Metric-driven Talent Management

Making you aware of emerging ways to recruit, retain and manage

21st Century TM Conference -Tanzania July 17, 2015

© Dr John Sullivan

1Slides can be found at: www.drjohnsullivan.com

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I’m from the Silicon Valley… so I will move fast today

But please interrupt with questions at anytime

We all dress like CEO’s in the Silicon Valley

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Mark Zuckerberg

Google’s office dress code “I guess you should wear clothes”

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My 4 goals for today

1. To make you think2. To expose you to some emerging

“different ways to do things” in Talent Management

3. To get you excited about using metrics to improve your results

4. To answer your questions on any Talent Management subject

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The 5 topics for today

1. A quick tour of the unique ways we manage in the Silicon Valley

2. Metric driven recruiting3. Metric driven retention 4. The top 15 Talent Management actions

firms should be taking (but aren’t)5. Metric driven workforce planning

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A quick tour of the silicon valley…

This will make you realize how different we are and what we will do to create innovation

However… you may see your own future direction

Topic # 1

Remote work changes everything

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Like it or not… you compete against Silicon Valley When leading global firms find out that there is

top talent living in your region… they will raid the region and offer 100% remote work jobs…

Then you have no choice but to match the job features and excitement of Silicon Valley firms

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How does coming to work at your firm compare to this?

 “It's like… going to Disneyland everyday”

Source Google employee on Glassdoor.com

How does this compare to your office?

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How does Amazon’s new HQ compare to yours?

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A view of and access to the SF bay

The campus design encourages collaboration

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The new Googleplex

How does this compare to your commute?

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Google’s Wi-Fi shuttle buses

How does this compare to your commute?

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Facebook and Google’s ferry

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Going to a conference room is different at Zappos

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Fun and collaboration on a Google conference bike

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Fun and collaboration in the video game room

Google wants going to a meeting to be fun

Slides in Google offices (they see no compliance issues)

19Regular slide Long slide Fireman’s pole

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Fun while at work – Climbing wall

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Can you compete with this fun feature?

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Google wants you to think

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Google sends a message that they want you to think

Sound and light proof decompression/ stress reduction chamber ball and nap rooms

Massage chambers

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Open space/ standing desk for collaboration – “swing your arms and hit someone”

Alternative ways to pay

How does “equal treatment” make top performers feel? (Google)

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Freedom is an alternative way to manage

Google’s 20% time

If you really trust your workers, you have to give them the freedom to innovate

From an employee’s perspective, under the rule.... “Nobody can tell you that you can’t experiment” Larry Page CEO

Employee freedom

Google - Less management means more freedomNo hiring, p. appraisal or deciding who to promote

Zappos – It eliminated most managersNo job titles. No traditional bosses. No hierarchyA radical approach called "holacracy," replaces

conventional command-and-control with a series of self-governed teams to speed decision-making, share authority and increase innovation (WL Gore)27

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“Freedom” practices at Facebook

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“Bootcampers choose the team they will join at the end” (onboarding)

Hackamonth allows you to select your next job

Freedom to change the rules

Google’s ‘Big Scrub’ fixes bad policies/rule

Every quarter employees list and then vote on the

top 20 rules they want to see changed

(Google pledges to fix those rules within 2 months)

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Our policies reveal freedom means we trust

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Facebook does not track employee absences

“There is no policy or tracking”

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Question 1

If your workers had a choice…

Where would you spend more time… your current place to work… or the

Silicon Valley?

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Question 2

But our firm simply can’t afford this approach?

We say instead…

You can’t afford not to match us… because of the ROI on innovation

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Recruiting… What would it look like if it was metric driven and

more aggressive?

Topic # 2

© Dr John Sullivan

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In the Silicon Valley we start by…

Showing the high economic value of recruiting and retaining talent

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The business case starts with knowing the differential

The best firms share one calculation, they all calculate the performance differential between a top-performer vs an average one in the same job?

- 25 times more than the average employee - 300 times more than the average - 1000 times more than the average

It is also a BP to convert HR results into $ - 25 X $2.2 million rev per ee =

Netflix & Yahoo -Apple

Google Microsoft

10 times the average employee

Always calculate the ROI of exceptional employees

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It calculates that:3 bad employees = 1 OK employee3 OK employees = 1 good employee3 good employees = 1 great employee

“We pay great employees up to 100% more than other retailers (they cost more)”But we get… “three times the productivity at two times the payroll cost” (ROI)“You save money, the customers win, and all the employees win because they get to work with someone great” They have a “10 % turnover rate” vs. 75% in the industry

Source : Container store web site (Texas)

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The business case for focusing on high-performers

Calculate the output surpluses produced by the top 1% and 5% (What do you think they are?)

The top 1% of your workforce produces what % of your total output ?

