Transcript: Moving Beyond the Employee Lifecycle - Talent Solutions for a New Workplace
Deloitte Insights podcast
Host: Welcome to another edition of Deloitte Insights, a production of Deloitte LLP. Deloitte Insights is an audio news podcast that looks at important business issues. Today's program: " Moving Beyond the Employee Lifecycle: Talent Solutions for a New Workplace."
In the old days if you wanted to get ahead in business you were expected to climb the corporate ladder, but not anymore. The ladder has been replaced by the corporate lattice. Thanks to globalization and technology, employees are able to move in many directions - laterally as well as vertically and select from among a bouillabaisse of work options. And with employees increasingly able to work from anywhere in the world, the traditional idea of the workplace is becoming obsolete. These revolutionary changes mean that companies need to innovate if they hope to find and retain the talent they'll need in coming years.
Young job applicants have higher and different expectations than their forbearers. A paycheck isn't the only thing that matters to them. They are also looking for work that's meaningful and they don't want to be tethered to cell phones and laptops 24/7.
Going forward in these challenging economic times, companies will need to create a different balance, retaining their best performers and attracting new people to replace their retiring baby boomers while keeping costs down. This isn't something that can just be handed off to HR, effectively talent strategy is also good business strategy.
Here today to talk about talent solutions for the workforce and workplace of the 21st Century are Heather Stockton, Jeff Schwartz and Jonathan Pearce. Heather Stockton is a principal with Deloitte Consulting for Deloitte Canada, LLP. Jeff Schwartz is a principal with Deloitte Consulting, LLP and the global leader for Organization and Change Services. And Jonathan Pearce is a senior manager for Deloitte Tax, LLP. Welcome to Deloitte Insights.
Jeff Schwartz: Glad to be here.
Jonathan Pearce: Thanks for having us.
Heather Stockton: Wonderful to be here.
Host: We know that talent is crucial for business, that's been true for quite some time. Have there been any important new developments in how companies are conducting the search for talent?
Jeff Schwartz:It's interesting. A lot has been written and said about talent in the last couple of years. Talent is not new on the business agenda or the HR agenda. There are a couple of things that are new. We can probably talk a little bit about some of the things going on right now in the economy. It's a particularly turbulent time and that creates some unique opportunities around talent. But what we found over the last couple of years was that many of our clients were taking, what we would describe as, very incomplete approaches to the talent challenge. And what we think is a fairly integrated way about what are the different levers that you can pull and focus on as a talent leader, whether you're coming from the HR suite or whether you're coming from a line of business leadership position or another functional position - IT or the finance or the research and development function. And key to our thinking has been organizing a framework that lays out several key components as to what a great talent strategy and solution includes.
Part of it, of course, is thinking deeply about business strategy and the alignment with talent strategy. The second is really expanding the range of solutions that are available when we think about talent. Probably one of the major insights into what we see going on right now in the market is this whole idea of thinking broadly, not just about people or talent based solutions, but also work based solutions. What we think is a very large addressable space, if you will, that's available, a whole broad set of solutions that we think can be applied to talent problems.
The other piece that we think is going to be coming on very strong is just the whole concept of innovation. In customer strategy innovation is often the center. So one of the items we're putting on the table is - what's the role of innovation in talent strategy? And then finally - what infrastructure is involved in approaching talent today? And we're seeing just a much broader set of infrastructure items, not just technology but things going beyond technology including leadership and culture - some of the things we might go into in the next few minutes.
Heather Stockton: Just to add to what's changed - it's interesting when we talk to clients both in the HR functional role and in the business that they're struggling with how to solve the talent issue that they have in their organization. They often forget to link it back to what they're trying to do as a business. What the chemistry of talents and the periodic table of talent does is really help HR leaders and functional leaders align their business strategy and their HR strategy and then identify - what are the elements and what are the levers they can pull to really target their talent efforts in a strategic way that drives outcomes? It really puts it all together in a framework that allows them to be very deliberate about what they do, when they do it, how they do it and what outcomes they expect.
In the past when you talked to HR functional leaders they know there's a problem but they have trouble articulating that to the business in a way that the business cares about. Really what this does is creates the bridge between what HR does and what the business needs and allows them to have conversations that really drive talent strategies that are all geared to delivering on business strategy. So that link is making a difference in the market and we're seeing much richer dialogues between the HR functional leader and the CFO or the CIO so that it's really about solving business problems.
Jonathan Pearce: I think it's a real challenging and exciting time to be an HR professional. Challenging because the priorities have completely shifted. I think in terms of the expectations that the business has from HR, if you look at what it was for the past 8 or 10 years, the late 90's, the early 2000's - HR was really focused on operational excellence, getting the transactions managed, doing that well and cheaply and efficiently. So we saw all of the HR outsourcing priorities, technology implementation, all of those things around operational excellence. And now taking the operational cost out of HR is not so much the agenda, talent is the agenda and what can HR really do to drive that talent agenda for the business. And frankly, nobody's going to join an organization thinking - I want to be part of this organization because they have the best payroll administration function and I just love being a part of it. They're going to join the organization because they see a different value proposition for them in their careers and they understand what the organization is doing to give them a learning and development experience in a career that's going to mean something to building their personal brand in their career.
Heather Stockton: And what's interesting with the business making decisions to offshore work outsourcing and using strategic partners and HR focused on operational excellence - everybody plays a role now in talent management and it's critical, and they need each other in order to be successful. And it's really interesting to see the emphasis shift from technical competency to leadership competency. And more and more when I go and talk to executives in organizations it's all about the fact that their leadership bench is not strong because organizations are flatter, they're using multiple partners to deliver the work that they're accountable for and they're also managing virtual teams, which creates a whole new complexity around how you lead.
