Succession Planning FleetPros FleetCon Sept-2017 · fleet. • Certified Automotive Fleet...

SuccessionPlanning-

“Brain-DrainPrevention”

Provo,UTSeptember11,2017

SteveSaltzgiverCAFS,MAOM

AbouttheInstructor• More than 40 years’ experience beginning as a truck assembly

worker, commercial driver and fleet maintenance journey technician, local municipal fleet manager and director over two large state government fleets (Utah and Georgia)

• Vice President of fleet operations for two fortune 500 corporate operations (Coca-Cola and Republic Services) and fleet management consultant.

• Recipient of multiple industry awards including, 2000 Honda Motors Environmental Leadership award, 2015 Sustainable Fleet Award, 2017 Government Hall of Fame Inductee and Legendary Achievement Award.

• Successfully transitioned from wrench-tuner to manager of a $1.5 billion (annual capital and operating budget), 50,000-unit fleet.

• Certified Automotive Fleet Supervisor (CAFS) from NAFA Fleet Management Association and currently serving on the NAFA Board of Directors.

• Holds Business Management and a Masters of Organizational Management degrees from the University of Phoenix.

AboutMercuryAssociates,Inc.

• LargestdedicatedfleetmanagementconsultingcompanyinNorthAmerica

• Morethan600clientsserved,withfleetsof<100to>200,000vehiclesandpiecesofequipment

• Company’smissionistohelporganizationsimprovefleetmanagementpractices,improvefleetperformance,andreducefleetcosts

KeyMercuryAssociatesServices

• FleetManagementBestPracticesStudies• FleetManagementProgramConsolidationandOrganizationalRestructuringStudies

• FleetCostAnalysis,Reduction,andContainmentStudies• FleetUtilization,Optimization,andRightsizingStudies• FleetManagementInformationSystemRequirementsDefinition,Acquisition,Implementation,Hosting

• OutsourcingFeasibilityStudies

KeyMercuryAssociatesServices

• DevelopmentofRequirements,Specifications,andTenders–Vehicles,Services,InformationSystems

• SupplierSelection,ContractNegotiation,andPerformanceReviews

• DeterminationofOptimalVehicleReplacementCycles• EvaluationofLeaseversusBuyandotherCapitalFinancingStrategies

• FinancialAuditsofFleetLeasingCompanyandotherSupplierInvoices

• ManagementTraining

SampleMercuryAssociates,Inc.Clients

• 3M• Air Products• Aramark• Bell Canada• Carolinas HealthCare

System• Danella• GlaxoSmithKline• Honeywell• Hunt Brothers Pizza• Intel• Johnson & Johnson• Johnson Controls• Lancaster Foods• Pfizer• Quanta Services• Rockwell-Collins• Schindler Elevator

• US Army, Navy, Air Force, Marine Corps

• US Departments of Agriculture, Defense, Energy, Homeland Security, Interior, Labor, State, Veterans Affairs

• US Postal Service• Smithsonian Institution; NASA• Canada Post• LDS Church• RAND Corporation• Goodwill Industries• Transportation Research Board• 33 of 50 largest cities in the US,

including 10 largest;• 3 of 5 largest cities in Canada• 35+ state and provincial

governments• 40+ colleges and universities

Corporate Government/Other• Alyeska Pipeline Service Co.• BNSF Railway• Bonneville Power Authority• BP Alaska• British Columbia Hydro• Cudd Energy Services• EPCOR• Flint Hills Resources• Georgia Power Company• Gulf Stream Marine• Hoosier Energy• Horizon Utilities• Hovensa• Pacific Gas & Electric• Southern California Edison• Suncor• UGI Utilities• Whiting Oil & Gas

Utilities / Fuel / Rail

Today’sDiscussionAs more and more baby-boomers retire and exit organizations,it’s becoming ever increasingly paramount for organizations tocapture institutional knowledge before they experience “Brain-Drain.” Failing to encapsulate knowledge will hamper employeereplacement transition, drive up costs, and impact customerservice delivery.

