Y stylesOrganizational Employee’s Needs OfferingsCorporate Values


Searching for Meaningful Differences and Drivers of Motivation

Measured:• Current levels of motivation• Psycho-demographic

characteristics related to the role of work in respondents’ lives, and

• Preference for and satisfaction with various “deal” attributes

Survey of 7,718 Adult Employees Who Work 30+ Hours per Week


Gallup Towers Perrin EEE0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

16%19%

55%

64%

17%29% Motivated

Neutral

Bitter

Source: The Gallup Organization, Towers Perrin, and The New Employee/Employer Equation, The Concours Group and Age Wave, 2004

Random samples of the working population in the U.S. over 18 years of age

18%

62%

20%

Sources Agree: Few Employees Are “Motivated” in Work


Breakthrough Results from EEE

• Six very different roles that work plays in our lives – six statistically-valid segments

• Each segment with distinct work-related preferences – how work is structured, how they are managed, how they

are compensated, and so on

• Correlation between the extent to which the specific segment preferences are met and employee engagement levels

Insight into the values and attributes that are most meaningful to each employee segment

Beyond measurement – tangible ways to improve motivation


Self-Empowered Innovators

14%

Accomplished Contributors 17%

Fair & Square Traditionalists 20%

Maverick Morphers

15%

Stalled Survivors

19%

Demanding Disconnects 15%

Recognizing Meaningful Differences – The Six Segments in Today’s Workforce that Link to Motivation

Work is about building something with lasting value

beyond themselves

Work is about the American dream – a

steady, predictable path to success

Work is an opportunity to be a valuable part of a winning team

Seek lives filled with change and adventure – work is one of

multiple opportunities to achieve these goals

Work is a source of livelihood but not yet (or not currently) a very satisfying

part of their lives

Work is generally frustrating and its value is largely the near-term economic gain




• Work is a source of great personal satisfaction Most likely of all employees to say they are energized by their work, and that time passes quickly on the job

• Entrepreneurial and creative Choose jobs offering individual latitude Avoid structure, routine and detail

• Hard-working and long-working: half say they will never retire

• Self-empowered: most likely to define success as being true to themselves

• Motivated by stimulating work that enables them to continue to learn and grow Less interested in traditional rewards: compensation, vacation, or

benefits


Work is about creating something of lasting

value


Fair & Square Traditionalists

• Highly reliable and loyal Longest average tenure with their employers of any segment Enjoy and get satisfaction from their work

• Motivated by fair, predictable rewards Want concrete compensation, benefits and a solid retirement

package Less interest in “softer” benefits like stimulating work or flexible

arrangements The least drawn to riskier compensation like stock or bonuses

• Prefer stable, secure work environments Choose work with structure and routine Avoid careers requiring entrepreneurial risk-taking or individual

latitude• Successful: Above average in household income• Traditional: Describe themselves as family men and women


Work is about the American dream – a steady,

predictable path to success


Accomplished Contributors

• Motivated by the organization’s success• Value teamwork:

Choose work that involves working with others Place less value than others do on individual financial rewards Express low need for individual variability: flexible work

arrangements or vacation• Strong preference for environments that are congenial

Fun is the number one correlation with engagement within this group

Cooperation and teamwork are also very important (ranked third)• Value competence

Want work that is personally stimulating Want to learn and grow

• Loyal, hard-working, reliable Willing to put in extra effort – but prefer stable and structured

environments, in return


Work is an opportunity to be a valuable part of a

winning team


Maverick Morphers

• Value excitement: not afraid to take chances• Restless and inquisitive

Continuously exploring options and new ways of working Willing to re-shape rules to fit their lifestyles Tenures with employers are often brief

• Motivated by personal (financial) opportunity: bonus compensation and stock

• Independent and self-reliant Motivated by flexible workplaces and schedules based on their

own terms “Own” their career Avoid work with significant structure and routine

• Attracted to education and personal growth 41% have college degrees (highest percent of any segment) Value organizations where they can work with other bright people