So it's interesting to see people navigate through all these different waters in addition to the turbulent times that they're in where the pressure to have a flatter organization and be efficient, but at the same time keep your top talent is becoming more and more critical as people navigate through this period.
Jeff Schwartz: This is a great discussion. And to go back to your initial question - what's changed - globalization is continuing. There is a lot of turbulence. We're going to use that word a lot because that's one way that we're thinking about what's happening in the economy. The world is flat, we know that, and yet we've built relatively few talent organizations and strategies that really work well in this kind of global world. We know that there are going to be shortage of skilled workers. And in today's environment that almost sounds counterintuitive - we will probably see unemployment rise around the world in both the developed and developing countries. That does not change the underlying dynamic of the talent shortages that companies are going to expect. The shortages are in areas of high skilled and specialty workers. And there's a very broad set of - there's many, many different kinds of specialties and technical skills that are needed by companies around the world.
That is not going to change over the next couple of years even as we may see, and we probably will see, availability of certain sets of skills in the marketplace but not the critical skills and the strategic skills that companies are looking for. Which leads to the whole discussion of not only, how do you find the people that you're looking for but how do you keep them?
One of the things that's changed is we're not just focusing; and companies are not just focusing, on talent in the first part of their careers. Yes, there's a very broad generational set of discussions going on. And it's very important to think about what your value proposition is, as Jonathan said, to workers in the workplace - but in the economy that we're in today it's as important to think about how compelling is your talent strategy to people in the middle of their careers and at the end of their careers. There are a lot of people who will probably be working longer than they thought a few years ago - are our talent program set up to get the most out of people who are trying to elongate their careers. Do we have the training and the development and the flexibility that people are looking for in the last part of their career as well as the first part of their career?
Host:It may sound paradoxical to be talking about recruiting talent in a severe economic downturn when so many companies are laying off workers. Are companies taking the risk of jeopardizing their competitiveness over the long term by shedding employees and curbing new hires in order to cut costs?
Heather Stockton: They do take that risk if they don't take those actions. They do have a risk if they go about shedding employees without understanding their workforce and having the analytics to understand what are the low value positions that they should be shedding, and considering different ways of delivering that work, and understanding who their critical workforce segments are. So who are the people that drive a disproportionate amount of value for the organization as they work through this turbulent time? And so they need to take a very deliberate approach to understand what their workforce looks like. Which segments of the workforce do they absolutely need to protect and preserve, and actually up the anti around how they retain those people and keep them engaged and challenged during this period of time and help them start to become part of the solution? And then look at the rest of the workforce to determine what are the segments that I can go after shedding so that I actually don't break something today, given the turbulent environment, that's going to have a very negative effect in the future from a strategic perspective.
I think people are just reacting, in many cases many clients I talk to, and not doing the workforce plan, which really needs to underpin how you make those choices.
Jeff Schwartz: I think Heather's hit the nail on the head. I think the starting point is a very clear understanding of the critical workforce segments or strategic workforce segments, the sets of skills that are absolutely essential to your business and your business strategy. The discussions that we're having with clients on this area really hit on both sides of this equation. One is what we would call performance management and retention and succession planning on steroids. In today's environment it's very important to be extremely focused on the people that you need to keep and develop. And the performance management and succession planning that has been quite successful over the last several years as the economy's been growing, may not be exactly the set of performance management and succession planning, programs and priorities you need when there's some changes in the economy, some contraction. But remember, and this is the interesting part, your most skilled and your highest valued critical workers are in demand even in this environment. So that's what creates a very interesting dynamic, which is - are you evaluating performance and keeping the people that you need in this particularly turbulent time?
The other side is attraction and recruitment. If you stop recruiting in this environment and you step back too far from your key recruitment pools, whether they be universities, technology institutes, graduate programs, MBA programs, it's very difficult sometimes to restart and establish your position. So it's one thing to say that you're going to change from recruiting 100 MBA's a year to recruiting 90 MBA's a year, but if you cut that number too much and the message is out that your organization is not committed to this critical workforce segment you can actually do damage to your brand in the short term. So there are some very difficult decisions being made right now in this area.
Jonathan Pearce: And like you said before, Jeff, there is this looming kind of skills gap and talent shortage. I think people have talked a lot about retiring baby boomers and maybe we'll see some postponement of that problem as people now think about working longer. But the fact remains that even in the U.S. there are 80 million boomers and there are 40 million Gen Xer's to replace them. And even if we can postpone D-day we're coming to a point in time where there is not just lack of people but it's really a skill gap of the kind of skills that are critical in these uncertain times where you really need experienced entrepreneurial managers who are going to grow a business and probably not even grow a business here at home. It's grow a business somewhere else in a new environment with a lot of uncertainty. And unless we take a real focus on the kinds of leadership that we will need to further that business agenda and really start planning their careers to accelerate their development so we can have a smooth handover in the relay, if you like, from our current leaders to the leaders of the future, then we're going to be caught short and fumbling and too slow in the competitive environment that we only expect to get harder and harder.
Heather Stockton: Well, just to add, we have a client right now, a very large bank working in multiple countries. And they're in the midst of multiple mergers - so bringing organizations together - and trying to understand of the workforce population that I have, where do I play to win? What are the people that I actually need to retain, even though as I create synergies they would be on my list of people to go? So who are the people that I'm going to play to win for the future, and how do I make sure that I'm picking those right competencies? Taking in to consideration external data, what's happening globally, what's happening in the markets that they operate in. So they're taking a very strategic approach to how they deliver on the synergies through their merger and deliver on some of the cost containment that they need to achieve by using the workforce planning exercise as a strategic exercise to not only deliver on the cost savings but also to deliver on their future strategic requirements.
