“You Say you Want a Revolution”- HR Business Leaders Driving Results & Other Cutting Edge Strategies in Today's Market, Phil McClurg, HR Transformation, Mercer

We all recognize and accept that the new Oil economy will be “leaner for longer”. As a result, HR functions will need to support companies as they return to growth while continuing to manage costs, i.e. not being able to dramatically increase headcount. This can be accomplished through an increased evaluation and implementation of systems and processes to yield the greatest efficiencies.

Transcript

1. H E A L T H W E A L T H C A R E E R M E R C E R Phil McClurg, Principal HR Transformation phil.mcclurg@mercer.com O C T O B E R 2 0 , 2 0 1 6
2. H E A L T H W E A L T H C A R E E R M E R C E R I S A G L O B A L F O R C E O F O V E R 21,000 UNIQUE INDIVIDUALS W I T H A PA S S I O N F O R E N H A N C I N G T H E HEALTH, WEALTH AND CAREERS O F 11 0 M I L L I O N P E O P L E W O R L D W I D E . W E ’ R E U N I T E D B Y A S I N G L E I D E A – T O M A K E L I V E S B E T T E R T O M O R R O W T H R O U G H A C T I O N S W E C A N TA K E T O D AY © MERCER 2016 CONFIDENTIAL AND PROPRIETARY
3. © MERCER 2016 CONFIDENTIAL AND PROPRIETARY 3 M E R C E R R E S E A R C H • Mercer Select Intelligence is an on-demand, mobile-first research platform that delivers Mercer’s analysis, news and trends to clients on a paid subscription basis. • This comprehensive tool is customizable to support your need, is updated 24/7 and includes daily email options. • Content includes talent, health and well-being benefits, rewards, retirement, and hot topics such as Brexit and cybersecurity as they relate to HCM. • Mercer Select Intelligence synthesizes cutting-edge insights in human capital, benefits, HR technology, and local and global market developments, with on-demand access to HR experts. • Membership can be shared with your HR team across functions, allowing greater access to current news, analysis, trends and research. R E C E N T R E S E A R C H I N T R O D U C I N G M E R C E R S E L E C T I N T E L L I G E N C E ( M S I )
4. © MERCER 2016 CONFIDENTIAL AND PROPRIETARY 4 T R E N D S I N A C H A N G I N G B U S I N E S S W O R L D N E W D E M A N D S O N H R GLOBALIZATION Creating value in today’s complex and competitive marketplace is a must to stay ahead. The most in-demand skills in 2016: • Inspirational leadership • Analytical skills • Global mindset In a world without boundaries, how do organizations develop talent with a global mind-set, encourage an agile workforce and balance global consistency with local needs? THRIVING WORKFORCE Being able to develop and grow is crucial for both organizational and individual success. 82% of HR leaders are focused on building diverse leadership teams, but only 58% of employees agree that their company has effective programs for diverse leadership. As organizations are faced with an increasingly multi-generational and multi-cultural workforce, how can businesses plan for and foster a diverse, engaged workforce? ERA OF THE INDIVIDUAL The fabric of work is changing and talent practices need to evolve if they are to inspire today’s workforce. 70% of organizations are confident about filling roles internally, but 28% of employees say they plan to leave, even though they’re satisfied, due to lack of career opportunities. As we move towards a “people first” approach to HR, how can organizations develop and convey a value proposition that compels individuals to join, stay and grow?
5. © MERCER 2016 CONFIDENTIAL AND PROPRIETARY 5 O R G A N I Z I N G A N D S T A F F I N G M O R E E F F E C T I V E L Y P R E V A I L I N G M O D E L H R L E A D E R S H I P T E A M Providing HR strategy and execution to the business and ensuring the success of the HR operating model H R S E R V I C E C E N T E R Delivering customer service and administration of HR programs with a focus on efficiency, data and technology FOCUS: operational excellence H R C E N T E R S O F E X P E R T I S E Designing appropriate HR strategies, programs, policies and processes FOCUS: program design H R B U S I N E S S P A R T N E R S Acting as a strategic partner and liaison between the business and centers of expertise FOCUS: strategic alignment T E C H N O L O G Y E N A B L E D HR portal Telephony Case management Knowledge management
6. © MERCER 2016 CONFIDENTIAL AND PROPRIETARY 6 G E T T I N G T H E R I G H T W O R K I N T H E R I G H T P L A C E H R ’ S J O U R N E Y H R L E A D E R S H I P / H R B P S C O E S H R S E R V I C E C E N T E R L O C A L H R HIGH HIGH LOW LOW S T R AT E G I C C O N T E N T C O M P L E X I T Y  Transaction efficiency  Fulfillment  Program design  Innovation and market scan  Strategy  Consultative and advisory
7. © MERCER 2016 CONFIDENTIAL AND PROPRIETARY 7 T R E N D I N G T O T H E T O P M A J O R C H A L L E N G E S A F F E C T I N G T A L E N T P R I O R I T I E S companies surveyed anticipate that competition for talent will further increase in 2016 9/10 Seismic shifts in: Composition of the workforce Skills that drive business performance Talent pools that will likely fuel growth in the future World Economic Forum: The Future of Jobs report Job disruption impacting job families Loss of 7 million jobs New skills needed to compete BY 2020
