a11 creating people advantage
TRANSCRIPT
Session A11Session A11
Creating people advantageHighlights from the global survey conducted by the Boston Consulting Group (BCG) for the WFPMA
Jean‐Michel CayePartner and Managing Director – Paris, France
Paul OrlanderPartner and Managing Director – Toronto, Canadag g ,
The sessions in the Insérer logoPersonal equity track
are presented by
Creating People Advantage How Companies Can Adapt their HR Practices for Volatile Times
Montreal, 27th of September 2010
1CPA 2010_Montreal-final_ 27-9-10 JMCPA.ppt
The Creating People Advantage series goes into fourth round
The CPA series has drawn strong participation in the past ...
The CPA series has drawn strong participation in the past ...
... and received extensive international media coverage
... and received extensive international media coverage
LaRepública
FinancialTimes
Times
Handelsblatt
Australian Fin. Review
The EconomicTimes
FrankfurterAllgemeine
Zeitung
TV: CNBC
Le Figaro
Il Sole 24 Ore
BusinessWeek
The HeraldBusiness
CPA Europe 2007
1,355 participants
CPA World 2008
4,741 participants
CPA Europe 2009
3,348 participants
Source: Selection of media responses 2007-2009
CPA World 2010
5,561 participants
BloombergBusinessweek
Le Figaro InterviewLe Figaro
CPA 2010 publication: Montreal, Sept. 27, 2010
2CPA 2010_Montreal-final_ 27-9-10 JMCPA.ppt
Portugal 100
More than 100 nationalities participated in global HR study
Note: Not all countries shownSources: Proprietary Web survey with 5,561 responses; BCG/WFPMA analysis
Norway 24Sweden 121
Zimbabwe 5
Ecuador 31Colombia 50
United Kingdom 131
Switzerland 67
Philippines 85
China 73
Slovenia
48
= 0
50–99100 or more
Fewer than 10
20–4910–19
Canada 438United States 293
Brazil 201
South Africa 97
Spain 50France 270
India 50
Australia 220
New Zealand 68
Singapore 3
Germany 173
Japan 18
Mexico 19Guatemala 16
Uruguay 27
Senegal 20
Denmark 42
Czech Republic 28
Estonia 1Austria 21
Russia 166
Taiwan 101Thailand 33
Sri Lanka 16
Argentina 25
Dominican Republic 24
Chile
7
Venezuela 38
Botswana 29
Finland 177
Hungary 36Netherlands 89
Belgium 26
Panama 24
Bolivia
4
Latvia 38
Poland 8
Slovakia 10
Malaysia 15
Costa Rica 42
Benin 4Algeria 1
Uganda 44Nigeria 8
Namibia 6
Malawi 2Tanzania 33
Swaziland 1
Italy
57Bulgaria 109
Turkey
53
Cyprus 20
Greece
89
Malta 74
Peru
26
Romania 52
Saudi Arabia 75
Serbia 22
South Korea 42
United arab. Emirates 10
Ireland 30
Macedonia 30
Paraguay
18
Kenya 11
Morocco 8
Nicaragua 8 Trinidad and Tobago 5
Tunisia 4
Côte d'Ivoire 3
Indonesia
3
Ukraine 3
Andorra 2
Moldova 2
Montenegro 2
Qatar 2Saint Kitts and Nevis 2
Afghanistan 1Albania 1
Brunei 1
Chad 1
Cape Verde 2
Angola 1
3CPA 2010_Montreal-final_ 27-9-10 JMCPA.ppt
Interviews with executives have been conducted around the world
Source: Interviews; BCG/WFPMA analysis
Tota
l
Sou
th A
frica
Aus
tralia
New
Zea
land
Philip
pine
s
Col
ombi
a
Bra
zil
Arge
ntin
a &
Chi
le
USA
Can
ada
UK
Net
herla
nds
Turk
ey
Switz
erla
nd
UAE
Spa
in
Finl
and
Nor
way
Italy
Hun
gary
Ger
man
y
Fran
ce
Chi
na
15361233478
137411
5133455568
1212
24
Interviews in AfricaEurope
88 6
Latin
America
11
Asia / Pacific
28
Kore
a
Sing
apor
e
Indi
a
Rus
sia
Mid.East
5
North
America
15
4CPA 2010_Montreal-final_ 27-9-10 JMCPA.ppt
Germany
USA
BASF Dr. H. Schwager CHRO
AmEx Kevin Cox EVP
HR
Australia Lynelle
BriggsAPSC Head of APSC
(Australian Gov.)