Jeff Schwartz: This is a great area that Heather's just hit on. The whole opportunity in talent today to look deeply at redeployment and the development of workers and professionals is a huge opportunity.
We were looking at an analysis recently with a couple of large companies and the metrics that we were seeing were suggesting that to fire 100 highly skilled workers and to rehire them at other parts of the country or the world can cost an average of $500,000 a person. So if you do this with hundreds of people the numbers quickly add up in to the millions of dollars. So what that suggests is if you have an idea of the skills and profiles that you'll need in the next couple of years and you can look deeply at the deployment and redeployment opportunities, there could be significant savings both in terms of redeploying people but also in developing the skills so that they are well positioned for what you're recruiting for in the near term. It's quite interesting that very large companies and organizations today are often having people leave their ranks with one skill set and then turning around in another part of the organization, sometimes in the same geography and hiring people with a skill set that may be 10-15˚ different in terms of what they're actually looking for. It may sound like an obvious issue with an obvious set of solutions but in order to do that you need really broad visibility across your workforce plan, not just in each business and not just in each function but also in each geography. And that creates a degree of flexibility and solutions that companies would like to have. And, as Heather's suggesting, some of that really can be enabled by, not just workforce planning, but workforce analytics that have a much deeper use of data and information in them, which we're beginning to see now as well given the use of some of the both ERP systems and sort of the data mining and the different tools that are being used around the data that's been collected as part of HR systems over the last couple of years.
Jonathan Pearce: And this does come back to the real role of HR. And for a lot of organizations I think a rebalancing of where the real accountability for talent ownership and talent planning sits - I think for a long time the prevailing wisdom has been put the ownership of talents into the lines of business and try and educate a line of business leaders to make wise choices about what they're doing with their talent. I guess what I'm seeing right now is a little bit of a recognition that the way we measure line of business leaders is typically a little more short term, it's a little more about today's results, not tomorrow's future. And HR, on behalf of the CEO, is looking at organizational priorities for the long term, the strategic talent planning that we need to do for the next five years or ten years or 20 years. And that means that for some critical talent assets like strategic workforce segments, HR or the corporate organization has to almost wrestle control back a little bit and start doing some more cross organizational planning and care for career path and so on for that talent. It's an interesting tension in some organizations right now.
We've got a company that we've been working with that was looking at general manager development. One of the problems that they had was leadership succession in that organization, which had a number of disperit businesses - was basically, I'm a high potential person, I'll find a high potential executive and hold on to their coattails and rise up to the top with them. That could work but it creates functionally specialist managers who understand a particular business. As a CEO looks at, what's the succession plan for the C suite, there are very few people who understand the entire enterprise, who understand what excellence looks like in every function and who understand how the business can integrate together and find opportunities to synergize new products or services.
So what they had to do was wrestle control back for some key talent that they wanted to turn into these new global leaders and start placing them across different functions and across different businesses in their careers, which had some tension because the business leaders in the functions don't want to let their best people go. But what it took was a kind of senior executive push that while we trust our business leaders to own our talent, there are some organizational talent assets that we really need to manage in a different, more holistic way.
Host: So who should be responsible for finding talent? Is it a job for HR? Is it a business issue? And whoever takes on that responsibility what kinds of rewards and benefits should they offer to attract and keep their talent?
Jeff Schwartz: Clearly recruitment and overall responsibility for talent is going to be shared. It's going to be shared by business leaders, functional leaders, including finance, IT, research and development, sales and also HR. What we're seeing now is companies are exploring with different types of governance models and leadership models that really look at how to share that responsibility well across business functional and HR leaders. So if you were to ask us sort of where do we see sort of governance and leadership of the talent process going, we're seeing companies spending a lot of time figuring out the right balance for them among business leaders, functional leaders and HR leaders.
This is important for a number of reasons. Part of it is there's simply a lot to do and what we're finding is that there's just a tremendous amount of talent work going on, sometimes it's being orchestrated and managed by the HR or the talent team formally and sometimes it's not. We're working with a couple of clients where there are very large initiatives around talent development and talent leadership development in the global IT function or the global finance function that are being led by the CFO and the CIO. And what, in effect, they're saying is, this is our responsibility as functional leaders or as business leaders. And we welcome the support of the HR leadership team but we can't wait for them. So some HR teams are sort of following the lead that's being taken by some business and functional executives and others are ahead. And we expect to see that mixture of leadership and governance strategies out there.
I think the other thing that we're seeing is - and this really goes to sort of some of our fundamental rethinking about what's going on in the talent market. Heather, a few minutes ago, made mention to something that we call the periodic table of talent. In effect, this is a framework that we've developed in order to try to get our hands around the range of discussions that are going on broadly around talent. And it was really a response to what we thought were very incomplete discussions. What we mean by that, just to try to be very direct is, there's been a lot of magic bullet thinking around talent. If I can just get succession planning right that's the heart of talent management. If I can just get recruitment right then I'll have talent management right. If I can just get compensation right then that's the ticket and I'm set for success. What we saw was a fairly narrow set of discussions - again we call it the employee lifecycle; recruitment, on-boarding, performance management, learning and development, succession planning - which his obviously the core underpinning of the way people would have a traditional career in a company. But then we step back and said, those are only five elements in this much broader set of potential solutions and influencers in talent. There are a set of influencers and solutions around work, which we can come on to. There are core solutions and there are solutions that can really differentiate you.
