Our Digital Future... ...and its implications for

Our Digital Future… …and its implications for the workforce

September 11, 2007

Deloitte Consulting LLP

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Discussion outline

The Talent Challenge

Critical Workforce Segments

New Approach to Talent Management

Open Discussion

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Good news for the media industry

Growth Rates of the Media & Entertainment Industry

US$ Million

344,225374,701 402,555

435,922 437,932 457,536 479,355510,165

538,214571,862

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

No business is more dependent on human talent than the Media & Entertainment industry. As growth continues and the industry transforms, there will be

increasingly greater reliance on skilled and experienced people.

No business is more dependent on human talent than the Media & Entertainment industry. As growth continues and the industry transforms, there will be

increasingly greater reliance on skilled and experienced people.

CAGR 5.2%

Source: Wilkofsky Gruen Associates

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10.6%

15.9%

Broadcasting & Cable, except Internet

389,000451,000

326,600

361,500

Motion Pictures and Sound Recording Industries

715,600

812,500 13.5%

The demand for workers is steadily increasing

Employment projection by sectors

• Increase trends in automation• More outsourcing/off-shoring

Source: Bureau of Labor Statistics: Deloitte Human Capital analysis

• Employment in all occupations within Media & Entertainment Industry is increasing at 13.5%

• Job growth will result from the explosive growth of demand for programming needed to fill an increasing number of cable and satellite television channels

• Also, more films will be needed to meet in-home demand for videos, DVDs, and films over the Internet. Responding to an increasingly fragmented audience will create many opportunities to develop films.

• The international market for U.S.-made films is expected to continue growing as more countries and foreign individuals acquire the ability to view our films.

2004 2014

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Media industry dynamics impacting the workforce

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Competition for talent has become increasingly fierce

Already experiencing severe talent shortage and

battles for talent

Caught short by talent

supply/demand imbalance and experiencing

early fights for talent

Most protected within current

climate, but with indications of

future shortages

HighCompetitionfor Talent

LowCompetitionfor Talent

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Source: CLC

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The importance of having the right skills and talent

But possibly the most interesting aspect…is how digital convergence could increase the need for traditional, non-digital skills and talent…the need for quality writing, casting, acting, editing and so on may rise considerably.

Joshua Auerback, VP Strategic Planning, Time Warner Inc.

As it is a new area, almost by definition convergence requires us to develop or acquire new skills and competencies.

Dr. Terumo Chikama, Corporate Senior VP, Fujitsu Limited

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1 Shrinking Pool of Skilled Labor

5 Emerging Expectations of Gen X and Gen Y

2 Changing Family Structures

3 Increasing Number of Women

6 Increasing Impact of Technologies

4 Changing Expectations of Men

Major trends are dramatically changing the workforce

Workforce in 2008

and beyond

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What is the impact of your evolving business model on your workforce? Where are you feeling the most pain?

Open discussion

Are you seeing more non-traditional competitors for employees and candidates?

Have you thought through “make versus buy” decisions? What seems the most feasible?

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Discussion outline




Open Discussion

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What are critical workforce segments?

Critical Workforce Segments are groups that drive a disproportionate amount of key business outcomes

Identifying CWS maximizes the value of investments in the workforce and ensures the resources needed to achieve business strategy and goals

Identifying CWS maximizes the value of investments in the workforce and ensures the resources needed to achieve business strategy and goals

SpecialistsReflects alignments formed where

companies do not have the existing skills and cannot develop them in-

house cost effectively


Highly-skilled, highly-trained individuals who drive 80% of the revenue growth


Highly-skilled, highly-trained individuals who drive 80% of the revenue growth

Core WorkforceBackbone of the company who are well-trained on firm processes but

knowledge and skills are easily replaced

Flexible LaborReflects alternatives companies can

use to meet periods of high demand for employees or the need to lower costs

High

Low

Impact on value chain

Diff

icul

t to

repl

ace

skill

s

Low High

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Plan and Execute

What tools can we use to secure our supply?

Critical Workforce Segments (CWS)

- Roles -

WorkforcePlanning-Talent-

Identify & Diagnose

What talent do we have? What talent do we need?

Business Alignment

What is the business strategy? Does leadership agree?

Business Priorities

External Workforce

Trends

Organizational Structure &

Culture

Business Strategy

How do you determine your critical workforce segments?

Critical Workforce Segments - Supply -

SourcingDevelopmentTalent Review

Succession

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What are your most critical workforce segments now?

Open discussion

How have your critical workforce segments changed?

What external forces are driving this change?

