fight for talent
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March 2014
Time for a moreholistic approach to talent risk
#Fight4Talent
2© 2014 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Presented By
LAURA CROUCHERPartner, Advisory Services National Lead People & Change (Canada)KPMG LLP
Follow the conversation:
#Fight4Talent@KPMG_Canada
lcroucher@kpmg.ca
@croucher_laura
Laura Croucher KPMG
+1 416-777-3417
3© 2014 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Agenda
7:30 – Breakfast and Networking
8:00 – Talent Risk Presentation - Laura Croucher
8:45 – Industry Panel
8:50 – Introductions
John Stockwell - VP HR, Open Text Corporation Maureen Berry - Corporate HR Executive, Canada Health Infoway Debbie Fischer - KPMG Associate and former EVP Strategy & Org Development, Mount Sinai Kate Humphries – Sr. Manager, Resource Planning & Succession Management at TD Bank Group
9:00 – Moderator Questions
9:25 – Audience Questions
9:55 – Final Remarks
#Fight4Talent
4© 2014 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
About this research
Organizations are competing for talent on an unprecedented scale
In this context, how effectively are
organizations identifying talent risks to their current
and future business growth?
And how effectively are they mitigating against
talent risks?
KPMG International commissioned the
Brandon Hall Group to conduct a global study of
talent-related risks
1,200 Human Resources (HR), talent, learning and business executives
54 countries
Government and 15 different industries represented
Just over a quarter of respondents work in companies with 30,000+ employees
Series of qualitative interviews
5 Cs: Talent Risk Categories
#Fight4Talent
6© 2014 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
The survey focused on five critical talent risk categories …
How concerned is your business?To what degree are you managing that concern?
Capability.
Capacity
Cost
Compliance
Connection
Key Findings: Capability & Capacity Risks
#Fight4Talent
8© 2014 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Global Talent Risk Profile
and
Highest Ranked
Capacity and Capability risks dominated both in terms of perception and mitigation of risk
Least likely to be ranked
Compliance talent risks was the most likely risk category to be listed as no risk at all by about 38% of the survey population
9© 2014 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
An insufficient budget for managing and developing talent Cost
Salary expectations of candidates with critical skills become too high Cost
Difficulties in recruiting top talent Capability
Salary expectations of candidates with critical skills become too high Capability
Skills and capabilities required by the business in the near future are not developed Capability
A lack of compelling development opportunities for top talent Capability
A lack of depth of internal candidates for critical roles Capacity
An insufficient pipeline of future leaders Capacity
What talent risks were respondents most worried about?
1
2
3
4
5
6
7
8Business leaders’ inability to engage with, motivate and nurture business critical talent 9 Connection
Managers view performance management, talent reviews et c as a process to comply with rather than as business critical activities 10 Compliance
10© 2014 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
21%
18%
32%
20%
6% 3%
We do not have succession plans
Not at all effective, lists with no action
Somewhat effective, lists with regular action
Very effective, succession planning discussions
Extremely effective, actively work with succors
I don’t know
‘An insufficient pipeline of future leaders’ ranks as #1 talent risk and yet few organizations have effective succession planning in place...
Effectiveness of Succession Planning
11© 2014 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
26% of organizations filled less than 25% of their Critical Roles with internal candidates
26%
22%20%
13%
10%
9%
Less than 25%26% to 50%51% to 75%76% to 90&More than 90%I don’t know
Percentage of Critical Roles filled with Internal Candidates in last year
12© 2014 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Which talent risks were respondents actively managing?
A lack of depth of internal candidates for critical roles 1 Capacity
An insufficient pipeline of future leaders 2 Capacity
Difficulties in retaining key people 3 Capability
A lack of clarify over which roles are ‘critical’ to deliver business value 4 Cost
The total cost of the workforce becomes unsustainable in relation to current revenues 5 Cost
Skills and capabilities required by the business in the near future are not developed 6 Capability
A lack of compelling development opportunities for top talent 7 Capability
Difficulties in retaining to talent 8 Capability
The cost of retaining top talent becomes unsustainable 9 Cost
Salary expectations of candidates with critical skills become too high 10 Cost
13© 2014 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
8%
22%
35%
25%
7%4%
No strategic workforce planning
Basic approach
Simple approachDetailed approach
Complex approach
I don't know
Respondents were not optimistic about their approach to strategic workforce planning ....