The top 5% produce

5%

26% (5X)

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How much $ do weak performing employees cost the firm?

A weak employee may cause errors and disruption each year up to 2 ¼ times their annual salary

(O’Boyle and Aguinis)

They take up a manager’s time because their managers must spend nearly one day a week (17%) dealing with them (Source: Robert Half)

Toxic employees make their teammates 54% more likely to quit (Source: Cornerstone)

Bad ones stay forever… weak hires may stay 20 years, multiplying their negative impact

What is the performance cost of a weak manager ?

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“Removing a poorly performing boss and replacing him or her with a top performing manager

Is roughly equal, in terms of productivity, to adding an extra person to the team.”

Source: National Bureau of Economic Research

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Pay employees to leave

At Netflix... “cutting smartly” means: “Adequate performance gets a generous

severance package”… Why? “Managers feel too guilty to let someone go”, so

you must pay the employee to leave“Pay to Quit” at Amazon “Once a year, we offer to pay our associates to

quit”. ($2,000 the 1st yr., to $5,000 the 5th) The goal is to encourage folks to take a moment &

think about what they really want in the long-run “An employee staying somewhere they don’t

want to be isn’t healthy for the employee or the company.”

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Learn from Google – Hire only smart people

Laszlo Bock VP at Google

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Focus on “A” players

Hire only “A” players“The problem is that A players are only attracted

to work at places where they see other A players… they smell B from a mile away” Inventor James Dyson

Always hire the best managers, "A" people… As soon as you hire a B, they start bringing in B’s and C’s" Source: Steve Jobs

“If people see poor performers all around them… your very best people will leave” Source: Laszlo Bock Google

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Use data and metrics to find out what works (and what

doesn't’) in recruiting

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We live in a fast-changing unforgiving VUCA world

It is no longer… the big and established firms that dominate the small ones…

it’s the fast, innovative and adaptive firms that now dominate the slower firms

Warning: If the speed of change outside your firm exceeds the speed of change inside your

organization, your end is in sight!

You can’t move fast… unless you have metrics to guide you

How are we doing in HR

Are we strategic?

How do we rank in the use of metrics?

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Almost everyone agrees that HR must become more strategic

When CEO’s and board-level executives rank business functions… which one is listed as the most strategic?

Sales

Where was HR ranked on the list?

“the least strategic function” Source: DDI

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HR must increase its business impacts

Of the 18 business factors that contributed the most to business outcomes…

#1 - with the highest impact was… reducing operational cost structures

“Talent was dead last” (#18)

(source: KPMG / HfS research) 47

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Almost everyone agrees that HR doesn’t use many analytics – so there is room for improvement

Where does HR rank in analytics usage compared to other bus functions?

% of advanced users % of non-user

1.Finance 58% 7%

2.Executive team 51% 11%

3.Operations 48% 9%

4.R&D 44% 23%

5.Marketing 41% 16%

6.Sales 34% 20%

7.HR (last) 27% 23%Source: AMA/i4cp 2013

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CEO’s do not have faith in our metrics

Only 12% of CEO’s are confident on the quality of Human Capital metrics

49AICPA survey 2012

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What is HR best at? Worst at? (KPMG)

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Learn from Google

Laszlo Bock VP at Google

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Google is the world’s only data driven TM function

“All people decisions are based on data & analytics” "We want to bring the same level of rigor to

people-decisions that we do to engineering decisions"

“You can measure everything”... “we measure revenue, productivity, engineering” Eric Schmidt

“The best thing about using data to influence managers… is that it’s hard for them to contest it”

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You need metrics in each of these 4 areas

1.One for every major program goal – Ex. new hire on-the-job performance and retention rate

2.One for every major improvement area – Ex. increase the diversity rate, cut offer rejects etc.

3.One for every major executive budgeting decision criteria – ID and gather information to meet each of the executive funding criteria

4.Data for assessing the ROI of a process- use data to calculate the ROI and then shift resources to the recruiting processes with the highest ROI

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There are 6 categories that should be covered in the metrics for assessing an entire HR program

1.Quantity (Volume) Number hired

2.Quality (Error rate) Performance on the

job

3.Time (On time or the time to complete) Time to fill

4.Money (Cost or revenue generated) Cost per hire ($9k)

5.Satisfaction (Of the users) Hiring mgr.

satisfaction

6.Comparison number Aver. CPH is $4k

QQTMSC Recruiting example

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Let’s shift our focus to recruiting

“Hiring is the most important thing you do”

(Google gets nearly 3 million applications a year)

Source: Eric Schmidt, Former CEO of Google

Being data-driven allows you to focus your resources on HR tools with the highest impact

56Source: BCG/WFPMA - From Capability to Profitability: Realizing the Value of People Management, 2012

Which HR function normally increases revenue & profit the most?