Europe
North America/ Latin America
Asia/Pacific/Australia/Africa
153 interviews have been conducted
BMW
Daimler
Sandy Price
Lazlo Bock
Joann
Eisenhart
Harald Krüger CHRO
Wilfried Porth CHRO
Head HR
VP of People OperationsSVP
WW HR
Finland Nokia Hallstein Moerk CHRO
South Africa Gold Fields Italia Boninelli SVP HR
Pfizer
Sprint
China Jianjun
BaiMa Steel Group Head
of HR
France Schneider Electric Karen Ferguson EVP
HR
UK Lloyds BankingGroup Angie Risley Group HR Director
5CPA 2010_Montreal-final_ 27-9-10 JMCPA.ppt
Some Results
6CPA 2010_Montreal-final_ 27-9-10 JMCPA.ppt
Google leads in ranking for best HR practices
Sources: Proprietary Web survey with 5,561 responses; BCG/WFPMA
analysis
23% of all respondents rated Google as the company with the best HR practice23% of all respondents rated Google as the company with the best HR practice
1
2
3
4
7CPA 2010_Montreal-final_ 27-9-10 JMCPA.ppt
Insights on "Engaging Employees"
Laszlo BockGlobal Vice President of
People Operations at Google
Laszlo BockGlobal Vice President of
People Operations at Google
Hallstein MoerckExecutive Advisor & Former Executive
VP of HR at Nokia
Hallstein MoerckExecutive Advisor & Former Executive
VP of HR at Nokia
8CPA 2010_Montreal-final_ 27-9-10 JMCPA.ppt
The 21 HR topics fall into five categories
Source: BCG analysis
Managing corporate social responsibility
Managing talent
Becoming a learning organization
Transforming HR into a strategic partner
Enhancing employee engagement
Measuring labor costImproving performance management and rewards
Measuring workforce performance
Improving leadership development
Managing work-life balance
Managing change and cultural transformation
Managing demographics
Strategically planning the workforce
Improving employer branding
Managing globalization
Delivering on recruiting
Managing diversity and inclusion
Restructuring the organization
Managing flexibility
Providing shared services and outsourcing HRMastering HR processes
Source
Perform
Develop
Affiliate
Achieve HR excellence
9CPA 2010_Montreal-final_ 27-9-10 JMCPA.ppt
Sources: Proprietary Web survey with 5,561 responses; BCG/WFPMA
analysis
Talent, leadership development, engagement and workforce planning are the most critical HR topics
Low
High
Future
importance
2010
Sample size:5,561
Relevance today
HighLow
Mediumneedto act
Strong need to
act
Low need to act
Current capabilityHigh Low
Leadership development
Managingtalent
Strategic workforce planning
Employee engagement
HRprocesses
Labor costs
Restructuring the organization
Recruiting
Flexibility
Performance management and rewards
Demo-
graphics
Change &Culturaltrans-formation
Globali-zation
Workforce performance
measurements
Shared services & outsourcing HR
Employer branding
Diversity &inclusion
Corporate
socialresponsibility
Work-life
balance
Learning
organization
HR as strategic partner
10CPA 2010_Montreal-final_ 27-9-10 JMCPA.ppt
Note: N of each country is above 50Source: Proprietary Web survey with 5,561 responses; BCG/WFPMA analysis
Managing talent and improving leadership development ranked high in most countries
1 2 43 51 2 43 5
Northern America Northern America
Latin Am. Latin Am.
Mid.East AfricaMid.East AfricaEuropeEurope AsiaAsia PacificPacific
53333344
3444555435333
1121122212112
221321112114 21
Philip
-
pi
nes
New
Ze
alan
d
Aus
tralia
Chi
na
Sou
th
Afri
ca
Saud
i A
rabi
a
UK
Rus
sia
Net
her-
la
nds
Italy
Ger
-
m
any
Fran
ce
Bra
zil
Uni
ted
Sta
tes
Can
ada Men-
tions
in Top
5
14
13
13
8
Country
Subject
552
1 35
3
3
Performance and rewards
Employer branding
554 4 4Learning organization
4325 4Change and cultural transformation
234 24 5HR as a strategic partner
35455 5Workforce perform. measurement
Employee engagement
Workforce planning
Leadership development
Managing talent
11CPA 2010_Montreal-final_ 27-9-10 JMCPA.ppt
Performance management and rewards, and employee engagement, have jumped in current importance ranking
18192021
1234567891011121314151617
2010 ranking
Improving leadership developmentManaging talentEnhancing employee engagementMeasuring workforce performanceImproving performance management and rewardsManaging labor costsDelivering on recruitingTransforming HR into a strategic partnerStrategic workforce planningMastering HR processesBecoming a learning organizationManaging change and cultural transformationManaging flexibilityImproving employer brandingRestructuring the organizationManaging work-life balanceManaging corporate social responsibilityManaging diversity and inclusionManaging demographicsManaging globalizationProviding shared services and outsourcing HR
Sources: Proprietary Web survey with 5,561 responses; BCG/WFPMA
analysis
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
2008 ranking
Managing talent
Improving leadership development
Delivering on recruiting
Managing work-life balance
Managing change and cultural transformation
Transforming HR into a strategic partner
Enhancing employee engagement
Improving performance management and rewards
Measuring workforce performance
Restructuring the organization
Becoming a learning organization
Managing demographics
Mastering HR processes
Managing diversity and inclusion
Managing corporate social responsibility
Managing globalization
Providing shared services and outsourcing HR
Current importance
12CPA 2010_Montreal-final_ 27-9-10 JMCPA.ppt
Of the Five Most Frequent Projects, Four Are Poorly Managed Lack of Focus of HR function?
Sources:
Proprietary Web survey with 5,561 responses; BCG/WFPMA
analysis.
Good practice•
Delivering on recruiting•
Mastering HR processes•
Transforming HR into a strategic partner
•
Improving employer branding
Number of projects undertaken
is above average
Number of projects undertaken
is below average
Below-average satisfaction
with projects
Above-average satisfaction
with projects
Difficult topics•
Managing change and cultural transformation
•
Strategic workforce planning•
Providing shared services and outsourcing HR
•
Managing diversity and inclusion
•
Managing demographics•
Managing globalization
Under-leveraged•
Managing corporate social responsibility
•
Becoming a learning organization
•
Managing work-life balance•
Managing flexibility
Top five HR projects (number of projects)
Poorly managed•
Improving leadership development
•
Restructuring the organization•
Managing talent•
Enhancing employee engagement
•
Measuring workforce performance
•
Managing labor costs•
Improving performance management and rewards
13CPA 2010_Montreal-final_ 27-9-10 JMCPA.ppt
Top ten HR projects of high-performing companies
Top ten HR projects of high-performing companies
Low-performing companies rank five HR projects lower than high performers
Low-performing companies rank five HR projects lower than high performers
Improving leadership development
Managing talent
Restructuring the organization
Delivering on recruiting
Measuring workforce performance
Enhancing employee engagement
Managing labor costs
Performance management and rewards
Transforming HR into a strategic partner
Improving employer branding
1
2
3
4
5
6
7
8
9
10 -4
-4
0
0
1
-5
0
2
-1
-1
-5 -4 -3 -2 -1 0 1 2 3 4 5
Sources: Proprietary Web survey with 5,561 responses; BCG/WFPMA
analysis.