8. © MERCER 2016 CONFIDENTIAL AND PROPRIETARY 8 H O W D O W E A C C E L E R A T E T H E T A L E N T E N G I N E ? BUILD DIVERSE TALENT POOLS EMBRACE THE NEW WORK EQUATION ARCHITECT COMPELLING CAREERS SIMPLIFY TALENT PROCESSES REDEFINE THE VALUE OF HR
9. © MERCER 2016 CONFIDENTIAL AND PROPRIETARY 9 # 1 . B U I L D D I V E R S E T A L E N T P O O L S Confident in filling critical roles internally 70% “My company is failing me on the development front” E M P L O Y E E S Believe company is doing enough to keep their skills relevant 25% “Our emphasis this year will be on building rather than buying talent” O R G A N I Z AT I O N S 82% Plan to develop and promote from within Strongly agree they have robust methods for identifying high potentials ONLY 25% Companies focused on developing local leaders in emerging economies 62% BUT LESS THAN 1/3 of employees Agree their company is actively working towards creating a diverse workforce How would you rate your manager? “C grade or lower” What would improve your work situation? “More/better training” Employee experience not aligned with employee needs Clear difference between organizational goals and actions
10. © MERCER 2016 CONFIDENTIAL AND PROPRIETARY 10 # 2 . 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 37% Are able to work virtually “Coaching is one of the top 3 in-demand skills for managers in the next 12 months” O R G A N I Z AT I O N S “My manager does not provide the tools, coaching and support I need to improve my performance” E M P L O Y E E S Individualization & Consumerization Fair & Transparent Rewards 56% Employees permitted a flexible work schedule Companies believe that their flexible work practices support employee productivity 66% 50% Companies consider themselves transparent with respect to pay information 66% Employees say the same 50% Focusing on non-monetary recognition this year Companies use a Total Rewards approach to recognition 80%
11. © MERCER 2016 CONFIDENTIAL AND PROPRIETARY 11 # 3 . A R C H I T E C T C O M P E L L I N G C A R E E R S Say that career path information is available 68% “Even though I’m satisfied, I plan to leave in the next 12 months” E M P L O Y E E S Satisfied in job but plan to leave due to lack of career opportunities 28% “Our talent pipeline is strong and we have good processes in place” O R G A N I Z A T I O N S 70% Confident about filling roles internally of employees agree ONLY 53% Conduct regular career conversations +70% ONLY 56% of employees agree Intend to add “stepping stone” roles into their career architecture Companies intending to add job levels 58% 45% Mobility practices is an area where little change is planned for 2016 Career Frameworks is on the HR agenda -but more urgency is needed
12. © MERCER 2016 CONFIDENTIAL AND PROPRIETARY 12 # 4 . S I M P L I F Y T A L E N T P R O C E S S E S 40% Need additional HCM technology to help integrate data from across the business Our new HCM technology implementation offers an ease of use not available prior to investment 18% O R G A N I Z A T I O N S E M P L O Y E E S “Our HR processes fail the test of being simple and efficient” “Our Talent processes need an overhaul” Employees want consumer-grade, technology-enabled interactions Managers want processes that require minimal time & effort Intend to reduce the link between performance ratings and rewards 50% Performance ratings are important as they help me to know where I stand and encourage me to improve my performance 54% Over 80% of HR respondents believe change is needed Only 4% of employees believe their company’s HR processes are state of the art Have concrete plans to change their people strategy, talent acquisition, HR technology and performance management processes in 2016 60% Career Management and Compensation are lesser priorities
13. © MERCER 2016 CONFIDENTIAL AND PROPRIETARY 13 # 5 . R E D E F I N E T H E V A L U E O F H R “HR is not viewed as a strategic business partner ” O R G A N I Z A T I O N S “it’s hard for me to get good answers and information from HR” E M P L O Y E E S Big Data was one of the top five workforce trends impacting in 2016 Climate of skepticism about the impact of the HR function of companies have the ability to leverage predictive analytics 10% Only 4% of HR professionals say HR is a strategic partner Gaps in HR service delivery and lack of key data impacts perceptions of HR Can do ‘cause and effect’ analyses of key workforce trends against business objectives Shift in what businesses value from HR from static HR metrics and review-based processes, towards dynamic HR insights and future focused activity such as workforce planning and career management 36% Technology investment is outpacing spend on HR training and development. The gap is leaving HR ill-equipped.  Dedicated Analytics function  Better quality of data and integrated systems  Skills in handling unstructured data and causal analysis 59%
