do millennials increase business risk? facts and myths · “almost 90% of millennials surveyed in...

Do Millennials Increase Business Risk? Facts and Myths

Bank of Canada

Krystelle BilodeauSpecial Assistant to the COO

Ontala

Linda Tuck Chapman

President

Do Millennials Increase Business Risk?Facts and Myths

March 2018

Linda Tuck Chapman

lindatuckchapman@ontala.com

416.452.4635 | 917.831.2923

Krystelle Bilodeau kbilodeau@bankofcanada.ca

613.782.8962

AGENDA

Managing people, knowledge and change

in the 21st century

1. Today’s speakers

2. Critical Third Parties and Talent Retention

3. Types of Risk Exposures

4. Relationship Management in the Age of Millennials

5. Millennial Behavior and Operational Risk – Myths and Facts

6. Conclusions and Strategies

Pre-requisite cute cat pics….

If critical third parties really are critical, then …..

Tangible Goods:

Hardware, raw materials, production Inputs, equipment, contract Manufacturing, servers

Business Services:Call center, IT Services, Cloud, Payroll,

Logistics, BPO, KPO, marketing services

Channel Partners:Distributors, agents, resellers, product

partners

Strategic Relationships:Partnerships, Joint Ventures, Brand Partners, Outsourced business units

…figuring out how to attract, engage, grow, the best talent for third party lifecycle management should be important too

Up your game with a “portfolio management” approach

And manage inputs to improve outcomes

PerformanceInnovation

1. Anti-Corruption/Anti-Bribery (ABAC)

2. Anti-Money Laundering (AML)

3. Business Continuity Management/ Resilience (BCM)

4. Cloud computing

5. Company officers and corporate viability

6. Compliance (regulatory and legal)

7. Contract

8. Financial viability

9. Foreign service-delivery location

10. Human Resources

11. Incentive compensation

12. Information and Cyber Security

13. Insurance

14. Model

15. Performance

16. Privacy

17. Physical Security

18. Records

19. Reputation

20. SOX- reportable financial loss

21. Supply Chain

22. Sub-contractor

23. Technology

24. Industry and business specific

What are the benefits of getting this right? ….

What are the consequences for getting it wrong?

Who are you reliant on to make critical third party relationships perform as expected ….and how could they cause harm?

What type of risk exposures could your firm face?

The future has arrived and it’s your workforce

Source:http://assets.pewresearch.org/wp-content/uploads/sites/12/2015/01/FT_16_04.25_generations2050.png

RPA and AI - impact on the workforce on the workforce

It’s complicated – but it’s also good news

• New workers:

– Are more educated

– Are socially conscious

– Want to have an impact

• New collar jobs:

– Require higher education

– Require social skills

– Are growing in management, education and health

Effective third-party management can’t happen without engaged, capable people at every level.

In the axiom, “people, process, technology”

…….. there’s a reason why “people” comes first

Are your people treated like valuable “human capital”?

• Employee turnover = dramatic erosion of “institutional knowledge” and relative

depth/breadth of skills and expertise.

• Relationship continuity = relationships, history, knowledge and experience leaves with them.

• Complexity of critical third-party relationships = steep learning curve to value.

• Employee disengagement = inconsistent business practices, lifecycle management,

monitoring, and oversight.

• Superficial communication (e.g. manage by text) ≠ meaningful business relationships.

Is Millennial behavior driving up operational risk?

Risk # 1: Millennials are Job-Hoppers

“The majority of employers (55%) said that they’ve hired someone they’d categorize as a job-hopper.

• 34% said the job-hopper left after a short period of time

• 40% said the job-hopper stayed for at least two years

• 17% said the job-hopper stayed for at least three years”

Employee retention is becoming a key issue… the cost of losing an employee ranges from 50% to 500% of that

employee’s annual salary. Sources:

1. Harris Poll on behalf of CareerBuilder (2014): Nearly One-Third of Employers Expect Workers to Job-Hophttp://www.careerbuilder.com/share/aboutus/pressreleasesdetail.aspx?sd=5%2F15%2F2014&id=pr824&ed=12%2F31%2F2014

2. US National Library of Medicine, National Institutes of Health: Employees’ Organizational Identification and Affective Organizational Commitment: An Integrative Approach (2015) https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4395289/

Risk # 1: Millennials are Job-Hoppers

“Almost 90% of Millennials surveyed in a new study said that they would choose to stay in a job for the next 10 years,

IF they knew they'd get:

• Annual raises

• Upward career mobility

“77% would be willing to take a salary cut

in exchange for long-term job security”

Source: survey provided exclusively to CNBC by Qualtrics, a Provo, Utah-based survey software firm, and venture capital firm Accel Partners (a Qualtrics investor).”

CNBC: Millennial Employees are a Lot More Loyal than their Job-hopping Stereotype (2017) http://www.cnbc.com/2017/05/10/90-of-millennials-will-stay-in-a-job-for-10-years-if-two-needs-met.html

Is this really too much to ask for?

