Getting the balance right
in
Next-Generation
Talent Management
Daniel Van den Broeck
Vice President HCM Solutions
Oracle Europe, Middle-East & Africa
1Agenda
• Today's Workforce Challenges
• Talent of the future : How to Get them - Keep
them
• Who will ultimately win "The war for talent"
• Q&A
2Today's Workforce Challenges
3Future workforce
challenges -
Demographics and
Diversity?
• Aging workforce - Workforce
generations
• Workforce diversity - Gender -
Sex - Ethnicity - Life pursuits…
• Rise in contingent workforce
• Need for flexible workforce
deployment models
• Global - Mobile - Virtual Worker
• Skills demand versus supply
4The Workforce is Getting Older around the World
5The Workforce is Shrinking
6"It is not an overstatement to say that the
demographic situation regarding the aging
workforce is one of the most pressing
issues confronting Europe today"
Anders L Johansson
National Institute for Working Life, Sweden
Source: Johansson, Anders L., "Work organisation in an ageing Europe." European Agency for Safety and Health at Work, September 2004.
7The topic of mature workers is gaining importance and
urgency in European Union (EU) member countries
EU targets to address aging workforce issue
ƒ Over the next two decades the number of
older workers (50-64 years) will increase by
25%, while the younger workers (20-29 years)
will decrease by 20%
ƒ Recognizing this growing issue, EU members
recently set the following goals:
- 50% employment rate for workers aged
between 55 and 64 years (European
Council, Stockholm, 2001)
- Exit age for older workers to be raised by
five years by 2010 (European Council,
Barcelona, 2002)
ƒ Despite some progress, the EU is "still far
short of both targets, and much stronger
efforts are needed to make the necessary
progress towards both targets"
Source: Commission of the European Communities, "Increasing employment of older workers and delaying the exit from the labour market," Communication from the
Commission to the Council, the European Parliament, The EuropeanEconomic and Social Committee and the Committee of the Regions, March 3 2004
8Shrinking Around the World
A S h ri n k in g W o rk f o r c e
Projected Change in W orking Age Population (15-64) 2010-2050
1970-2010 2010-2050
20 0 %
18 0 %
16 0 %
14 0 %
12 0 %
10 0 %
80%
60%
40%
20%
0%
-2 0 %
-4 0 %
-6 0 %
l
a y n n y s a a i o a
i l n ce c lia c i
s a rea na n i UK a az US d
pa a nd
It o a a r
In
Ja Spai m Chi rl st Br
Rus r Fr Mexi
h Afr Canad u
Ge A
uth K ut
So Nethe So 1
9Baby Boomer
• Make up 43% of workforce
today
• Grew up in tough but stable
post-war world
• Live to work
• Seen as hardworking and
loyal
• Make up most of middle and
upper management
10Generation X
• Make up 50% less than
Baby Boomers
• Dissolution of the
nuclear family
• Work to live
• Loyalty to profession
not company
• Motivated by "what is in
it for me"
11Generation Y
• Sometimes referred to as
Echo Boomers
• 78% say work/life balance
a priority
• Telecommuting - work is
time driven, but no longer
time bound
• Grew up with technology
• It isn't about the money
12How to span 40 years of more??
TraditionalistBoomer Gen X Gen Y
Too much and I'll Required to keep Continuous &
Training
The hard way
leave me expected
Collaborative &
Learning style Classroom Independent
Facilitated
networked
Communication
Top down Guarded Hub & spoke Collaborative
style
Hierarchical Horizontal Independent Collaborative
Problem-solving
Decision- Seeks approval Team informed Team included Team decided
making
Command &
Leadership style Get out of the way Coach Partner
control
No news is good
Feedback Once per year Weekly/daily On demand
news
Unable to work Unfathomable if not
Technology use Uncomfortable Unsure
without it provided
Part of my daily
Job changing Unwise Sets me back Necessary
routine
Source: Lancaster, L.C. and Stillman, D. When Generations Collide: Who They Are. Why They Clash. How to Solve the Generational Puzzle at Work. Wheaton, IL. Harper Business, 2003.
13Shortage in Workforce
14Across the globe, there are a number of
emerging shortages for skilled employees
Top 10 Talent Shortages Worldwide
• Sales representatives
• Engineers
• Technicians (primarily production/operations engineering and
maintenance)
• Production operators
• Skill manual trades (e.g. carpenters, welders and plumbers)
• IT staff
• Administrative assistants
• Drivers
• Accountants
• Management/Executives
Source: Manpower, Inc., "Confronting the Coming Talent Crunch: What's Next" February 2006
15Other Workforce Statistics
T h e W o rk fo r c e is C h a n g in g
Labor Force Make-Up Percentage Labor Force Percentage Change Labor Force Growth Rates
Change By Age Group By Age Group Percentage Change
(projected 2002-2012) (projected 2002-2012) (projected 2002-2012)
2002
30%
2012 65 + 19% Total 12 %
55 to 64 44%
White 8.5 %
20% 45 to 54 11%
-9% 35 to 44 Black 19.3 %
25 to 34 8%
Hispanic 32.6 %
10%
16 to 24 7%
Total 12% Asian 50.8 %
0
16-24 25-34 35-44 45-54 55+
Key Dem ographic Trends
9 For the first tim e in American history, the num ber of younger workers entering the labor m arket will not
replace those who are leaving
9 Every day 10,000 Baby Boomers turn 55 years old
9 One in six workers will be over age 55 by 2006
9 For every two experienced workers leaving the workforce, one will enter
9 Workers age 25 to 34 will shrink by alm ost 9% in the 10 years ending in 2006
9 By 2010, Am erican businesses will face a labor shortage of m ore the 10 m illion workers
9 By 2030, the gap will grow to 35 m illion
Corporate Leadership Council
State of the W orkforce 2004: United States
2
16Do You Still Need More Stats?
