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Copyright © 2015 Deloitte Development LLC. All rights reserved. 1 Global Human Capital Trends 2015 Copyright © 2015 Deloitte Development LLC. All rights reserved.

2015 ISA Conference

Leading in the new world of work

Josh Bersin Principal and Founder Bersin by Deloitte March 2015

Copyright © 2015 Deloitte Development LLC. All rights reserved. 2 Global Human Capital Trends 2015

Leading in the New World of Work

• The New World of Work

• Trends Facing HR, Learning, and Business Leaders

• The Bersin Experience: Growing a content and services business

Agenda

Copyright © 2015 Deloitte Development LLC. All rights reserved. 3 Global Human Capital Trends 2015 Copyright © 2015 Deloitte Development LLC. All rights reserved. 3 Global Human Capital Trends 2015

Barriers between

work and life dissolve

Talent in high

demand

Millennials make up 50% of

workforce

Global transparency

in job market


3,300+ Business and HR leaders

106 countries

One of the largest-ever longitudinal global talent studies

Unless otherwise cited, all data referenced in this presentation is from the Global Human Capital Trends 2015 survey.

Global Human Capital Trends 2015


Global Human Capital Trends 2015

LEADERSHIP Why a perennial issue?

LEARNING AND DEVELOPMENT Into the spotlight

CULTURE AND ENGAGEMENT The naked organization

PERFORMANCE MANAGEMENT The secret ingredient

WORKFORCE ON DEMAND Are you ready?

SIMPLIFICATION OF WORK The coming revolution

REINVENTING HR An extreme makeover

HR AND PEOPLE ANALYTICS Stuck in neutral

PEOPLE DATA EVERYWHERE Bringing the outside in

MACHINES AS TALENT Collaboration, not competition


Culture and engagement

Leadership gaps

Learning and development

HR Skills and capability

87%

86%

86%

80%

% VERY IMPORTANT

50%

51%

40%

39%

35%

34%

29%

26%

20%

14%

Importance of Trends to Business Percent Rating Trend Important

Workforce capability

Performance management

HR and people analytics

Simplifying work

Machines as talent

People data everywhere

71%

57%

52%

80%

75%

75%


CULTURE AND ENGAGEMENT

The naked organization

talent issue

Create meaningful work, deep engagement, and job fit

#1global say the problem is “very important”– double the 2014 percentage

50%

60% of HR and business leaders do not have an

adequate program to measure and improve engagement.

Only 12% have a program in place to define and improve

culture.

Only 7% rate themselves excellent and driving and

improving retention

Copyright © 2015 Deloitte Development LLC. All rights reserved. 8 Global Human Capital Trends 2015 8

Careers Have Changed and So Have People

• “Our candidates today are not looking for a career…”

• “They’re looking for an Experience.”


Millennials Also …

80% Want to give performance

appraisals to the boss

60% think 7 months of work means they’re

“loyal”

2/3 Want to be “creative” at work

in their job

Their “team mates” are the most

important people at work

Expect feedback weekly and progression

annually


Companies with “soul” had a

return from 1996 through 2006,

8x higher than S&P 400 firms

1026% Companies with “soul” experience:

• Higher engagement and retention

• Better customer service

• Long-term profitability

Source: Simply Irresistible: Engaging the 21st Century Workforce, Bersin by Deloitte, 2014

Importance of Mission and Purpose


Culture is The New Black

95% of candidates believe culture is more

important than compensation

<5% of candidates value compensation over

culture


The Global Engagement Challenge Glassdoor Ratings of Employer (Recommended to friends), 20,000+ respondents

Average 3.1

What are these

companies doing??


The Simply Irresistible Organization®

What we have learned: An Integrated Approach is Needed

Meaningful Work Great Management Fantastic Environment

Growth Opportunity

Trust in Leadership

Autonomy Agile Goal Setting (i.e. OKR)

Flexible, humane work environment

Facilitated talent mobility

Mission and purpose

Selection to Fit Coaching & feedback Recognition rich culture Career growth in many paths

Investment in people, trust

Small Teams Leadership Development

Open flexible work spaces

Self and formal development

Transparency and communication

Time for Slack Modernized Performance Mgt.