Approach to strategic workforce planning.
14© 2014 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
The two big challenges for talent management
Organizations take a narrow view of talent management 1
2
3
■ There is a strong focus on the ‘traditional’ areas of talent management – capability and capacity
■ This is coupled with a relative lack of concern about connecting and engaging with talent as well as enabling and encouraging collaboration
Insufficient focus on total cost of workforce 2
■ There are a number of talent risks which appear in the list of top 10 risks identified but do not feature in the list of top 10 risks actively being managed:
■ Managers view performance management and talent review processes merely as something to comply with, rather than a business critical activity
■ Business leaders’ inability to engage with, motivate and nurture business critical talent
■ An insufficient budget for managing and developing talent ■ Maintaining employee engagement in the face of a less committed, more flexible workforce
Key Findings: Connection-related talent risks
#Fight4Talent
16© 2014 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
The top 10 list of risks respondents were least worried about featured a number of Connections risks…
Talent management processes become non-compliant with local regulation, for example data protection 1 Compliance
International mobility policies and processes make it difficult to transfer talent between countries 2 Connection
Employee relations hinder rather than help talent management processes 3 Compliance
A lack of workforce diversity 4 Capacity
An inability to define the new skills or capabilities that will be needed by the business in the near future 5 Capability
Business leaders’ reluctance to share talent across the organization 6 Connection
Business leaders’ and HR/talent team’s inability to work effectively together to manage talent 7 Connection
A lack of clarity over which roles are ‘critical’ to deliver business value 8 Capacity
The total cost of the workforce becomes unsustainable in relation to current revenues 9 Cost
The cost of retaining top talent becomes unsustainable 10 Cost
17© 2014 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
In addition, effort does not appear to be expended consistently in such a way as to address the top 10 risks identified…
Bottom of the list
Respondents ranked the risks of their ‘business leaders inability to engage with, motivate, and nurture business critical talent’ as a top ten critical risk – yet awarded it fell to almost the bottom of the list of risks that were least actively managed
33% Only 33 percent of respondents felt their business unit leaders were ‘incentivized to share talent across organizations for the benefit of the business and the talent – seemingly at odds with the inclusion of development, retention and several other risks within the top 10 risks.
and
18© 2014 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Talent Review Processes are also not used effectively as an engagement driver...
Do your organization’s formal talent review meetings result in development plans for which leaders take responsibility?
Key Findings: Cost-related talent risks
#Fight4Talent
20© 2014 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Cost related risks featured at the bottom of the top 10 list of risks respondents were least worried about featured …
Talent management processes become non-compliant with local regulation, for example data protection 1 Compliance
International mobility policies and processes make it difficult to transfer talent between countries 2 Connection
Employee relations hinder rather than help talent management processes 3 Compliance
A lack of workforce diversity 4 Capacity
An inability to define the new skills or capabilities that will be needed by the business in the near future 5 Capability
Business leaders’ reluctance to share talent across the organization 6 Connection
Business leaders’ and HR/talent team’s inability to work effectively together to manage talent 7 Connection
A lack of clarity over which roles are ‘critical’ to deliver business value 8 Capacity
The total cost of the workforce becomes unsustainable in relation to current revenues 9 Cost
The cost of retaining top talent becomes unsustainable 10 Cost
21© 2014 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
24%
38%
27%
11%
NoYes, in a limited scopeYes, extensivelyI don’t know
Over 60% of organizations do not track total cost of workforce at all, or use it only in a limited scope...
Does your organization use 'Total Cost of Workforce' as a key metric?
Additional Insights
#Fight4Talent
23© 2014 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Clear differences emerge when it comes to attitudes and perceptions of HR leaders, and executives and front-line managers...