We found ten different strategy and metric solutions that companies can look at, and eight different infrastructure solutions and then we have an initial set of four, sort of, innovation factors that we think are relevant. We've got 41 elements, 41 potential places to look at and to orchestrate potential talent strategies and talent solutions. With that kind of universe of opportunity, everything from recruitment, retention, competency modeling, global mobility, virtual work, social networking, career customization - with that set of alternatives out there you need a governance and a leadership process that really is balanced and integrated across business leaders, functional leaders and HR leaders.
Heather Stockton: I agree, Jeff. Part of what we're definitely seeing as we talk to the heads of HR, the heads of functional business lines - they're starting to actually hold their leadership accountable and how they measure them and how they reward them for the whole talent issue. So what are the number of high potentials that are leaving your organization? What kind of bench strength are you creating in your organization? How quickly are you on-boarding senior executives and making them productive in your organization? What number of people that you bring into the organization that are very costly leave in the first two to three years? So the idea is that the elements count but it's also people are being rewarded and recognized and held accountable, both in HR and at a functional level, to pay attention and focus on talent. It's becoming critical to their ability to deliver on their strategic priorities and their plan.
So it's the rubber's starting to hit the road, and I think that's changed because talent has been a topic for a number of years but now people are being held accountable for it. So part of the beauty of the periodic table of talent is it's not one size fits all. The priorities you pick need to align with what you're trying to do as a business and what you're trying to do as an executive so that you really target your effort and take a very strategic approach to handling a very complex problem.
Jonathan Pearce: A strategic approach, it's a phrase that we use a lot. What we mean by a strategic approach is making choices. Fundamentally strategy is about making choices. What we're trying to lay out in our approach to talent strategy is that there really are a range of choices that can be considered, not just a narrow range around the employee lifecycle, but a much broader range around strategy and metrics, talent, work, innovation and infrastructure.
This question started with compensation of benefits and what are people looking for in today's environment. Or, in a phrase, what do people want? What do employees want? What do potential employees want? It's a very interesting question. We see the discussion going in two very different ways. In one way there's this analysis that begins to spread and talk about the differences among generations. Millennials are different than Xer's. Xer's are different than Boomers. Boomers are different than World War II and the great generation. And there's some very interesting analysis that looks at what the generations want and how they're different.
It's actually very important to focus on what the different generations want. One of the other things we're seeing is at the same time that we're getting a sense that younger workers and workers in the middle and end of their career want different things, there are some similar things that they're looking for. They're looking for a different view of compensation and rewards.
One of the things that we started with was people are looking for more than a paycheck. Whether it's a Millennial or someone in Generation X or a Boomer, they're all looking for rewards and a relationship with their company that obviously includes appropriate compensation, core benefits. Things like flexibility around schedule, the ability to work on site sometimes in your office and from home if that's possible in the field and the industry in which you're working. Different kinds of benefits in terms of opportunities in the career that people have. We've talked a lot about career customization. In fact, a couple of our colleagues, Cathy Benko and Anne Weisberg wrote the book on Mass Career Customization. And looking at the expectations of careers, that's not just a Millennial issue or an Xer issue or a Boomer issue. What we're seeing is that workers across the generations want different kinds of career customization. So having insight in models that allow you to do career customization in different ways can afford you the opportunity to put together a broader compensation and benefits and reward package that not only includes money and benefits but also includes community activities, also includes workplace flexibility, also includes the ability to customize and manage your career.
Host: Could you talk about talent sourcing? Are there more advantages to relying on third parties for their talent or are companies getting along well with the talent they can develop in house?
Heather Stockton: What's interesting about talent sourcing is there isn't one source. So we're seeing some organizations are leveraging third party recruiters less, putting a lot of emphasis on the network that individuals in an organization have and tapping into those networks because they find that the cultural fit and the quality is much better. They're relying on third party offshore partners, third party consulting partners to really create that combination of talent that they need. So it's a multitude of things that they're doing in order to source talent. It's not one solution and it really varies based on what the priority is, how unique the skill is they're looking for. And that's just making it more complex for the business leader and HR to be creative and innovative and here's the options that you have and here's the most effective way to go source your talent based on what your need is, the timing that you have that need, the complexity of the skills that you require. So it's not one size fits all. And that's a very new dynamic that's just increasing with complexity as people have demands that change quite quickly.
Jeff Schwartz: Sourcing really is running in two directions at the same time. I think that's what is clear in your question. We're working with a client now that is looking at their talent requirements over the next five years. On the one hand they're looking at one major segment of their company where they're going to be moving from about 30% offshore workers to about 70%. So from that part of sourcing looking very carefully at the global market, and this is the technology related part of their business, but going from a 70% in-house, 30% offshore to 30% in-house, 70% offshore for one particular part of their business is a major change for them, in terms of career pathing, development of the professionals who will stay in that function in the "onshore" piece and they'll have a whole set of challenges around talent and work in terms of both sourcing and then managing a very significant offshore piece.
At the same time, for other segments of their business, they're effectively doubling down on internal development. So what we see companies are doing is effectively pursuing, as Heather outlined, two different sides of sourcing at the same time. For certain parts of your business, for certain workforce segments you might be extending your reach very, very far into global labor markets and it could be using third parties, not just to recruit but actually do that work. At the same time what we're seeing in this case, this company do and others, is say for people that are critical to operations - general managers, project managers, people doing certain types of product development - we need to be much, much better at developing those people. We can get great people from the universities but we need to be investing over a five or a ten or a 15 year period in order to create the types of, again, in particular, project managers, general managers and product managers that we need, whereas we can take certain of our activities and source them in different ways.