Inclusive, diverse culture

High impact learning culture

Inspiration


LEADERSHIP

Why a perennial issue?

see leadership shortfalls as a top-3 issue

Need to focus on developing leaders at all levels

Treat as short-term training instead of a strategic initiative

86%

Leadership “capabilities” in 2015 are no higher than in

2014, despite the fact that this was the #1 issue in 2014.

Leadership spending

increased by 14% in 2014 with no real impact on results.

Only 6% rate themselves excellent in developing

Millennial leaders and 66% rate themselves “weak”

Only 8% feel strong in

developing global leaders and 57% feel weak


Leadership creates shareholder value Analysts place a 35% spread on stock price based on how they view leadership

+15.7% Equity premium on organizations

perceived to have effective

leadership

-19.8% Equity discount on organizations perceived to have ineffective leadership

$2.4 billion Premium as 15.7% of Company Market capitalization

$3.0 billion Discount as 19.8% of Company Market capitalization

consider their leadership development programs very effective, and… 4.3% 2%

And yet, companies aren’t getting the investment right…

Believe that their succession management is where it needs to be

* Source = Talent Edge 2020


Bersin Leadership Development Maturity Model

Inconsistent Management Training Content Available • No Development Process • Benefit to Employees

Level 1

Structured Leadership Training Core Competencies • Well-Defined Curriculum • Developing Individuals

Level 2

Focused Leadership Development Culture-Setting • Future-Focused • Developing Organization

Level 3

Strategic Leadership Development Championed by Executives • Talent Management Integration

Level 4

Be

rsin

by

De

loit

te

25%

38%

28%

10%


10%

19%

26%

36%

First-level

Mid-level

Senior-level

Executives

Source: Leadership Development Factbook Survey, Bersin by Deloitte, 2014, n=288

% of Positions with Successors Identified (Large organizations)

Does Succession Management Even Work?


• The average tenure at work is <4 years, so “lifetime employment” strategies are out of date

• 55 Million people (32%) in the US work part-time, contingent, or as contractors

• 30% of Tech workers believe they could get a better job within 60 days if they looked (Dice)

• 50% of Millennials will change jobs within two years

• If you don’t have a facilitated talent mobility strategy good people will leave

New Models for Talent: No Longer for Life


The Talent Mobility Formula Bringing the Talent System Together

DESIRED COMPETENCIES (KNOWLEDGE,

BEHAVIOR, SKILLS)

OPEN POSITIONS & OPPORTUNITIES

INDIVIDUAL NEEDS/DESIRES

INDIVIDUAL DEVELOPMENT PLAN

(IDP)

VISION

STRATEGIC INITIATIVES

DESIRED BUSINESS

OUTCOMES

VALUES

MISSION

ORGANIZATION NEEDS

MOBILITY

STRENGTHS

DEVELOPMENT NEEDS

CAREER ASPIRATIONS

ANNUAL GOALS

Succession Management

Career Development

Individual Development

Plan (IDP)

Strategic Competencies Workforce

Planning

Performance Management

Development Planning


Talent Mobility takes a Complete Commitment Only 11% of companies have a clear strategy for career development

• Identify

Career Goals

• Maintain Profiles • Demonstrate

Values • Socialize

Interests • Create Internal

Network • Share Expertise

Employee • Define Job

Profiles • Provide Coaching • Assess Potential • Identify

Development Opportunities

• Provide Candid Feedback

• Share Talent Openly

Manager • Provides Tools &

Resources • Develop Career

Models • Facilitate

Process • Offer Career

Coaching • Career

Development Training

• Integrate with Talent Mgmt

HR • Infrastructure –

Process, Technology, People

• Create Culture of Mobility

• Communicate Expectations

• Create Transparent Marketplace

Company


What Millennials Want (and Need)

• Companies are desperately looking for ways to build leaders from Millennials

• Mentors and mentor programs are among the hottest programs to build new leadership

• When asked “how would you like to learn to lead,” more than 60% of Millennials say “I’d like a mentor.”

The Mentor Next Door


LEARNING AND DEVELOPMENT

Into the spotlight

Need to reinvent the learning experience

Skill shortage is holding back strategy execution

see L&D as a top-3 issue; up from #8 last year

84%

Learning moved from #8 to #3 in priority this year.