Work is one of multiple opportunities to lead a life

filled with adventure


Stalled Survivors

• Highly preoccupied by challenges outside of work Feel pulled in multiple directions Trying to balance their lives – personally, financially, and

emotionally• View their current challenges as temporary

Many are starting their careers, attending school, getting married, having children

• Looking for employers who can make it a little easier to cope Seek flexible work arrangements and roles that allow more

balance Seek additional pay, vacation and family benefits or leave Gravitate to work with well-defined routines Tend to avoid work that involves direct personal interaction Value work environments that are congenial and fun


Work is a source of livelihood but not yet (or

not currently) a very satisfying part of their

lives


Demanding Disconnects

• Work is frustrating Customers, bosses and colleagues are annoying Do not describe themselves as achievers Turned off by the nature of their work, by a lack of opportunity, or

by perceived unfairness in their employment arrangements• Least committed to their employers and least engaged in

their work Gravitate to jobs that are relatively easy to come by, such as

those in retail Avoid work with significant individual latitude or entrepreneurial

demands Most feel that their current organizations do not bring out the

best in them• Expect a lot

Place high value on traditional compensation and lucrative benefits packages

Want stability and security, more recognition and more reward Source: The New Employee/Employer Equation,

The Concours Group and Age Wave, 2004

Work is generally frustrating and its value is largely (only) its near-term

economic gain


Work is Clearly Not the Same Thing To All People, Therefore People are Not Motivated by the Same Thing

• Not all people are equally well-suited to all types of work• Not everyone values the same things from the work

experience• There is not one definition of a “good” manager• It is smart to target employees; “Profile Matching,” that are

best for your firm and the type of work you need to do Richard Dettling: First, get the right people on the bus Old Management Wisdom: Hire for attitude; train for skill

• Consistency is key: Right segment(s) for your business Fit with your corporate culture, values, and external image Appropriateness for the type of work Alignment of all parts of the employee experience – job design,

compensation, management style, and so on In short, a compelling, consistent employee brand


Long-term/Big Picture Benefits or Impact

Immediate Benefit or Impact

Economic Rewards

Psychosocial

Rewards

5

Fair and Square Traditionalists

Retirement savings and

pensions Self-Empowered InnovatorsWork that is

worth-while to society

Demanding Disconnects

Healthcare and salary

Accomplished ContributorsCooperation

and teamwork


Varying Motivational Preferences for the Employee/Employer Relationship

Maverick MorphersBonus payments and

stock options Stalled Survivors Raises and childcare


Rank-Ordering of Motivational Preferences: Wide Variation

Work that enables me to learn and grow

Work that is personally stimulating

Workplace that is enjoyable

Work that is worthwhile to society

Flexible work schedule

Comprehensive benefits package

Comprehensive retirement package

Flexible workplace

Ten percent more in total compensation

Two weeks additional paid vacation

Note: BLUE bold indicates that the segment places MORE importance on this element than most other segments do. RED bold italic indicates that the segment places LESS importance on this element than most other segments do.


Comprehensive benefits package

Comprehensive retirement package

Workplace that is enjoyable

Flexible work schedule

Ten percent more in total compensation

Work that enables me to learn and grow

Two weeks additional paid vacation

Work that is personally stimulating

Work that is worthwhile to society

Flexible workplace




Are You Satisfied with Our Benefits Program?

No . . .

But it hardly matters to me. The fundamental work is so important and

challengingNo . . .

And its really stressful for me. The security of my family

and our future – making sure we’re

covered under every uncertainty – is very

important.


Motivation Preferences for Management Style: No Common Definition of a “Good Manager”

"Catalyst”• Eliminate bureaucracy and remove

logistical impediments• Offer “stretch” projects• Be aware of signs of burnout and over

extension• “Promote” their work

"Accountant”

• Be clear and up front on expectations; follow through

• Tie compensation to clear goals

• Create a path that respects experience and tenure

• Provide regular professional development Source: The New Employee/Employer Equation,

The Concours Group and Age Wave, 2004


Fair & Square

Traditionalists


Are You Satisfied with Your Manager?

No . . .

He drives me crazy with excessive structure and

oversight. Yes . . .

The communication is

frequent and thorough. I

appreciate the detailed feedback

and regular reviews.

