Innovating for Today s New Workforce

Transcription

1 RETHINKING PROCUREMENT TALENT MANAGEMENT: Innovating for Today s New Workforce Presented by: Don Dougherty, Partner Executive Vice President Marrena Anderson Senior Vice President

2 AN APPROACH UNHEARD OF IN TRADITIONAL CONSULTING AND STAFFING FIRMS We give clients access to unbundled resources, plus the ability to selectively add value through leading-edge methodologies, the latest best practices, and specialized insight and advice. Since 1996 we ve focused only on procurement s success. IT S ALL WE DO. 2

3 Agenda Talent s New Landscape Trends & Innovations in Procurement Talent Management Recruiting & Retention Strategies Social Networking Knowledge Management Programs Training Methods Compensation Models 3

4 Talent s New Landscape 4

5 The Importance of Talent Management Take our 20 best people away and I can tell you that Microsoft would become an unimportant company 5

6 The Evolution of Procurement Over the last 20 years, procurement has shifted from a back office clerical function to a strategic one that creates shareholder value Manage Shareholder Value Manage Cost Tactical Strategic 6

7 Why Are Procurement Skill Requirements Continuing to Evolve? New processes that did not exist years ago Strategic Sourcing Supplier Development and Supplier Relationship Management Spend Management New tools and technologies Strategic Sourcing Suites and e-sourcing Tools Spend Analysis Contract Development, Maintenance and Compliance Tools Supplier Identification Solutions Supplier Scorecards Changing markets Local to Regional to National to Global Increased risks and other factors that drive market volatility Higher expectations on Supply Chain organizations to contribute to operating results The transition from transactional to strategic activities Continued value contribution Successful cost reduction falls directly to the bottom line 7

8 The Times They Are A-Changin Economic and employment conditions have moderated, but unemployment rates will remain high Pressure and opportunity to do more with less Global talent challenges are impending Talent / culture will be the great differentiator Good talent has choice Talent surplus is as much a reality as a talent shortage Got Talent? 8

9 Managing The Talent War The war for talent exists organizations need to address the workforce gaps and their future potential to remain competitive. Some issues that need to be addressed include: How do I find and grow my knowledge workers and leaders? How large is the gap between my near future needs and reality? Buying talent will not be sufficient as a solution to meet my business needs. We need to minimize poor hiring decisions. Growing and measuring talent internally is key, but how? We must retain top talent, but how? 9

10 Generational Motivators Generation Birth Years % of Wkforce Motivators Traditionalists % Value respect, part-time hours, temporary employment Baby Boomers % Feel needed, be part of a team, training, flexible retirement options Generation X % Immediate feedback, flexible work environments, results focused Generation Y % Mentors, work with bright people & new technologies, learning opportunities, work/life balance, recognition, career mobility 10

11 So, what s next? Rethinking Procurement Talent Management How Do We Innovate For Tomorrow s Workforce? More is Expected from Procurement! 11

12 Polling Question What is the most critical workforce issue that Procurement is facing today? 1. Finding and attracting qualified staff 2. Developing and training employees in new important skills 3. Developing and training employees in new technologies & processes 4. Fostering knowledge transfer 5. Retaining critical talent 6. Other What do you think? 12

13 Trends & Innovations in Procurement Talent Management 13

14 What is Talent Management? Talent Management is a holistic approach to the employment lifecycle. What Companies MUST Get Right: Leadership and talent strategy closely aligned to and executed against organizational goals Selection and onboarding a rigorous and consistent approach Leadership right leaders, right behaviors, and right skills Performance Management honest talent-management discussions facilitated and calibrated consistently; transparent and strong performance-management expectations Development/Training accelerated development through experiential, relational, and traditional processes; driven from the top Succession management deep and robust talent pipeline High-potential and critical talent definition, identification, calibration, and development Metrics to drive desired results, differentiated compensation, and rewards 14

15 Insight into Next-Generation Procurement - Executive Interviews & Roundtables Emerging Trends Innovation Predictions Value 1 Proactive Involvement 1 Expanding Procurement s Value 2 Expanding Procurement s Scope 2 The Virtual Procurement Organization 3 Organizational Investment 3 Rethinking Talent Management Next 1 2 years Next 3 5 years 15

16 Trends & Innovation Predictions Rethinking Talent Management To create a highly functioning Procurement organization, a few things leaders will need to do: Make a significant shift in recruiting, retention, and succession strategies Create formal knowledge management programs Develop evolutionary compensation and incentive plans Embrace social networking to foster a more collaborative culture Use creative, entertaining, and experiential training methods Go t Talent? 16

17 A Tale of Two Hires it is EXPENSIVE to Make a Bad Hiring Decision Three playoff appearances Three AFC Championship games One Super Bowl victory No playoff appearances.313 winning percentage No longer a head coach Estimated replacement cost of a bad procurement hire (buyer level) is $269,000* * Source: HR World online Bad Hire Calculator: includes costs for advertising, recruiting, interviewing, relocation, productivity loss, and training cost. 17

18 Recruiting Strategies Procurement organizations will reshape their expectations and recruiting approaches for Talent Several trends to do things differently: Develop value propositions and brand to increase attraction Scale back use of job boards, use alternate methods instead Use more holistic selection criteria Use multi-dimensional interviews geared toward those skills Plan for turnover 18