HR projects Number of ranks different from high performer
Three high-priority projects of high-performing companies are neglected by low performers
14CPA 2010_Montreal-final_ 27-9-10 JMCPA.ppt
When adapting HR practices for volatile times five areas of HR should be in focus
Building Flexibility in the Workforce
A Strategic Workforce Plan to Build the
Capabilities You Need
Developing Capabilities for HR to Partner with
the Business Units
Creating a New Deal for Middle Managers
Do You Have the Right Future Leaders?
How Companies Can Adapt their HR Practices
for Volatile Times
15CPA 2010_Montreal-final_ 27-9-10 JMCPA.ppt
Sources: Proprietary Web survey with 5,561 responses; BCG/WFPMA
analysis
Do you have the right future leaders?
Low
High
Future
importance
2010
Sample size:5,561
Relevance today
HighLow
Mediumneedto act
Strong need to
act
Low need to act
Current capabilityHigh Low
Leadership development
Managingtalent
16CPA 2010_Montreal-final_ 27-9-10 JMCPA.ppt
Projections 2020 2030
Low Medium HighEmployability/immigration capabilityNo pressing talent shortageor skill gaps
High talent shortageor skill gaps
Very high talent shortage or skill gaps
Talent shortage or skill gaps
Manufa
cturing
Manufa
cturing
Constr
uction
Constr
uction TradeTrade
Hotels, restaur-
ants
Hotels, restaur-
ants
Trans-
port,
commu
nication
Trans-
port,
commu
nication OthersOthers
Public adminis
tration
Public adminis
tration
Edu-
cation
Edu-
cationUtilitiesUtilities
Health care
Health care
It & Bus.
service
It & Bus.
serviceFinan.serviceFinan.service
The region-industry matrix highlights likely skill shortages in 2020 and 2030
Pacific
Source: BCG analysis.Note: The country assessment scoring is derived from a combination of the employability score and the ease-of-immigration score. The country/ industry assessment scoring is based on the size of the current employment situation, the CAGR
difference between supply by country and demand by industry, and the CAGR
difference between labor supply and demand on the country level.
GER
TradeTrade OthersOthersUtilitiesUtilities
ITA
BRAMEXUSACAN
UK
ESP
FRA
AUSJPNKORCHNINDRUS
POL
SWE
TUR
Am
eric
aEu
rope
Asia
GER
17CPA 2010_Montreal-final_ 27-9-10 JMCPA.ppt
Talent management: from serendipity to strategy
Ratios Leadeship Pipeline
~x 5
~x 3
~x 3
Function 1 Function 2 Function 3
Talent risks by functions% Talents / total staff
1 Division 2 Divisions 3 Divisions+
Proactive career management
Talent risks & strategies by geographies
€€
Leadership & Learning Center
Talent HR processes
BusinessStrategy Anticipate & Invest
Attract &identify
Assess&
select
Affiliate
Develop
1
2
3
4
5
18CPA 2010_Montreal-final_ 27-9-10 JMCPA.ppt
Talent issues to differentiate upon maturity of organization
–
Low turn-over and low growth–
Status-quo and silo oriented executives–
Overload of low performers–
Important HR systems legacy–
Complex decision making on talents–
More attractive for farmers than developers–
…+
Highly educated talents+
Internal sourcing more important than external
+
Important HR systems legacy+
Profitability and excellence oriented KPIs+
…
Mature Organizations
–
Often talent massive education required in RDEs
–
Unstability of talents and management–
Often non adapted managers–
Little culture of meritocracy in RDEs–
Lack of cohesion–
External sourcing is crucial–
Little equipement in HR systems–
…+
High turn-over and growth+
Rapid decision making on talents though some opacity
+
Growth oriented KPIs+
Attractive for developers+
…
Rapidly
Developing
Organizations
19CPA 2010_Montreal-final_ 27-9-10 JMCPA.ppt
Top performing companies are able to fill top executive positions internally – Low performers struggle
Sources: Proprietary Web survey with 5,561 responses; 1,089 responses in this section; BCG/WFPMA
analysis
60%
47%
60%
13%
51%
63%
0
20
40
60
80Internal fill rate (%)
Top managersSenior middle managersFrontline managers
Low performerHigh performer
21CPA 2010_Montreal-final_ 27-9-10 JMCPA.ppt
In North America women make up 1/3 of talent pools - in Europe less than 1/4 of employees in talent pools are women
Source: Proprietary Web survey with 5,561 responses; BCG/WFPMA
analysis
15%
24%
24%
24%
27%
32%
33%
96%
85%
76%
76%
76%
73%
68%
67%
Makeup of talent pool
80604020 1000
Women Men
Middle East 4%
Established Asia
Africa
Latin America
Europe
Emerging Asia
Pacific
North America 38%
31%
42%
44%
50%
49%
61%
90%
Companies with ≤10% women in talent pool
22CPA 2010_Montreal-final_ 27-9-10 JMCPA.ppt
The best leaders will demonstrate differentiated leadership Need to navigate an uncertain, ambiguous world with a shortage of key talent
Source: Interviews, survey responses and BCG analysis
N
E
S
Timeless
Leadership differentiators
WDrive toachieve
JudgmentCourage
Integrity
Intelligence
mpathizeAchieve through network influence and authority
in & winDeliver sustainable success
to company and stakeholders
elf-correctUnlearn outmoded
success models
avigateEmbrace global uncertainty
and chart a clear course
Vision
Compelling aspiration
IQ and people smarts
Right trade-offsOwnership and risk
Resilience
Ethics
23CPA 2010_Montreal-final_ 27-9-10 JMCPA.ppt
Development conversations and plans are relatively popular but not considered effective
Training actions performed (% of respondents)Training actions performed (% of respondents)Effectiveness of each training
action Effectiveness of each training
action
Low HighSources: Proprietary Web survey with 5,561 responses; 1,089 responses in this section; BCG/WFPMA
analysis.