Learning Objectives:• Why is succession planning important and what is successionplanning?

• Why retaining institutional knowledge is important fororganizational success.

• Employee tasks and activities plan prior to an employee'stermination or retirement.

• Processes that can be used to prevent Brain-Drain” andimprove succession planning

• Case study: How successful fleet managers tackled thischallenge before exiting their organization.

WhyDoOrganizationsNeedSuccessionPlanning?

• Baby-boomersExitingWorkplaceDuetoRetirements

• Brain-drainAvoidance– LossofManyYearsofInstitutionalKnowledge

• AcceleratedComplexityofVehiclesRelatedtoTechnologyAdvances

• Shortage- QualifiedPoolofFleetTechnicianCandidatesandMillennialWorkExpectations

• LackofFormalizedMentoringandSuccessionPrograms

WhyisSuccessionPlanningimportant?

Dependingonwhichstudyorsurveyyouacceptbelowareafewfactstoconsider:•33%ofbusinessownersplantoexitinthenext5-10years

•10%ofbusinesseshaveaformalsuccessionplan•38%haveanunwrittenorinformalsuccessionplan•52%havenosuccessionplanatall•Over$1.2Trillioninbusinessassetswillbetransferredtonewleadership

WhyisSuccessionPlanningimportant?• BureauofLaborreportstechsupplygrowing2.6%anddemandgrowing0.7%annually– Qualityv.Quantity

• Turnover/rehireequals3Xemployee’ssalarytoreplace• 40-50%oftechnicianswillretireinthenext15years…• Over40%ofbusinessesstrugglingtofillvacancies.• Over1munemployedveteransw/perfectskillsforindustry• Averageageofvehiclesisrising(9.1years),requiring>Techs• Techsarepredominantlymaleworkforcebetweenages40and49• Estimated20-25%oftechniciansreceivenofringebenefitsandlessthan50%arecoveredbyamedicalplan

• Averagetechnicianworksabout44hoursaweek.• Averagesalaryforatechnicianis$43,000,butAdvancedTechnicianscanearnupto$57,000

9TrendsinPublicFleetManagementSeptember2016,GovernmentFleetMagazine

byThiDao

….“Vince Lorefice, director of Public Works for the Town of Wickenburg,Arizona agreed it has been hard to find talented fleet technicians,partially due to the fact that it’s not viewed as a prestigious job.”

…“Lorefice said the [FleetPros} is aware of this problem, and the grouphas been focusing on succession planning for the past few years in anattempt to train the next generation of fleet managers, providing classeson topics such as management skills and analyzing data through itsFuture Leaders program.”

WorkforceMagazine[Excerpt]*

… “Jim Skinner, former CEO of McDonald’s Corp., was known to tellmanagers: “Give me the names of two people who could succeedyou.” It was just one way the CEO continued the culture of successionplanning at McDonald’s.”

…”It was an understandable priority considering Skinner only landedin the role in 2005 after two other CEO’s died suddenly over thecourse of just two years. And when he retired in 2012, Skinner wasconfident that his successor, Chief Operating Officer Don Thompson,was ready to take over, because he spent much of his seven yearsmentoring him.”

*http://www.workforce.com/2013/03/11/succession-planning-roadmap/

WhatisaSuccessionPlan?

•Successionplansareamethodologyforoldleaderstoidentifyanddevelopnewleaderswhentheyleave,retireorexittheworkplace

•Successionplanshavebeenusedforcenturiesbydictatorsandmonarchiestopreventpowerstruggles,coosandchaos

•Successionplanninghasbeenusedbylargecompanies(e.g.,GE,IBM,Coca-Cola,MS,Marriott,etc.)fordecadestomaintaincontinuity

•Successionplanning(i.e.,apprenticeshipprograms)wasusedbytradecraftsforyears

WhataretheCriticalFactorsinaSuccessionPlan?

