online webinar series: the future of work is human...
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The Future of Work is Human
Webinar 3:
Retain and Engage Talent Through Reward and Culture
13th September, 2017
Online Webinar Series:
© 2017 Korn Ferry. All rights reserved 2
Our presenters and panellists
Mark Thompson
Head of Reward Consulting,
UK & Ireland
Thomas Gruhle
Country Leader
Steve Newhall
Managing Partner, United Kingdom
Ben Hubbard
Director EMEA, Engagement & Culture CoE
© 2017 Korn Ferry. All rights reserved 33
Housekeeping
• All lines are muted.
• Please submit your questions via
the Q&A panel at any time.
• The session will be recorded.
• Your feedback is important:
Please take our 1-minute
survey which will open in your
browser after this session
Online Webinar Series:The Future of Work is Human
• The Future of Work is Human – July 6th
• How to Assess and Acquire Your Future Workforce – July 19th
• Retain and Engage Talent Through Reward, Engagement and Culture
– September 13th
• Leading the Workforce of the Future – September 28th
© 2017 Korn Ferry. All rights reserved 5
Paint people out at your peril…..
1Technology (product,
customer channels)
2 R&D / Innovation
2 Product / Service
2 Brand
2
Real Estate (including
offices, factories, owned
land)
CEO’s rating of most valuable
assets (in 5 year)
© 2017 Korn Ferry. All rights reserved 6
Paint people out at your peril…..
1Technology (product,
customer channels)
2 R&D / Innovation
2 Product / Service
2 Brand
2
Real Estate (including
offices, factories, owned
land)
CEO’s rating of most valuable
assets (in 5 year)
For every dollar invested in human
capital, $11.39 is added to GDP
Humans: $1,215 trillion
vs.
Technology: $512 trillion:
But….
© 2017 Korn Ferry. All rights reserved 7
Part 1: Engaging Employees, Now and in the Future
Ben Hubbard
© 2017 Korn Ferry. All rights reserved 8
“Prediction is very difficult, especially about the future.”
Mark Twain
© 2017 Korn Ferry. All rights reserved 9
Organisations are being forced to evolve faster than everFortune 500 Firms 1955 V. 2016
Only 12% of Fortune 500 companies in 1955
were still on the list 61 years later in 2016
Fifty years ago, the life expectancy of a firm in
the Fortune 500 was 75 years. Today, it's less than
15 years
© 2017 Korn Ferry. All rights reserved 10
World’s Most Admired Companies have changed markedlyThe most highly regarded companies for innovation
Rank 2006
1 Apple
2 Procter & Gamble
3 Walt Disney
4 Tesco
5 Walgreen
6 FedEx
7 Best Buy
8 Texas Instruments
Rank 2016
1 Apple
2 Amazon.com
3 Google
4 Nike
5 Netflix
6 Facebook
7 Walt Disney
8 Starbucks
Source: FORTUNE / Korn Ferry World’s Most Admired Companies Study. Top 8 companies ranked by ‘Innovativeness’ across industries
© 2017 Korn Ferry. All rights reserved 11
The robots are coming, the robots are coming!
The least
safe jobs
Chance of
automation
Telemarketer 99%
Loan officer 98%
Cashier 97%
Paralegal and legal
assistant 94%
Taxi driver 89%
Fast food cook 81%
The safest
jobs
Chance of
automation
Mental health and
substance abuse
social worker
0.3%
Occupational
therapist 0.35%
Dietitian and
nutritionist 0.39%
Physician and
surgeon 0.42%
Clergy 0.81%
Source: The Future of Employment / Guardian
© 2017 Korn Ferry. All rights reserved 12
Six megatrends are reshaping future societies, economies and the world of work
Globalization 2.0
Environmental
Crisis
Demographic
Change
Individualism
Digitization
Technology
Convergence
Source: Korn Ferry Hay Group Leadership 2030 research
Source: Korn Ferry Hay Group ‘Leadership 2030’ and associated research
© 2017 Korn Ferry. All rights reserved 13
What are the mega trend implications for…?
1 Conceptual and strategic thinking
2Ethics: integrity, sincerity, intellectual
openness
3Loyalty creation – meaning and
identity economics
4Leadership of heterogeneous and
diverse teams
5Real, power-sharing team work inside
and outside of the organization
1 Become technologically savvy
2 Become even more strategic
3Understand human limitations
– what is possible and what is not
4Manage expectations (development,
rewards, strategic clarity)
5 Connect people across organisations
Leaders… HR…
© 2017 Korn Ferry. All rights reserved 14
Fresh approaches to employee engagement are critical to sustain high
organizational performance.