8%
21%
22%
30%
30%
33%
40%
44%
47%
48%
International assignments
External assignments (such as joint ventures and NGOs
Tailored career tracks along functions, regions, position
Cross-functional assignments
Mentoring
Internal executive-development program
Individual coaching
On-the-job projects
Regular development conversations and plans
Technical and functional training
24CPA 2010_Montreal-final_ 27-9-10 JMCPA.ppt
Top 10 stand-out preparation practices for Leadership development
1. Mandate experiences via development formulas, e.g. 2x2x2+5
2. Immerse leaders completely in unfamiliar markets (e.g., live in rural India, favelas, Iraq)
3. Temporarily assign leaders to external groups, e.g. industry policy groups, payers
4. Embed social causes into the business to generate leader loyalty
5. Provide opportunities for very high-potential leaders to "skip a chair"
6. Create critical assignments bank to develop next generation leaders and enable late career leaders to migrate to new role while still making value-adding contribution
7. Map external top talent in key markets to determine the market's best
8. Provide limited-authority experiences, e.g. peer-group leadership, JV leadership
9. Conduct "after-action reviews" every Friday or after every assignment
10. Conduct quarterly talent reviews with templates reporting action plan follow-up, senior team health, succession confidence, high-potentials pipeline, and diversity
Example practices
Expand horizons
Create fast tracks
Accelerate skills
development
25CPA 2010_Montreal-final_ 27-9-10 JMCPA.ppt
When adapting HR practices for volatile times five areas of HR should be in focus
Building Flexibility in the Workforce
A Strategic Workforce Plan to Build the
Capabilities You Need
Developing Capabilities for HR to Partner with
the Business Units
Creating a New Deal for Middle Managers
Do You Have the Right Future Leaders?
How Companies Can Adapt their HR Practices
for Volatile Times
26CPA 2010_Montreal-final_ 27-9-10 JMCPA.ppt
Sources: Proprietary Web survey with 5,561 responses; BCG/WFPMA
analysis
Creating a new deal for middle managers
Low
High
Future
importance
2010
Sample size:5,561
Relevance today
HighLow
Mediumneedto act
Strong need to
act
Low need to act
Current capabilityHigh Low
Leadership development
Employee engagement
27CPA 2010_Montreal-final_ 27-9-10 JMCPA.ppt
White paper on engagement was released in July 2010 Title: "Creating a New Deal for Middle Managers –
Empowering a Neglected but Critical Group"
......
28CPA 2010_Montreal-final_ 27-9-10 JMCPA.ppt
Note: Scale of engagement indicators: 1 = strongly disagree, 2 =
disagree, 3 = neither disagree nor agree; 4 = agree; 5 = strongly agreeSources: Engaging
for
Results
database; BCG/WFPMA
analysis
Engagement of middle managers is still suffering after crisis
1 2 3 4 5
People managercapabilities 3.7
Recognition 3.5
Performancemanagement 3.3 -8%
-5%
-5%
Difference in engagement before and after the financial crisis
Engagement level of top management
is slightly down
Indi
cato
r of e
ngag
emen
t
Engagement 2009 <-7% <0%Change 2007-2009: >0%
Engagement score
Top managersTop managers
1 2 3 4 5
3.5
3.2
3.1 -14%
-14%
-10%
Middle managers are increasingly
disengaged
Engagement score
Middle managersMiddle managers
1 2 3 4 5
3.4
3.1
3.1 +7%
-6%
+3%
Engagement of team members has
not suffered
Engagement score
Team membersTeam members
29CPA 2010_Montreal-final_ 27-9-10 JMCPA.ppt
The importance of middle managers
Middle managers...
manage day to day business and are key to
execution
are unengaged after the crisis
The Middle Matters
should function like a v-belt between top mgmt and
employees
have often been
neglected, in favor of top
managers and high potentials
make up the vast majority of managers
should translate vision and strategy to
employees
have a direct impact on employee
engagement
need support to develop leadership
skills
30CPA 2010_Montreal-final_ 27-9-10 JMCPA.ppt
Middle managers need new roles, responsibilities, and levers
Source: BCG/WFPMA
analysis1. Span of control of 7 used in this example
High
pot
entia
ls
Topmgmt
Front-line management
~ 50-200 top managers
~ 7,000 middle managers
~ 43,000non-managers
Illustrative company with a workforce of 50,0001
Do we have too many management layers?
Do middle managers have the right levers to manage and engage?
Do middle managers have the required leadership skills?
Is middle managementactively involved in company affairs?
elayer
and create larger, exciting roles for middle managersD
mpower
managers to act
ccelerate
leadership skills
everage
the power of middle managers
E
A
L
Middlemanagement
Non-managers
31CPA 2010_Montreal-final_ 27-9-10 JMCPA.ppt
1. Span of control less than sixSources: BCG/WFPMA
analysis
New DEAL interventions
Delayer and create larger, exciting roles
•
Significantly reduce micro-teams1
and increase average span of control•
Design new role mandates defining accountabilities, decision rights, key performance indicators, and desired leadership behavior for each middle manager
•
Redesign their vertical and horizontal career paths and performance management and incentive systems
D
Empower managers
to act
•
Give the middle managers the levers and the authority to manage•
Make middle managers accountable for their team organization •
Provide them with rigorous objective setting and evaluation systems for their teams •
Give middle managers leeway to reward and recognize their teams •
Grant them the responsibility and the means to develop employees
E
Accelerate leadership
skills
•
Train middle managers on managerial skills—especially goals setting, performance evaluation, and employee coaching and development
•
Develop leadership behaviors in middle managers consistent with company strategy through 360°
feedback, development workshops, performance management, and coaching
•
Establish modules along the hierarchy ("first leadership experience", "dealing with Generation Y", etc.)