Clearobjectivesarecriticaltoestablishaneffectivesuccessionplanningprogram:• Identifythosepotentialemployeeswithtalentneeds• Providecriticaldevelopmentexperiencesforpotentials• Engageleadershipsupportintalentdevelopmentforkeyroles

• Buildatalentprogramtomakebetterstaffingdecisions• Initiateprogramsforemployeeengagementandmorale• Improveemployeecommitmentandretention• Implementcareerdevelopmentprogramsforemployees• Developinternalcandidatesandreduceexternalrecruitingneedsandcosts

WhatElementsareRelatedtoSuccessionPlanning?

•AnnualCompany/EmployeeGoalSettingProcess• PersonalPerformanceObjectives(PPOs)

•EmployeePerformanceEvaluations• Annualevaluationprocess&ratings

•EmployeeEngagementMonitoringandMeasuring

• AnnualorBiennialEmployeeSurveys•TalentReviewandRatingProcess

• 9BoxAssessment&RatingProcess•CareerDevelopmentPlanningProcess

• IndividualDevelopmentPlans(IDPs)• PerformanceImprovementPlan(PIP)

HowDoesanOrganizationDevelopmentaSuccession

StepstoSuccessfulSuccessionPlanning

Step1:IdentifyKeyAreasandPositions

Determinewhoisinterestedinandhasthepotentialtofillkeyareasandpositionsq Discusscareerplansandinterestswithemployeesq Identifythekeyareasandpositionsthatare

vulnerableandthecandidateswhoarereadytoadvanceorwhoseskillsandcompetenciescouldbedevelopedwithintherequiredtimeframe

q Ensurethatasufficientnumberofbilingualcandidatesandmembersofdesignatedgroupsareinthefeedergroupsforkeyareasandpositions

Step2:IdentifyCapabilitiesforKeyAreasandPositions

Toestablishselectioncriteria,focusemployeedevelopmentefforts,andsetperformanceexpectations,youneedtodeterminethecapabilitiesrequiredforthekeyareasandpositionsidentifiedinStep1:q Identifytherelevantknowledge,skill(including

languageskills),abilities,andcompetenciesneededtoachieveorganizationalbusinessgoals

qUsekeyleadershipCompetenciesprofilingtoassessemployeeskills

q Informemployeesaboutkeyareasandpositionsandrequiredcapabilities

Step3:IdentifyInterestedEmployeesandAssessThemAgainstCapabilities

Determinewhoisinterestedinandhasthepotentialtofillkeyareasandpositions:q Discusscareerplansandinterestswithemployeesq Identifythekeyareasandpositionsthatare

vulnerableandthecandidateswhoarereadytoadvanceorwhoseskillsandcompetenciescouldbedevelopedwithintherequiredtimeframe

q Ensurethatasufficientnumberofbilingualcandidatesandmembersofdesignatedgroupsareinthefeedergroupsforkeyareasandpositions

Step4:DevelopandImplementSuccessionandKnowledgeTransferPlans

Incorporatestrategiesforlearning,training,development,andthetransferoforganizationalknowledgeintoyoursuccessionplanningandmanagementqDefinethelearning,training,anddevelopmentexperiencesthatyourorganizationrequiresforleadershippositionsandotherkeyareasandpositions

q Linkemployeelearningplanstotheknowledge,skills,andabilitiesrequiredforcurrentandfutureroles

qDiscusswithemployeeshowtheycanpassontheircorporateknowledge

Step5:EvaluateEffectiveness

Evaluateandmonitorsuccessionplanningandmanagementeffortstoensurethefollowing:qSuccessionplansforallkeyareasandpositionsaredeveloped

qKeypositionsarefilledquicklyqNewemployeesinkeypositionsperformeffectivelyqMembersofdesignatedgroupsareadequately

representedinfeedergroupsforkeyareasandpositions

HowtoAssessEmployeeTalentManagement?

