best practices of retention
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GOOD MANAGEMENT ADOPTIONSTRANSCRIPT
Best Practices of Best Practices of Succession Management Succession Management and Employee Retentionand Employee Retention
Questions To Consider...Questions To Consider...
What % of your employees will retire in the next 5 years?
Questions To Consider...Questions To Consider...
What % of your employees are looking for other employment?
So…what are you planning So…what are you planning to do about it?to do about it?
Session ObjectivesSession Objectives
Briefly explore current trendsUnderstand succession management
versus succession planning – and the alignment to employee retention
Understand best practice processes and examine a few of the tools and methodologies being used
Discuss the roadblocks and benefits of implementation
Explore how to get started
Why the Interest in Why the Interest in Succession Planning and Succession Planning and Employee Retention?Employee Retention?
Numbers of people retiring and numbers of people entering workforce
Loss of organizational memory Skills shortages are acute Retention of talent Future of work – different needs for generations
of employees What else?
Trends and Forecasts*Trends and Forecasts*By 2008, more people will be leaving the
workforce than entering44% of workers aged 45-59 say they will
retire before 6510% of workers aged 50-59 who leave full
time jobs, move into part time within 2 years
1/3 of workers aged 50-59 who leave full time jobs, move back into full time
* Statistics Canada research
Trends and Forecasts*Trends and Forecasts*
72% of companies predict they’ll have an increasing number of leadership vacancies over the next 3-5 years
76% of those same companies are “less than confident” in their abilities to adequately staff these positions
* Corporate Leadership Council research (reported by The Gallup Organization)
Current Economic IssuesCurrent Economic Issues
Workplaces will lose high performers as economy strengthens
Currently, workplaces that understand future skills needed are having difficulty recruitingRecruitment strategies are strengthening
Retention of talent is increasingly becoming a “hot” issue
The Internal ChallengeThe Internal Challenge
Who is going to do the work?
What knowledge are we about to lose?
What skills will we lose?
What traditions will change? Is this good?
The External ChallengeThe External Challenge
The market place for good talent will be competitiveThe good people will be able to pick and choose their working environmentHow do we create an organization in where people want to stick around?
Who is responsible to Who is responsible to ensure you have the peopleensure you have the people
to get the job done?to get the job done?
Shift from Industrial Age to Shift from Industrial Age to Information AgeInformation Age
The Old WayHR is responsible for people managementWe provide good pay and benefitsRecruiting is like purchasingDevelopment happens in training
programsWe treat everyone the same
Source: “War for Talent”
Shift from Industrial Age to Shift from Industrial Age to Information Age Information Age The New WayAll managers are accountable for
strengthening their talent poolsWe shape our workplace, jobs, and strategy
to appeal to talented peopleRecruiting is like marketingWe fuel development through stretch jobs,
mentoring and coachingWe affirm our people, but invest differently
in A, B, and C players
Source: “War for Talent”
Questions To Reflect OnQuestions To Reflect On
If the dam bursts today, what is the impact to your organization?
How would you replace the people, knowledge, lost productivity?
One Approach…One Approach…
It’s not just about havingIt’s not just about havingthe bodies.the bodies.
It’s about the It’s about the rightright bodies bodies doing the doing the rightright things. things.
Creating an organization of Creating an organization of which people want to be a part.which people want to be a part.
Retention:Retention:What keeps employees What keeps employees
happy?happy?
Current Retention TrendsCurrent Retention Trends
Towers Perrin (2002) Canadian study
59% are open to changing jobs11% actively looking
45% passively looking
“To retain me, you’ve got to help me advance, keep the good people, and provide competitive pay….”
Top 15 Retention DriversTop 15 Retention DriversRetention Items %
1. Exciting work & challenge 48.4
2. Career Growth, Learning & Development 42.6
3. Working with great people & relationships 41.8
4. Fair pay 31.8
5. Supportive management/great boss 25.1
6. Being recognized, valued & respected 23.0
7. Benefits 22.0
8. Meaningful work, making a difference & contribution 17.0
9. Pride in organization, its mission & product 16.5
10. Great work environment / culture 16.0
11. Flexibility 13.6
12. Autonomy, creativity and a sense of control 12.6
13. Job security & stability 10.5
14. Location 10.3
15. Diverse, changing work assignments 7.7
Source: Career Systems International, 2005
Other ResearchOther ResearchRetention Items
1. Career growth, learning and development
2. Exciting work and challenge
3. Meaningful work, making a difference and a contribution
4. Great people
5. Being part of a team
6. Good boss
7. Recognition for work well done
8. Fun on the job
9. Autonomy, sense of control over work
10. Flexibility – for example, in work hours and dress code
11. Fair pay and benefits
12. Inspiring leadership
13. Pride in organization, its mission and quality of product
14. Great work environment
15. Location
Source: Love ‘Em or Lose ‘Em, 1999
Understanding the DataUnderstanding the Data
Employees are looking for job growth and learning opportunities, or they are looking for a new jobAre you offering the items on these lists to your employees?As managers in your organization, how many of these items do you believe are within your control?