X type management

Y type management


Employee Preferences Vary Across the “4 C’s”

ConstructWhat’s the job?

Structure and definition of the work Degree of definition, pace, risk, degree of team interaction

CompensationWhat do employees get in return?

The entire scope of the “deal”Salary, benefits, deferred compensation, learning opportunities, satisfaction from giving back, pleasure from social networks

ConnectionHow do we relate?

Preferred style of managementAmount of interaction, frequency and formality of feedback, preference for hierarchy or participative management

CommunicationWhy do we care?

Key messages and shared valuesAlignment with core values



A Common Condition: 4 C Misalignment!

Self-Empowered innovators


Accomplished Contributors

Maverick Morphers

Stalled Survivors Demanding Disconnects

Construct Career paths are well-defined and structured

Compensate Salaried by level; generous monetary benefits

Connect Expectations of high

performance and teamwork

Communicate Create a lasting legacyCollaborate with world leaders



Immediate Contribution and Long-term ContextUse newest hires to develop the next generation of strategic ideas, products and leaders• Significant challenge and risk: A three-month in-house immersion process for all new employees

Month One – Stretch challenges, resulting in intense teamwork, deep bonds with peers, character by being stretched beyond the point of failure

Month Two – Charged to come up with breakthrough new product or service ideas and to develop the business and marketing plan working with Trilogy’s best and most senior people

• Responsibility to “own” your career Month Three – Building on connections with projects or sponsors, a rigorous evaluation by section leaders,

managers and fellow graduates, and a list of specific short and long-term goals, find own place in organization

• Exposure to leaders and experts: Run by top management, including the CEO

• Opportunity for broad impact: Dramatic benefits for the organization Primary R&D engine Development and proving ground for the company’s future generation of leaders Constant source of organizational renewal and transformation

Segment Alignment: Self-Empowered Innovators; Maverick Morphers


Segment Alignment: Self-Empowered Innovators; Accomplished Contributors

Creating a Strong Link from the Past . . . to the Future Reminding Employees of the Heritage and the Goal

http://www.xilinx.com/


Employees Caught Doing Things RightSpot Reward Program in the Hands of Attentive Line Managers• Immediate, short-term, task-specific rewards: Outstanding overall employee recognition program

Little money available for cash awards Uses day-to-day, informal, creative recognition, delivered with sincerity

• Managers focused on close connections: Ability to give recognition seen as a key leadership capability Sincere, specific, timely and personalized Managers measured on recognition of their staff – who is being recognized, by whom, and how often Managers held accountable for making and maintaining connections with employees

• Customized: Programmatic support Leadership training programs on personalized recognition Tools and exercises available to help supervisors get to know individuals’ recognition preferences

Segment Alignment: Stalled Survivors and Demanding Disconnects


• Specific well-structured process, clearly communicated: Extensive, well-defined training New recruits start with a full 5-day training program Managers expected to spend extensive amounts of time with each individual employee During the first year, new employees get 235 hours of training In following years, employees get an average of 160 hours of training Continuing education program – a three-day intensive training program for career-minded employees from

across the organization, including presentations by staff from every department, covering every facet of the firm

• Long-term, career development focus: Success based on attracting, training and retaining a highly capable and fiercely loyal workforce through a culture of trust and openness Employees motivated by an atmosphere of teamwork and service where helping customers is perceived as a

public good Extensive and ongoing investment in employee training and indoctrination in company values

Segment Alignment: Fair & Square Traditionalists, Demanding Disconnects

Investing in a Common Base of Competence A Well-Defined Career Path, with Detailed Training, Creates Fierce Loyalty


• Team-based processes – hiring, workflow: Employees at Whole Foods have complete control on who becomes part of their team Every store is divided into teams New employees are hired into one of the teams on a provisional basis After four weeks of work, the team votes whether the employee gets to stay or not; requires 2/3s “yes”

