An Oracle White Paper June The New Business of Business Leaders: Retaining and Growing Talent

Transcription

1 An Oracle White Paper June 2012 The New Business of Business Leaders: Retaining and Growing Talent

2 Introduction As a business leader, you re focused on ensuring that your organization is prepared to meet its objectives now and in the future. You develop strategies to grow revenue, improve profitability, expand into new regions, or enter new markets. There is a constant that all of these efforts share the constant of people. Yet, at a time when business agility is absolutely critical, it is getting harder to find, retain, and develop the talent you need. This white paper is one in a series of five white papers exploring your role as a business leader in driving talent forward in your organization. Other white papers in this series address the business challenges and impacts of recruiting, performance management, and talent development. This paper focuses on how to meet the challenges related to retaining your team and of growing employees skills in new directions to support new roles. This talent intelligence is the key to managing both retention and employee growth. With the right talent intelligence, you can address the key challenges of retention and productivity: knowing the talent you need, retaining top talent by finding the best fit for your people, and planning for long-term talent needs. 1

3 Leaders Increase Retention and Productivity Retention of key employees is typically high on the priority list for line-of-business leaders. In recent studies by both IBM 1 and Deloitte 2, business leaders ranked retention of key talent as among their top five priorities, but most leaders lack the talent data and related insights that would enable them to proactively address retention risks. Further, the need to increase retention and productivity is one you cannot ignore. The harsh truth is that your ability to retain top performers and to continually improve the skills and productivity of your team are two of the most important proof points of successful leadership. Together, these two outcomes are effective barometers for how well you manage your talent. Successful retention and high productivity mean that you are: Hiring the right people for the right roles and quickly integrating them into the fabric of your team Providing opportunities for development and advancement Effectively balancing and rebalancing the skills of your team against strategic objections and aligning individual goal plans with these larger objectives Properly balancing compensation, performance objectives, and results Although human resources (HR) teams may separate themselves into specific silos related to recruiting, organizational development, performance consulting, training, and compensation, you don t have this option. As a line-of-business leader, you not only need to manage each of these activities individually, you also need to manage the intersections and overlaps. This is actually a good thing because it helps you see the big picture firstly, the connections among talent gaps, new hires, and new employee development; and secondly, the connections among the reassignment of key talent, internal development, and retention. You need to take a balanced approach to putting the right talent in place. Effective recruiting is critical for bringing the right talent into the organization, but skill shortages in the labor markets mean that overly relying on outside hiring can increase risk. Research suggests that for leadership positions, internal hires tend to be more effective and successful. 3 Studies also show that internal development and hiring also can improve employee engagement and productivity. 4 Savvy business leaders rely on a 1 IBM, 2010 IBM Global Chief Human Resources Officer Study: Working Beyond Borders, September Deloitte, Talent Edge 2020: Blueprints for the New Normal, Taleo Research, Grow Your Own CEO: The Importance of Homegrown Talent in Succession Planning, December IBM Consulting Services, The Global Human Capital Study, August

4 mix of external hiring, internal hiring, talent development strategies, and internal mobility. This strategy helps you move top talent internally into positions that will maximize the use of the person s current skills and grow those skills needed for the future. Challenge: Knowing What Talent You Need On the surface, this seems like a fairly straightforward challenge with obvious solutions. For many business leaders, the challenge of assessing talent needs is met by making a list that includes a new, approved headcount, backfills for departed employees, and replacement hires in anticipation of possible employee actions. The next logical step that most managers take after creating this inventory is to contact their recruiting departments to begin finding the right external hires. There are two drawbacks to this standard approach first, you may already have the talent you need within your organization; and second, this approach only focuses on short-term talent needs. You can avoid the pressure of constant, immediate talent shortages if you leverage the talent you have and plan more effectively for the future. Uncovering Your Hidden Talent The law of averages suggests that the larger an organization, the more likely it is to contain an individual who has both the skills and aspirations to meet your talent needs. Yet, managers rarely review the talent that exists within their larger teams or organizations before turning to external hiring. Why? The short answer is that it s often too time-consuming to do so. To uncover hidden talent, you need talent intelligence comprehensive information about all your employees made readily accessible. The good news is that you probably already have both formal and informal processes necessary to collect key data. During the recruiting process, you can collect a wealth of data on each candidate s past work history, certifications, and even formal competency assessment results. Goal setting and review processes give you the opportunity to capture information about projects completed and the skills employees have exercised (or not exercised) in completing those projects. Feedback that employees get on a daily or weekly basis from peers and superiors offers further data on their relative strengths. To provide managers with good visibility into talent, you should consider consolidating this information into a centralized employee talent profile that captures past history as well as current performance and future aspirations. Many organizations are still struggling with providing managers with this comprehensive view of employees. Only 37 percent of organizations in the U.K. 5 and fewer 5 Taleo Research, U.K. Talent Mobility in 2011, May