Understanding the Data – Link Understanding the Data – Link to Recruitmentto Recruitment
Attraction is part of retention, so this information also informs recruitment practices
Employees will be attracted to organizations that have well-developed mentoring programs, career development initiatives, and job enrichment opportunities
Link to Employee Link to Employee EngagementEngagement
Research shows positive correlation of engagement scores with:
Employee attraction and retention
Engagement scores also have a positive correlation with:
Customer satisfactionRevenue growth and shareholder returnsEmployee productivityEmployee attendance
What is Engagement?What is Engagement?
SaySay StayStay StriveStrive
Speak positively about the organization
to co-workers, potential employees
and customers.
Have an intense desire to be a member of the
organization.
Exert extra effort & are dedicated to doing the very
best job possible to contribute to the
organization’s business success.
EngagementEngagement
Calculating Employee Calculating Employee EngagementEngagement
I would, without hesitation, highly recommend this organization to a friend seeking employment. Given the opportunity, I tell others great things about working here.
It would take a lot to get me to leave this organization.I hardly ever think about leaving this organization to work somewhere else.
This organization inspires me to do my best work every day.This organization motivates me to do more than is normally required to complete my work.
SaySay
StayStay
StriveStrive
Scores from the following six questions are used to calculate the engagement score:
Succession Planning:Succession Planning:Helping you understand Helping you understand
whowho to focus on to focus on
Quick Poll…
Who has:
No succession planning in place?
Succession planning in place, but not sure it is, or will be, successful?
A successful succession planning initiative?
The Traditional Approach to The Traditional Approach to Succession PlanningSuccession Planning
Often highly politicalLittle thought given to what kind
of leaders required in the futureDone secretlyFocus on putting names in boxes
(“replacement”)Few conversations held
Results of This Approach to Results of This Approach to Succession PlanningSuccession Planning
Strategies become academic and administrative exercises. Change happens and rigid plans are not applicable – a waste of time and money
Little focus spent on the development of individuals
A Different Way to Think A Different Way to Think About Succession PlanningAbout Succession Planning
Succession management is a process of ensuring there are leaders and talent that can implement the organizational vision
It requires the systematic identification of those individuals who have the potential to turn the vision of the organization into reality
Elements of an Effective Elements of an Effective Succession Management Succession Management Process*Process*
1.Individual Career
Planning andDevelopment
2.SuccessionPlanningAnalyses
3.Group Discussion
and Review
* The Gallup Organization
Succession ManagementSuccession Management
Focus on individual development strategically aligned to future vision
Leadership development can ensure that the potential identified through succession process is realized
Result is long-term leadership sustainability through attraction, retention and development of talent
Succession ManagementSuccession Management
A key strategic initiativeCannot be done in isolation to other
cultural and people oriented initiatives in the organization
More than just “putting names in boxes”
Succession ManagementSuccession Management
Focus on integrating many elements of organization development
High level steps need to be customized for each organization
“Leadership Pool” approach is gaining in popularity (identifying all potential employees vs. positional replacements)
“There are no recipes or formulae, no checklists or advice that describe “reality”. There is only what we
create through our engagement with others and with events.”
(Margaret Wheatley,“Leadership and the New Science”)
Vision and CompetenciesVision and Competencies
Alignment to vision and strategyBusiness plan for succession initiatives
Succession and leadership aligned to the vision, critical business issues/skill gaps
Executive commitmentDevelop leadership competenciesDevelop a succession management
roadmap
Need for a RoadmapNeed for a Roadmap
Implementing succession initiatives impacts culture
A roadmap shows how to get there
“Without a roadmap, the likelihood is that you will focus too much attention on details
and miss the ‘big picture’.” (William Rothwell)
Talent Review ProcessTalent Review Process
An interactive dialogue and discussion to support the performance and potential of talent in the organization
A process to look at key talent, open positions, promotions and leadership development
Discussion to support shared ownership of the talent pool and development opportunities
Talent Review ProcessTalent Review Process
Robust Talent Review (“War for Talent”):Full day on-site for each divisionDiscuss quality of incumbentsReview individuals and the talent
strength of each unit, and discuss other issues such as retention or recruiting
Rigorous, candid and open debate
Talent Review ProcessTalent Review Process
Robust Talent Review, continued:Drive to a distribution of ratingsSpecific action plans written and
followed up for each unitAs important and intense as the budget
process, with real accountability and a performance focus
Talent Review Roadmap Talent Review Roadmap QuestionsQuestions
How far down in the organization? What groups?
High potentials or everyone?Replacement or pool – or both?Assess on performance and potentialOther assessments required?Who will assess? Do they have the skills
to assess?
Pool versus Pool versus ReplacementReplacement
Identifying “bench weakness” (e.g. managers, technicians)
Assess individuals Develop as pool – stretch
assignments, leadership development
Track progress
Folio MapFolio Map
Potential
Performance
3.6
3.6
High Performance/ High Professional
New in Position/High Potential High Performance and Potential
5.0
5.0
Outplacement
Needs Improvement
Competent/ Capable
2.6
0
Identifying High Potentials
High
Low High
Pote
nti
al
Performance
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Our leadership “Talent Pool”
The “bar” is a ratingof 3.6 or above on potential
Must be at leastcompetent in eachof the Standards ofLeadership
3.6
1.0
5.03.61.0
Folio MapFolio Map
Permits participants to identify specific developmental actions for employees
Assists conversations regarding next steps
Shows progress from year to year
Critical Positions/People*Critical Positions/People*
Critical Position – A critical position in the organization that is imperative to running the business. Key strategic importance to have back fill.