• Team-based compensation: Pay beyond base wages linked to team performance People don't want buddies; they want workers -- people who are going to make them some money Teams that do well share in the profits -- up to $2.00 extra an hour is paid right back to team members, every

other paycheck (13 times a year)• "Customers experience the food and the space, but what they really experience is the work culture. The true hidden

secret of the company is the work culture. That's what delivers the stores to the customers.” -- Chris Hitt, former President of Whole Foods

Segment Alignment: Accomplished Contributors

Recruiting for – and by – the Team Employee teams recruit new employees, using peer pressure to build performance


• Ambitious business needs: Goal to differentiate the Tesco deal from competitors’ by offering choice around pay, training, development and benefits

• Thoughtful, in-depth understanding of meaningful differences: Understood drives and needs by segment • Customization: Tailored the employment proposition to enhance overall commitment levels and improve retention

Created a portfolio of programs to offer more choices to employees and reflect the values and motivations of the different types of employee

For example young parents can take advantage of childcare vouchers, or highly ambitious employees can choose share options

• Organizational reinforcement: Appointed internal “Brand Managers”

Multiple Brands Based on Segmentation Using its Customer Insight Unit, normally dedicated to understanding the brand among shoppers, to segment the workforce

Source: Case Study developed by Lynda Gratton, London Business School

Identified five broad attitude segments within the Tesco

workforce

Work-LifeBalancers

Pleasure Seekers

Want it All

Live to WorkWork to Live


Plotting Your Journey to Extraordinary Motivation

Business Outcomes and Future Workforce

Requirements

Engagement Levels,

Employee Segments and Current Deal Satisfaction

External Brand

Attributes

Transition Plan for

Alignment of the 4C’s

1. Context

2. Assessment

3. Design

Brand Aspiration and Target Segments’ Experience

Organization’s Hidden Logic and Change Readiness

The Current Employee

Experience: the 4C’s

4. TransitionWhat are the

elements of your employees’ experience

today? What workforce do you have?

How motivated are they today?

What workforce do you need?

What workforce have you promised?

What employer brand is optimum?

How can you create a compelling employee experience – high level design of

the 4C’s – for each targeted segment?

What is the organization’s ability to implement realignment of the 4C’s?

What are the rules governing change in your current culture?

What is the optimum transition process?


The Evolving Philosophy of Performance Management

Focus on . . .

Efficiency Talent Motivation

Philosophical Focus

Management to standards

Management by objectives

Management of (customized)

employee experience

Variation Vary what we expect you to do

for the corporation

Vary what the corporation will

do for you

1950’s 1980’s Today


Going Forward: Shaping the New Workforce – Five Key Shifts for HR Leaders

Shift your focus from reactive activity to thoughtful “what if”

Create a long-term workforce strategy that addresses uncertainties related to future needs and counter-intuitive sources of talent. Address the uncertainties and options ahead.

Source: Tamara J. Erickson, The Concours Group

Shift HR capabilities from “doing” to designing and measuringDesign operations for world-class execution through efficient, flexible processes, at the necessary service levels, whether within the firm, or through outsourced relationships.

Shift the culture from competition to cooperationIn a world where value is created through innovation and resources are coupled flexibly, cooperation becomes a critical organization capability. Become masters of cultural change.

Shift the goal from employee satisfaction to employee motivationImproving motivation is a powerful lever to improve productivity. Most companies have exhausted their ability to squeeze increased productivity through top-down pressure.

Shift the HR philosophy from “equal” to “fair”Evolve from treating everyone the same, to customizing arrangements to individual needs and preferences. Develop strong “marketing” capabilities: world-class skills in survey research, segmentation, “brand” management, targeting, and communication strategies.


The Goal: The Employer of Choice for the Employees You Need

• A company that outperforms competition in the attraction and retention of the type and quantity of talent needed for business success

• An organization that is able to create extraordinary levels of employee motivation: Above average levels of productivity High customer satisfaction Clear link between employee performance and business results

• A distinct brand that improves the quality of candidates, improves retention, and enhances motivation

A Compelling Employee Experience

A Highly Productive, Appropriately-Skilled Workforce



• HR Outsourcing Overview• Impact on Companies• Impact on HR Profession• Impact on Your Career• Selecting, Managing, and Measuring Outsourcing Providers

• Helpful Resources

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