Mid and lower impact HR functions

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HR must identify and focus its resources on activities that increase revenue & profit (BCG)

58Source: BCG/WFPMA - From Capability to Profitability: Realizing the Value of People Management, 2012

Which HR functions have the highest impact on rev. /profit?

What single factor in recruiting had the highest overall impact on TA results?

“Strong relationships with hiring managers” is the #1 contributing factor to TA performance. It is 4X more influential than the other 15 drivers.

(Source: Bersin by Deloitte 2014).Source: BCG WFPMA – From Capability to Profitability: Realizing the Value of People Management, 2012

If you’re not familiar with really aggressive

recruiting

Here are a few quick examples

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POP “mobile” recruiting

Yahoo coffee cart recruiting at the Google bus stop

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POP “proximity” recruiting

BigCommerce recruiting at hi-tech bus stops with “poached” egg sandwiches and coffee

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Mobile recruiting… the creative way

Zscaler drove a van with this sign around the neighborhood of their competitor Blue Coat

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Would this be aggressive recruiting on Craigslist?

Searching for 2 F**king Great Developers ($115k - $140k / yr) (San Diego)

If you're a great f**king developer who wants to make a bunch of money working somewhere awesome then keep reading. We're a San Diego Tech Company (relocation covered for the right candidates) that's looking for not one but two awesome developers. So digest this ad, accept your fate, and take one last lap around your office to say goodbye to your friends because you're about to upgrade.What You'll Be Doing:This quarter you'll be adding kick ass new features to our already massively successful products. Afterwards depending on your ability, interests, and attitude you'll be working on any number of projects like new products, internal tools, improving our already f**king great scalable architecture, or skunk works machine learning data analysis for new product R&D.

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It takes a great bus case to justify outrageous referral bonuses

ThoughtSpot offered a $20,000 referral for any job

Any “friend of the company” qualifies for the $

They hired 9 in 1 month (from a base of 32 employees)

Why? “People don't always listen to recruiters,

but they do listen to their friends”

Let’s look at how…

Each of the steps in recruiting

should be metric driven

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Data-driven recruiting steps

Forget past practices or hunches, shift to data-driven recruiting

1. Find the job requirements KSAEE that correlate with… on the job success in this job family (i.e. factors that predict Q of H)

Let’s look at some examples >

These Google data points might change what you think you know about hiring

“GPA’s “Test scores “Brainteasers Interviews – “many managers, recruiters, and HR

staffers think they have a special ability to sniff out talent. They’re wrong” “it’s a complete random mess”… “we found a zero relationship” (between interview scores and on-the-job performance)

No value is added “after 4 interviews”College –“the proportion of people at Google

without any college education… has increased over

time”What predicts? – “capability & learning ability” 67

are worthless as a criteria for hiring”

are worthless”are a complete waste of time”

Laszlo Bock, Senior VP of people operations at Google The New York Times

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Most selection criteria are inaccurate

Gate Gourmet at O’Hare used big data to improve new hire performance It analyzed new hire turnover rates It learned they were closely connected to…

commute distance and access to public transportation

After changing its hiring criteria, the firm achieved “fully staffed status” for the first time

And cut unwanted turnover to 27%

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Data-driven recruiting steps

2. What % of the qualified targets are actively looking and what % are passive? (employed)

3. For actives, use surveys to identify their job search approach and steps

4. For passives, identify what makes them active5. Use surveys to find out where actives would see

an open job or recruiting message… and passives would see a branding message

6. When is the best time to recruit - when a lot of qualified applicants are looking but few firms are hiring let’s look at an example >

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Recruiting on the “right day”

On most days, you will get a hard “no” from top prospects… except on these “right days” Birthdays and New Year are reflection days A boss/ mentor/ best friend / CEO left Day of a merger or layoff Lost a promotion or a key project After their yearly bonus After their performance appraisal When their project is ending Their annual work anniversary an example >

Traditional HR would guess / speculate for recruiting purposes… when do new hires quit?

Source: entelo.com using 1 million resumes

Anniversary date at 36 months

Anniversary date at 24 months

Anniversary date at 12 months

Waiting period

Metrics can prove what causes these “turnover spikes”

Employees that quit

Years at the firm

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Data-driven recruiting steps

7. Use surveys to identify the company (brand) and job factors that attract… those with the right job requirements and put them in the position description let’s look at an example >

High-performers demand different things to take a job… and stay in a job

Criteria for top performers

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1. High pay

2. Guaranteed pay

3. Exceptional benefits

4. Security

5. Time off with pay

6. No surprises/predictable

7. Seniority matters

8. Equal treatment

9. Minimize risk and stress

10.Work/Life balance

Criteria for average workersDoing the best work of your life1. “Can’t put it down” exciting work2. Proud of their impact3. Work with top co-workers4. Great managers5. Learn new things rapidly/growing6. Opportunity to innovate & take risks7. To be constantly challenged8. Freedom, a choice of projects9. Opportunity to implement ideas10.Be an expert/mastery of an area11.Input into schedule/location12.Opportunity to make decisions13.Measure & reward performance >

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11 Data-driven recruiting steps

8. Identify the best sources during onboarding…

that produced Quality applicants/hires (referrals,

boomerangs, events, viewing their work, contest

winners, internships)

9. Identify the most effective way for pairing the

best individuals to your open jobs?