• In the auto manufacturing environment 40% of managers will retire
in the next 5 years
• The Public Sector in the US, Canada and Australia will loose more
than 30% of workforce by 2010 - Healthcare and Energy are close
behind
• In the US alone it is expected that we will be short 1,000,000
nurses by 2012
• By 2050 - 40% of Europe's total population and 60% of the
working age population will be over the age of 60
• The US Dept. of Education predicts that 60% of jobs in the 21st
century will require skills possessed by only 20% of the current
workforce
• Science and Engineering degrees - 5% of graduates in US, 42%
of degrees in China; German engineer degrees declined by 30% to
only 36,000
17Impact on Poland?
"According to Polish CEOs, what will influence companies abilities
to succeed in Poland most strongly, from both a short and long
term perspective, are: increased competition, economic conditions
and human issues."
2006 Best Employers in Central Europe Study
Hewitt Associates
18Impact on Poland?
• Poland populations declining since 1999 (- 0.025%
pa), estimated to be 5% lower in 2025
• Increasing proportion of ageing people & declining
birth rates - in 1950, people less than 20 years were
39% of population; in 2002, only 26% were
• With more than 2 M people currently studying in
University, Poland is one of the better educated
societies of Europe
• But best & brightest emigrate, highest emigration in
18 - 34 year group
• In one of the fastest growing economies in Europe,
highest unemployment rate - 18%
Data Sources: Economist, Hewitt Associates, various web sites
19Impact on Poland?
• Hardest hit are health care professions (doctors,
dentists, nurses), specific technical skills & leadership
• All the Best Employers & 90% of other companies
experience talent shortages
• Most important CEO challenges 2006: People issues
like accessibility of an effective leadership, employee
engagement & loyalty
• Key HR issues in Poland - acquisition & retention of
talent, productivity/individual/collective performance,
motivation/enagement of employees & corporate
culture
Data Sources: Economist, Hewitt Associates, various web sites
20Future Talent
How to get them
How to keep them…
21People Are Capital
Resource
Something that can be used for support or help
An available supply that can be drawn upon as needed
Capital
An asset or advantage
Material wealth used in the production of more wealth
Page 22 22Major Shift in the
Makeup of
Companies
The Source of Value Has
Shifted from Tangible to
Intangible Assets
1. Brookings Institute
2. Baruch Lev analysis of S&P 500 companies
23Tangible Versus Intangible
But what about people?
Patents Property, plant
Trademarks and equipment
Cash
Proprietary raw
material sources Receivables
Brand name Inventory
Goodwill
Intangible Assets Tangible Assets
24What CEOs are asking from HR
• What workforce segments
create most value?
• How will business be
impacted by impending
retirement and are we
prepared?
• Where is talent demand
outpacing supply?
• What's are the employee
productivity figures?
• Is the absenteeism
improving - decreasing?
25What CEOs are asking from HR
• What skills will we need in
next 5 years that we don't
have today?
• Turnover? How much is it
costing in customers? In
productivity? In innovation?
In quality?
• Do we have a workforce
plan to communicate
financial consequences of
talent decisions on our
business?
26CEO Priorities? Workforce Excellence!
2003 2008
9%9%9% 28%28%28% • Top Management succession
12%12%12% 22%22%22% • Talent identification and growth
24%24%24% 31%31%31% • Developing & retaining potential leaders
31%31%31% 18%18%18% • Engaging employees in visions, values, goals
• Improving product innovations
25%25%25% 28%28%28%
43%43%43% 18%18%18% • Reducing costs
45%45%45% 33%33%33% • Customer retention
The Conference Board, 2003
27What is Talent Management?
A set of business practices that manage the planning,
acquisition, development, retention and advancement
of talent in order to achieve business goals and
optimize performance.
"Nothing is as important as identifying, training, and holding
onto talented people" - Jack WelchWhat's Wrong With Today's Model?
• Lack of insight into the
organization's capabilities
• Lack of insight into what's
needed to build the future
• Inflexible deployment
models
• No connection of labor to
Performance / Learning /
Compensation
• Lack of optimization of
the "People Chain"
29What's Wrong With Today's Model?