It’s a challenging task. But failure is not an option, because the ability to
attract and retain talent will either be a competitive advantage or a fatal
flaw.
Senior Consultant, Talent Management, Kimberly-Clark
“
”
© 2017 Korn Ferry. All rights reserved 15
Becoming an employer of choice has never been so simple!
‘How to become an Employer of Choice’
70,800,000 results
Source: Bersin
© 2017 Korn Ferry. All rights reserved 16
Shifting candidate priorities when choosing an organization
7%
15%
39%
19%
2%
1%
16%
1%
23%
22%
19%
16%
9%
5%
5%
1%
Company culture
Career progression
Benefits package
Company brand / reputation
Company mission / values
Flexible working
Job stability
Focus on corporate social responsibility
5 years ago Today
Source: The Talent Forecast, Futurestep’s global survey of more than 1,100 hiring professionals, Jan. 18, 2017
What is the main reason candidates are choosing organizations…
No 15 years from now
© 2017 Korn Ferry. All rights reserved 17
Attracting and retaining the best young talent will be challenging
44%
48%
60%
70%
74%
61%
26%
26%
20%
15%
14%
19%
31%
27%
20%
15%
12%
20%
Under 20
20 to 29
30 to 39
40 to 49
50 to 59
Over 60
Percent intending to stay with company... >5 years 3-5 years 0-2 years
AGE
Source: Korn Ferry Hay Group Engagement & Culture normative database
© 2017 Korn Ferry. All rights reserved 18
Employee expectations and needs differ by generation
Engagement Driver Millennials Gen X Baby Boomers Veterans
Respect &
Recognition 1st 2nd
Professional
Development 2nd 1st
Purpose &
Strategy 2nd
Pay &
Benefits 1st 2nd
Performance
Management 1st
Source: Korn Ferry Hay Group Engagement & Culture normative database
© 2017 Korn Ferry. All rights reserved 19
Our smart and flexible ways of working means we can attract highly
talented people who have something else in their life more important
than work.
Having a flexible approach to when, where and how work is done is
part of our commitment to supporting people to be the best they can be
– inside and outside work.
Group Executive, Suncorp Human Resources
“
”
© 2017 Korn Ferry. All rights reserved 20
Companies often don’t live up to early expectations
55
60
65
70
75
80
85
Tenure:< 1 yr
Tenure:1 yr to < 2 yrs
Tenure:2 yrs to < 5 yrs
% e
mplo
yees g
lobally
agre
e
Recommend the company as a good place to work
55
60
65
70
75
80
85
Tenure:< 1 yr
Tenure:1 yr to < 2 yrs
Tenure:2 yrs to < 5 yrs
% e
mplo
yees g
lobally
agre
e
Good opportunities to achieve career goals at company
-11
-13
Source: Korn Ferry Hay Group Engagement & Culture normative database
© 2017 Korn Ferry. All rights reserved 21
To organize the world’s
information and make it
universally accessible and
useful.
To bring inspiration and
innovation to every athlete
in the world.
Our purpose is to help
create lasting solutions to
the injustice of poverty.
Source: Dan Pink, Drives
“Authenticity is everything—
you can’t fake purpose.”
John Replogle, CEO
Purpose led organizations put people first and outperform the market
Example mission statements
© 2017 Korn Ferry. All rights reserved 22
Engagement Survey results at large global bank
Clear evidence that pay is a necessary but not sufficient determinant of employee engagement
Work Environment Factor Rank impact on Employee Engagement
Career Development 1st
Collaboration 2nd
Enablement 3rd
Respect & Recognition 4th
Client Focus 5th
Reputation 6th
Confidence in Senior Leaders 7th
Trust & Empowerment 8th
Strategy & Direction 9th
Senior Leader Behavior 10th
Tools & Support 11th
Corporate Responsibility 12th
Performance Management 13
Ethics and Control 14th
Direct Manager 15th
Pay & Benefits 16th
Brand Perception 17th
Work Life Balance 18th
© 2017 Korn Ferry. All rights reserved 23
There’s no such thing as one-size-fits-all engagement. And because
we’ll all go through our own personal transition, we’ll need different
kinds of support from our leaders and the business throughout the
journey.
Global specialist, organization and culture, Telenor
“
”
© 2017 Korn Ferry. All rights reserved 25
The future of work – is reward fit for purpose?