So the sourcing question is really getting pushed very, very hard both in a development direction and in the sort of global sourcing and offshoring direction at the same time. That's what makes it interesting and that's what makes it hard.
Jonathan Pearce: On that global point, I think one of the real challenges for organizations is even looking at is knowing the talent that they have. It speaks a little bit to global platforms for technology and things like performance management and career management. So often organizations have relied on the fact that where their established markets are or where their headquarters is, where they have their biggest group of talent is where their highest potential people are sitting, where their critical workforce really is.
I think for so many organizations right now there's a growing realization that the next CEO for a company based in New York might not be sitting in New York. They might be sitting in Singapore or São Paulo. We need the global consistency and systems and approaches to make sure we find that critical talent and give that talent the opportunities that it might not get in Singapore or São Paulo to reach its real potential.
Jeff Schwartz: Not necessarily from the talent area. There's a well known company that set up a globalization leadership team. The company is based out of the United States, but they didn't actually set up their globalization team in the U.S. They set up their globalization team in India. And it raises a similar question from a talent perspective, which is - given that the majority of growth in terms of skills and the working population over the next decade clearly are going to be in markets like India and China, no surprise about that. It would be interesting to see whether or not some global companies based in Europe and the U.S. would begin to move some of their leaders, global corporate leaders in the talent area to places like India and China.
Jonathan Pearce: There are some obvious, I think, examples where we understand that there is technology technical talent in India. The education platforms are there to produce that talent and a lot of companies have taken advantage of it already. I think there's a challenge to understand what other countries and education systems are producing in terms of key talent that might be useful. I heard of one example that was interesting to me. There was a company in the extractive industries that had just realized that in Australia, in particular universities and university programs were developed and mature in terms of producing engineers with the right kind of skills and talent that they could really access and get effective very, very quickly. But there are myriad examples of that in countries all around the world that I think companies that are getting more global are starting to tap into and understand more.
Host: Businesses are increasingly measuring customer segments in terms of their preferences. Are companies doing the same with their talent? How are they tracking whether their talent is being use effectively?
Heather Stockton: We recently worked with a well known insurance company, property and casualty, to look at their workforce in technology. And to their surprise 70% of their workforce were not full time employees and they had a significant amount of institutional knowledge that was in that group of 70%. Many of that 70% were individual contractors that they had found in a local market, some of them were partners. And at the same time they were looking to outsource a significant part of their work. So what that meant for them from a business perspective is a lot of the institutional knowledge that they needed in order to deliver on their plans over the next three to five years was actually not resident in the full time people that they had in the workforce.
So part of what they really needed to adjust was proactively measuring that mix of talent and identifying where could they afford to offshore or onshore talent from an outsourcing perspective? Where did they need to move the institutional knowledge to support their strategy? So they were putting a lot more rigor around measuring their mix of talents, how they were sourcing it and really how did they deliver on their plan, because they had no idea that 70% of their workforce were people that didn't have a long term relationship with and they were relying on heavily to deliver on their plan.
So I think that people are starting to experience problems and delivering on their business priorities. They step back and say, let's measure it and then they're being surprised by what they find.
Jeff Schwartz: When we look at customer markets, we're very comfortable talking about customer intimacy, about really knowing our customers, knowing what they want, knowing what they want in the future and being really, really in sync with them. We all have images of product focus groups and services focus groups and commercials where you see people testing out new products. So that concept of getting really close to your customer, the concept of having a dialogue in a relationship with your customer, is very, very clear.
We think there's an imperative or an opportunity today for talent leaders to do something very, very similar. To take the concepts of being customer centric, really thinking about what your customers want, listening to customers, creating services and products with your customers, again, very common ideas in the customer and product marketplace. And taking these concepts and applying them directly to the way that employers and organizations relate to the people that they are recruiting, the people that have careers with them, creating what we would call, in a phrase, a talent dialogue really shifting from a relationship that was even historically more of a command and control relationship into a sort of factory model relationship even for services workers, to much more of a relationship and a dialogue. What's the evidence of this? We are seeing companies doing a lot more surveying of their employees. We're seeing annual and periodic surveys on commitment, on values, on workplace and job satisfaction. It's becoming a very common way that companies work. There's opportunities to increase dialogue in the recruitment process to find out why people are joining you and why they're not joining you. There are opportunities in the dialogue when people exit the organization. If somebody decides to leave your firm to go to another firm - imagine you're a company with hundreds or thousands or tens of thousands of employees. Are you systematically capturing and using that information? Are you having a dialogue, not just with your customers but with your talent? We think that, again, you can call it an opportunity, you can call it an imperative - there's something afoot in the area of talent dialogue that is quite new and compelling. Because we think that that's what we're hearing that workers want. They want a collaborative relationship with their employer. They want to have a relationship that is not as asymmetrical as it's been, as one sided as it's been. So the whole concept that we've touched on, things like career customization, the different community programs that companies have, the whole concept of flexibility are examples of that sort of dialogue, that talent dialogue in action.
Jonathan Pearce: The question was asking about measuring the talent and how it's being used. I think there's this real shift in what we're measuring, what the metrics are telling us. Certainly traditionally HR metrics have been the lagging indicators of how well we're managing. So how good is our retention? How many people are we losing? Even performance metrics and things like that.
