what the coming years will bring to recruiting leaders - and how you can respond

© 2013 Towers Watson. All rights reserved.

New Realities, New Opportunities

The Future of Recruiting

Ravin Jesuthasan

September 2013

towerswatson.com © 2013 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. 1

Headlines: challenges and opportunities

Talent 2021GWS

Transformative HR

Generation Gap? Not when it comes to pay…it is

the #1 attraction driver for all ages in the U.S.

Structurally Unsound. Businesses are attempting to

reach 21stC heights on 20thC talent and reward platforms

Friction Points. By 2021, a new map of

talent surplus and deficits will emerge

Security Minded. Whether it is attraction or

retention, financial security is top of mind

Engagement at Risk. Only 35% are highly engaged,

stress is increasing and energy is flagging


Human Capital Research


The major themes of Global Talent 2021

Business transformation demands new skills

Mobility from industrialized to emerging markets

Global talent mismatches

Changes in talent management strategies


What is driving the talent agenda?

0 10 20 30 40 50

Generational, social and cultural drivers

Geopolitical trends

Increasing focus on diversity

Regulatory changes

Sustainability and the environment

Shift of market momentum to emerging markets

Industry consolidation and transformation

Increasing competition

Changes in customer needs and behavior

Labor markets shifts

Globalization of markets

Technological and digital change

% of respondents

Market shifts that will have the biggest impact on future

talent requirements

Source: Global Talent 2021 Study conducted by Oxford Economics and Towers Watson, 2012.


What strategies will most impact talent needs?

0 10 20 30 40 50

Other

Outsourcing and offshoring

Organizational realignment

Mergers, acquisitions and alliances

Downsizing and restructuring

Speeding time to market

Supply chain management

Emerging market focus

Penetrating new customer segments

Process improvements

Extending product and service portfolio

Developing digital channels

Reinventing business models

Driving innovation

Global expansion

Improving quality and customer service

Cost reduction and efficiencies

% of respondents

Organizational strategies that will have the biggest

impact on future talent requirements



Demand for talent will rise strongly over next decade

4.0

1.8

4.4 4.5

4.7

4.5

1.2

5.05.3 5.3

-0.5 0.6 -0.5 -0.8 -0.7

-2

-1

0

1

2

3

4

5

6

Global NA &Europe

Americas AsiaPacific

MEA

Market for talent: Global

Demand Supply Talent gap

% p.a.



But supply to expand even

faster in emerging countries

4.5

5.24.6

5.37.3

4.6

-0.8 -2.1 0.0

-4

-2

0

2

4

6

8

Asia Pacific India China

Market for talent: Asia Pacific

% p.a.




0.5

Talent challenge greatest in developed economies

1.8 1.6 1.62.2

1.2

0.90.7

1.4

0.6 0.7 0.6 0.9

0.8

-1

0

1

1

2

2

3

NA &

Europe

France Germany UK U.S.

Market for talent: North America and Europe

% p.a.




Talent friction points in ten years:

Where are your future talent needs?

Deficit countries

Surplus countries

At equilibrium

Norway 0.5

Sweden 0.5

UK 0.9

France 0.7

Spain 0.2

Canada 0.9

USA 0.8

Mexico 0.1

Columbia -1.1

Argentina 0.1

Brazil -0.1

Morocco -0.8

Chile 1.0

Peru -0.6

Russia 0.1

South Korea 0.9

Japan 1.4

Philippines -0.2

Thailand 0.6

Malaysia -0.1

Indonesia -1.5

Netherlands 0.4

Germany 0.6

Poland 1.2

Czech Rep -0.8

Austria 0.4

Switzerland 0.5

Italy 0.8

Greece 0.7

Singapore 0.6

Turkey 0.7

Egypt -0.7

Saudi Arabia -0.2

United

Arab Emirates-0.2

Qatar -0.6

China -0.0

India -2.1

South Africa -1.0

Bermuda -0.1

Australia 0.5



The Global Workforce Study 2012 helps us understand

the drivers of attraction, retention and sustainable engagement

Attraction Drivers Retention DriversSustainable

Engagement Drivers

Base pay/salary Base pay/salary Leadership

Job securityCareer advancement

opportunities

Stress, Balance and

Workload

Career advancement

opportunities

Relationship with

manager/supervisorGoals and Objectives

Convenient work locationTrust/confidence in

senior leadershipSupervision

Opportunities to learn

new skills

Manage/limit work-

related stressImage

Drivers linked to Total

Rewards


The current status of the global workforce

35%

22%

17%

26%

Source: Towers Watson 2012 Global Workforce Study.


BY THE NUMBERS

The value of achieving high sustainable engagement

Only 15% of employees with high

engagement are high retention

risks compared to

64% of disengaged employees

3x

High sustainable engagement

companies’ operating margins are

3x higher compared to those with

the lowest levels of engagement

7.3

Higher presenteeism: An average of

6.2 days lost per year for employees

with high engagement vs. 13.5 days

lost per year for the disengaged

49%

operating margin fewer days

lower retention risk


What does this mean for the future of

the workforce?