14. © MERCER 2016 CONFIDENTIAL AND PROPRIETARY 14 # 5 . R E D E F I N E T H E V A L U E O F H R MOVE TOWARDS HIGH IMPACT SERVICES EVALUATE HR OPERATING MODEL Align HR strategy to business strategy Business strategy Human Capital / Talent Strategy HR Function Strategy Improved results FOCUS ON VALUE CREATION • Evolve the HR model to deliver value given corporate strategy • Evaluate where HR is spending time today and gap to future state BUILD THE CASE FOR CHANGE • Develop the ROI for change and secure executive sponsorship • Build in near-term successes to sustain momentum UNDERSTAND AND REACT TO FUTURE WORKFORCE • Partner with strategy and line executives • Build proposition based on strong data and workforce scientists • Address capability gaps and stay abreast of technology changes
15. © MERCER 2016 CONFIDENTIAL AND PROPRIETARY 15 W H A T ’ S C H A N G I N G N O W ? H R B U S I N E S S P A R T N E R S O R G A N I Z AT I O N S H AV E FA C E D D I F F I C U LT Y T R U LY I M P L E M E N T I N G H R B P … But changing now 1. More HRBP training/upskilling 2. Businesses rotating line managers into the HRBP role 3. HRBP serving as more of a talent consultant
16. © MERCER 2016 CONFIDENTIAL AND PROPRIETARY 16 W H A T ’ S C H A N G I N G N O W ? C E N T E R S O F E X P E R T I S E W H AT ’ S C H A N G I N G ? 1. More global focus 2. More talent strategy and development focus 3. Local COE deployment is shifting to employee service centers or technology- enabled self-service Have concrete plans to change their people strategy, talent acquisition, HR technology and performance management processes in 2016 86%
17. © MERCER 2016 CONFIDENTIAL AND PROPRIETARY 17 E M E R G I N G C E N T E R S O F E X P E R T I S E N E W C O E S A R E A D D R E S S I N G T H E C H A N G I N G R O L E O F H R A N D H O W I T A D D S VA L U E T O T H E B U S I N E S S W O R K F O R C E A N A L Y T I C S & P L A N N I N G W O R K F O R C E S T R A T E G Y M E R G E R & A C Q U I S I T I O N M A N A G E M E N T W O R K F O R C E A N D R E W A R D S O P T I M I Z A T I O N W O R K F O R C E I N N O V A T I O N S T R A T E G Y A N D E X E C U T I O N C O N T I N G E N T W O R K E R S E L E C T I O N A N D O P T I M I Z A T I O N Deliver on the promise of deep analytic insights and predictive modeling Connect workforce data and drive business results through people Rapidly assess and digest newly acquired companies Create segmented rewards and performance strategies for pivotal roles Create tools and processes to drive an innovation culture Enable a flexible workforce based on business conditions
18. © MERCER 2016 CONFIDENTIAL AND PROPRIETARY 18 W H A T ’ S C H A N G I N G N O W ? H R S E R V I C E C E N T E R S W H AT ’ S C H A N G I N G ? 1. Tier 1 is shrinking and being replaced by self service and HR Portals 2. Increased reporting, analytical and data interpretation skills 3. Increased flexibility to support peak call periods AND support peak periods of the HRBP and COE teams with project management, data analytics and analysis
19. © MERCER 2016 CONFIDENTIAL AND PROPRIETARY 19 H O W W I L L H R C H A N G E ? L E A N E R / L O N G E R : Employee service centers, self-service and enhanced technology — along with increased outsourcing of operations, strategy and design activities — will continue to decrease the size of the HR function as organizations are pressured to do more with less. We will see smaller staff sizes with clearly defined roles. Investments in HR will focus on closing the skill gaps in key areas. T A L E N T S T R A T E G I S T S : HR management will lead the strategic identification, development and retention of talent with simple and streamlined processes and systems. HR will guide managers in talent decisions, equipping them with a clear understanding of their key players through pulse metrics and helping them determine the best course of action by modeling possible interventions and their implications. Data-driven insights will underpin success in this area. I N N O V A T I V E : HR will position itself to anticipate how work and employee relationships are changing, and will be the first to adapt and respond. HR leaders will change policies/programs and leverage strategic partnerships and technology to support the business. T E C H N O L O G Y L E A D E R S : HR leaders will understand and embrace technology with a willingness and ability to use data to drive business decisions. HR will be ahead of the HR technology market and play the HR technology strategist role in close collaboration with IT.
20. © MERCER 2016 CONFIDENTIAL AND PROPRIETARY 20 W H A T C A N Y O U D O A T Y O U R O R G A N I Z A T I O N ? Assess and design the right HR operating model and organizational structure to best fit your business Evaluate current technology and create an HR technology strategy Assess HR staff competencies and fit with the future operating model requirements Enhance HR staff strategic skills Acknowledge that HR needs to change and adapt to meet today’s realities for the function of Human Resources