Pre-Hire,Acquisition,Development,Performance,Promotionandthrough

Termination

IndustryBestPractices– TalentManagementandReviewProcess

EffectiveEmployeeManagementProcessesKeyElements:• Policiesandprocedures• Standardoperatingprocedures• Structuredinterviewguides(SIG)• OnboardingPlan• IndividualPerformanceObjectives(IPO)alignedtocompanygoals

• IndividualDevelopmentPlans(IDP)

• Employeeevaluationandappraisalprocess

• Self-assessments• Mgr.assessments

• Talentratingcalibration• PerformanceImprovementPlan(PIP)

Example

TalentAssessmentandRatingProcesses

IndustryBestPractice– TalentReview

TalentRating/Ranking• Talentassessment* andrankingemployeesprovidesguidanceonorganizationalstatus

• Viewandfilltalentgapsproactively

• Determinetopandbottomperformers

• Managerscanfocusonemployeeperformancegoals

• IDPsforTopandPIPsforbottomperformers

*Sample“9-Box”rating/rankingprocess- SAPCareerFactors

9-BoxTalentAssessmentTool

1.StarPerformer

• Pastrecordofconsistentlyand/orexceedingperformanceexpectations

• Actsatalevelofcapabilityofatleastthenextlevelintheorganization

• Acknowledgedasaskilledsituationalleaderandrolemodel

• Haswidespreadinfluencebeyondcurrentrole

Readytoadvancetonextlevelin6to12months

9.LowPerformer

• Doesnotmeetperformanceexpectationsorhasinconsistentperformance

• Difficultyperformingsatisfactorilyinhis/hercurrentposition

• Maynotbeinterestedinadvancement

CandidateforDisciplinaryActionand/orPersonalImprovementPlan

BuildingaFleetManagementPeopleCapabilityStrategy

NextSteps:UnderstandingtheRelationshipBetweenHumanResource

ManagementandDevelopmentofPeopleCapability(i.e.,Talent)

PeopleCapability– GuidingPrinciples

•Talentisabusinessproblem,notanHRproblem– SuccessionPlanningiscritical

•PeopleReflect,ProtectandPreservetheOrganization’sBrand

•AssessingCapabilityisCross-functionalEffort

•IncreasedDiversityDrivesInnovationandCompetition

UnderstandingtheLinkBetweenPeopleCapabilityandSuccessionPlanningCycle

ProcessRecruiting

Goal-Setting Performance

Evaluating

DesignIDPs&PIPs

AssessingTalent(9-Box)

EmployeeEngaging

Training&Developing

DesignIPOs

Succeeding

On-Boarding

SuccessionPlanningBeginswiththeEmployeeRecruitingandHiringProcess

Challenges– SpecifictoFleet

IncreasinglydifficulttoattractadequateMaintenanceTalentandcapability• Unabletoattractandacquireenoughtalentedandqualifiedtechniciansandsupervision

• Fleetsuccess,executionanddurabilitydependonquantityandqualityfleetpersonnel

• UnabletocompetewithothercompaniesforqualityTechnicians• Impactinghigheroutsourcelaborcosts,increasedmistakes,overtime,etc.

• Needtostrengthenitsfleetmanagementskillsusingtraditionaleducation,internaltrainingtoolsandindustryrecognizedcertificationprogramstobettercompeteinthemarket.(e.g.,University/College,Trade/VocSchools,IntranetLearningPortalandCAFM)

RecruitingandRetainingQualifiedTechniciansisChallenging

Whatyouneedtounderstand?1. Societyhasnegativeviewoftheprofessionaltechniciancareer

path.2. Guidancecounselorsandparentsdiscourageyouthtoconsidera

careerinvehiclemaintenance.3. Feweropportunitiesforyouthtoobtainexperienceworkingin

automotivemaintenance.4. Vehiclesmorecomplexandyouthunableorill-equippedtowork

onownvehiclesandcultivateinterestinautomotivetechnology.5. Internalprocessesmayneedstreamlining(or>training)

