health wealth career total rewards forum · talent shortage – “there’s a big gap between all...

H E A L T H W E A L T H C A R E E R

TO TAL RE WAR D S F O R U M

O C T O B E R 2 0 1 6Melbourne | 19 October 2016

© MERCER 2016 1

W E L C O M E

R A P H A E L E N I C A U DP A R T N E R

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T H E B I G P I C T U R E

R A P H A E L E N I C A U DP A R T N E R

© MERCER 2016 3#MercerForum

1 . S L O W G R O W T H

Image credit: Luc B https://www.flickr.com/photos/fatboyke/2668411239/


1 . S L O W G R O W T HI M F S E P T 1 6 – W O R L D C H A N G E I N G D P ( % )

2.4

3.2

2.6

22.2

6.9

2.93.1

1.6 1.7 1.8

6.6

2.7

3.4

2.2

1.51.1

6.2

0

1

2

3

4

5

6

7

8

Australia World US Euro Area UK China

201520162017


2 . E M E R G I N G M A R K E T G R O W T H M O D E L B R O K E N

Image credit: Kees Torn https://commons.wikimedia.org/wiki/File%3ACSCL_Globe_(ship%2C_2014)_001.jpg


3 . G L O B A L D E B T L E V E L S A R E V E R Y H I G H


4 . I N T E R E S T R A T E S W I L L R E M A I N L O W


5 . P R O D U C T I V I T Y G R O W T HW H Y I S I N N O V A T I O N E V E R Y W H E R E B U T I N T H E D A T A ?


U N K N O W N B R E X I T


M O R E U N K N O W N


W H A T D O E S T H I S M E A N F O R R E M U N E R A T I O N ?


K N O W Y O U R M A R K E T H U B


K N O W Y O U R M A R K E T H U B – F O R E C A S T

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QUESTIONS

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W H Y H R N E E D S T O C H A N G E

L I L Y K A NP R I N C I P A L


S E S S I O N A G E N D A

Workforce TrendsDriving Need for

HR Change

01Why Is It Importantfor HR to Change?

02What is the Future of

HR?

03


E M E R G I N G W O R K F O R C E T R E N D S A R E D R I V I N G T H EN E E D F O R H R T O C H A N G E

D I G I T A LW O R K F O R C E &T E C H N O L O G Y

E V O L V I N G R O L EO F M A N A G E R

C H A N G I N GS K I L L S

L A N D S C A P E

C O N S U M E R I S M& E R A O F T H E

I N D I V I D U A L

R I S E O F T H EF R E E A G E N T

B R A N D I N G &E M P L O Y E E

E X P E R I E N C E

T A L E N TS C A R C I T Y

U S I N G D A T AA N A L Y T I C S


1 . T E C H N O L O G Y & D I G I T A L W O R K F O R C E

GOINGDIGITAL

Technology is shaping theHR agenda

The increasing number of‘digital natives’ in the

workforce


Anecdotes Reactivechecks

Ongoingreports

Benchmarks Correlations Simulations& forecasting

Predictivemodeling

Leveraging thepredictive power

of data todevelop

evidence basedstrategies

2 . U S I N G W O R K F O R C E D A T A & A N A LY T I C S

M O R E P O W E R F U LL E S S P O W E R F U L

You cannot justrely on anecdotesand benchmarks


3 . B R A N D I N G A N D E M P L O Y E E E X P E R I E N C E

Your reputa t ion i s be ing shaped and re in fo rced pub l ic ly.


4 . E M P L O Y E E C O N S U M E R I S M & T H E E R A O F T H EI N D I V I D U A L

The employment deal is changing =A new work equation


5 . T H E E V O L V I N G R O L E O F M A N A G E R S

EmployeeValue

Proposition(EVP)

IndividualValue

Proposition(IVP)

FOCUS ON THEINDIVIDUAL


6 . R I S E O F T H E “ F R E E A G E N T ”

Talent Ecosystem – theNew Normal


S K I L L SI N S TA B I L I T Y W I L LB E H I G H F O R A L LI N D U S T R I E S

3 5 % O F C O R ES K I L L S W I L LC H A N G E B Y 2 0 2 0

C U R R E N T S TA B L EJ O B S W I L L R E Q U I R ED I F F E R E N T S K I L LS E T S I N J U S T A F E WY E A R S

C R I T I C A L N E E D T OA N T I C I P A T E &P R E P A R E F O RF U T U R E S K I L L SR E Q U I R E M E N T

7 . C H A N G I N G T A L E N T & S K I L L S L A N D S C A P E


8 . T A L E N T S C A R C I T Y

Ranked as the NumberONE workforce trend inAustralia(2016 Global Talent Trends Study)

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W H Y I S I T I M P O R TAN T F O RH R T O C H AN G E ?