I think right now there's an opportunity to get mastery of the data in terms of what it's going to tell us about predicting behavior or predicting what people want. In the same way, Jeff, you were talking about companies understand our consumer habits or the way credit card company understands our profile and what that means in terms of what we'll spend on what and why. I think understanding what even simple demographics can tell us about how people will behave in terms of where they are, what education that they have, how far they commute, all of those things can tell us things about what points in their career people will be at risk, or what kinds of support or services can we provide as an employer that will mitigate that risk.
Jeff Schwartz: I think you've hit on one of the major opportunities we're seeing right now in the talent field generally. And it really is, as you and Heather have touched on, this whole area of metrics in measurement. Moving beyond lagging indicators, I think that's a great description, to leading indicators and predictive indicators. And we are seeing some great work being done by companies now. Companies that are taking the huge amounts of data that they have - we're working with a very large financial services company. It's equivalent of a broker or an agent network. And quite frankly, when they look at the opportunity that they have in the marketplace they don't have enough brokers and agents given the demand for financial services for people who are preparing for their retirement, people between the ages of 40-80 who are thinking about the financial products that they need and support they need.
So one of the things that we're looking at with this company and others is - how do they turn their analytic eye towards the other employees in their organization? The people not in the agency or the brokerage workforce, to identify using different quantitative measures that they've already got on their employees, who they might tap to retrain or to redevelop or focus to move into the next part of their career in the brokerage or the agency area. It goes back to something we talked about a few minutes ago. One place to look for new employees is outside your organization. Another place to look for new employees is inside your organization. And a particular tool that you can use is the information and the data that you have. We're seeing using the customer example the opportunity to move to just a different level of advanced analytics. And again, I think Jonathan summarized it well, moving from lagging indicators to chasing a problem to leading and predictive indicators in areas like recruitment and retention, which are two key areas where we're seeing an explosion of the use of workforce analytics and advanced analytics.
Host: Talent solutions focus on the workforce, they're about who, but we also have to consider the where, namely the workplace. The workplace is changing dramatically. In many cases it exists only in cyberspace. Could you discuss the impact of the transformed work environment on the search for talent?
Jonathan Pearce: This is probably one of the major areas that we're focusing on now in the work that we're doing in talent, is exactly as you've ask in the question - not just the who on the talent side, but it's not just where, it's also the what. It's not just the workplace but it's the work itself. So what we're seeing is that one way to deal with talent shortages and one way to actually get more out of the talent that you have is to think about the what, the where and the how of the work itself. Some of it is related to the workplace, how the workplace is designed, how the workplace is becoming more virtual, how work is being managed in a way that it can be done more virtually. But some of it is how the work itself is done. And we've got some very interesting examples of companies that are actually redesigning jobs, redesigning functions within the organization because they don't have enough of a critical skill within their workforce. So one way to get that group to do more is to basically break down their jobs and their work into components so as opposed to having a group of 50 researchers do a certain job - if you can restructure their work so you can have those 50 researchers do the part of their job that they can uniquely do given what their skills are, and then add in another 100 people, let's say, to do clinical testing or clinical trials, who have a different skill set that may be easier to develop, recruit for or find in your organization, you can grow an organization from 50 to 150, not by recruiting another 100 people with the same skill profile but literally by changing the work. So the work side of it is both about the workplace and it's definitely about the opportunities to reengineer work itself.
Heather Stockton: The other thing that we're seeing huge emphasis on is given that how the work is changing and where people do the work, is leaders being trained and educated on virtual leadership and what does that mean. The other thing the organizations are doing is they're looking across their geographies for talent. So if I need to deliver a technical system I’m not necessarily going to use people in my local geography. I'm going to go around the world and pick from my different geographies in order to deliver that because that's easier for me to do than go out and find people or potentially pay for expensive resources that don't have the institutional knowledge.
So when organizations make those choices there's significant pressure on how do you manage that virtual team and how do you keep that group connected when they physically don't work together and they need to share information, which feeds into social networking and collaboration tools. So the whole complexity of the workforce and how people do their work and the bias in the past, it's got to be face to face interaction to - I think the preference in the future is going to be staying connected in multiple different ways. We're seeing interesting changes in what people are looking for in leadership, how they're choosing the teams that they work with and then how they deliver the work.
Jonathan Pearce: And this is great kind of win-win that a company can get if it gets imaginative and creative around how to arrange work and how to rethink about workplaces. We see, for example, global teaming and people working in virtual global teams has taken a lot of the pressure of people actually traveling across borders and the compliance and the cost and all that complexity that goes along with that. And it can be a win for the employee in terms of getting people to take on global challenges without having to relocate their families and disrupt their personal life so you kind of win on flexibility with the employees. And this huge win on cost reduction and less compliance complexity for the organization - and just the same with remote workers. There's huge opportunity to give employees what they want in terms of flexibility and working when and where and how they want. But also a huge potential saving on things like real estate and hard infrastructure that you need to support hard working spaces.
At the same time there are these benefits to flexible working and virtual working and especially across boarder of virtual working. Certainly there are still challenges that organizations need to take account of in terms of being more flexible in terms of whether employees will work and where their employees need to be to work. I think we're seeing this reevaluation of global mobility and the fact that careers need to be more global. Again, it's a kind of a win-win in some ways. For organizations, I think, looking at where their growth is going to be in the next decade to sustain their survival. It's not going to be where their organizations have traditionally had their major markets. It's going to be in the emerging market economies. The problem for that is where their talent is, where their entrepreneurs and general management talent is not there, where their skills are is not there. So there's this huge disconnect between where the opportunity is and where the talent is.