Risk #2: Millennials are Disengaged Employees

Millennials :

• have different values that may look like disengagement

• Their new values shape how they express themselves, which in turn impacts workplace perception.

• Most want a job that really uses their skills and makes them feel like they’re making a difference.

Perceived New Values and Beliefs

Millennials:

Millennials want to make a difference

• Are connected and acutely aware of the world around them

• Are tech-savvy and comfortable with technology

• Have problem solving and critical thinking skills

• Are better educated than the generations before them

• Have disregard for cyber and data privacy

• Want “bite-size”, efficient communication and value responsiveness

Millennials want to make a difference in the world, and care about the environment

On the Upside…

• Critical thinking, problem solving skills and a more tech-savvy workforce can flatten learning curves, increasing the speed to competency.

• Harnessing a deeply rooted desire to make a difference can bring tangible benefits to third-party relationships and “mini-ecosystems”.

• Opportunities arise to make a difference through innovation, improving a process, eliminating redundant work, seeking new CSR solutions, or by working in teams to solve systemic issues and look for broader opportunities.

Tech-savvy employees, educated in critical thinking and with a bent for innovation

bring a fresh approach to problem solving.

Risk #3: They don’t know how we do things here

“55% of our workforce will be eligible for retirement in the next 5 years.”

Who will do all this work when we’re gone?

Will they be as smart as we are?

• The facts impacting generational differences are real:

We’re worried about loss of “institutional knowledge”

Source: CHA USA.org Terrence F. Cahill, Ed.D., FACHE and Mona Sedrak, Ph.D.: Age-Related Conflicts: The Generational Divide (July – August 2011) https://www.chausa.org/publications/health-progress/article/july-august-2011/age-related-conflicts-the-generational-divide

• Employees at every level are cycling through jobs faster than ever before.

• High-level employees transitioning within a company feel they add value by about six months. Those coming into a challenging job outside the company take a year to feel they add value.

• Current realities and practices and their relative effectiveness require different approaches to onboarding and transferring “institutional” knowledge.

If the workforce has dramatically changed and

practices haven’t kept pace, would you change?

It’s time to change workforce management

People, process, knowledge: A three-pronged strategy is the best approach to mitigating

third-party risk.

Research confirms that:

“Work experiences indicating that the organization treats its employees favorably and enhancing employees' sense of personal importance and competence are very likely to induce an emotional attachment to the organization.”

Be smart, thoughtful and open minded

*IBM Institute for Business Value: Myths, exaggerations, and uncomfortable truths – The real story of Millennials in the workplace (2015) https://public.dhe.ibm.com/common/ssi/ecm/gb/en/gbe03637usen/GBE03637USEN.PDF

“Managing a multigenerational workforce entails seeing people as individuals, not generational stereotypes.”*

(Most) Millennials are:

1. Better educated than previous generations

2. Tech savvy: lifetime access to powerful technology, the internet, and social media

3. Valued by nurturing parents, and they’ve learned to expect frequent positive

feedback

4. The product of a relatively stable environment – socially, politically, and

economically

5. Committed to making a difference in the world

Five “facts” that can be leveraged, if you’re thoughtful

The Path Forward

Harness: • Values of knowledge and regular feedback• Values of leadership exposure and development opportunities• Desire to understand why things are the way they are• Value of meaningful contribution

Manage Risk: • Knowledge sharing• Hiring people rather than jobs• Inclusive knowledge development• Knowledge dissemination• Aligning and communicating values

Encourage Innovation:• Tap into decision making skills• Tap into unique perspective and breadth of experience• Add depth to their breadth of experience• Tap into the mobilization of their unique perspectives

Develop deliberate strategies

• Supplement what you already know how to do with new ways of doing things

• Understand how business norms have changed, AND focus on what this means in the context of third-party lifecycle and relationship management

• Take ownership of the relationship and the risks

• Create more opportunities for relationships

• Create more critical mass by expanding the teams responsible for the critical third-party relationship

More ideas

• Be purposeful about engaging the whole relationship team at the social/work level

• Employees retire or change roles giving rise to concerns about retention of institutional knowledge

• Bite-sized communication becomes more and more efficient, and broader communication less and less common

• Allocate budget dollars for quarterly offsite meetings between the internal team

Even more ideas

• Learn new ways of doing old tactical and strategic things

• Create a different type of “critical mass” with enterprise-level Tiger Teams

• Invest in new techniques in Meta Learning like story boarding and institutional story telling

• Increase employee engagement by building understanding between co-workers and across generations

Let’s keep the dialogue going

Linda Tuck Chapman

416.452.4635 | 917-831-2923

www.ontala.com

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Linda Tuck Chapman

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416.452.4635 | 917-831-2923

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Facts and Myths

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