The capability gap tripled from

2014 to 2015.

Only 24% feel capable of using advanced media in learning (76% are weak)

30% now feel they have

capability to use MOOCs, yet only 12% feel they have

mastered L&D operations


We are Here E-Learning & Blended

Talent Management

Experiential Learning

Continuous Embedded

2001 2005 2015

Evolution of Corporate L&D From Content-Centric to Continuous and Experience-Centric

2010

E-Learning Get Materials Online

Social, Collaborative Corporate University

Blended Programs

Content Management Taxonomy

Learning Paths Role-Based

Self-Authored Extreme Blended

Gaming, Embedded, On-Demand

Rich Catalog University

2020

Learning Everywhere

All The Time

Intelligent Learning

Instructional Design Kirkpatrick

Career Curricula

Content Community

70-20-10

Job Relevant Classroom

LMS as E-Learning Platform

LMS as Talent Platform

LMS as Data (Where is the LMS?)

LMS as Experience Platform


What People Want

Rated 7th


We Have A “Learning Engagement” Problem


Learning Environment at TELUS

EXPERT DIRECTORY LEARNING

PORTAL CAREER SOCIAL

KNOWLEDGE BASE

SOCIAL SERIOUS GAMES

COLLAB PROJECTS ONBOARDING FOLLOWING VIDEO


Many Disruptors Coming Self-Authored Content Catalogs, Adaptive Learning, Analytics, and MOOCs


Corporate Capability Development Weak

14%

14%

9%

9%

5%

76% Rate Current Workforce Capabilities an Urgent Problem … Yet Only 13% Feel Fully Ready

% Excellent


of organizations have a senior leader running

the training function

Only 49% of organizations have a written business plan

for learning

<45%

70% 64% 43%

26% 48%

29%

HILO Overall

Competencies & Profiles

Development Planning

Career Paths

L&D Organization and Governance Continues to be Challenging

Bersin High-Impact Learning Organization Model


REINVENTING HR

An extreme makeover

Align HR capabilities with business goals

HR is being redefined as an enabler and builder of talent

see an urgent need to reskill the HR function

39%

HR skills are the fourth highest priority in all areas with almost

40% rating the problem “urgent.”

Only 11% have strong

programs to develop HR professionals internally.

Despite a 4% increase in HR

spending, almost all talent capabilities this year have

dropped


HR is not keeping up

HR capabilities

Simplifying Work

Learning and

development

Performance Management

Reinventing HR

HR & people Analytics

Culture and Engagement

Leadership

-26 -28 -29

-30 -31

-31

-36

Business needs

Global Economic Growth


Global Capability Gaps Percent Rating Trend Important


HR is Under the Gun by Business Leadership


PERFORMANCE MANAGEMENT

The secret ingredient

Emphasize coaching and feedback

Less emphasis on evaluation; more on agile goal setting

have changed performance management processes or plan to change it in the next 18 months

89%

Today 10% of companies believe their performance

management process is an effective use of time (up from

8% last year)

35% believe the process drives no value at all

45% believe it hurts

engagement and only 10% believe it helps engagement.


Burdensome,

Fixed

Flexible,

Agile, Simple

Ongoing,

Continuous

Assumption

Based

Annual,

One-Time

Data Driven

Centralized,

Deferred

Local,

Real-Time

Appraisal

Focused

Development

Focused

Remediation Strengths

Future Outlook

Investments in development

planning reduce voluntary and high

performer turnover while increasing

the average revenue by employee1

1 Bersin: High Impact Performance Management (2011) [n=200+] 2 Gallup Organization Research (1998 – present)

The defining characteristic of high

performing teams is that each

member feels that their role

repeatedly calls upon their strengths2

* Additional research can be found in the appendix

Time for a Shift in PM Principles


Clarifying the Purpose of PM

Coaching for Development

Talent Decisions

Performance Improvement

Legal Documents

Employee Motivation

Compensation

Performance Feedback


Coaching for Development

Talent Decisions

Performance Improvement

Legal Documents

Employee Motivation

Compensation

Performance Feedback


Kelly Services

Source: “Getting Away from the Score: Creating Better Ongoing Performance Feedback,” Bersin & Associates, 2012.