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Discussion outline




Open Discussion

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Conventional Talent Management

Does not get to the heart of who creates the most value in the emerging business

Often not connected to business strategy or the pace of change

Tends to overlook value of employees already on board – with an expensive focus on acquisition and retention (e.g., companies tend to spend 50 times more on recruiting than training1)

Human capital programs are often fragmented and divorced from key business imperatives

Conventional Talent Management

Does not get to the heart of who creates the most value in the emerging business

Often not connected to business strategy or the pace of change

Tends to overlook value of employees already on board – with an expensive focus on acquisition and retention (e.g., companies tend to spend 50 times more on recruiting than training1)

Human capital programs are often fragmented and divorced from key business imperatives

Acquire Deploy Develop

The Traditional Talent Management Process

Retain

In the U.S., companies spent $1,415 on average in recruiting costs for every $10,000 of new-employee compensation. But the median training expense per full-time worker in 2000 was $288. In companies of more than 5,000 people, it was only $109.

Why the old ways won’t work anymore

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Focus on Critical Workforce Segments (CWS) - that generate a disproportionate share of current or future value, typically in high demand and low supply

Integrate human capital programs to create a cohesive talent strategy based on business priorities.

Focus on Critical Workforce Segments (CWS) - that generate a disproportionate share of current or future value, typically in high demand and low supply

Integrate human capital programs to create a cohesive talent strategy based on business priorities.

A new approach to managing talent

Organizations that focus on these 3 things “acquire and retain” talentOrganizations that focus on these 3 things “acquire and retain” talent

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Connect focuses on how individuals interact and perform together:

Develop means helping employees build the capabilities they need to achieve personal and business goals:

Deploy means providing employees with the experiences they need to perform to the full extent of their abilities:

Invest in new and more robust training approaches, knowledge sharing tools and rotational programs in order to deepen skills within underwriting and claims workforces - developing the next generation of underwriters and claims professionals.

Create rotational programs for up and coming stars in the organization.

Sourcing strategies should consider alternative workforces such as semi-retired insurance professionals.

Create flexibility in the work environment (e.g., flexible work arrangements). Establish communities of practice

and mentoring programs to connect seasoned workers to the junior workforce.

Establish knowledge management programs to retain key knowledge from aging employees and pass down to new joiners.

Develop

Deploy ConnectAlignment

CommitmentCapability

Manage Performance

Enabled by Integrated Human Capital Programs

Develop, deploy and connect your workforce

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Some important talent leversBegin by assessing the effectiveness of existing talent programs to determine the need for enhancements or the development of new programs to improve the overall Talent Management effort.

• Provide employees with the skills, tools and insight they need to facilitate/accelerate their integration.

Orientation, Onboarding & Assimilation

• A strategic and integrated process of setting, tracking and measuring individual performance objectives against organizational goals and competencies to develop the capabilities of individuals and teams to deliver sustained success to organizations; including compensation strategies for hiring and retaining talent.

Performance Management & Total Rewards

• Identifying and engaging the most appropriate candidates to staff an organization. Staffing includes placing the right people with the right skills in the right jobs to maximize personal performance and organizational success.

Recruiting & Staffing

• Proactively managing the transition of people to minimize the risk of operational disruption.

Workforce Transition

• Develop the capabilities of individuals and teams to deliver sustained success to organizations through a focus on learning strategy, systems and courses, knowledge management and leadership.

Learning & Development

• Competency models are a set of observable behaviors that encompass the knowledge, skills, and abilities that drive high performance for a particular role, job family, or function. Once defined, they serve as the integrating platform across interview assessments, learning paths and performance evaluations.

Competency Modeling

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Some important talent enablers

Enablers are significant elements in the organization environment that enable successful talent strategies and solutions and unlock talent potential.

• In addition to having the right talent it’s critical to have that talent operating in an organization and jobs structured for optimal performance and learning.

Organization & Job Design

• In order to enable talent solutions, technology must be included as part of the overall solution and incorporated into the long-term talent roadmap.

Collaboration & Knowledge

Management Technologies

• Workplaces of the future often focus on virtual and remote spaces but we must not lose sight of physical spaces. The design of workspaces to reflect the nature of work – not hierarchy – is now recognized as an enabler of productivity.

Virtual Workplace

• Culture can support or work against the business and talent strategies. Understanding what it is and desired changes can help shape the talent solutions chosen; for example, performance and rewards are key influencers of culture and behavior.

Culture

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Putting the pieces together

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What is the role of leadership and line management versus HR in effecting change?

Open discussion

What has worked particularly well in your organization?

What is the correlation between your workforce and your workplace?

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Discussion outline




Open Discussion