10.Identify the most accurate assessment

approaches that predict on-the-job success

11.Identify the best approaches for selling/closing

quality applicants

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Use data and metrics to find

out which recruiting

approaches and sources

produce the best performing

hires

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Many have difficulty in finding top talent

It may “seem like” top talent is not available

But the real problem may be that you have no compelling attraction bait or recruiting approach

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11.Internal executive search

12.Competitor analysis

13.Project NH trajectory

14.Reward recruiters (QofH)

15.ID your farm teams

16.Acqui-hiring

17.Give them a real problem

18.Inside best practice

sharing

19. Hire them both (buddy)

20. Select a rec. strategy >

1. Data-driven TA

2. Using Q of H info to shift

3. Prioritize jobs by rev impact

4. Hiring innovators

5. Raise referrals to 50%

6. Raise boomerangs to 15%

7. Speed to get quality

8. Ranked on best place lists

9. Poach /Team lift outs

10.Most wanted list

Top 20 recruiting actions with the highest strategic impact

Referrals are #1

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“Over 93% of the top performers in their field

find a job by being “referred by someone they

know”, they do not find their jobs through a job

posting”…Source: Forbes 8/03/2014

Facebook and Twitter hire more than 50% of

their hires from referrals and the average for top

firms is 46% Source YesGraph

Referred workers are more productive during

their first 400 days  (Source: Evolv)

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Referrals are #1 for quality hires

Use the “give me 5” referral approach (Google)

Proactively approach top performers and ask them To identify the top five people that they know in

their field… in these categoriesThe best performer you ever worked withThe most innovativeThe best team playerThe best managerThe best working under pressure

Then ask your employee to contact these 5 individuals and try to convince them to apply

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Boomerangs are #2 for quality hires

Use a Boomerang re-hire program Determine when they are leaving who you

would want to re-hire based on their performance and skills

Use offboarding to explain your desire to keep in touch

Build a corporate alumni group on LinkedIn or Facebook

Periodically push information, discounts and relevant jobs… ask for business referrals

Use reference checking calls to your firm as an indication that they are looking

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“Proactive” tools

Reach out to job references for referrals

Identify top performing hires from last year

Call their references that said accurate things

Thank them

Ask them “Do you know anyone else as good?”

Ask them to be a future reference source

Reconsider semifinalists

Implement a "silver medalist” approach Maintain ties with candidates who have been

runners-up for past jobs… and• Those that rejected our offers• Soon to be qualified• Bad fit for this manager • Top recruiting process dropouts

"we hire a ton of people from that group" Silver medalists get emails and text updates as

more job opportunities become available Also used by GE and Intuit 82

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Employee Videos are powerful messaging tools

Employee videos make “finding and feeling the excitement” easier for outsiders (Film Festival)

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Referral cards can be powerful

Your customer service just now was exceptional.I work for the Apple store and you’re exactly the kind of person we’d like to talk to. If you’re happy where you are, I’d never ask you to leave. But if you’re thinking about a change, give me a call.This could be the start of something great.

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Simple but effective recruiting tools

Ask for names during the hiring and the on boarding processes During interviews, challenge the industry

knowledge of your best candidates by asking them to list the names of the outstanding individuals that they know

Also ask all top new hires during onboarding “who else is good at their former firm and in the industry?" Next ask the new hire to help you recruit any desirable individuals that they know.

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Simple but effective recruiting tools

Make your job postings exciting

Most job descriptions are painfully dull

So hiring managers and recruiters should work

together to rewrite them so that they “sell” the

exciting aspects of the job (video job descriptions)

At the very least, job descriptions should be

tested side-by-side against your competitors’

descriptions to ensure they are more compelling

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Simple but effective recruiting tools

Utilize the mobile platform because people carry them 24/7Smart recruiters take advantage of them because

of their high response rateMake sure that your corporate website and

application process is compatible with smart phones

And then use it’s text, picture, voice and video capability to communicate your recruiting messages

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Simple but effective recruiting tools

Develop a “company sell sheet”… because managers do a poor job selling the company to potential recruitsSurvey your key employees to identify the

specific factors that make your firm superior to your competitors

Provide them with a “side-by-side” opportunity comparison sheet showing where your firm’s opportunities are superior to each of your competitors