A
Leverage the power of middle
managers
•
Involve middle managers in strategy development, continuous improvement processes, and innovation•
Establish "middle-out" programs and platforms to engage employees with corporate vision, strategy, values and actions
•
Establish recognition programs to celebrate success in the middle
L
32CPA 2010_Montreal-final_ 27-9-10 JMCPA.ppt
Due diligence can help pinpoint
~ 50-200 top managers
~ 7,000 middle managers
~ 43,000non-managers
Illustrative company with a workforce of 50,0001
Topmgmt
Front-line management
Middlemanagement
Non-managers
High
pot
entia
ls
0
100
200
300
4321 ...111098765 1 2 3 4 5
Non-managersMiddle managersTop managers
Spans and layers analysis
Assess structural symptoms for sources of disengagement and inefficiency
•
Narrow spans of control (below 6)•
Too many layers
Average span of control: 5.3
Span of control
Micro teams
Elements of engagement
Engagement survey (EFR)
Assess engagement levels of employees for:•
Low overall engagement scores•
Dissatisfaction in specific domains•
Differences among management cohorts
Sources: Engaging for Results database, data from 2009; BCG/WFPMA
analysis
ObjectivesAspirations
AccountabilityCollaboration
Performance managementRecognition
People manager capabilitiesInteractions
Overall engagement
Engagement score
Illustrative example of spans of control of executives
33CPA 2010_Montreal-final_ 27-9-10 JMCPA.ppt
When adapting HR practices for volatile times five areas of HR should be in focus
Building Flexibility in the Workforce
A Strategic Workforce Plan to Build the
Capabilities You Need
Developing Capabilities for HR to Partner with
the Business Units
Creating a New Deal for Middle Managers
Do You Have the Right Future Leaders?
How Companies Can Adapt their HR Practices
for Volatile Times
34CPA 2010_Montreal-final_ 27-9-10 JMCPA.ppt
Sources: Proprietary Web survey with 5,561 responses; BCG/WFPMA
analysis
A strategic workforce plan to build the capabilities you need
Low
High
Future
importance
2010
Sample size:5,561
Relevance today
HighLow
Mediumneedto act
Strong need to
act
Low need to act
Current capabilityHigh Low
Strategic workforce planning
Workforce performance
measurements
35CPA 2010_Montreal-final_ 27-9-10 JMCPA.ppt
The time horizon is often shorter for workforce planning than for corporate strategy
Note: Values below 1% not shown.Sources: Proprietary Web survey with 5,561 responses; 833 responses in this section; BCG/WFPMA
analysis.
Percentage of respondents
Companies that use the same time horizon for workforce planning and strategic planning
Company’s timehorizon forworkforce planning
6 or more
years
5 years
3 years
2 years
1 year
Company’s time horizon for strategic planning
4 years
5%
1%
4%9%
6 or more
years
5 years4 years3 years2 years1 year
3%
2%
2%
2% 7%
3%
10%
5%5%
17%
2%
1%
2%
14%
36CPA 2010_Montreal-final_ 27-9-10 JMCPA.ppt
Derive actions from a
supply-and-demand
model: 6%3
Have a supply-and-
demand model:
9%2
Basic workforce models are prevalent, but more sophisticated simulations are rarely used
Have a supply model:15%1
Consider age of current workforce 62%
Consider current job groups 72%
Consider current job groups
Simulate different scenariosDerive workforce demand for the
entire company along job Simulate productivity increases
Simulate technology changes
70%
53%
47%
45%
39%
47%Simulate new hires
42%
%
77%
57%
36%
Simulate retirement
Staff reductions
Derive workforce supply for theentire company along job
Apprenticeship actions with quantified goals
Recruiting actions with quantified goals
36%
Simulate different scenarios
53%
Simulate attrition
47%
Qualification actions with quantified goals
33%
1. Subgroup is asked to further specify workforce supply model. 2Subgroup is asked to further specify demand model. 3Subgroup is
asked to further specify actions derived.Sources: Proprietary Web survey with 5,561 responses; 883 responses in this section; BCG/WFPMA
analysis.
37CPA 2010_Montreal-final_ 27-9-10 JMCPA.ppt
Identify gaps/risk4
Define job roles
1
Job family group
Job family
Job function
Simulate workforce demand per job role
Simulate workforce supply per job role
2
3
Current workforce
Development scenarios
Assumptions--for example,•
Fluctuation•
Retirement•
Phased retirement
Workforce demand logic
Strategic scenarios
Assumptions—for example,•
Strategic planning•
Growth scenarios•
Technological changes
Future supply
Future demand
FY15FY14FY13FY12FY11FY10
FY11FY10 FY15FY14FY13FY12
Propose measures
5
•
Recruiting•
Training•
Transfers•
Insourcing/outsourcing•
Capacity reduction
>20
>15 to 20
>10 to 15
<-80 to -65
-80
Surplus or shortage of requirements in the respective year (%)
Strategic workforce planning at Lufthansa Technik
Gap analysis per qualification group 2008 2009 2010 2011 2012 2013 2014 2015
Specialist mechanical engineer -19% -27% -34% -39% -42% -46% -49% -64%
Specialist electrician 9% -25% -41% -35% -50% -55% -65% -71%
Supervisor mechanical engineer -15% -33% -40% -39% -33% -38% -61% -66%
Specialist electroplater -11% -38% -41% -38% -51% -58% -65% -67%
Specialist machinist 6% -10% -22% -33% -44% -44% -45% -46%
Instrumentation engineer ERI 21% 20% 17% 17% 15% 15% 7% -19%
Specialist for nondestructive testing -7% -36% -42% -48% -9% -57% -57% -58%
Specialist for blasting 23% 21% 21% 20% 14% 21% 11% -9%
Specialist painter/graphics -18% -38% -51% -64% -67% -58% -62% -62%
Supervisor electroplater -9% -21% -36% -36% -40% -47% -61% -61%
Instrumentation engineer electrician -12% -22% -24% -33% -37% -40% -51% -48%
Supervisor machinist -2% -13% -15% -21% -21% -24% -31% -38%
… 5% -1% -21% -38% -47% -53% -65% -67%
Source: BCG analysis.