W H A T C E O S A R E S AY I N G A B O U T H R C H A L L E N G E S

Ensuring right access to keyskills1 of the Top 3areas of CEOfocus(PwC 19th Annual Global CEO)

72% Say the next 3years will bemore critical fortheir industrythan the last 50years

Talentdevelopment &management

- one of the top3 strategic

priorities overthe next 3

years (KPMG’s 2016 Global CEO Outlook)

Top 3

Humancapitalranked asthe #1challengefor the pastfew years

#1

(Conference Board ’s Survey of GlobalCEO Challenges)

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W H AT I S T H E F U T U R E O FH R ?


T H E N E W H R O P E R A T I N G M O D E L

U n d e r s t a n d a n d c h a m p i o n t h e r o l e o f t h e m a n a g e r i nd r i v i n g b u s i n e s s r e s u l t s

I n f u s e t e c h n o l o g y, d a t a a n d a n a l y t i c s i n t o a l l t h a tH R d o e s

E m b r a c e t h e n e w w o r k e q u a t i o n ( n e w d i g i t a lw o r k f o r c e , f l e x i b l e w o r k p l a c e , e m p l o y e e s a sc o n s u m e r s )

B r o a d e n t h e t r a d i t i o n a l v i e w s o f t h e l a b o u r m a r k e tt o e m b r a c e t h e w h o l e t a l e n t e c o s y s t e m


W H A T E L S E H R M U S T D O T O M E E T C H A L L E N G E S ?

I N N O VAT I V ET E C H N O L O G YL E A D E R S

TA L E N TS T R AT E G I S T

L E A N E R H R


N E W C E N T R E S O F E X P E R T I S E

W O R K F O R C ES T R A T E G Y

W O R K F O R C EI N N O V A T I O N

S T R A T E G Y& E X E C U T I O N

C O N T I N G E N TW O R K E R

S E L E C T I O N &O P T I M I S A T I O N

W O R K F O R C EA N A L Y T I C S &

P L A N N I N G

M E R G E R &A C Q U I S I T I O NM A N A G E M E N T

W O R K F O R C E A N DR E W A R D S

O P T I M I S A T I O N


C O N C L U D I N G R E M A R K

“I dream of companies that actual ly deservethe passion & creat ivi ty of the folks who workthere, and actual ly e l ic i t the very best thatpeople have to give”

G a ry H a m e l

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QUESTIONS

© MERCER 2016 36

I N N O VAT I O N I N R E M U N E R AT I O NA N A LY T I C S :A F I V E Y E A R V I E W

S I M O N K E N N E D YP R I N C I P A L


More Corporate Social Responsibility – “Companies that once only operated for profit will place new emphasis on theimportance of its people, as well as the impact the company’s existence has on the planet. The new bottom line willincorporate profit, people and planet,”

More Social Technology – “Vlogging, Twitter, intranet chat rooms, Skyping — even today, there’s a vast array of onlinecommunication tools, with more to come.”

Mobile Workplaces – “Increasingly powerful mobile phones are replacing laptops as the main work device.”

More Work/Life Flexibility – “For younger generations, work is a significant part of their life, but they don’tcompartmentalize it like older generations tend to. It isn’t about work-life ‘balance;’ it’s about work/life integration.”

Serious Play as a Training Tool – “‘Sims’ (Simulated Games) is the new buzz word in training: online Sims allowemployees to learn new jobs through low-risk direct practice.”

A Different Kind of Mentoring – “One-on-one mentoring is still a powerful way to develop employees, but companies willalso use reverse-, micro- and group-mentoring.”

The Democratization of Information – “Digital record keeping makes company information accessible to all.”

An Increase in Personal Branding – “Social technologies track personal ratings, referrals and reputations.”

Talent Shortage – “There’s a big gap between all the Boomers retiring and the number of Generation X’ers available to filltheir shoes.”

T H E F U T U R E O F H R : P A S T P R E D I C T I O N S


T H E N E W H R O P E R A T I N G M O D E L

U n d e r s t a n d a n d c h a m p i o n t h e r o l e o f t h e m a n a g e r i nd r i v i n g b u s i n e s s r e s u l t s

I n f u s e t e c h n o l o g y, d a t a a n d a n a l y t i c s i n t o a l l t h a tH R d o e s

E m b r a c e t h e n e w w o r k e q u a t i o n ( n e w d i g i t a lw o r k f o r c e , f l e x i b l e w o r k p l a c e , a n d e m p l o y e e s a sc o n s u m e r s )

B r o a d e n t h e t r a d i t i o n a l v i e w o f t h e l a b o u r m a r k e t t oe m b r a c e t h e w h o l e t a l e n t e c o s y s t e m


R E M U N E R A T I O N D A T A : T O D AY V S . 2 0 2 1

TODAY 2021

Disparate data source

Clunky collection processes

New / difficult demands frommanagement

Backward looking inferences

Operating on the backfoot

One data source

Seamless collection process

Data visualisation & insights

Forward looking predictiveanalysis

Integrated with businessobjectives


M U L T I P L E S O U R C E S C O M B I N E D

Source: 8pt Arial1 FootnoteNote:

Remuneration

Benefits

Staffing mix

Productivity

Staffing movements

Business / Financial Metrics

New Sources?