You can also attach a version of this sell sheet to your application form

Example of a “Side-by-side sell sheet”

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They offer We offer

Growing by 10% each year

3 weeks of training

Industry-leading products

5 locations to work at

“Best place to work” award

Recent layoffs

1 week of training

Cheaper copycat products

Only 2 locations

None

2.3 Glassdoor CEO rating4.6 Glassdoor CEO rating

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Simple but effective recruiting tools

Select a hiring team Some managers aren't good salespeople or

recruitersSo identify a group of your employees that excel

at selling candidates and let them do most of the hiring

Because they will do a lot of hiring, they will naturally understand the recruiting market and be better at it… than a single manager that only does hiring once or twice a year

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Simple but effective recruiting tools

Show them where they will be in 2 years Provide top candidates with a profile of what

“others like them” have accomplished and learned while at your firm

Excite them by showing them their likely trajectory (where they could be in a year or two)… if they were to join your firm

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Simple but effective recruiting tools

“Hire them both” buddy program This is a variation of the successful U.S. Army

programWhen you encounter an exceptional candidate,

offer to hire them and their best friend at the same time (i.e. colleague, college friend or spouse/partner)

This may provide a desirable candidate with an opportunity to commute together or to work together with a best friend

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Simple but effective recruiting tools

Utilize "exploding offers”Try offering a significant sign-on bonus that is

contingent upon accepting an offer immediately (either before they leave your facility or the same day)

If the offer is not accepted right away, the bonus continually decreases over the next few days

This bold approach can provide a powerful incentive to accept or make a quick decision

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Simple but effective recruiting tools

Get referrals/names at professional eventsEncourage your firm’s attendees to compile a

referral list by asking speakers and attendees… “who is the best”, “who do you learn from” and “how would you solve this problem __________?”

Provide recruiters a “call me when you are ready” card to hand to10 people

Ask “the smartest person” to coffee/lunchHave your employees find the top people in

competitor’s trade booth and assess those that come through yours

Find the best at certification/ training classes

Recruiting your customers

Recruit customers because they already “like you”

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Improving candidate assessment

1. Live video interviews will make more candidates available (iPhone app)

2. Give them real problems during the interview (like you would hire a chef)

3. Ask them to project the future of their job/the industry

4. Give them a flawed process and ask them to find the weaknesses

5. Review samples of their work6. Hire them for one time weekend or remote work

WHY RETENTION IS HEATING UP

And why it must be data-driven

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Topic # 3

© Dr John Sullivan

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Retention is an important issue among executives

A SHRM/economist survey of global C-suite executives showed these top issue over 10 years

1. Retaining and rewarding the best people2. Attracting the best people to the organization

SilkRoad’s survey on “Things that keep HR up at night” ranked it #1 (2014)

Data really educates managers on retention

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Most hiring is inaccurate

“46% of new hires fail within 18 months”

100Source: Forbes 1/23/12 Based on study tracking 20,000 new hires

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During what month do most salespeople quit?

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Source: Entelo 2015

Turnover seems even… until you add December

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A data-driven approach to retention

6 key retention principles to remember1. Most retention processes are not data-driven2. Companywide retention actions that equally

impact all employees have a low success rate / ROI3. Prioritize jobs and key employees because you

can’t (and don’t want to) keep everyone4. It takes a “career impact event” to trigger leaving5. Everyone has a unique set of reasons for leaving,

so you need a personalized retention plan6. The #1 reason for leaving is generally under their

manager’s control example >

Rule #1 You may be the problem!

“No one ever quits a company…

they quit their manager!”

Conclusion of the Gallup Survey

Managers… “had a much greater impact on employees’ performance… than any other factor” Google project oxygen

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Google’s “project oxygen" showed managers had the #1 highest impact on productivity

8. Have key technical skills to advise the team (not #1)

7. Have a clear vision and strategy for the team6. Help your employees with career development 5. Be a good communicator & listen to your team4. Don’t be a sissy; Be productive / results-oriented3. Show interest in their success & personal well-being2. Empower your team and don’t micromanage 1. Be a good coach – hold regular one-on-one’s &

provide personalized constructive feedback

“We were able to improve “75 percent of our worst-performing managers” Source: L. Bock

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Retention must be a data-driven approach

Identify “why” employees have left

1.Identify general causes of turnover – develop a process for identifying the general causes of turnover in the past (summarizing all exit interviews)

2.Identify the turnover causes for key individuals that left – develop a process for accurately identifying the specific causes why a targeted individual actually left (use post-exit interview with the ex-employee or “buy” offer letters)

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Data-driven retention

Identify “why” individual current employees stay “Why do you stay?” stay interviews,

Also ask “What factors would cause you to begin to consider leaving?”