>5 to10
<-5 to 5
<-20 to -5
<-35 to -20
<-50 to -35
<-65 to -50
Illustrative—fictive numbers
38CPA 2010_Montreal-final_ 27-9-10 JMCPA.ppt
Companies rely more on basic input-related KPIs and often lack efficient follow-up processes
Inpu
t-rel
ated
KPI
sO
utpu
t-rel
ated
KPI
s
Input-related KPIs are usedmuch more widely thanoutput-related metrics
(% of respondents)
Input-related KPIs are usedmuch more widely thanoutput-related metrics
(% of respondents)
Target values, processes to improve results, and compensation linkage to
KPIs are rarely used (% of respondents)
Target values, processes to improve results, and compensation linkage to
KPIs are rarely used(% of respondents)
Use of metric Compensation linkProcess to improve resultsTarget value
0 10 20 30 40 50 60 70
% of new hires receivingtop performance ratings 12%
ROI of recruiting 13%
ROI of training 14%
Value added per person 27%
Training costs as% of total budget 41%
Training time per employee 46%
Cost of personnel 62%
Employee head count 68%
Sources: Proprietary Web survey with 5,561 responses; 833 responses in this section; BCG/WFPMA
analysis.
0 10 20 30 40 50 60 70
39CPA 2010_Montreal-final_ 27-9-10 JMCPA.ppt
When adapting HR practices for volatile times five areas of HR should be in focus
Building Flexibility in the Workforce
A Strategic Workforce Plan to Build the
Capabilities You Need
Developing Capabilities for HR to Partner with
the Business Units
Creating a New Deal for Middle Managers
Do You Have the Right Future Leaders?
How Companies Can Adapt their HR Practices
for Volatile Times
40CPA 2010_Montreal-final_ 27-9-10 JMCPA.ppt
Sources: Proprietary Web survey with 5,561 responses; BCG/WFPMA
analysis
Building flexibility in the workforce
Low
High
Future
importance
2010
Sample size:5,561
Relevance today
HighLow
Mediumneedto act
Strong need to
act
Low need to act
Current capabilityHigh Low
Managingflexibility
41CPA 2010_Montreal-final_ 27-9-10 JMCPA.ppt
Labor cost reduction was often achieved by reducing head count
Note: Values below 1% not shown.Sources: Proprietary Web survey with 5,561 responses; 731 responses in this section; BCG/WFPMA
analysis.
Head count reductionin 2009
1%
4%
2%
1%
3%
7%
4%
1%
6%
16%
4%
2%
2%
6%
6%
1%
2%
6%
7%
14%
>40%21%–
40%11%–20%5%–10%2%–4%<2%
>40%
21%–40%
11%–20%
5%–10%
2%–4%
<2%
Percentage ofrespondents
In 34% of companies,labor cost reduction was higher than head count
reduction
In 13% of companies,labor cost reduction was lower than head count
reduction
In 48% of companies,labor cost reduction equaled head count reduction
Labor cost reduction in 2009
42CPA 2010_Montreal-final_ 27-9-10 JMCPA.ppt
Flexibility and cutback measures are used during difficult times
Comp.and
benefits
Worktime
Head-count
Workorgani-zation
Source: Proprietary web survey with 5,561 responses; 1,338 responses in this section; BCG/WFPMA
analysis; Percentage of companies using measure during crisis
•
Performance management is tightened
50%•
Profit-related component of salary is increased
14%
•
Employees take time off for earlier overtime
31%•
Flexible work time is set up
25%•
Work week is shortened temporarily
16%
•
Job mobility is reinforced: employees are trained
43%
to perform different jobs within company
•
Fixed-term contracts are not extended
40%•
Hiring criteria are tightened
38%•
Number of hierarchies is reduced
34%•
Tasks are centralized in shared services centers
29%•
Work is outsourced
27%•
Sub-contracted activities are insourced
19%•
Work is offshored
9%
•
Company events are cut back
64%•
Training activities are cut back
47%•
Bonus payments are cut back or postponed
44%•
Fringe benefits are cut back or postponed
29%•
Overtime is no longer paid out
21%•
Base salary is reduced
19%•
Non-monetary component of salary is increase
9%•
Pension plans are reduced
9%
•
Employees are forced to take their vacations
35%•
Part-time work arrangements are increased
19%•
Unpaid leaves are increased
18%•
Employees are encouraged to go on sabbaticals
11%
•
Recruiting is cut back
63%•
Employees are laid off
48%•
Share of temporary employees is increased
24%•
Early retirement is increased
21%
Cutback measuresFlexibility measures % of companies that performed action
% of companies that performed action
43CPA 2010_Montreal-final_ 27-9-10 JMCPA.ppt
Actions performed in 2009
Actions performed in 2009
Actions maintained in the future
Actions maintained in the future
Effectivenesscompared to average
Effectivenesscompared to average
Flexibility measures tend to be more effective
9%
Subcontracted activities are insourced 19%
Work is outsourced 27%
Tasks are centralized in shared-service centers 29%
The number of hierarchies is reduced 34%
Processes are streamlined 61%
Hiring criteria are tightened 38%
Fixed-term contracts are not extended 40%
Job mobility is reinforced 43%
Workweek
is
shortened
temporarily 16%
Flexible work time is set up: pay is reduced for reduced work hours 25%
Employees
take
time off to compensate
for
earlier
overtime 31%
Profit-related component of compensation is increased 14%
Performance management is tightened 50%
Work is offshored
62%
61%
75%
72%
30%
66%
19%
71%
53%
79%
79%
61%
46%
65%
-5%
1%
-4%
0%
1%
9%
9%
5%
9%
2%
10%
6%
-1%
4%
Lesseffective
Moreeffective
1. Compensation and benefits Sources: Proprietary Web survey with 5,561 responses; 731 responses in this section; BCG/WFPMA
analysis.