Sample:Strategies– OpportunitiesDevelopa“Positive”TechnicianMarketingProgram• Accentuatethepositivesofjoiningthefleetindustryasastableandgrowingworkforce

• Developaprogramtopromoteandexpandtheorganizationbrandtoattractlargercandidatepools

• Designandimplement“careerfair”programtoproactivelymarkettheorganization’stechnicianopportunitiesüWorkcloselywithgovernmentagencies(i.e.,Military)totargetpotentialcandidatesüWorkwithvocationalschoolstoattractcandidates

• Expandorganizationtrainingopportunitiesandcompensatetechnicians(one-timebonus)foreachclasscompletedwithclaw-backclause

• Expandengagementtoincrease“non-monetary”incentiveprogramstorewardtechniciansforincreasedproductivityandqualityüToolpurchasingprogramsüEducationreimbursementprograms

Sample:Strategies- OpportunitiesDevelopa“Positive”TechnicianMarketingProgram• PartnerwithCommunicationsDepartmentonsolutions• IdentifyfutureneedandpeoplenumbersforFleetstaff• ExpanduseofSocialMediawebsitestoattractcandidates• Definedjobsandleveloftechnicalskillsneededtomaintainequipment.

• Effectivematerialsnecessarytopersuadepotentialemployeesandthosewhoareinfluentialintheirdecision-makingprocess.

• Designateregionalemployeestoserveinanadvisorycapacityinvocationalschools.

• Leverageindustrytoolsandvenuestobroadenoutreach(e.g.,LinkedIn,CareerBuilder,Indeed,Monster,TMC,NAFA,etc.

• PrepareadvanceCommunicationpacketandtalkingpointsforLeaders

• EstablishFleet“PeopleCommittee”anddesignatespecificmanagerstobeinvolvedwithprogramsthatpromotetechnicianimageandCompanyprograms.

Sample:Strategies- OpportunitiesExpandandstrengthenIncentivesandCompensationprograms• Offer“Sign-OnBonus”toincentcandidatestojoinorganization• Develop“Apprenticeship”programtoexpandTechniciancareerpathtowardjourneyistTechnician(e.g.,CtoATechnicianin4years)

• DesigncareerpathtoserveinSupervisordevelopmentprogram• Modify“ToolAllowance”programstobettercompensateTechniciansforcontinuedinvestment

• Strengthenthe“shiftpay”programdifferentialstomitigatethreatofTechnicians’leaving(ornotjoining)toworkdesireddayshiftsathigherpayingcompanies(e.g.,GovernmentandDealers)

• Developanannualincentive(bonus)programtocompensateTechnicianswitha“Claw-back”forgreaterretentionfocus

• ImplementcompensationprogramtopayforASE(AutomotiveServiceExcellence)continuoustraining(i.e.,Testingand%salarybumpforpassingtests)

Sample:Strategies- Opportunities

ExpandyourOutreach:• WorkcloserwithVocational&TechCollegestoproactivelyattractcandidatespriortograduation(Part-Timeworkforce)

• Increasefocusonstrengtheningcandidatepoolworkingwithdiversityoutreachprograms

• NetworkearlytoidentifyHighSchoolseniorsaspotentialcandidatesanddevelopapart-timeworkerprogramtohirestudentsaslaborers.

• WorkwithGovernmentandNon-GovernmentOrganizations(i.e.,church,seculargroups,etc.)

• TargetVeteranoutreachprogramstoattractqualitycandidatesfromthosereturningfromMilitarydeployment

• DevelopinternaloutreachprogramtoincentemployeestoconsideracareerinFleetManagement

• Utilizeretired(orsoontoretire)employeesasa“SuccessionPlanning”resourcetomentornewlyhiredassociates

Sample:FleetPeopleCapabilityInitiativesBuildandExpandCapabilities:• LinkagetoOrganizationalgoals• SkillsAssessments• Mgr.BootCamps• AssistantMaintenanceManager

(AMM)Program• IndividualDevelopmentPlans

IndividualPerformanceObjectives• BuildInternalTrainingPrograms

q Fleet101,201• LeverageExternalPartnerTraining

Venuesq ASE/NAFA/OEMq VocationalSchools/Colleges(Tuition

Reimburse)• OnlineLearningPortalImplementation• Certificationprograms• TargetedDiversity&Militaryrecruiting

focus• OperationalExcellence

q Lean,6Sigma,FMEA,DMAIC,etc.