Why did you quit your last 2 jobs? (Ask during onboarding)

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Use “stay interviews” to keep the best

Factors that cause the average employee to stay1. Exciting work and challenge2. Career growth, learning and development3. Working with great people4. Fair pay5. Supportive management/good boss6. Being recognized, valued and respected7. Benefits8. Meaningful work and making a difference9. Pride in the organization, its mission and its products10.Great work environment and cultureSource: B. Kaye and Jordan-Evans Love ‘em or Lose ‘em survey of 17000 employees

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Data-driven retention

How to identify “who” is at risk of leaving?

Develop a process for identifying “who” (which individual employees) are most likely to leaveThe process might include external approaches:A search of the web for resumes Blind recruiter calls… to see who respondsA dry search by a headhunter to see who is desirable

Run blind ads to identify who is applyingSuddenly speaking at conferencesThey extensively update their LinkedIn profile

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High performance tool

Google uses predictive metrics to ID who might quit Employee reviews Promotion history Pay history Employee surveys Peer reviews (360 degree) Employee training Leadership meetings

They look for employees who “feel underused”

The retention actions of firms usually don’t match the reasons why employees leave

Why employees leave

1.Better comp/benefits $2.Coaching programs 3.Mentoring programs 4.Tuition reimbursement $ 5.Stock options $6.Profit-sharing $7.Flexible hrs./schedule8.Retention bonuses $Only 2 of 6 causes are met

Most common offerings

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1.Career advancement2.Pay/benefits $ 3.Lack of job fit4.Management/environ5.Flexible scheduling6.Job security

1 of 6 is $

Sources: Gallup 2006 Sources: OI Partners 2012

Company best practice examples

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112Source: Workday Insights Retention Analytics

Influence managers with data by distributing ranked reports (retention flight risk)

Personalized approaches improve retention

Mass career customization (Deloitte)

Every employee can dial up/down their job… as career aspirations & personal needs change. They can adjust:• Work hours• Travel demands• Job responsibilitiesResults: Do most employees choose to dial down or dial up their career? And what is the ratio? Voluntary turnover rates of top performers choosing this option were 2x lower

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2/3 dial up

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Scheduling and flexibility impacts retention

Results Only Work Environment•Pick your hours•Pick where you work•No in-person meetings required

The business impacts: RetentionROWE individuals have ___ lower turnover

($13 million per year at $102k per employee)When workers switch to ROWE, their

productivity jumps by 35%

45%

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A motivation survey tells you what motivates them (besides $)

Ask key employees in a survey to rank their motivators… The types of economic rewards that motivate The types of non-monetary rewards The types of choices in their job environment The types of recognition that will have the most

impact

This enables managers to customize recognition, & promote employee satisfaction and retention

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An onboarding alert

Each new hire’s manager is sent a JIT on-boarding email reminding them to do these 5 things

1.Have a discussion on their role and responsibilities

2.Match your new hire with a peer buddy

3.Help your new hire build a social network

4.Set up onboarding check-ins once a month for

their first six months on the job

5.Encourage an open dialogueResult – 1 email causes a 25% increase in productivity Source: Laszlo Bock

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And finally… measuring retention success

High business impact metrics for retention

1. Performance turnover (Top performers count more)

2. Regrettable turnover

3. High revenue impact turnover

4. Key position turnover

5. Key individual turnover

6. Preventable turnover

7. Where the turnover goes

8. Involuntary turnover

THE TOP 15 STRATEGIC THINGS THAT TALENT

MANAGEMENT SHOULD BE DOING (but isn’t)

© Dr John Sullivan 118

Topic # 4

The top strategic actions in Talent Management

1) Increase the productivity of your workforce Workforce productivity is merely comparing the

output of your entire workforce (the total value of the products and services they produce) with the cost of your workforce (total labor and HR costs)

Many Talent Management departments measure engagement (only a precursor to productivity) but they don't measure productivity

Increasing productivity requires you to identify the barriers that restrict productivity

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More productiveMake internal talent more productive

RetainRetain key internal talent

MoveRedeploy internal talent

BorrowBorrow contingent labor

HR has only 8 options for increasing productivity

Release Weak & excess labor

Use substitutes (Tech, contingent, outsource, cust.)