Critical Person – A critical person in the organization which would result in a significant adverse impact on the business if the person left.
* Johnson & Johnson definitions
Example
Multi-level ownershipMulti-level ownershipCEO
Reviews plan to monitor corporate future
President/Sr. VPReview functional plans & Develops Company level plan
Functional Area/Company ManagersIdentifies high potentials across area
Drafts succession plan
Manager Discussion with employee & functional manager re. development/succession
EmployeeCreate Development Plans & Performs Leadership Assessment
Succession Manageme
nt
Retention
??
File it away…File it away…
Start having conversations! Start having conversations!
Great Leaders Great Leaders Make A Make A
Great DifferenceGreat Difference
Leadership Effectiveness Leadership Effectiveness and Turnoverand Turnover
19
9
14
8
10
12
14
16
18
20
22
Bottom 10% Middle 80% Top 10%
Leadership Effectiveness
Tu
rno
ve
r P
erc
en
t
Leadership Effectiveness Leadership Effectiveness and Retentionand Retention
19
51
79
0102030405060708090
Bottom 10% Middle 80% Top 10%
Leadership Effectiveness
Inte
nti
on
to
Sta
y w
ith
C
om
pa
ny
(%
)
Leadership Effectiveness Leadership Effectiveness and Customer Satisfactionand Customer Satisfaction
21
50
82
0
20
40
60
80
100
Bottom 10% Middle 80% Top 10%
Leadership Effectiveness
Rat
ing
s o
f C
ust
om
er
Sat
isfa
ctio
n (
%)
Making Leadership Making Leadership Development WorkDevelopment Work Identify, inform and invest heavily in talent Use 360s to build on strengths Set extremely high expectations for your
leaders – and measure their results Make leadership development a long term
process and not an event Use the succession process as an
opportunity to develop and measure the leadership potential
Senior Management RoleSenior Management Role
Responsible for succession process Approve high potentials, individual
development, leadership development Determine success measures, next
steps and time frames Determine management
accountability Follow-up on actions
MeasuresMeasures
Define up front what you want to achieve in the broader scope
Then…once succession data gathered, define specific measures, timing and accountability. Measure regularly.
Track development of talent, and their progress, regularly over the long term. Assign accountability to managers for progress, assign mentors, reward
Possible Succession Possible Succession MeasuresMeasures By ___ 90% of development actions complete Increase movement of high potentials to other
areas of workplace Increase employee engagement/satisfaction By year 20xx, increase high potential leaders by
x% Over x years, increase high potential retention by
x% External measures - attract high potentials
Employee ConversationsEmployee Conversations
What needs to happenin these conversations?
Individual Development Individual Development PlanningPlanning
ActionsGoals and measuresFollow-up, follow-up, follow-up
More Best Practices More Best Practices (Hewitt)(Hewitt)
Senior management lead the chargeManiacal focus on the best talent
High potentials are carefully identifiedCompensation is highly differentiatedAssignments drive high potentials’ growthTracking progress is critical
ChallengesChallenges
TimeBuy-inLose sight of big picture –
administrative nightmareEmployee/manager conversationsCultural biasesResource issues that arise
Results of Implementing
Succession Management
A high-performance culture that continuously attracts and retains the right people
Strong leaders who can develop others
Mentors that can provide a legacy
A culture of openness and focus
Results of Implementing
Succession Management
No “unspoken agenda” concerning individuals’ aspirations and potential
Investor confidence – Hay (1988) and McKinsey (1999) studies link effective SM to increased ROI and annual return to shareholders
Keys to SuccessKeys to Success
Top management must buy-in and be active participants
Link succession efforts to needs and strategic objectives of the business
Minimize paperwork and bureaucracyMake succession and leadership
development a constant preoccupation
Keys to SuccessKeys to Success
Identify high potential talent early – devise strategies to retain that talent
Recognize that effective succession management is not fast
Spend time to evaluate results and provide feedback to stakeholders
Keys to SuccessKeys to Success
Ensure leaders have an opportunity to apply the skills they are learning
Ensure everyone is, and can be, responsible for their own development
Ensure effective role modeling of leadership excellence
Measure behaviour change
DiscussionDiscussion
Where should we start?
What will be easy?
What will we stumble over?
ResourcesResources
“War for Talent” – McKinsey & Co. “Leadership Pipeline” – Ram Charan “Grow Your Own Leaders” – W. Byham “Effective Succession Planning” – W. Rothwell “Love ‘Em or Lose ‘Em” – Kaye & Jordan-
Evans Centre for Creative Leadership – www.ccl.org Statistics Canada – www.statcan.ca/ “The Extraordinary Leader” – Zenger &
Folkman