Leading in a New World of Work: Human Capital Trends...

Leading in a New World of Work: Human Capital Trends and the Implications for HR

Keather SnyderVice PresidentWorldwide Sales & Client Engagement

Washington, D.C.October 9, 2015

2 Copyright © 2015 Deloitte Consulting LLP. All rights reserved.

Introductions‏

Deloitte Human Capital Trends (Ten) 2015: Leading in the New World of Work‏

The Implications for HR‏

Activity/Q&A‏

Agenda

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2015 Global Human Capital Trends

Leading in the new world of work

March 2015

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3,300+Business and HR leaders

106countries

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



2015 Global Human Capital Trends 2015

LeadershipWhy a perennial issue?

Learning and development Into the spotlight

Culture and engagement The naked organization

Performance managementThe secret ingredient

Workforce on demand Are you ready?

Simplification of work The coming revolution

Reinventing HR An extreme makeover

HR and people analyticsStuck 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 BusinessPercent 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%



Global Capability GapsPercent Rating Trend Important



CULTURE AND ENGAGEMENT The naked organization

talent issue

Create meaningful work, deep engagement, and job fit

#1globalsay 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




Barriersbetween

work and life dissolve

Talentin high

demand

Millennialsmake up 50% of

workforce

Globaltransparency

in job market



Engagement still startlingly low

Only13%‏ of employees worldwide are highly engaged‏ -Gallup

Copyright © 2015 Deloitte Development LLC. All rights reserved.14 Global Human Capital Trends 2015

Four generations in the workplace – with Millennials making up 50% of the USA workforce in 2020

Traditionalist 1901 – 1943

Also referred to as the Silent

Generation5% of workforceKey descriptors:

Disciplined, Dedicated, Willing

to Sacrifice

Baby Boomer1944 – 1964

Makes up 38% of current workforce

Key descriptors:

Driven, Optimistic, Involved, Idealistic

Generation X1965 – 1981

Makes up 32% of current workforce

Key descriptors:

Informal, Pragmatic,

Entrepreneurial

Millennial1982 – 2003

Gen Y25% of

workforceKey

descriptors: Achievement oriented, Civic

minded, Confident,

Team focused

Digital Native

Our next generation - Born 1996 – Present Also referred to as “Generation Z” These are "native speakers" of the digital language of computers,

videos, video games, social media and other sites on the internet The first generation to grow up completely in a digital world


Millennials…..



71%say business should do more to improve living standards

20%trust business leaders to make ethical, honest decisions

78%say innovation influences employer choice

61%think management is the biggest barrier to innovation

75%say theirorganization could do more to create future leaders

The Millennial mindset

The Millennial Survey 2014 by Deloitte 7,800 respondents in 28 countries


“Our candidates today are not looking for a career…

They’re looking for an Experience.”

Careers have changed and so have people



Furthermore….…

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



“Culture is everything….

<5% of candidates value

compensation over culture

95% of candidates believe culture is more important

than compensation



Culture is a consistent theme on CXO agendas

“Over time a dysfunctional corporate culture is likely to affect everything from your company’s performance to the way your brand is perceived. As Starbucks CEO Howard Schultz recently said, ‘The value of your company is driven by your company’s values.’”

- FORBES

"Culture drives innovation and whatever else you are trying to accomplish within a company—innovation, execution, whatever it's going to be. And that then drives results…It’s the people, the leadership, and the ideas that are ultimately driving the numbers and the results.”

- HARVARD BUSINESS REVIEW

“In the end, people create the culture of a company. And corporate culture ultimately separates the winners from the pack.”

- BLOOMBERG BUSINESSWEEK


Companies with “soul” had a

1026%return from 1996 through 2006,

8x higherthan S&P 400 firms

Companies with “soul” experience:

• Much 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



Glassdoor ratings of employer recommendations — 200,000+ respondentsEngagement appears to be a global challenge

Average3.1

What are these

companies doing??



The Simply Irresistible Organization®

What we have learned: an integrated approach is key

Meaningfulwork

Greatmanagement

Fantasticenvironment

Growthopportunity

Trust in leadership

Autonomy Agile goal setting (i.e. OKR)

Flexible, humane work environment

Facilitated talent mobility

Mission and purpose

Selection to fit Coaching and feedback

Recognition rich culture

Career growth in many paths

Investment in people, trust

Small teams Leadership development

Open flexible work spaces

Self and formaldevelopment

Transparencyand communication

Time for slack Modernizedperformance management

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



Analysts place a 35% spread on stock price based on how they view leadershipLeadership can help create shareholder value*

*Source: Talent Edge 2020, Deloitte Consulting LLP

+15.7%Equity premium on organizations

perceived to have effective

leadership

-19.8%Equity discount

on organizations perceived to

have ineffective leadership

$2.4 billionPremium as 15.7% of Company Market capitalization

$3.0 billionDiscount as 19.8% of Company Market capitalization

Consider their leadership development programs very effective, and…

4.3% 2%And yet, some companies aren’t getting the investment right…

Believe that their succession management is where it needs to be



Millennials know where they need to improve to become the desired 21st century leader

Millennials agree thatwhen they left college,they did not offer the fullrange of skills, personal qualities, and experiencefor which today’sbusinesses are looking.