C&
B1
Wor
k tim
eH
ead
coun
tW
ork
orga
niza
tion
44CPA 2010_Montreal-final_ 27-9-10 JMCPA.ppt
Cutback measures tend to be less effective
47%
Company events are cut back 64%
Employees are laid off 48%
Recruiting is cut back 63%
Employees are encouraged to go on sabbaticals 11%
Unpaid leaves are increased 18%
Part-time work arrangements are increased 19%
Employees are forced to take their vacations 35%
Training is cut back
9%
Nonmonetary compensation is increased 9%
Base salaries are reduced 19%
Overtime is no longer paid out 21%
Fringe benefits are cut back or postponed 29%
Bonus payments are cut back or postponed 44%
Early retirement is increased 21%
Share of temporary employees is increased 24%
Pension plans are reduced
33%
47%
17%
30%
43%
29%
46%
48%
52%
85%
28%
50%
42%
23%
19%
30%
3%
0%
4%
4%
-15%
0%
3%
5%
-15%
-8%
-9%
-24%
-10%
-7%
-7%
-3%
Sources: Proprietary Web survey with 5,561 responses; 731 responses in this section; BCG/WFPMA
analysis.
Com
pens
atio
n an
d be
nefit
sW
ork
time
Hea
d co
unt
Actions performed in 2009
Actions performed in 2009
Actions maintained in the future
Actions maintained in the future
Effectivenesscompared to average
Effectivenesscompared to average
Lesseffective
Moreeffective
45CPA 2010_Montreal-final_ 27-9-10 JMCPA.ppt
High performing companies are more selective in their use of specific measures
Flex
ibili
ty m
easu
res
Cut
back
mea
sure
s
Processes are streamlinedJob mobility is reinforced: employees are trained to perform different jobsFixed-term contracts are not extendedThe number of hierarchies is reduced and the span of control is
increasedPerformance management is tightenedHiring criteria are tightenedFlexible work time is set up: pay is reduced for reduced working
hoursEmployees are compensated for earlier overtimeTasks are centralized in shared service centersWork is outsourcedSubcontracted activities are insourcedThe workweek is shortened temporarilyThe profit-related component of compensation is increasedWork is offshoredCompany events are cut backRecruiting is cut backEmployees are laid offTraining is cut backEmployees are forced to take their vacationsBonus payments are cut back or postponedFringe benefits are cut back or postponedPart-time work arrangements are increasedOvertime is no longer paid outThe share of temporary employees is increasedEarly retirement is increasedBase salaries are reducedUnpaid leaves are increasedPension plans are reducedEmployees are encouraged to go on sabbaticalsThe nonmonetary component of compensation is increased
more oftenless often
high low performer
Sources:
Proprietary Web survey with 5,561 responses; 731 responses in this section; BCG/WFPMA
analysis. Seldom OftenUsage of measure
46CPA 2010_Montreal-final_ 27-9-10 JMCPA.ppt
Flexibility measures tend to rank higher on perceived effectiveness and employee engagement
Sources: Proprietary Web survey with 5,561 responses; 731 responses in this section; BCG/WFPMA
analysis.Note: Size represents the percentage of companies using the measure during the crisis
Below average Average engagement Above average
Ave
rage
ef
fect
iven
ess
Abov
e av
erag
eBe
low
ave
rage
7
21
Averageflexibilitymeasure
10 9 8
3
Averagecutback
measure
4 5
Average flexibilityAverage cutbackFlexibilityCutback
Examples of cutback measures
1 Employees are laid off
2 Early retirement is increased
3 Base salaries are reduced
4 Bonus payments are cut back or postponed
5 Company events are cut back
Examples of flexibility measures
6 Performance management is tightened
7 Job mobility is reinforced: employees are trained to perform different jobs within the company
8 Processes are streamlined
9 Hiring criteria are tightened
10 Flexible work time is set up
6
Measures:
47CPA 2010_Montreal-final_ 27-9-10 JMCPA.ppt
When adapting HR practices for volatile times five areas of HR should be in focus
Building Flexibility in the Workforce
A Strategic Workforce Plan to Build the
Capabilities You Need
Developing Capabilities for HR to Partner with
the Business Units
Creating a New Deal for Middle Managers
Do You Have the Right Future Leaders?
How Companies Can Adapt their HR Practices
for Volatile Times
48CPA 2010_Montreal-final_ 27-9-10 JMCPA.ppt
Sources: Proprietary Web survey with 5,561 responses; BCG/WFPMA
analysis
Developing capabilities for HR to partner with the business units
Low
High
Future
importance
2010
Sample size:5,561
Relevance today
HighLow
Mediumneedto act
Strong need to
act
Low need to act
Current capabilityHigh Low
HR as strategic partner
49CPA 2010_Montreal-final_ 27-9-10 JMCPA.ppt
Today, how much time does your HR function spend on what?