2018 2019 2020 2021 2022

1.PeopleCommittee2.Recruiting&onboardprocesses3.EngagementPlan4.Assessskills9-Box&IDPsandIPOs5.LeverageOEMtrainingvenues6.CreateOEMTrainingTracker7.DesignLeaderBootCamps8.MarketingPlan9.SocialMediaadoption

1.Designtrainingrequirementsforallfleetjobdescriptiontitles(e.g.,ASE)2.Buildleadertraining(e.g.,CAFS,CAFM)3.EdReimburseprograms4.Award&recognitionprograms(MIP)5.Partnerw/3PLschools/military6.Diversityprogram

1.DesignemployeeOneFleetcertificationprogramcapability2.CreateShopOneFleetCertificationPrograms3.Reviewandstandardizetoolallowances4.IntegrateOperationalExcellencecapabilityinfleet5.DevelopAMMProgram

Sample:5YearPeopleCapabilityPlanStrategies

Organize StandardizeStabilize Optimize Realize

1.Strengthentraining/certificationprogramstoaddressTechshopautomation2.Integrateadvancedfleettrainingcurriculumandtestingprograms3.Revampjobdescriptionsw/advancedrequirements4.DesignApprenticeshipprogram(Talentpipeline)

1.ReducedTurnover2.Qualified&Certifiedemployees3.Engaged&CommittedEmployees4.ImprovedEmployeeMorale5.IncreasedEmployeeProductivity6.ReducedfleetOpscosts

Transit:ExampleofanIndustryThat’sWinningtheSuccessionPlanningGame!

• 15yearsinTransitandparticipateda4yearApprenticeshipProgramtobecomeaJourneymechanic.ManyTransitorgsstillhavetheseinplace.

• Apprenticeshipprogramsworkassuccessfulsuccessionplans

TransitClientsinCalifornia:• Ourmechanicturnoverraterangesbetween2-3%annually.Wehiremechanicsthroughourapprenticeshipprogramgraduatesandwehireoursupportstafffromourapprenticeshipprogramwashouts.

• Ourmechanicturnoverratioisverylowbut40%ofoureligibletoretireinthenext5years.Thisproblemthatwillneedtobeaddressed,however,weuseourServiceemployeesasafeederprogramtothemechanicstaff.Serviceemployeeareadmittedtotheapprenticeshipprogrambyatest.

• Thentheymustcomplete1950classroomhoursplusOn-The-JobTraining.Wehaveanin-houseteamof10instructorsteachingourMasterMechanicmandatorytrainingwhichrequirespassing22modules.

Questions

ForFurtherInformation

SteveSaltzgiverMercuryAssociates,Inc.

ssaltzgiver@mercury-assoc.com801-702-7288

Presentationavailablefordownloadatwww.mercury-assoc.com(clickonResourcestab)

Resources&References

• Wikipedia:SuccessionPlanning• WorkforceMagazine-http://www.workforce.com/2013/03/11/succession-planning-roadmap/

• GovernmentFleetMagazine:9TrendsinPublicFleetManagement-byThiDao,September2016

• WhatManagersNeedtoKnowAboutSuccessionPlanning?– SusanM.Heathfield,2017

• SuccessFactors (SAPCompany)– TalentManagementProgram– 9Box• SuccessionPlanning:Howtodoitright?– StephenA.Miles,2009• SuccessionPlanningandManagementFive-StepProcess:TreasuryBoardofCanada,2009

Succession Planning FleetPros FleetCon Sept-2017 · fleet. • Certified Automotive Fleet...

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