▪ More agile working,
▪ Team-based organization forms
▪ Flexible work-force
▪ The development of career/experience pathways that typically involve cross lateral as well as hierarchical career progression
There is an acceleratingtrend towards:
▪ They are job-based and work on the premise that the job is fixed and relatively timeless
▪ They are hierarchical – there’s little incentive to develop a portfolio of skills when the quickest way to increase pay is a promotion to the boss’s job
Most reward structures are not aligned to these approaches to work and career design
© 2017 Korn Ferry. All rights reserved 26
There is an old joke in
consulting about the
client who rings up and
says he urgently needs
to develop a new reward
strategy to show his
CEO.
The Consultant replies
that he will e-mail one
over within the hour.
Duncan Brown
© 2017 Korn Ferry. All rights reserved 27
Reward strategy review at a retail bank – the case for change
• The current reward system is predicated on the idea that it is a ‘good
thing’ to retain people over the long-term. This isn’t necessarily in
the best interests of Bank or its people going forward.
• Career progression through functional siloes is the quickest and
easiest way for individuals to achieve higher pay and recognition.
More cross-functional mobility and the development of ‘portfolio’
careers are likely to be more important in the future work environment.
• Performance measures tend to encourage risk aversion. Clearly
taking calculated risks is the core competence of the Bank, but
evidence for this is not an absence of failure. The current approach
may reward the faint-hearted.
© 2017 Korn Ferry. All rights reserved 28
Reinventing reward at a retail bank
1. Encourage mobility but break the entitlement culture of more money for every move (cash awards for moving encourage bidding wars for internal talent and if we have to bribe people to move around the business then we have failed in communicating the message that building a portfolio career is the best way to develop a career whether within the Bank or outside it.)
2. Focus on skills that are needed to drive the Bank’s success. Skills are much more important than job accountabilities as a driver of reward because jobs are constantly changing whilst skills are transferable.
3. Break the link with organisation hierarchy – the current system acts as a block to mobility because the best prizes are gained through vertical progression ‘through the ranks.’ Mobility in all its forms - horizontal and lateral and both up and down needs to be seen as a critical contributor of career and personal development.
Objectives of the new reward strategy 1- 3
© 2017 Korn Ferry. All rights reserved 29
Reinventing reward at a retail bank - 2
4. Redefine loyalty – away from tenure and towards ‘brand advocacy’. Whether people have applied for a job at the Bank and been rejected, currently work at the Bank on a permanent or contract basis, have left to pursue their career elsewhere or are pensioners, they are all in the Bank club and there should be benefits for being so. Their advocacy will provide a significant boost to the reputation of the Bank brand.
5. Stop locking people in with reward systems. If the highest-paid people are also those who have been in post for the longest, they are likely to be blocking career paths for others and paid more than equivalent roles in other organisations.
6. Measure performance based on achievement. Great performance will include the bravery to make mistakes and this should be recognised.
Objectives of the new reward strategy 4- 6
© 2017 Korn Ferry. All rights reserved 30
Pay at the bottom
KFHG Reference Level Benelux Retail Bank Consumer Products Retailer Multinational Bank
6
17 1
1 18 2
29 3
2
2
10 4 3
11 5
3
4
12 6
3
13 7
414
15
Pay structures at the lower levels of organisations are in flux, changing in response to
automation, higher minimum wages and changes to organisation and job design and the
strive for higher productivity.
European Pay grading structures examples: 2017
© 2017 Korn Ferry. All rights reserved 31
Pay at the bottom
KFHG Reference Level Benelux Retail Bank Consumer Products Retailer Multinational Bank
6
17 1
1 18 2
29 3
2
2
10 4 3
11 5
3
4
12 6
3
13 7
414
15
This is a
traditional job-
based reward
structure. Best
if you want tight
control of pay
linked to the
market.
European Pay grading structures examples: 2017
Pay structures at the lower levels of organisations are in flux, changing in response to
automation, higher minimum wages and changes to organisation and job design and the
strive for higher productivity.
© 2017 Korn Ferry. All rights reserved 32
Impact of pay structures at the bottom
KFHG Reference Level Benelux Retail Bank Consumer Products Retailer Multinational Bank
6
17 1
1 18 2
29 3
2
2
10 4 3
11 5
3
4
12 6
3
13 7
414
15
This is a
flexible
structure which
can link pay to
the individual,
but it’s not so
good for
controlling the
pay bill
European Pay grading structures examples: 2017
Pay structures at the lower levels of organisations are in flux, changing in response to
automation, higher minimum wages and changes to organisation and job design and the
strive for higher productivity.