• No data exports

• Your HRIS connected directly to Mercer’sAnalytical Database

A S E A M L E S S P R O C E S S – G A T H E R I N G A N DI N T E R P R E T I N G


D A T A V I S U A L I S A T I O N


F U T U R E O F R E M U N E R A T I O N A N A L Y T I C S

© MERCER 2016 46

E X E C U T I V E R E WA R D S

W H E N I S H I G H R E M U N E R A T I O N O K ?

A P A Y - F O R - P E R F O R M A N C E C A S E S T U D Y

D A N I E L Y I NP R A C T I C E L E A D E R ,E X E C U T I V E R E W A R D SW i t h s p e c i a l t h a n k s t o K i r s t e n R o s s a n d A l y B o y d


I N T H E N E W S

AFR“Ramsay Health Care CEO Chris Rex’s pay rises 19pc to $14m”“Ramsay CEO Rex’s pay hits $18m”

Sydney Morning Herald“Ramsay Health Care has come under scrutiny for paying chief executive Chris Rextoo much…”

The New Daily“Hospital CEO’s $30m pay cheque labelled ‘appalling’”

The Facts0 TFR* STI LTI TR

Accounting Value 2,355,635 2,297,330 8,962,779 13,615,774

Realised 2,355,635 2,297,330 13,324,190 17,977,155

* I n c l u d e s b a s e s a l a r y p l u s s u p e r a n n u a t i o n p l u s a l l o w a n c e s


A B S O L U T E A L I G N M E N TC E O P AY V S V A L U E O F $ 1 0 0 I N V E S T M E N T( L A S T 5 Y E A R S )

2012 2013 2014 2015 2016Pay 5,133,691 6,052,079 9,562,523 15,402,869 17,977,155

28% TSR

30% Pay


R E L A T I V E A L I G N M E N TP E E R C O M P A N I E S

Company Market Capitalisation

CSL Ltd. $40,180m

Sonic Healthcare Ltd $8,591m

ResMed Inc. $7,944m

Healthscope Ltd $4,711m

Cochlear Ltd. $4,565m

Ansell Ltd. $3,689m

Primary Health Care Ltd $2,601m

Sirtex Medical Ltd $1,642m

Regis Healthcare Ltd $1,550m

EBOS Group Ltd. $1,545m

Sigma Pharmaceuticals Ltd. $835m

Australian Pharmaceutical Industries Ltd $732m


R E L A T I V E A L I G N M E N TC E O P AY V S P E E R S ( L A S T Y E A R )


P E E R C O M P A N I E SA N A D D I T I O N A L P E R S P E C T I V E

Company Market Capital

CSL Ltd. $40,180m

Ramsay Health Care Ltd $12,278m

Sonic Healthcare Ltd $8,591m

ResMed Inc. $7,944m

Healthscope Ltd $4,711m

Cochlear Ltd. $4,565m

Ansell Ltd. $3,689m

Primary Health Care Ltd $2,601m

Sirtex Medical Ltd $1,642m

Regis Healthcare Ltd $1,550m

EBOS Group Ltd. $1,545m

Sigma Pharmaceuticals Ltd. $835m

Australian Pharmaceutical Industries Ltd $732m


R E L A T I V E A L I G N M E N TC E O P AY V S P E E R S ( L A S T Y E A R )

Adjusted for company size


R E L A T I V E A L I G N M E N TC E O P AY A L I G N M E N T V S P E E R S ( L A S T 3 Y E A R S )

0%

50%

100%

0% 50% 100%

Perfo

rman

ce

Pay

ANN

API

CSL

RHC

EBO

HSO

RMD

SIP

SHL

COH

PRY

SRX

REG

Alignment Test Result -20%Equal to:

Performance Percentile Rank (80%)minus

Pay Percentile Rank (100%)


0%

50%

100%

0% 50% 100%

Perfo

rman

ce

Pay

ANN

API

CSL

RHC

EBO

HSO

RMD

SIP

SHL

COH

PRY

SRX

REG

R E L A T I V E A L I G N M E N TC E O P AY A L I G N M E N T V S P E E R S ( L A S T 3 Y E A R S )An additional perspective


C E O O U T P E R F O R M A N C EG L O B A L T O P 1 0 0 B E S T - P E R F O R M I N G C E O ’ SHarvard Business Review (November 2016)

• Assess CEO’s performance over entire tenure (long term performance)• Based on objective data, not public opinion• CEO’s of S&P Global 1200 companies• CEO’s with sufficient track record (> 2 year tenure)• 895 CEOs based in 32 countries• Average tenure of Top 100 CEOs is 17 years• Financial performance metrics (80%):

1. Country-adjusted TSR2. Industry-adjusted TSR3. Change in market capitalisation

• Non-financial performance metrics (20%)1. Environmental, social & governance (ESG) performance

• Chris Rex was ranked No 88.


Q U E S T I O N S

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R E - D E F I N I N G T H E VA L U E O F H R

I L O N A C H A R L E SA C O N E XC H I E F P E O P L E O F F I C E R

health wealth career total rewards forum · talent shortage – “there’s a big gap between all...

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