I think global mobility becomes part of a solution whether you're either trying to move the talent to where the work is or move the work to where the talent is, there's this real important piece of connecting people and the opportunities. Some of that can happen virtually but some of it really needs to happen with feet on the ground. Especially from a global development point of view one of the things that we've seen is being part of a global virtual team can be a great experience for an executive or a high potential employee. It can give you a lot of the sense of diversity. What it doesn't give you is the opportunity to grow the skills to manage operate in a different environment, to lead people with very different points of view about how work should be managed, how performance should be managed, how people should be inspired and motivated. And there's this real change in the things companies are focused on in terms of cross cultural ability.
I think before we were looking at how to take people - and if we were moving them to Singapore - how do we make them successful in Singapore? So we'll give them cultural training.
What I think we're now looking at is, how do we produce leaders that are global chameleons in a sense that can operate in Singapore today and Vietnam tomorrow and Poland the next day.
When we look at the win in terms of employee value proposition for this - we recently did a survey of university graduates asking them to rate 13 different things that they wanted to achieve within their first three years of graduating college. And for global students, having an international assignment ranked number two, only below being able to manage my professional and personal life. For U.S. college graduates it ranked number four. In any case, both in the top five and above things like getting a stable economic platform, or, reaching management position, or some of the things we might have thought were more motivators. So capitalizing on the fact that we've got employees that want global, we've got a company in a competitive situation that demands global. How do we put global mobility platforms in place that let us capitalize on both?
Jeff Schwartz: Global is top of mind for people entering the workforce. It's top of mind for business leaders. So the challenge is how do we, as talent leaders, put it in the middle of our equation as well?
Jonathan Pearce: It hits perfectly on what you were saying, Jeff, around connecting work and talent. I mean, that's the proposition. I think so often in HR we focus just on the talent piece, on the employees and on serving employees. I think there's a real opportunity for HR to step in and start redefining work, redefining what the work is or how it gets arranged and how it gets done and connecting the talent that we have to the work that needs to be done.
Heather Stockton: And layering in the flexibility around whether the talent goes to the work or the work comes to the talent, and understanding what's the best mix of all of that – which is the opportunity.
Jonathan Pearce: Exactly. So often the people that go on these national assignments in the past have not been the ideal leaders that we wanted to invest the global experience in. They have sometimes been the people that would go or the people that were thought of, or the people that had the relationship or something.
When we surveyed in terms of a target profile of employee in a global organization just recently - we said, let's not survey the actual international assignees. Let's survey the people that we wish were international assignees. And most of them said they didn't see international assignment as a career enhancer right now. They might have wanted to do it but they didn't see it recognized. And over 75% of them said that the number one motivator for taking an international assignment was understanding how it fit into an overall career path.
Jeff Schwartz: Yet executives are telling us that they need more global executives.
Jonathan Pearce: Yeah, right.
Heather Stockton: Well, they do and large life insurance company in Canada - huge turnover for their ex-pats that come back. They come back to Canada and they either end up getting packaged or they resign because they haven't thought about that continuum around - I sent this person away, they've got all this great experience and I bring them back and I forget about them. So how do you actually stay connected as you move the talent around?
Jonathan Pearce: In traditional programs there's a lot of risk as a high potential person to taking an international assignment. You want me to go to the Philippines for three years while my peers are at home making their relationships at the headquarters with the senior executives that are going to push them through their careers. That's a huge risk you're asking me to take that I'll be successful in the Philippines, that anyone will remember that I was there. So often I think what's that meant is this repatriation retention problem that so many companies deal with is often, at base, the fact that - well, we sent the people that would go. There's this idea in financial services called "FILTH" and it stands for a certain kind of employee, it's failed in London, try Hong Kong. And it's that, well let's just send the people that would go because how much damage could they do in our emerging market. So when people repatriate the problem often with that talent is that it wasn't the best talent to begin with. Yes, we've invested millions of dollars in it but when it comes back it's still not our best talent. Whereas if we could have selected the people that we really wanted to go, if we could have given them the comfort that it wasn't a career risk, then we could have really done something meaningful with them on return.
Jeff Schwartz: Global is important but it's not easy.
Host: HR's job is to deliver the infrastructure necessary to support workforce planning. What are some of the ways that HR can work with a company's business side to make this happen?
Heather Stockton: I think we touched on that earlier around the emphasis - HR has produced the statistics and they've been lagging statistics. They can help the business executive really understand what is this telling me, what's in the predictive modeling that I can consider around what it means in the future. And really translate that information they get through the workforce planning into meaningful data that the executive can actually decision and act on. I think that's really the shift that we're seeing. And the need that the business executive has and the requirement for HR to really drive the maximum value they can is shift away from what's history telling me and what's that mean for the future.
Jeff Schwartz: In some ways this is the best and the worst of times to be in HR. And talent's a really good example of this. There are multiple very, very large challenges on the plates of most of the HR leadership teams that we're working with around the world. As Jonathan talked about earlier, there's some major emphasis on HR operational efficiency, and that's manifesting itself in part with significant outsourcing in different ways of different parts of HR.
At the same time HR leaders are expected - and we've seen some research and we've done quite a bit of research that looks at what are the expectations of business leaders and HR leaders themselves as to what they'll be doing over the next 3-5 years. And whether you survey HR leaders or whether you survey business leaders at the C suite level, the clear indication is that something is happening to the HR function. And the HR function needs to be more strategic. Part of that is freeing up time through outsourcing and operational efficiency.
The big challenge, however, is in really staying integrated and being in sync with the business strategy and the business priorities and not confusing what we think in HR is strategic with what the business thinks is strategic.