5 than 15 percent of organizations in Australia 6 have individual talent profiles that include prehire data. Fewer than 25 percent of organizations in the U.S. have access to comprehensive talent profiles. 7 Once talent information has been centralized, managers should be able to browse and search that information with the same speed and ease provided by the best consumer internet experiences. Whether you need an expert on financial accounting for mergers, a manager who has led global teams, or a product specialist with in-depth knowledge of the new markets your competitor is pursuing, you need simple, easy-to-use search tools to help you find the right employee within your organization. Identifying internal talent is an essential first step in potentially avoiding a lengthy search-and-interview process for an external hire. A Long-Term View of Talent Needs In addition to improved visibility into your organization s talent, you also need visibility into future talent needs. In the same way that you may manage financial risk by considering different pricing scenarios or manage inventory risk by considering different market demand scenarios, you need to manage talent risk by modeling different talent scenarios. The key to managing that risk is to understand the current state of talent and the dynamics around talent. How likely are you to lose talent in key roles? Which skill gaps might those losses create in the future? How long does it take for your employees to develop the skills that are essential to the success of your business? How long does it take to hire external talent with critical skills? To answer these questions effectively, you need talent intelligence specifically, talent insights and rich analytics that integrate key talent information such as competency levels and histories, risk of loss, and hiring metrics. Using these analytics, you can take proactive steps to mitigate talent risks. For example, if your organization is fully staffed when it comes to critical positions but a majority of people in those positions are possible flight risks, you may choose a variety of risk mitigation strategies. Armed with that insight, you can take action to proactively identify and develop other talent to step into those roles, re-examine compensation levels to ensure they are consistent with market rates and commensurate with performance, or consider alternate roles within the organization. Challenge: Retaining Talent Retaining your top performers is an important element in maintaining a healthy talent pipeline. Employees generally leave their jobs for one or more of the three following reasons: 6 Taleo Research, Australia Talent Mobility in 2011, August Taleo Research and Human Capital Institute, Talent Intelligence and Management: Key to U.S. Business Success, June

6 1. Below-market compensation 2. Unfulfilling current job role 3. Limited opportunities for developing skills and careers with the organization It s important for managers to examine each of these causes to minimize turnover. Optimizing compensation practices and creating employee engagement by aligning work with strategic goals are covered in the performance and compensation white paper in this series. The discussion below focuses on how you can improve employee engagement by better matching employee talents with their current and future roles in the organization. Investing in Your Employees Current and Future Success Even if manager performance is not explicitly judged by the ability to develop people, encouraging managers to help employees build skills in line with both their professional needs as well as their aspirations can boost engagement and retention. It s no secret that working with employees to create effective development plans is challenging. A dialogue that will touch on an employee s weaknesses is not an easy conversation. Development plans that are created and revisited once a year are less likely to have practical relevance to projects and goals that change more frequently. Finally, development plans that focus primarily on the short-term won t help employees realize that vision of how they would like their careers to progress. These challenges can all be addressed or mitigated through talent intelligence. While managers can sometimes have unique insights into an employee s strengths and weaknesses, it s more common for these strengths and weaknesses to be recognized by a majority of the employee s coworkers. Approaches that enable coworkers to share feedback on each other or even nominate each other for succession plans enable a kind of crowd-sourced review and recommendation model that can provide support for manager comments (or encourage a rethinking of unrecognized bias). Solutions that enable this exchange and surface these insights for managers make it easier to discuss strengths and weaknesses and possible future roles. Similarly, solutions that show the most common career paths and development plans for individuals in the same or related roles can suggest possible paths. Another set of insights can be surfaced about related job families and degree of fit for other roles. In short, talent intelligence can enable much deeper and more meaningful conversations about future career paths, development opportunities, and effective development plans. Talent Mobility: Encouraging Horizontal Promotion Once an employee has developed the skills needed to move into the next desired role, the best thing you can do as a steward of your organization is to find the best match between what your employee wants to do and the talent needs of your entire organization (not just your group). By doing this, you help engage and retain talent as well as help fill organizational talent gaps quickly. Encouraging talent mobility requires a difficult shift in mind-set. While you may be ready to move people vertically via promotion within your own organization, moving employees horizontally or geographically is difficult because it can create a gap in your own group. In the U.K., 61 percent of 5