19 Keeping Your Best People Most Effective Ways to Retain High Performers 1. Career Advancement Opportunities 2. Dedicated career & development planning 3. Life / Work balance 4. Innovative compensation and benefit plans 5. Challenging work 6. Individual succession plans 7. Non-financial incentives 8. Company culture / management team Strategies Keep your team s work challenging Structure your department to nurture highly-skilled candidates Target your compensation to be 10-20% above industry average Encourage and allow balance between work and life Develop mentoring programs that encourage advancement * Source: ProcureAbility Survey of Supply Chain Professionals 19

20 Knowledge Management - Does This Happen in Your Organization? We always seem to re-invent the wheel when we start a new sourcing effort Sourcing is an art - everyone has their own special approach Once we source a category, we leave the supplier relationships up to the business units I don t know what we would do if Jane Doe left this group Everyone has their own RFPs and templates on their hard drive - it s too difficult to share If so, then a Knowledge Management program will help 20

21 Knowledge Management - Considerations for What to Capture CAPTURE THIS. All sourcing related processes, e.g. Strategic Sourcing, Supplier Development, Annual Market Review, Performance Management, etc. Relevant, recent market intelligence Relevant spend category information, including specification rationale, user requirements, cost drivers Best practice RFX s, Supplier Evaluation Templates, Site Visit Guides, Internal & External Assessment Templates, Strategy Templates, etc. BUT NOT THIS. Notebooks full of old process charts Folders with useless and dated market intelligence Thousands of drawings and specification files Every document used by every sourcing team (unless required by law) Be careful not to capture too much - information overload will create a Knowledge Management program that is never used 21

22 Incorporate a Web-based Sourcing Process Toolkit SAMPLE SOURCING PROCESS TOOLKIT CONTENTS Opportunity Assessment and Start-up Category and Market Analysis Sourcing Strategy Go To Market Implementation Gather Base Data Gather Detailed Category Data Develop Sourcing Strategy Develop and Distribute RFX Develop Final Agreement Description Identify Opportunity Conduct Market Analysis Validate Savings Target Create Selection Criteria Communicate and Celebrate Approach Conduct Preliminary Feasibility Study Identify Stakeholders & Establish Team Team Kickoff Develop and Distribute RFI Develop Cost Models Obtain Stakeholder Approval Evaluate Proposals and Risk Conduct Negotiations Select Supply Base Obtain Stakeholder Approval Initiate Supplier Development Tips & Challenges Tools & Templates Checklist 22

23 Training & Development Based on each individuals skills assessment results, develop a fit-for-purpose training & development program tailored to upgrade the desired skill set Create game-like approaches Use a combination of experiential classroom, interactive/virtual settings, and onthe-job training to ensure that the organization has a clear understanding of: Standardized processes that are expected to be utilized Category and market intelligence data capture format requirements Tools and templates that are available, and processes for submitting improvements Training: Sourcing Negotiations Skills Cost Modeling Team Building Etc. 23

24 Examples of Training Modules A sample of the training modules that are typically used for Strategic Sourcing skills development include: Strategic Sourcing and Advanced Sourcing Leading for Excellence Cost Modeling and Analysis Team Building Supplier Collaboration Supplier Performance Management Empowered Decision Making Procurement Principles Advanced Communication Skills Alliance Development Basic Negotiation Skills Building Competitive Advantage Risk Mitigation Advanced Negotiations RFP Development Basics of Financial Analysis Managing Customer Interactions Effective Communications These may be available through your internal training group, local university programs, or external training/consulting organizations Time Management Innovation in Business 24

25 Innovations in Compensation Top purchasing organizations are expecting to innovate employee pay around some common themes: Pay-for-Performance: Differentiate elements of the four general pay categories cash, benefits, equity, and time and place Reallocate towards high performers to ensure retention, and away from mediocre and poor performers Research indicates aggressively increasing the pay of the most productive employees can create a return of more than 200% Use Soft Dollars: Allow for flexibility in the use of the currency of time and place Flexible work schedules, unpaid sabbaticals with benefits, extra vacation, additional work-at-home days Align Comp Plans with Strategic Objectives: Ensure pay plans drive desired behavior to achieve results Expand traditional salary band ranges to allow for more differentiation between good and poor performers Sources: ProcureAbility primary research; Strategic Performance Measurement for Purchasing and Supply, CAPS, Center for Strategic Research,

26 Innovations in Compensation Top purchasing organizations are expecting to innovate employee pay around some common themes: Understand the Financial Priorities understanding which form of capital, cash or equity is more plentiful for the company can guide design decisions., Measure the ROI: Calculating the all-in cost of each pay program relative to the pay delivered and discontinuing low-return forms of compensation can free up pay dollars to boost other forms of pay. Sources: ProcureAbility primary research; Strategic Performance Measurement for Purchasing and Supply, CAPS, Center for Strategic Research,

27 Summary PLAN what kind and how many ATTRACT those you want RECRUIT the right people ASSESS them correctly DEVELOP them carefully RETAIN only those you want Look for part 4 in our whitepaper series coming soon: Rethinking Procurement Talent Management 27

28 What s Next? ProcureAbility is continuing our research into Procurement Innovation and look forward to sharing more findings with you soon Don Dougherty Executive Vice President ddougherty@procureability.com Marrena Anderson Senior Vice President manderson@procureability.com 28