© 2017 Korn Ferry. All rights reserved 33
Keeping talent – predictors of employee retentionAs we know, it’s not always about pay
Employees planning to
stay for > two years
Employees planning to
leave within two years Gap
Confidence in ability to achieve career objectives 64% 31% 33%
Trust and confidence in company senior management 60% 35% 25%
Opportunities for learning and development 71% 45% 25%
Benefit that meet employee needs 68% 45% 23%
Company demonstrates care and concern for employees 62% 39% 23%
Company is effectively managed and run well 73% 51% 23%
Adequately authority to do job 73% 51% 23%
Employees paid fairly for the work they do 53% 31% 22%
Supervisory coaching for development 67% 45% 22%
Support for employee creativity and innovation 70% 48% 22%
Cross-work unit collaboration and support 63% 41% 22%
Direction and goals are the right ones for the company 73% 51% 22%
To work, reward strategy has to a fully integrated part of talent management
Source: Hay Group Employee Opinion Norms (2017)
© 2017 Korn Ferry. All rights reserved 34
Part 3: Future measurement
of reward, engagement
effectiveness and ROI
Thomas Gruhle
© 2017 Korn Ferry. All rights reserved 35
4.88
0.25
2.03
(4.05)
(0.85) (1.04)
People drive performance: multi-client study illustrates engagement and enablement are leading indicators
Return on Equity
Average % change
Year 1-Year 2
Return on Assets
Average % change
Year 1-Year 2
Return on Investment
Average % change
Year 1-Year 2
Source: Korn Ferry Hay Group multi-client study comprising over 400,000 employees.
Companies that did
increase engagement
and enablement in
proceeding 18
months
Companies that did
not increase
engagement and
enablement in
proceeding 18
months
© 2017 Korn Ferry. All rights reserved 36
Companies are using new techniques to put the voice of their people at the heart of strategy execution
Focus Expectations
Speed Rapid and real-time feedback
Power to the User Self-service tools to trigger and explore feedback
Mobile Options Digital and mobile feedback channels
Beyond the Annual Survey Continuous listening and feedback
Unsolicited Feedback Monitoring sentiment via internal and external social media
Connection Linking multiple data sources through advanced analytics
Impact Linking engagement, culture and organisation health to performance outcomes
The Engagement Journey Understanding engagement across the talent lifecycle
Text Analytics Mining qualitative feedback and data for hidden meaning
© 2017 Korn Ferry. All rights reserved 37
Establishing insights across the employee life cycle
Attract
On-board
DevelopRetain
ExitIN
TE
RN
AL
RE
AL
ITY
EX
TE
RN
AL
PE
RC
EP
TIO
N
POTENTIAL GAP = RISK
Engagement &
Mobility Surveys
New Joiner
Surveys
Voluntary
Leaver Surveys
© 2017 Korn Ferry. All rights reserved 38
PrescriptiveHow to make it
happen?
DiagnosticWhy did it
happened?
DescriptiveWhat happened?
PredictiveWhat will happen?
Advanced talent analytics for smarter decision making
HINDSIGHT FORESIGHT INSIGHT
© 2017 Korn Ferry. All rights reserved 39
Measuring the employee journey with interconnected surveys
☺Positive onboarding
experience
Neutral onboarding
experience
Negative onboarding
experience:
85%
68%
57%
7%
11%
18%
Onboarding survey category Subsequent Engagement Score % Voluntary Turnover in 3 Years
© 2017 Korn Ferry. All rights reserved 40
Aligning actual pay with perceived pay
LOWHIGH
Market Pay
53% 47%
LOWHIGH
Perceived Pay
50% 50%
LO
W
LOWHIGH
27%23%
Market Pay
Perc
eiv
ed
Pay
30% 20%
Risk?All good?
Immediate riskNeed for
communication
Potential
flight risk
© 2017 Korn Ferry. All rights reserved 41
Key Takeaways
1. Link multiple data sources through advanced analytics and get workforce segmentation right
2. Understand engagement and enablement across the talent lifecycle
3. Use engagement metrics in performance criteria
4. Be transparent: Explain your (reward) policies and get on the front foot to explain the underlying trends at work
5. Ensure that financial rewards are fair and competitive without overstating the importance of rewards as a motivator
6. Measure total rewards including structure and composition of the organization
7. Include employees and managers in reward design and launch
8. Quantify the actual cost of voluntary turnover and corresponding replacements
9. Communicate the value of what you have
Online Webinar Series:The Future of Work is Human
• The Future of Work is Human – July 6th
• How to Assess and Acquire Your Future Workforce – July 19th
• Retain and Engage Talent Through Reward, Engagement and Culture
– September 13th
• Leading the Workforce of the Future – September 28th
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