7 survey respondents said they were effective at vertical mobility, but only 52 and 29 percent reported being effective at moving talent horizontally and geographically, respectively. Diligent succession and development planning efforts can ensure that you are prepared when an employee makes a move. Talent mobility can also make it easier for you to bring in new talent from outside the organization. More than 50 percent of job seekers in surveys conducted in the U.K. and Australia indicated that they would give preference to employers who promote internal moves that best match their capabilities and aspirations to an organization s needs. You can also make talent mobility work in your favor by attracting the right internal candidates to open positions in your group. If you have a reputation as a manager who encourages team members to find their best fit within the organization, you are more likely to attract high-quality candidates from within the company. A key element of success in this effort is the ability for you or your recruiting partner to find talent internally. Talent intelligence can provide the tools you need to make this happen. If your organization maintains centralized talent profiles that capture performance and competency data for employees, you or your recruiting partner can search these profiles to quickly find employees that fit the requirements for your open position. These same profiles can also offer up other relevant data points regarding work history, aspirations, development plans, and any number of meaningful insights that can help you make a better decision. Challenge: Stronger Succession Plans A formal succession planning process provides a solid framework for identifying and developing people who will eventually fill critical positions in your organization. Unfortunately, many organizations fall into the trap of taking too narrow of a view on possible successors they consider only people within the organization who are employed one or two levels down from that specific position. This approach can be limiting. First, it weakens succession plans by keeping the number of candidates low or by tying the same individual to too many plans. Second, it limits the career options for employees outside the hierarchy by removing them from consideration. Finally, it represents a missed opportunity for organizations to build leaders with broader cross-functional experiences. To create stronger plans that will improve your chances of having the right talent when needed while also improving employee engagement and building organizationwide skills work with your HR business partner to take a broader view of succession planning. Focus on Skills, Not Positions Focusing on skills, rather than on positions, during the succession planning process can help you increase the number of potential candidates both for leadership positions and for positions with specialized skills. While functional expertise is an important characteristic of anyone leading an organization, there is also a common set of skills needed for any leadership position, regardless of function. The more senior the leadership position, the more important these common skills become. A skill-oriented view to succession planning can also be useful for nonleadership positions. It s likely that a finance manager supporting one business unit can be successful in a similar role in a different 6

8 business unit. The keys to success in this approach are talent data and insights that fuel thoughtful business decisions in other words, talent intelligence. By enabling skill assessment and gap analysis of anyone within the company, talent intelligence solutions can help managers identify adjacent roles that might be suitable for a team member while also expanding the potential pool of candidates to similar job families and the employees who work in those roles. Armed with this information, you can create pools of employees with sets of skills that can feed into succession plans for multiple positions. Grow Your Pools and Plans While many managers default to a reactionary hire from the outside approach to fill open positions, savvy leaders are thinking more broadly about their talent strategies and the way that retention, job fit, and talent mobility can address staffing gaps. By shifting your mind-set to consider internal hires, you can greatly expand your talent options and improve your chances of filling open positions with the right people while also improving the organization s ability to retain key talent. Your succession planning efforts can also benefit from a shift in mind-set that takes a more balanced view of talent. Just as managers default to external hires when thinking of open positions, they tend to default to internal employees as candidates for succession plans. There is a wealth of information on skills and history captured during the recruiting process that can be used to determine a candidate s suitability for inclusion in a succession plan. When a position becomes available, the inclusion of both candidates and employees on a succession plan can dramatically increase the depth and breadth of your succession pools. Conclusion We live in the age of talent where people are the business differentiators who power innovation in design, IT, supply chain, process, training, networking, communication, content, and everything else. People are the difference and talent management is the business strategy. Talent intelligence insights provide the information you need to truly know the people who drive your organization s success and unlock the power of your people. With ever-faster business cycles and a growing awareness of the value of talent to business success, business leaders are driving more core HR functions than ever before. For innovative leaders, talent management has become the new business of business. Study after study validates that this closer alignment drives performance, profit, and shareholder returns, while also fueling the careers of talentfocused leaders. Galileo once said, Count what is countable, measure what is measurable, and what is not measurable make measurable. This is the core of talent intelligence: information, insight, and knowledge to help you make better business decisions. With the right technology, you can see a whole new universe of talent both inside and outside your company, giving you the competitive advantage you need to thrive in the age of talent. 7

9 The New Business of Business Leaders: Retaining and Growing Talent June 2012 Oracle Corporation World Headquarters 500 Oracle Parkway Redwood Shores, CA U.S.A. Worldwide Inquiries: Phone: Fax: Copyright 2012, Oracle and/or its affiliates. All rights reserved. This document is provided for information purposes only and the contents hereof are subject to change without notice. This document is not warranted to be error-free, nor subject to any other warranties or conditions, whether expressed orally or implied in law, including implied warranties and conditions of merchantability or fitness for a particular purpose. We specifically disclaim any liability with respect to this document and no contractual obligations are formed either directly or indirectly by this document. This document may not be reproduced or transmitted in any form or by any means, electronic or mechanical, for any purpose, without our prior written permission. Oracle and Java are registered trademarks of Oracle and/or its affiliates. Other names may be trademarks of their respective owners. Intel and Intel Xeon are trademarks or registered trademarks of Intel Corporation. All SPARC trademarks are used under license and are trademarks or registered trademarks of SPARC International, Inc. AMD, Opteron, the AMD logo, and the AMD Opteron logo are trademarks or registered trademarks of Advanced Micro Devices. UNIX is a registered trademark of The Open Group oracle.com