Buy Recruit regular employees

BuildDevelop internal talent

The top strategic actions in Talent Management

2) Increase employee innovation

Fierce competition requires firms to accelerate

innovation in product and administrative areas

Target the hiring / retention of innovators

Identify and minimize the barriers that

innovators face

HR must help shape the culture… so that there

is an expectation of continuous innovation 121

The top strategic actions in Talent Management

3) Reward great people management Most managers simply don't spend enough time

on talent management activities Managers are not directly measured or rewarded

based on how well they manage their talent. (This is true even though HR “owns” all of the key components related to measuring and rewarding (performance management, performance appraisal, competencies and reward systems))

Develop a "people management scorecard" for each manager and reward them based on their performance against those standards 122

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Ex. - Quarterly people management scorecard

1.Team productivity & quality2.Employee innovation impacts3.Quality of hires4.Retention of key employees5.Development of leaders6.Internal release of developed leaders7.Employee satisfaction with feedback8.Best practice sharingAverage combined rating on the 8 factors ______

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Name _________________ Dept._________Quarter # ______

Key people mgmt performance factors

The top strategic actions in Talent Management

4) Identify and fix bad managers Research by Google has shown that in most cases,

an employee’s manager is the single highest impact factor on employee hiring, retention, innovation, productivity and the development

Yet most organizations have no formal program for identifying weak managers

Actions would include surveys and performance metrics to identify weak managers

And to provide them with a list of proven tools and approaches to improve a manager’s people management performance 124

The top strategic actions in Talent Management

5) Convert Talent Management metrics into their dollar impact

Most traditional talent management metrics fail to impress executives because they are not expressed in "the language of business", which is dollars

Executives care most about increasing revenue

Don’t report turnover is 20%... instead say it is costing us $12.3 million a year or 9% of corp. revenue

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The top strategic actions in Talent Management

6) Develop predictive metrics and alerts

Historical metrics have little value

Start with “real time metrics” that tell managers

what is happening today

Then use “predictive analytics” to show trends

(a new hire’s career trajectory – retention in years,

highest job level, stays in the same function?)

Use “why metrics” to find and fix the root causes

Use “manager alerts” to warn in advance & JIT 126

The top strategic actions in Talent Management

7) Calculate the risks of weak Talent Management Risk management is an increasingly important But unfortunately, few talent functions have put

anyone in charge of risk management Risk managers identify and quantify the risks

associated with potential talent problems (its probability and likely costs)• Losing key innovators to competitors• Failing to have enough developed leaders• A weak employer brand that doesn’t attract• A bad hire or a poor performer

127

The top strategic actions in Talent Management

8) Improve internal best practice sharing Rather than developing new programs… HR can

have a higher impact faster and at lower cost by identifying and sharing "hidden" best practices

A superior approach is a proactive one that seeks out these affected practices and posts, pushes and shares in such a manner that managers easily see their value and implement them

Best practice sharing should be timed and usage tracked throughout the firm

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The top strategic actions in Talent Management

9) Speed up internal movement through proactive internal placement

Faster internal movement increases productivity, retention and development fast

Rather than waiting for the employee to move… a more strategic approach is a proactive one where recruiters periodically identify and then help to correctly place employees that should be moved both for their own and for the firm’s good

Short-term projects and virtual projects and rotations can also facilitate future movement

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The top strategic actions in Talent Management

10) Measure / improve your employer brand During the economic downturn, the area of

employer branding has been frequently ignored

The growth of glassdoor.com, blogs, Yelp, Twitter and Facebook now make it much easier for negative messages to be spread

At the very least, the positive/negative aspects of your employer brand should be measured, monitored and improved

130

The top strategic actions in Talent Management

11) College recruiting must be reengineered College recruiting programs have been stagnant

for years, even though colleges, communications and job seeking approaches have changed dramatically

Program features that need to be examined include remote college recruiting, social media approaches aimed at college students, mobile platform approaches and marketing research to better understand the needs of top grads

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The top strategic actions in Talent Management

12) Directly increase corporate revenues by focusing on revenue generating and rev. impact jobs

Work with the COO to identify the jobs that generate significant amounts of revenue or that directly impact revenue generation

TM must then prioritize its resources and people so that they focus on hiring, retaining, developing etc. the areas that have a high revenue impact

Work with the CFO in order to prove the $ increase in revenues

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WORKFORCE PLANNING IS CRITICAL

© Dr John Sullivan 133

Topic # 5

Why your firm must excel at workforce planning

134

Can we all agree…we have failed in the past

CEO’s / CFO’s want smoother ups & fewer downs

135

2012 2013 2014 2015 2016 2017

Any questions?

136

Strategic workforce planning defined

An integrated… forward looking talent management plan, process & way of thinkingdesigned to predict labor needs (what, when, how much)…

and then cause action to meet them.In order to mitigate people mgmt. problems… and take advantage of talent opportunities to improve the “talent pipeline”… so that you have the needed “people capabilities”…to meet business goals… and to build a competitive advantage!

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Our turbulent environment has a name… V.U.C.A.

