2014 EMEA Job Levelling Summit
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1 2014 EMEA Job Levelling Summit One size fits all? Views from around the world. Carole Hathaway EMEA Practice Leader, Rewards Laury Sejen Global Practice Leader, Rewards Towers Watson
2 What we will cover Building a vision for a global reward and career framework The business case and key drivers Why are companies going global Observations from around the world Some thoughts on successful global implementations 2014 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. 2
3 Global reward and career framework
4 DRAFT Towers Watson s Rewards and Career Framework Supporting the Employee Life Cycle Workforce Analytics & Planning Staffing & Selection Development & Career Management Performance Management Compensation & Benefits Succession Management Competency Model Rewards and Career Architecture Job Levelling A systematic process of determining the relative value of jobs in an organisation Job Architecture The infrastructure for organising jobs (job codes, job titles, functions, disciplines) Inputs Business Context Reward and Talent Strategy Job Content Employee Data Market Data 2014 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. 4
5 Why do we need this and what are the benefits? Set up a common definition of roles to manage talent, mobility and reward Allow internal consistent and transparent view of roles across functions and geographies Provide employees a clear picture to understand current position and future opportunities Enable rapid reaction and deployment to new markets with minimum of disruption Benefits include: Organisation Line Managers Employees A more structured and consistent framework to manage and reward roles within the organisation Adopting market best practice on reward management, aligning the needs of the business and employees Makes it easier to manage and mobilise talent across geographies Clear and consistent information to help communicate a role's position within the business Have more effective conversations with direct reports on career opportunities and potential mobility Clarity on what it means to be in a certain role Greater transparency on the level of roles across different functions and geographies Provides a common language for identifying and classifying roles to facilitate career planning and development 2014 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. 5
6 Business case and key drivers
7 Business needs supported by global job architecture and job levelling Organisational effectiveness Alignment and and consistency Analytics Efficiency Integration Governance Quality Managing complexity Talent management Job clarity and expectation-setting Career development and career advancement opportunities Mobility and Attraction and retention Cost management Competitiveness Rewards optimisation Managing turnover Risk management Compliance Pay equity Limiting undesired turnover 2014 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. 7
8 During this session we are going to ask you some questions Using the Keypad: Questions will be shown on the big screen Follow the question instructions and enter your answer while the words Vote Now appear in the top right corner If you want to change your answer, just enter your new answer 2014 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. 8
9 What was the primary and secondary driver for your organisation to introduce Job Architecture? Vote Now 1. Organisation effectiveness 2. Talent management 3. Cost management 4. Risk management 2.8% 29.2% 27.4% 40.6%
10 What was the primary and secondary driver for your organisation to introduce Job Levelling? Vote Now 1. Organisation effectiveness 2. Talent management 3. Cost management 4. Risk management 5% 24% 29% 42%
11 The case for going global
12 The inevitability of globalisation It has been said that arguing against globalisation is like arguing against the laws of gravity. Kofi Annan 2014 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. 12
13 Why are companies going global? Alignment Governance Cost management Efficiency Quality Talent mobility Complexity 2014 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. 13
14 Does it mean that one size fits all? The Decentralised model The Global Talent Pool model The Conversion Table approach The Centralised model 2014 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. 14
15 Vote Now My organisation s approach to Job Architecture is? 1. Globally consistent for all job families 2. Globally consistent for some job families 15% 3. Varies by country/business unit 37% 48%
16 Vote Now My organisation s approach to Job Levelling is? 1. Globally consistent for all jobs 2. Globally consistent for some jobs 15.5% 3. Varies by country/business unit with an established conversion table 12.6% 4. Varies by country/business unit without an established conversion table 35.0% 36.9%
17 Vote Now Job titles within my organisation are? 1. Globally consistent for all jobs 13.3% 2. Globally consistent for some jobs 18.4% 3. Titles vary by geography/business unit 4. We have globally consistent internal titles with local business card titles 21.4% 46.9%
18 So what can we learn from around the world?
19 Observations from North America Large majority of US headquartered companies maintain formal approach to job levelling Some companies continue to rely exclusively on market data US companies have fairly free hand in determining approach Companies with operations in Canada are required to comply with pay equity legislation Forces use of point factor evaluation and the measurement of specific requirements that may not correlate with market or even internal value of jobs Most organisations pair market data with formal levels to develop compensation structures US companies looking for flatter structures to support career development objectives Flatter structures very prevalent for executive roles For those with global operations, this objective is often difficult to realise if they want a globally consistent structure In parts of EMEA and Asia, cultural expectation for more rapid promotion and rapid rate of increase of market value impede desire for flatter structure Long-term trend to more integrated rewards and talent management, supported by an overarching rewards and career framework, but only in place among a minority 2014 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. 19
20 Observations from India When introducing job levelling what are the main HR challenges companies are seeking to address? Grade drift/creep is the biggest issue that concerns organisations when they are considering a new approach to job levelling. Employees seek promotions as it makes the biggest impact on pay and organisations often find themselves top heavy or with unsustainable wage costs. Do local companies approach job levelling in a different way to multinationals? Owners/leadership take a greater interest. It is not just an HR initiative, but an important organisational exercise. Local companies are less concerned about global consistency and job evaluation for global mobility and associated programmes. What are the main considerations multinationals should keep in mind when introducing a global job levelling framework in India? Link to compensation is the most visible outcome, and companies should not use narrow pay ranges for their bands. This puts flat structures under severe pressure. Companies are forced to promote to allow for salary growth Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. 20
21 Observations from EMEA Business models of many organisations have traditionally been decentralised Varies by sector e.g. pharmaceutical vs. insurance But we see some change Long and enduring history of job evaluation in Western and Northern Europe Newer economies embrace job levelling with scale Low but increasing incidence of global HRIS platforms But as organisations adopt technology we see a move towards globally consistent HR approaches and job architecture and levelling must come first! Increasing incidence of job architecture based solutions to enhance job levelling Focus on supporting career development Significant labour relations and regulatory infrastructure in some countries 2014 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. 21
22 It s a marathon, not a sprint Lessons from Global Initiatives 1. Obtain global agreement up front on key objectives and deliverables 2. Address BU- or region-specific goals respect local needs 3. Secure executive support use a business case to ensure executives and line managers see value of envisioned outcomes 4. Agree project management protocols and governance for decision making during the project 5. Know the limitations of your existing global data 6. Ensure active HR involvement from across the world 7. Make the approach global -- avoid home-country- HQ-centric design or assumptions 8. Determine where flexibility may be required to align with specific market needs 9. Create a global governance model for on-going maintenance and management 10. Achieving global consistency is not difficult, but the change management and communication is key agree what will be global and what will be local 2014 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. 22
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