50%of working millennial respondents arealready in leadership positions—creating asense of urgency to prepare them

44%of working millennial respondentshave only 3 – 5 years of workexperience, yet

have 4 ormore directreports

Millennial leadership is no longer a theoretical issue

41%

Sources: Deloitte 2015 Millennial Survey – Mind the Gaps; Deloitte Millennial Leadership Study


Bersin Leadership Development Maturity Model

Inconsistent Management TrainingContent Available • No Development Process • Benefit to Employees

Level 1

Structured Leadership TrainingCore Competencies • Well-Defined Curriculum • Developing Individuals

Level 2

Focused Leadership DevelopmentCulture-Setting • Future-Focused • Developing Organization

Level 3

Strategic Leadership DevelopmentChampioned by Executives • Talent Management Integration

Level 4

Ber

sin

by D

eloi

tte

25%

38%

28%

10%



Leadership development marketplace: Broken?This is a hand-stitched approach

Vendor solutions only play

here



10%

19%

26%

36%

First-level

Mid-level

Senior-level

Executives

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

Percent of positions with successors identified (large organizations)

Succession management very weakCan it work?



New models for talent:

• People change jobs: average tenure at work is <4 years

• Part time and contingent: “Uberization of Work:

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

• Skilled workers in high demand:

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

• Without a facilitated talent mobility strategy good people will likely leave

• Alumni networks, external mentoring, job rotation inside and outside the company are all important today

No longer for life……

See: The Alliance: Managing Talent in the Networked Age , Reid Hoffman, July 2014



A method for bringing the talent system togetherThe Talent Mobility Formula

Desired competencies (knowledge,

behavior, skills)

Open positions & opportunities

Individualneeds/desires

Vision

Strategic initiatives

Desired business

outcomes

Values

Mission

Organization needs

Mobility

Strengths

Development needs

Career aspirations

Annual goals

Successionmanagement

Careerdevelopment

IndividualDevelopment

Plan (IDP)

Strategic competencies

Workforceplanning

Performancemanagement

Developmentplanning



Only 11% of companies surveyed have a clear strategy for career developmentTalent mobility takes a complete commitment

• Identify career goals

• Maintain profiles• Demonstrate values• Socialize interests• Create internal

network• Share specializations

Employee• Define job profiles• Provide coaching• Assess potential• Identify development

opportunities• Provide candid feedback• Share talent openly

Manager• Provide tools &

resources• Develop career models• Facilitate

process• Offer career coaching• Offer Career

development training• Integrate with talent

mgmt

HR• Develop Infrastructure

– process, technology, people

• Create culture of mobility

• Communicate expectations

• Create transparent marketplace

Company



LEARNING AND DEVELOPMENT

Into the spotlight

Need toreinvent 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



Content explosion!

Blogs

Ratings

Mentoring

Wiki’s

Video

Podcasts

Discussion Boards

Social Networking

Tagging

Micro-blogs

Virtual Worlds

Stretch Assignments

Communities of Practice

Collaboration

Search

Simulations

Surveys

WhitepapersCase

StudiesArticles

Visual Aids

Presentations

Books

Corp Websites

Manuals

Performance Support

Product Demonstrations

Instructions

Observations

Journaling

Standard Operating

Procedures Newsletters

Corporate Communications

Marketing Collateral

Business Process

Documentation

Programs

Role Playing

Classroom ConferenceseLearning

Coaching

Webinars

Lunch ‘n Learns

Chalk TalksOnboarding

Debates

Consulting

LecturesExperiments

LabsTeaching

Courses

Workshops

Interviews

Feedback

MistakesSuccesses

Job Rotations

Peers

Project Post-Mortems

Meetings

Role ModelsJob

Shadows

After Action Reviews

Customer Data

Goals

Play Conversations

DialogueReports Memos

Appraisals

Business Performance Data

CRM Records

Proposals



From content-centric to continuous and experience-centricEvolution of corporate L&D

We are hereE-learning& blended

Talentmanagement

Experientiallearning

Continuousembedded

2001 2005 20152010

E-learningget materials online

Social, collaborativecorporate university

Blendedprograms

Content managementtaxonomy

Learning pathsrole-based

Self-authoredextreme blended

Gaming, embedded,On-demand

Rich cataloguniversity

2020

Learning everywhere

all the time

IntelligentLearning

Instructional designKirkpatrick

Careercurricula

Contentcommunity

70-20-10

Job relevantclassroom

LMS asE-learning platform

LMS as talentplatform

LMS as data(where is the LMS?)