1. High Performers are Disappointed

2. Mid-level Performers can Lay Back

3. Low Performers can Hide

4. Managers rate Themselves

5. Compensation is a separate, distinct process from evaluation and rating

The Myth of the Bell Curve


Within the pilot/test population, increased Check-in frequency maps to increased engagement

3.2

3.4

3.6

3.8

4.0

4.2

4.4

Control Group

1

0-59%

Control Group Top Quartile Check-In Frequency* Bottom Quartile Check-In Frequency*

*By total opportunities to Check-In

1. I am really enthusiastic about the mission of the firm

2. At work, I clearly know what is expected of me

3. In my team, I am surrounded by people who share my values

4. At work, I have the chance to use my strengths every day

5. My teammates have my back 6. I know I will be recognized for

excellent work 7. I have great confidence in the firm's

future 8. In my work, I am always challenged

to grow

1

2

3

4

7

6

8

5


HR AND PEOPLE ANALYTICS

Stuck in neutral

Need a long-term commitment to analytics

No year- over-year improvement in analytics capabilities

rate analytics important; only 8% are “strong”

75%

Year over year there has been almost no improvement in

analytics maturity and capability around the world.

2/3 of companies have little or no capability to correlate HR

data to business data

Only 28% use HR data to predict workforce performance and only 4% feel expert today


What is People Analytics Bring HR & Business Data Together

Recruiting and Workforce Planning

Comp and Benefits

Performance Succession Engagement

Learning & Leadership

HRMS Employee

Data

Engagement & Assessment

+ Sales Revenue

Productivity

Customer Retention Product

Mix

Accidents Errors Fraud

Quality Downtime

Losses

Groundbreaking New Insights & Tools for Managers to Make Better Decisions

= Data management, analytics, IT, and business consulting expertise

+


What Our Research Discovered

• Bersin by Deloitte Talent Analytics Maturity Model

Be

rs

in b

y D

elo

itte

Operational Reporting Reactive Reporting of Operational & Compliance Measures •

Focus on Data Accuracy, Consistency & Timeliness

Level 1

Advanced Reporting Proactive Reporting for Decision-Making • Analysis of Trends

& Benchmarks • Customizable, Self-Service Dashboards

Level 2

Advanced Analytics Statistical Analysis to Solve Business Problems • Identification of Issues

& Actionable Solutions • Centralized Staffing & Integrated Data

Level 3

Predictive Analytics Development of Predictive Models • Scenario Planning •

Integration with Business & Workforce Planning • Data Governance Model

Level 4

56%

30%

10%

4%


Value is High

Today, 14% of HR ORGANIZATIONS believe they “regularly use data to make talent and HR strategy decisions”… …and these organizations, are…

2X as likely to

believe they are excellent at

selecting the right

candidates

2X as likely to

believe they are delivering a

strong leadership

pipeline

Generating

30% higher stock

returns than the S&P 500 over the last three

years

3X as likely to

believe they are efficiently

operating HR


SIMPLIFICATION OF WORK

The coming revolution

Redesign work to focus on what matters

Technology and globalization creating overwhelmed employees

see need to simplify work; 25% say need is very important

75%

Believe it or not, 63% of companies have some

program in place to “simplify work” but only 12% feel it is

driving significant value today.

74% say their work environment is “highly

complex” or complex, and only 4% say it is “simple”


New Solutions: Design Thinking


Growing Your Business



Learning and Leadership Markets

• Is it the Chief Learning Officer? • Is it the Chief HR Officer? • Is it the Line of Business Leader?

Who is the buyer?

CEO – “I have problem X”

CHRO - ”Are you any good? Have I heard of you?”

CLO - ”How does your product work and how does it compare with alternatives?


ISA Conference

• Positioning – where do you fit?

• Uniqueness -- How are you really different?

• Scale – what is your real product and can you scale up?

• People and Culture – customer intimacy, support, and hiring?

• Leadership – are you a founder, manager, or leader?

• Focus – how to avoid distractions but stay innovative?

• Energy – can you keep it up?

What I Have Learned


Thank You