Performance
Performance
Learning
Learning Management
Management
(Manual)
(Manual)
Succession/
Succession/
Talent
Recruiting Talent
Recruiting
Management
Management
Competencies
Competencies
(Manual)
(Manual)
Workforce (Multiple
Workforce (Multiple
Planni ng Repositories)
Planni ng Repositories)
Learning
Learning
Career
Career
Learning
Learning
Planni ng
Planni ng
(Manual)
(Manual)
30The answer to this question = MS Excel…New Model for Managing People
Business Process/Systems
Competencies
Have It? Performance Management
Succession Planning
Performance Management
Talent Compensation
Build It? Learning Management
Demand
Career/Succession Planning
Buy It? Talent Acquisition
32Have It?
Building From What You Already Own
• Holistic view of what you own today
• What can you build from what you already have?
• Understand what you need to build for tomorrow
• Redeploy to mission critical initiatives
• Focus on enriching behavior and engagement
33Build It?
Adding New Capabilities
• Goal Alignment
• Pay for Performance
• Learning and
Development
• Succession Planning
• Career Planning
• Focus on enriched
behavior and
engagement
34Buy It?
Acquiring New Talent
• Acquire based on Comprehensive Role Profile
• Collect Key Talent Data
-Capabilities
-Experience
-Exposure
-Education
• On-Boarding Process to Initiate Other Talent
Management Process
• Measure Behavior - Effectiveness and
Engagement of Hire
35Oracle's HCM Value Proposition
ALIGN Workforce with
Goals and Objectives Align
Measure Workforce
Drive Company Performance Effectiveness
Improve Decision Support
Measure
Comply Automate
Enterprise-wide Streamline Systems and
Governance & Compliance Self Service
Mitigate Workforce Risk Drive Workforce Efficiency
36Integrated Systems
Recruiting Performance
Recruiting Performance
Succession Talent
Succession Talent
Learning
Learning
Planning DNA
Planning DNA
CareerCareer
HRMS
HRMS
PlanniPlanningng
37Workforce Compliance…it's everywhere….
Sarbanes Oxley: Organizational Impacts
CEO/CFO
Tone at the Top/Code of Conduct
CEO/CFO Certifications
Senior Management Learning Management
HRMS
Organizational Structure
Assigning Responsibility
Competencies
Learning Management
HRMS
Finance Performance Management HR
Compensation
Segregation of Duties
Segregation of Duties
Finance HR
Certification Benefits
Incentives
Financial Reporting Police
Roles& Responsibilities
Compensation/Variable Comp
Stock Admin
Job Descriptions
HRMS
Stock/Benefits Competencies
Learning Management
Workforce
ManufacturingFSI Real Estate Health Care Certifications
Competencies
Documented
Performance & Learning Management Processes
Process Documentor
38Who will ultimately win "The war
for talent" ??
39Attract, Retain and Engage Employees
Source: Towers Perrin Global Workforce Study 2005 40Recruiting - Developing and Retaining key employees
will become even more important
Factors influencing the retention of high performing employees
Vision • Do individuals see a purpose in what they are doing?
Opportunity • Do individuals see the opportunity to advance and be
recognized for their work?
Incentive • Do individuals believe they receive equitable financial and
non-financial rewards?
Impact • Do individuals see how their work affects the organization?
Community • Do individuals have a social connection to others in the work
environment?
Communica • Do individuals have access to information to do their jobs
tion more effectively?
Work • Do individuals have flexibility in terms of how, where and
flexibility when they perform their jobs?
Source: Ulrich and Wayne Brockbank. The HR Value Proposition. Harvard Business School Press. Cambridge, 2005, p. 16
41Winning the War for Talent
HR Must Understand:
• Demographic changes
and their impact
• Cheaper to Retain than
Hire
• Be an Employer of
Choice
• Organizational
Nimbleness
• Transform Human
Resources
42Being the Employer of Choice
• Culture is key
• Branding as a weapon
• Understanding the new
workforce & cultural fit
• Celebrating diversity
• Effective work/life
practices
• Create long term
relationships with
employees, customers,
suppliers
43Flexible, Adaptable
Organizations
• Great companies
are nimble
• Autonomous work groups
• Project-based teams
• Expanded use of the
"contingent workforce"
• Movement from silos
to networks
• More collaboration
(customers, partners,
even competitors)
44Transforming the HR Skill set
• One size does not fit all
• Business Partner/Business
alignment
• Owner of corp.
culture/employee brand
• Competency/talent
identification &
development
• Better analytical skills
• Process flexibility and
adaptability
45Leveraging Technology for the HR
Business
• Predictive Workforce Analytics
and modeling
• Personalized Service through
intelligent Portals and
Communication technologies
• Adaptation of innovative and
emerging technologies
• Collaborative Applications
between various stakeholders
• Contingent Workforce
Management
• Implementation of alternative
service delivery models
46The best of times..
• #1 HCM vendor in the world!
• HCM vision and heritage belongs
to Oracle!
• And…
47The best run HR departments run Oracle HCM
NOT SAP!!
48Q U E S T I O N SQ U E S T I O N S
&
A N S W E R SA N S W E R S 49