LMS as experienceplatform



What do most people want? It’s not training

37%

52%

59%

65%

74%

78%

81%

87%

0% 20% 40% 60% 80% 100%

Company training

Self-directed courses

Curated external content

External news and blogs

Professional networks

Meet and talk with others

Web search for resources

Share knowledge with my team

Our survey indicates training is now the least desirable way people want to learn

Rated 7th

(% rated “essential” or “important”)



Learner expectations have shifted



Need for learning culture

Great corporate university

Strong CLO andalignment

Excellent L&D skills

Use of rich mediaand social tools

Excellent training and e-learning

Innovative program design

Have we created an organization which truly has a culture to learn?

Does leadership reinforce the need

to learn?

Are decision-making processes

clear?

Do people shareinformation

openly?

Do people feelempowered to

point out errors?

Do we listento customers

openly?

Do we takethe time to

reflect?

Do peoplemove around

and take risks?

Is expertiserewarded and

valued?



Practice Category Potential impact onbusiness outcomes

1 Leaders are open to “bad news.” Empowering employees Very high

2 Asking questions is encouraged. Empowering employees Very high

3 Decision-making processes are clearly defined throughout the company. Empowering employees Very high

4 Employees are frequently projects beyond their current knowledge or skills level to stretch them. Formalizing learning Very high

5 Employees in my organization have influence over which job tasks are assigned to them. Empowering employees Very high

6 The organization values and rewards employees who learn new knowledge and skills.

Demonstrating learning’s value High

7 The organization values mistakes and failures as learning opportunities, and provides opportunities for reflection. Encouraging reflection High

8 The organization believes that learning new knowledge and skills is a valuable use of time.


9 Employees believe the learning and developmental opportunities offered to be of high value.


10 Employees in my organization take active responsibility for their own personal development.


High-Impact Learning Culture®



Learning culture is a business strategyMost organizations with a strong learning culture significantly outperform their peers…

Innovation

92%more likely to devise

novel prods & processes

Productivity

52%greater

employee productivity

CustomerSatisfaction

53%better

response to customer

needs

Costs

50%greater ability to manage

costs

Time to Market

56%more likely to be first to

market

Profitability

17%more likely to

be market share leader

From: High-Impact Learning Culture: The 40 Best Practices for Creating an Empowered Enterprise, Bersin, June 2010


Copyright © 2015 Deloitte Consulting LLP. All rights reserved41

Understanding Today and Planning a Path Forward

High performing learning organizations* have a measurable and reportable impact on business

performance

Today

What you do & results

Budget and Vendors

Operating Model

Technology

11

*Bersin by Deloitte

Copyright © 2015 Deloitte Consulting LLP. All rights reserved42

Levels of the HILO Maturity Model

The four levels of high-impact learning organizations are characterized by many different attributes.

Level 1

• Limited L&D professionals with no dedicated leadership

• Low competence at L&D capabilities

• Local alignment, no enterprise strategy, and no executive awareness

• Common examples of learning include job shadowing and documentation

• Pressures to mature include desire for training effectiveness and process efficiency

• Learning technologies are used to track and administer content

Level 2

• Training organization with dedicated L&D professionals and dedicated leadership at the department level

• Growing competence at L&D capabilities

• Lack of alignment and inconsistent enterprise strategy and limited executive awareness

• Common examples of learning include formal courses

• Pressures to mature include desire for alignment and scalability

• Enterprise learning technologies

Level 3

• L&D organization with dedicated L&D executive(s)

• High competence at L&D capabilities with a focus on talent development

• Increasing alignment with enterprise strategy and identified executive sponsor(s)

• Common examples of learning include curricula, development plans, and OTJ support

• Pressures to mature include desire for agility in addressing business needs

• Learning technologies used for talent development

Level 4

• Agile L&D organization with dedicated L&D executive(s)

• High competence at L&D capabilities with a focus on talent and succession planning

• Strong alignment with a clear enterprise strategy owned and driven by executives

• Common examples of learning include customized learning plans and career paths

• Incorporation of social networking and user-generated content through enterprise technologies


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 often under the gun by business leadership



Most HR professionals surveyed agree there is a problem

30%strongly

believe they have a

reputation for sound

business decisions

28%feel highly confident

that they are efficient

22%feel confident that they are adapting to employee needs well

20%feel that they are

adequately planning HR for the company’s future needs

Source: Bersin by Deloitte High Impact HR Research 2014



The High Impact HR organizationWell beyond the service delivery model

PersonneldepartmentAdministrationPayrollRegulationBack office function

Control

Strategic HRRecruiting, L&D, organization designTotal rewardsService center, COEHR business partner

Serve StaffAutomate

Integrated talentmanagementManagement, succession,leadership, coaching,integrated processesTalent management

Enable Decisionsand Management

Business-integrated HRDifferentiate & segment talentGlobally enhance talent practicesPredict and analyze dataIntegrated with the business

Drive the BusinessPlan for the Future



WORKFORCE ON DEMAND

Are you ready?