■ Executives and frontline managers were most concerned about cost-related talent risks – while HR leaders were even more concerned about capacity risks
■ Overall, HR felt that all areas were being mitigated more effectively than both executives and managers, except workforce cost
Perceived level of risk impact by roles
Capacity Capability Cost Connection Compliance
2.0
2.5
3.0
3.5
4.0
3.093.17
2.95
2.67
2.48
3.09 3.13.2
2.57
2.44
3.293.21
3.142.98
2.69
Scale:
1= Not managing2= Identified, no plans
to manage3= Plans to manage4= Managing and
seeing progress5= Managing and
mitigating risk:
Perceived level of risk mitigation by roles
Scale:
1= Not managing2= Identified, no plans
to manage3= Plans to manage4= Managing and
seeing progress5= Managing and
mitigating risk
Capacity Capability Cost Connection Compliance2.5
3.0
3.5
4.03.85 3.83
3.63
3.353.23
3.56 3.55
3.7
3.133.04
3.54 3.5
3.35
3.17
2.91
HR Executives Business leaders
Note: this data is based on the averages of the survey respondents to a five point scale. Half a point difference is equivalent to a 10 – 20% difference in perception, given the sample size
24© 2014 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
HR’s confidence in talent risk mitigation not matched by executives and frontline managers
■ This mismatch between HR and executives and frontline managers brings into focus that the business is struggling to feel a positive return from talent management efforts
Note: this data is based on the averages of the survey respondents to a five point scale. Half a point difference is equivalent to a 10 – 20% difference in perception, given the sample size
Perceived average talent of risk mitigation level
Scale:
1= Not managing2= Identified, no plans
to manage3= Plans to manage4= Managing and
seeing progress5= Managing and
mitigating risk
Perceived average talent risk mitigation level3.15
3.20
3.25
3.30
3.35
3.40
3.45
3.50
3.55
3.60
3.65
3.58
3.38
3.3
HR Executives Business leaders
What does this mean for Canadian companies?
#Fight4Talent
26© 2014 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
What does this mean for Canadian companies?
■ Retention continues to be a key concern consistent with last year’s KPMG’s global survey – Canada rated this the #1 Challenge in the Rethinking Human Resources in Changing World Survey
■ Survey reports organizations are downplaying talent risks in the areas of connection, diversity and performance management
■ Lack of emphasis on “connection” is a concern given the nature of work today as well as the entry of younger generations into the workforce
■ In Canada, downplaying Diversity has increasing importance with the recent announcement from the Ontario Securities Commission requiring companies to annually publish a description of their diversity policies. This new standard is the first of its kind in Canada and will likely be the catalyst for change in diversity in many organizations.
■ Cost as a driver/concern is best considered a more balanced view of talent needs and challenges
■ The survey points to a difference of opinion between HR and line Managers about talent needs and priorities
Call to Action
#Fight4Talent
28© 2014 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Final Thoughts: Organizations must embrace a more holistic approach to talent management
Holistic Approach
Build a talent strategy based on an
understanding of what the organizations
needs to win in the future
29© 2014 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Final Thoughts: Organizations must embrace a more holistic approach to talent management
Holistic Approach
Pause to consider whether all major
talent risks have been identified & prioritized – does the business
agree?
30© 2014 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Final Thoughts: Organizations must embrace a more holistic approach to talent management
Holistic Approach
Work with leadership to connect and
engage with talent across the
organization
31© 2014 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Embed strategic & holistic talent planning into
business planning – it’s not a standalone
exercise
Final Thoughts: Organizations must embrace a more holistic approach to talent management
Holistic Approach
32© 2014 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Seek to understand and track the total
cost of workforce
Final Thoughts: Organizations must embrace a more holistic approach to talent management
Holistic Approach
33© 2014 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Evaluate talent-related decisions
for return on investment
Final Thoughts: Organizations must embrace a more holistic approach to talent management
Holistic Approach
34© 2014 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Hardwire talent risk into wider enterprise
risk management frameworks
Final Thoughts: Organizations must embrace a more holistic approach to talent management
Holistic Approach
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.
© 2014 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International.
Visit us at kpmg.ca/talentrisk
LAURA CROUCHERPartner, Advisory Services National Lead People & Change (Canada)KPMG LLP
lcroucher@kpmg.ca
@croucher_lauraLaura Croucher KPMG+1 416-777-3417#Fight4Talent
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