This is a very interesting challenge that's on the plate right now, which is what we're finding is the more that talent leaders are part of line of business and other functional - by which I mean IT and, as we talked about, IT finance centers - through the extent that talent leaders are part of those business and functional leadership teams, and they're thinking broadly about the range of concerns to the product line, to the service offering to the function, they're probably better equipped. So what that means is in order to play this new game of strategic HR and talent we're going to see some changes in the kind of development and the expectations of people who are playing leadership roles in talent. Less of a back office opportunity, less of a support activity and more of a frontline working with the senior executives of group. And just to end where we started - we talked a little bit about - we could talk a lot more about the turbulence and the economy.
Companies are changing their strategy and they're reemphasizing certain strategic priorities right now as they look at what's going on in the economy. That ability to change quickly and to make sure that the talent priorities around recruitment, around development - we talked earlier about retention and performance management on steroids are real requirements, changing requirements that really have to do with their core with HR and talent leaders being on the same team on a daily basis with the people making strategic and operational decisions.
Heather Stockton: Jeff, what's interesting about your comments is while HR is at a crossroads there has been no better time to be an HR professional, have the ability to have impact and have real positive impact on business outcomes and really make a difference. So while it's a turbulent time and a tough time it's a very exciting time for somebody who's passionate about talent, passionate about what HR can do for an organization and has ability really embed themselves and understanding what the business is trying to do, and influence how talent delivers on that.
Jeff Schwartz: I agree with you but let me add one maybe slightly controversial perspective particularly for HR professionals and maybe for business professionals. Albert Einstein is quoted as saying that idiocy is doing the same thing over and over again and expecting a different result. This is a great time to be in HR and a talent leader. But part of the opportunity and part of what I think we've seen in working with our clients over the last couple of years is there really is an expanded space. There really is an opportunity to reframe how we are thinking about people in HR and talent issues. A lot of the work that we've touched on, whether it's the chemistry of talent idea with these 41 elements or thinking about work from the perspective of how the workplace has changed, how the work itself has changed, how there are many different ways to deal with globalization, some of it is through virtual work, some of it is through global mobility, but global mobility through a strategic lens, not an opportunistic lens - send me to Singapore because I'll go versus we're going to send you to Singapore because five years from now we want you to be part of the headquarter Asia-Pacific leadership team here. It's that kind of reframing that I think is going on right now. That's why it's an incredibly exciting time, but not necessarily to do what we've been doing before. This reframing, this resizing, this thinking about a different range of solutions, particularly in the talent area is one of the things that makes it a very exciting time, as you said.
Heather Stockton: I absolutely agree. You're seeing more and more business people come in to HR and more and more HR people go into the business in order to create that tension and that friction to actually think about doing things differently to drive a different result.
Host: We've spoken about a lot of complicated issues related to finding and retaining talent, but many companies are all at sea. So if they're going to get a handle on their talent strategy where should they start?
Heather Stockton: With the business.
Jeff Schwartz: Yeah, the starting point and the ending point for talent strategy is business strategy. We've talked about the notion that, not our insights, strategies about making choices. Companies are making very difficult choices about products, customers, how they're going to operate everyday. This is not a one time process. Strategic alignment of talent priorities is not something that's done once a year. It's not something that sits in a document - here's our talent strategy. We sat with the business leaders at the beginning of the year and we have a 100 page document and the first two pages summarize the strategic objectives of the company and then we go on and tell everyone what our talent strategies and our supporting programs are going to be. It's not encapsulated in a document. It's a way of working as part of an executive team.
We talked about the whole governance and leadership question, a new kind of partnership across HR and talent leaders, business leaders and functional leaders. That's what we're talking about. It's integrating into talent strategies and solutions, business strategy everyday. It's integrating ongoing innovation and ways of being talent centric, as we talked about as well. And it's also about staying connected to infrastructure and making sure that what you do around talent infrastructure is not just a lagging indicator but is a leading indicator. Are we developing the kinds of infrastructure that we need to get ahead of the game? And an example would be, and this is one of the most exciting areas that we've seen in discussions with clients over the last several months is the whole area of social networking. There's an opportunity from the talent and HR perspective for the people who are leading the people function to be thinking with business leaders about how to use social networks in order to improve productivity, how to use them as part of talent programs. And we recently had a conference with chief human resource officers and I will tell you that the highest level of energy in the room was a discussion about the role of social networks and politics and how we can apply some of that scale and some of that dynamism to what's going on in business and talent issues today.
Jonathan Pearce: I really think that, like you said, the opportunity is to build a relationship with the business. For so many companies HR has a brand that's a downstream transaction manager of people related issues and even just in engaging this conversation with the business about what is the strategic plan in terms of growth, in terms of capability. I think that starts changing that brand and leads to richer and richer dialogues around what can HR do to really support the strategic business objectives of the enterprise.
Heather Stockton: But really the talent strategies are about making choices everyday that drive business outcomes and that's making sure that the link between those two exists at all times in conversations, in choices that are made and priorities that are made.
Host: Thank you for joining us today on Deloitte Insights.
Jeff Schwartz: Thank you, it's been a great discussion.
Jonathan Pearce: Yeah, it's been fun.
Heather Stockton: Thank you.
Host: Visit www.deloitte.com to find " Chemistry of Talent: New Ways to Think About People and Work," which served as the basis for today's discussion, as well as articles, newsletters and other information of interest.
You've been listening to Deloitte LLP's production of Deloitte Insights, the program that looks at today's important business issues. We want to hear from you. Contact us with your feedback or suggestions for future podcast topics and find Deloitte Insights at www.deloitte.com/us/podcasts. This has been a production of Deloitte LLP. Thanks for listening and bye for now.