A need for new skills in the future

Digital Skills

Agile Thinking

0%

10%

20%

30%

40%

50%

60%

70%

Total Americas APAC MEA Europe

Ability to consider and prepare for multiple scenarios

Innovation

Dealing with complexity and ambiguity

Managing paradoxes, balancing opposing views

Ability to see the “big picture”

0%

10%

20%

30%

40%

50%

60%

70%

Total Americas APAC MEA Europe

Digital business skills

Ability to work virtually

Understanding of corporate IT

Digital design skills

Ability to use social media and web 2.0

Source: Talent 2021.


A need for new skills in the future

Interpersonal and Communication Skills

Global Skills

0%

10%

20%

30%

40%

50%

60%

TOTAL Americas APAC MEA Europe

Co-creativity and brainstorming

Relationship building (with customers, partners, government, etc.)

Teaming (including virtual teaming)

Collaboration

Oral and written communication

0%

10%

20%

30%

40%

50%

60%

TOTAL Americas APAC MEA Europe

Ability to manage diverse employees

Understanding international markets

Ability to work in multiple overseas locations

Foreign language skills

Cultural sensitivity

Source: Talent 2021.


Ready for What’s Next...

Shape work

Environment

that

engages,

enables and

energizes

over time

Think more

broadly and

creatively

about where

talent is sourced

Embrace the

virtual

workplace and

maximize

mobility

and flexibility

Invest more

heavily

in retraining

and

reskilling

(security in

opportunity)

Rethink and

restructure

how

certain work

is

accomplished

Engaging

environment

Talent

sourcing

Virtual

workplaceRe-skilling

Rethinking

work


What does this mean for the Future

of Recruiting?


A shift from delivering services to

educating, enabling and equipping business leaders

Evidence Based Change . . . A Mindset and Approach

SegmentationIntegration

and SynergyOptimization

Logic-Driven

AnalyticsRisk Leverage

Strategically

categorize

workforce

segments

Understand

pivotal

segments to

advance

business

priorities

Manage

unique

segments

holistically

Understand

how to

leverage the

unique

capabilities of

different Bus

and other

organizations

Focus on

“collaborative

production”

Prioritize

investment

where returns

are greatest

Enable the

business to

seamlessly

manage the

entire

“continuum of

work”

Identify the

pivotal issues

associated

with getting

work done and

the revenue,

cost and risk

implications

Robust

analytics to

bring focus to

issues and root

cause

Identify and

analyze risk

associated

with alternative

talent pools

Identify the

tradeoffs and

the “risks worth

taking”

Superior business outcomes are achieved when these principles are evident

1 2 3 4 5


Bring the same level of rigor to

human capital planning as you do to business planning

Are you measuring the impact of

your talent decisions relative to

business objectives and results?

Do you measure in single

dimension or focus on the few

critical linkage points?

Do you measure success through

traditional metrics or the desired

business outcome?

Getting the numbers right is just the beginning. The “magic” happens when

measures and analysis are combined with the logic of knowing where to look for

the important connections and the savvy of knowing when a story is better than

a number (for example, framing a talent problem using the metaphor of a supply

chain would likely motivate managers to think about it more critically)

Ensure common frameworks and mental models for analyzing issues and

defining success


The evolution of segmentation:

Granularity and sophistication have greatly evolved, allowing us to

address key questions such as:

What employee behaviors does the business model require, and how

can we effectively elicit those behaviors from different segments?

Where does exceptional talent really make a difference versus where

does good enough suffice?

What behaviors do we need to change (e.g., healthier

lifestyles, increased retirement savings) to improve program

effectiveness and ROI?

Organization:

Key drivers and performance expectations

Pivotal versus proficiency rolesPotential Life stagesAttitudinal

DemographicsPerformanceJob roles

Rank and File vs. Executives Employee:

Preferences, values, behaviors

Lifestyles and life choices

Limited Traditional Microsegmentation: Two perspectivesEmerging


Microsegmentation enables us to identify

the organization requirements for talent in various roles

Example: Airline Industry

Pivotal role analysis, a key element of segmentation, helps

organizations determine how talent in different roles contributes to

business value and where having “great” talent versus “good” talent can

make a difference

Employee Performance

Customer

Loyalty

Airline Pilots

Having more higher

performing airline pilots

will not yield additional

business value (defined

as customer loyalty) to

the organization

Flight Attendants

Employee Performance

Customer

Loyalty

Because airlines maintain

competitive advantage by

differentiating the customer

experience, flight attendants

are a pivotal employee

segment. Higher levels of

performance yield significantly

greater customer loyalty


Create integration and synergy

How to we meet our talent needs without building up cost and

infrastructure

How do we tap into a unique ecosystem that ensures an optimal

supply at the right cost

Transcend the typical organization construct to create integration and

synergy through “collaborative production” across:

Organizations

Functions and Business Units


Be prepared to deal with risk in a very different way

What’s known today

and what’s is

unknown

Plan for different scenarios


Optimize the sources of work

How to we seamlessly move work across multiple delivery platforms

and employment relationships to optimize

Capacity and Capability

Cost

Risk (and control)

How does HR exercise governance and control across these multiple

relationships

Full

time, onsi

te

Independent

contractor /

free agent

Full

time, virtu

al

JV/Partner

entity

Outsourced/

Offshored

what the coming years will bring to recruiting leaders - and how you can respond

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towers watson client

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talent management strategies

impact talent needs

major themes of global

new map of talent surplus