Need to apply engagement strategies to all workers

see an increase in contingent hiring in the next 3 to 5 years

Organizations are tapping networks of specialists

51%

41% expect to increase or significantly increase the use of contingent labor in the coming

year

51% expect this increase over the next 3-5 years.



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?

Bringing HR and business data together

Recruiting andworkforceplanning

Comp andbenefits

Performancesuccessionengagement

Learning& leadership

HRMSemployee

data

Engagement& assessment

+Sales revenueproductivity

Customerretentionproduct

mix

Accidentserrorsfraud

Qualitydowntime

losses

Groundbreaking new insights &tools to help managers to make better decisions

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

+



What our research discoveredBersin by Deloitte Talent Analytics Maturity Model

Operational reportingReactive reporting of operational & compliance measures •

Focus on data accuracy, consistency & timeliness

Level 1

Advanced reportingProactive reporting for decision-making • Analysis of trends

& benchmarks • Customizable, self-service dashboards

Level 2

Advanced analyticsStatistical analysis to help solve business problems • Identification of

issues & actionable solutions • Centralized staffing & integrated data

Level 3

Predictive analyticsDevelopment of predictive models • Scenario planning • Integration

with business & workforce planning • Data governance model

Level 4

Ber

sin

by D

eloi

tte

56%

30%

10%

4%



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

…and these organizations, are…

Value of analytics is high

2Xas likely to

believe they are

excellent at selecting the right

candidates

2Xas likely to

believe they are

delivering a strong

leadership pipeline

3Xas likely to

believe they are

efficiently operating

HR

Generating

30% higher stock returns than

the S&P 500 over the last

three years



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.



Rating and Ranking

The Bell curve often alienates high‏performers and lets mid-level performers hide

It does not reflect the philosophy of‏“managing to strengths” or the power of “hiring the best”

It can get in the way of teamwork and‏cooperation

In most companies the rating process‏reduces performance and alienates people from managers

The myth of the Bell curve



Time for a shift in PM principles

Investments in development planning can 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

Flexible, agile, simple

Ongoing, continuous

Assumption based

Annual, one-time

Data-driven

Centralized, deferred

Local, real-time

Appraisal focused

Developmentfocused

Remediation Strengths

Future Outlook

Burdensome, fixed



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”



The overwhelmed employee


MACHINES AS TALENT

Collaboration, not competition

Stay vigilant for opportunities to apply technology

believe they have a detailed understanding of how cognitive computing will impact their workforce

say that cognitive technology at work is important or very important

Nearly 60% Only 5%



PEOPLE DATA EVERYWHERE

Bring the outside in

Need to leverage inside and outside data sources

Vast amount of valuable social and other outside data

leverage social data for recruiting and engagement

39%



1Engagement and culture

are #1 issues today

2Companies

must should

invest in global

leadership

3Learning

has exploded

as a critical focus area

5Analytics is

here but progress is

still generally

slow

6The HR

function is at a

crossroads

4Redesign of performance management

will likely accelerate

Key takeaways




www.deloitte.com/hctrends2015

Global Human Capital Trends 2015Leading in the new world of work

?Want to read more‏



Be BOLD



B O L D

Buildan irresistible organization

Ownthe leadership

agenda

Leverage learning

everywhere

Demanddata



Activity: Consider the Trends – which trend are you most impacted by today? What are you doing about it?

2015

LeadershipWhy a perennial issue?

Learning and development Into the spotlight

Culture and engagement The naked organization

Performance managementThe secret ingredient

Workforce on demand Are you ready?

Simplification of work The coming revolution

Reinventing HR An extreme makeover

HR and people analyticsStuck in neutral

People data everywhere Bringing the outside in

Machines as talent Collaboration, not competition


“The credit belongs to those who are

actually in the arena, who strive

valiantly; who know the great

enthusiasums, the great devotions, and

spend themselves in a worthy cause;

who at best know the triumph of high

achievement; and who, at worst, if they

fail, fail while daring greatly, so that

their place shall never be with those

cold and timid souls who know neither

victory nor defeat.”


THANK YOU!!


Leading in a New World of Work: Human Capital Trends...

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