How much time do you spent on what? Actual vs target numbers
How much time do you spent on what? Actual vs target numbers
Strategic future focus
People
Day-to-day business
Process
Functionalexpert
PlanungControlling
Besetzung/Recruiting
BeurteilungKarriere-
management
ZielvereinbVergütung
Administrativeexpert
Change agent &peoplepertner
Strat business
partner
Human capital manager
...%
...%...%
...%
...%
...% Allocation of the HR department's capacity
50CPA 2010_Montreal-final_ 27-9-10 JMCPA.ppt
HR is enhancing its role as business partner, but integrating HR activities into line management is proving ineffective
24%
26%
30%
35%
41%
43%
73%
0 20 40 60 80
Outsourced HR activities
Integrated HR activities into line management
Bundled HR services in enterprise-wide shared-service centers
Introduced or enhanced the role of the HR business partner
Built HR centers of excellence
Bundled HR services in HR shared-
service centers
Introduced HR employee self service
Percentage of respondents that introduced a conceptPercentage of respondents that introduced a conceptEffectiveness of
each conceptEffectiveness of
each concept
Sources:
Proprietary Web survey with 5,561 response; 641 responses in this section; BCG/WFPMA
analysis.
Low High
51CPA 2010_Montreal-final_ 27-9-10 JMCPA.ppt
Business planning and analytics rank as high priorities, but capabilities lag
Low High
Sources:
Proprietary Web survey with 5,561 response, 641 responses in this section; BCG/WFPMA
analysis.
HR professionals’ view
IT acumen
Conflict resolution
Policy implementation
HR expertise
Contracting
Marketing
Project management
Resource management
Business managers’ view
HR Business Partner Skills: Differences in Importance and Capabilities Ranked by GapHR Business Partner Skills: Differences in Importance and Capabilities Ranked by Gap
Low High
Business analytics
Business planning
Client relationship
management
IT acumen
Conflict resolution
Policy implementation
HR expertise
Contracting
Marketing
Project mgmt
Resource mgmt.
Business analytics
Business planning
Client relationship
management
CapabilityImportance
1
2
3
4
5
6
7
8
9
10
11
1
2
3
4
5
6
7
8
9
10
11
52CPA 2010_Montreal-final_ 27-9-10 JMCPA.ppt
Only 40 percent of respondents offer training on business expertise to HR partners
15%
27%
29%
34%
37%
40%
41%
56%
57%
Offer rotational programs outside the HR function
Build financial acumen
Employ people from outside HR
Prioritize business knowledge and capabilities in hiring
Measure and provide incentives based on business performance
Offer training on business expertise
Develop change management capabilities
Offer training on leadership and managing people
Offer training on HR expertise
Activities performed (% of respondents)1Activities performed (% of respondents)1 Effectiveness of activitiesEffectiveness of activities
1. Includes only companies that have introduced the HR business-partner position. Sources: Proprietary Web survey with 5,561 response; 641 responses in this section; BCG/WFPMA
analysis.
Low High
53CPA 2010_Montreal-final_ 27-9-10 JMCPA.ppt
8
Dealing with low performers is a development priority for both groups
Business Managers’ Skills: Differences in Importance and Capabilities Ranked by GapBusiness Managers’ Skills: Differences in Importance and Capabilities Ranked by Gap
CapabilityImportance
Sources: Proprietary Web survey with 5,561 response, 641 responses in this section; BCG/WFPMA
analysis.
Low High
Assess training needs
Recruiting
Make redundancydecisions
Make promotiondecisions
Manage staff costs
Deal with low performers
HR strategy development
Provide training
Low High
Assess training needs
Recruiting
Make redundancydecisions
Make promotiondecisions
Manage staff costs
Deal with low performers
HR strategy dev.
Provide training
1
2
3
4
5
6
7
81
2
3
4
5
6
7
HR professionals’ view Business managers’ view
54CPA 2010_Montreal-final_ 27-9-10 JMCPA.ppt
Leadership training dominates business managers’ curricula
6%
7%
17%
18%
22%
23%
27%
27%
43%
0% 10% 20% 30% 40% 50%
Offer training on business expertise
Offer training on HR expertise
Offer training on leadership and managing people
Offer training on change management skills
Offer rotational programs that includea stay in the HR function
Employ former HR professionals as business managers
Offer training on HR information technology
Prioritize HR knowledge and expertise in hiring decisions
Measure and provide incentives based on people management performance
Activities performed (% of respondents)1Activities performed (% of respondents)1 Effectiveness of activitiesEffectiveness of activities
1. Includes only companies that actually performed the activity.Sources: Proprietary Web survey with 5,561 response; 641 responses in this section; BCG/WFPMA
analysis.
Low High
55CPA 2010_Montreal-final_ 27-9-10 JMCPA.ppt
Discussion
56CPA 2010_Montreal-final_ 27-9-10 JMCPA.ppt
CPA 2010 comprises of the report supplemented by a CD with interactive material and a White Paper
•
White Paper stand-alone and attached to the report:–
Focus on engaging and empowering middle managers–
White paper has been sent out to local offices as PDF–
PDF version available for download at www.bcg.com
or potentially via WFPMA
affiliates web sites
•
10,000 hard copies printed –
will be sent out to clients, interview partners, WFPMA conference participants and survey respondents
•
Report includes 21 HR topics, 4 deep dives and several case studies (~50p)•
Report can be ordered via www.bcg.com•
PDF version available for download on BCG Perspectives or potentially via WFPMA
affiliates web sites
•
CD with electronic material and extra analyses:–
33 countries: current capabilities and future importance of 21 HR topics–
15 industries: current capabilities and future importance of 21 HR topics–
additional case studies–
two video interviews–
report and white paper
57CPA 2010_Montreal-final_ 27-9-10 JMCPA.ppt
The partners
Source: WFPMA
Homepage
The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients in all sectors and regions to identify their highest-value opportunities, address their most critical challenges, and transform their businesses. Our customized approach combines deep insights into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competit
ive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 66 offices in 38 countries. For more information, please visit www.bcg.com.
The World Federation of People Management Associations (WFPMA) is a global network of professionals in people management. It was founded in 1976 to aid the development and improve the effectiveness of professional people management all over the world. Its members are predominantly the continental federations which are made up of more than 70 national personnel associations representing over 400,000 people management professionals. For more information, please visit www.wfpma.com.