V for Volatility – major change will be frequent

and sudden U for Uncertainty – there will be many surprises

and change will not follow a predictable patternC for Complexity – problems & opportunities will

be complex… with many different elementsA for Ambiguity – confusion from contradictory

information / data will make mis-reads likely

An “adaptive” firm and HR function are needed

in a VUCA world

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Adaptability / agility will be required in HR

A flexible HR approach is required – your HR strategy/programs must be “scalable” and be able to “shift” to meet the ups and downs of the business environment

A flexible workforce – sudden bus. shifts and project work require a larger % of well managed contingent labor

Be prepared to add / cut talent capabilities – HR must be able to add talent capabilities in one business unit or region… while simultaneously reducing labor costs in another

Rapid internal redeployment – you must have the capability for rapidly and proactively moving employees and teams to the most urgent bus. areas

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The traditional WP model

has five major components

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The five major components of WP

First you identify your firm’s future talent needs

1.Corporate labor needs (aka labor demand) –You must forecast what you need to meet bus. goals including… labor volume, skill sets, performance level, the % of innovators needed and where and when talent is needed

Next you need to deduct the talent that you expect to still have

2. Projected internal availability of labor – start with your current employees and labor, minus… projected turnover, retirements and skill deficiency gaps

You now know your net talent need >

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The five major components of WP

You must predict the external supply available to your firm

3. Gross external availability of labor (supply) – forecast the supply of labor that is available to all firms, including experienced and college sources

But remember… not everyone will want to work for your firm

4. So subtract… the % of the labor force that can’t be attracted – remove the % of the gross available workforce (with the needed skills) that will not work for you… because of your… employer brand, recruiting capability, headcount limits, location or due to competitor actions

You now know the net available external labor supply

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The five major components of WP

You now must develop plans to close the talent gaps

5. Action steps to close the gaps - plans, processes and tools to meet future labor needs (shortages or surpluses)

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What are the most common HR errors that you

should avoid when designing your WP?

144

HR failure factors

The 6 most critical design errors made by HR

1.Lack of integration within HR – there is no coordination and integration between the HR functions that must respond to forecasted workforce problems and opportunities

2.Weak forecasts – the forecasts are inaccurate, and overly positive

3.Straight line projections – most forecasts are merely straight-line projections… with no variations based on changing business and economic events

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6 WP failure factors

4.Failure to identify barriers – HR assumes it’s job is done with the forecast and the report… but it must dedicate sufficient time and resources on identifying resistance, roadblocks and HR programs that might not work (i.e. PA, PM and training)

5.HR works in isolation – the process does not involve managers, finance and strategic planning. HR must also have an “executive “champion” from a powerful business unit or function

6.No rewards – HR must offer rewards to managers and HR for successful planning

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Succession planning

Developing leaders and effectively “placing” them

147

Most firms don’t do succession planning well

Only 23% have formal succession plans (SHRM survey 2011)

Only 34% say senior management is committed

to succession planning

The #1 reason not to do Succession Planning is…

more immediate projects are taking precedence

A staggering 55% drop out of HiPo programs

(SHL Talent Management research)

Up to 33% of HiPo’s are looking externally (Talent

Management Magazine)

Succession planning

7 ways to identify Hi-Potential employees

1.Base them on the decision maker’s relationships

2.Select those with the most seniority

3.Let managers use their own appraisal criteria

4.A discussion and a vote among decision-makers

5.Let them self-select or others nominate them

6.Set fixed criteria/competencies that have proven

to predict success

7.Short-term stretch projects & rotations to assess 148

Succession planning

Problems in identifying Hi-Pot’s and Hi-Per’s The definition of potential may change so often

that predicting it isn’t possible over the long term

Measuring potential is an “iffy” process

Managers are often not good at identifying

potential (they may look at people like themselves)

High turnover of HiPo’s may make many of the

identified ones unavailable

Incumbents fail to leave/ retire 149

Succession planning

Best practices in succession planning Begin with a “back-fill” plan for sudden departures Call it a progression plan (Movement not promotions)

It’s best to consider succession planning… as an accelerated “stretch” assignment program

Use multiple sources to choose namesMake the plan transparent to create a “powerful

conversation”Limit the time frame for development to 18

months150

Succession planning best practices

Best practices to consider (Continued)

Expect 20% churn when the plan is updated

Check to make sure that your succession plan does

not mirror the organization chart

Track to see if your succession plan is actually

followed for promotions and during layoffs

Let employees refer… or self-nominate

Succession plans normally only cover 5-10%...

career path plans cover the rest151

Succession planning best practices

Best practices to consider (Continued) Include “key and mission-critical jobs”, not just

executive jobs Start low in the organization and early (or the good

upcoming leaders might not be around to fully develop)

Innovators may be as important as leaders Good plans identify “non-obvious” candidates (in

other SBU’s, diversity and international jobs) Allow a “take a chance” person Consider external candidates (WellPoint, Booz Allen)

End of succession planning 152

Any more questions?

153

Did I make you think?

These slides can be found at www.drjohnsullivan.com