Global Talent Mobility:New Models for SuccessFebruary 2013

Brian KellyPartner, Mercer

Lacey AllDirector, Starbucks Corporation

MERCER 1

Today’s Speakers

Brian J KellyPartner, Global Practice Leader, WorkforceAnalytics & PlanningMercerbrian.j.kelly@mercer.com+1 215 350 2641

Lacey AllDirector, Strategic Talent InitiativesThe Starbucks Corporationlall@starbucks.com+1 206 318 7592

QUESTIONS?Please type your questions in theQ&A section of the toolbar and wewill do our best to answer it.

While in full-screen mode, simplyuse the Q&A button on the bottomright-hand side of your screen.

While in half-screen mode, use theQ&A panel on the bottom right-hand side of your screen.

MERCER 22

Welcome and Introductions

Talent Mobility & Workforce Planning in 2013- World Economic Forum Research

Case Study: The Starbucks Corporation

Q&A

Objectives for Today’s Presentation

MERCER 3

MERCER 4

MERCER 5

MERCER 6

MERCER 7

MERCER 8

MERCER 9

MERCER 1010

Welcome and Introductions

Concept of Talent Mobility

Case Study: The Starbucks Corporation

Q&A

Agenda

Starbucks Confidential – INTERNAL USE ONLY

2012 Revenues: $13.3 billion

Total Stores: ~ 18,000+

Global Footprint: Over 52 countries

Workforce: 200,000+ worldwide (company-operated)

Anticipated new hires over next 5 years: 375,000

COMPANY PROFILE

Workforce Planning Case Study

STARBUCKS BRAND

§ One of the “100 Best CorporateCitizens” – Corporate ResponsibilityOfficer / Business Ethics 2000-2012

§ One of the “World’s Most EthicalCompanies” - Ethisphere 2007-2012

§ “#1 Best Coffee in the Fast Food andQuick Refreshment categories and #1Most Popular Quick RefreshmentChain - Zagat Survey 2009-2011

§ One of “The 100 Best Companies toWork For” – Fortune 1998-2000,2002-2012

§ One of the “Most Admired Companiesin America” – Fortune 2003-2012

§ Among the “100 Best Global Brands”– BusinessWeek 2001-2008

§ One of the “Top 50 of the S&P 500” -BusinessWeek 2004-2009

§ “”Best Coffee House, Germany”Deutschland Institute for ServiceQuality – 2010

§ One of the “Global 100 MostSustainable Corporations in theWorld” Corporate Knights – 2010

§ One of the “Best Places to Work forLGBT Equality” – The Human RightsCampaign – 2009-2012

§ 24th Most Innovative Company, FastCompany, 2012

Since the beginning, Starbucks has been a different kind of company. Onethat is dedicated to inspiring and nurturing the human spirit. Committed toserving the finest coffee, creating an exceptional customer experience, andbeing a great place to work.

Here are some of our recent awards and recognition:

ABOUT US

It happens millions of times each week – a customer receives a drinkfrom a Starbucks barista – but each interaction is unique.

It’s just a moment in time – just one hand reaching over the counter to presenta cup to another outstretched hand.

But it’s a connection.

We make sure everything we do honors that connection – from ourcommitment to the highest quality coffee in the world, to the way we engagewith our customers and communities to do business responsibly.

From our beginnings as a single store over forty years ago, in every place thatwe’ve been, and every place that we touch, we've tried to make it a little betterthan we found it.

AND INNOVATEBEYOND STARBUCKS STORES…

BUILDING FOR THE FUTUREInvesting for disciplined and profitable growth to create long-termshareholder value

• Deliver enhanced customer experience• Drive operational leverage• Deliver relevant innovation and profitable growth platforms through multiple

channels

"We are building a solid and secure foundation for profitable growth in both new and existingbusinesses," Schultz said. "Our next phase of growth will come from extending the StarbucksExperience to our customers beyond the third place to every part of their day, through multiplebrands and channels. Starbucks U.S. retail business and our connection with our customers formthe foundation on which we build all of our lasting assets, and we will combine that with newcapabilities in multiple channels to accelerate the model we've created that no other company canreplicate”

16

SWP–OUR PERSPECTIVETo be strategic, workforce planning efforts must:

– Be aligned with the business strategy– Focus first on the roles that impact the business strategy most significantly– Leverage both quantitative and qualitative measures of the workforce – current-

state and future-state perspectives– Result in action plans owned and monitored by the business– Be embedded into the broader enterprise-wide strategic planning process

16

ORIGINS OF SEGMENTATION

Workforce Segmentation borrows from other organizationalfunctions with disciplined approaches for making capital decisions.

Most notably:• Finance/Accounting uses logic and methods that use accounting data to

improve decisions about financial assets– ROI– Net Present Value (NPV)

• Marketing Departments subdivide a market along some commonality,similarity, or kinship.– Customer Segmentation– Market Segmentation– Store Segmentation

WHY SEGMENT ?

Workforce Segmentation allows an organization to focus on the critical few thatwill impact strategy the most. With workforce segmentation, organizations canprioritize talent management activities to ensure the impact is relevant topeople, positions or pools that are aligned to the long-term success of theorganization.

Activities include:

– Sourcing– Marketing & Employee Value Proposition Campaign development– Talent/Skills Development– Reward and Recognition– Career Paths/Succession Planning

Segmentation

Workforce segmentation is about taking the larger workforce (internal and external)and breaking it down into categories based on strategic importance. It’s aboutunderstanding where human capital makes the biggest difference to yourorganizations’ strategic success.

Individuals have different interests, resources, values, family requirements andwant different things from a job.

A segment is a grouping of these individuals that share common interest, wants,needs etc., yet are unique from other segments

3 Areas:– Pools: where current and future talent comes from– People: who is most critical to current and future strategy– Positions: roles (not people) that are critical to success

STRATEGIC PLANNING

What are Pivotal Roles?

Differential Starbucks as a leader in the globalmarketplace

20

All Roles

Core Roles

Pivotal Roles

Over 200,000 Starbucks partners worldwide

Necessary for success, support generalbusiness operations

PIVOTAL ROLESPurpose: to develop a framework to identify roles across the

organization as pivotal to the current and future core businessstrategy using qualitative and quantitative measures

Strategic Imperative: to ensure Starbucks has the right talent to beflexible and strategic in responding to current and future economicand business innovation demands

Objectives:• Provide leaders with an on-going, objective decision science [1] (or framework)

for making business decisions with regard to talent• Ensure resources are deployed against pivotal roles• Understand Starbucks Profit Model(s) [2] and connect it (them) to how we invest in

pivotal talent

[1] Boudreau, J. W. & Ramstad, P. M. Talentship and the New Paradigm fro Human Resource Management. Human Resource Planning. 28, 2. Defined as: A logical, reliable andconsistent framework that enhances decisions about a key Resource, wherever those decisions are made.

[2] Slywotzky, A. & Morrison, D. The Profit Zone. New York: Times Business, Random House 1997. How profit happens in an organization, the sources and drivers of profit.

Starbucks ExperienceCultivated at stores with

moments of connection

Grows with product connections

Enhances in digital space

ProfitabilityReduces costs

Drives growth

Unlocks value

Shareholder ValueStewardship over corebusinesses

Develops portfolio

10 Pivotal Roles live at the intersection of allthree drivers of success10 Pivotal Roles live at the intersection of allthree drivers of success

22

2013 Starbucks Pivotal Roles

LESSONS LEARNED

• HR Business Partner capability critical to WorkforcePlanning success

• Build a scalable portfolio that can be nimble to thechanging business need

• Segmentation aligns your efforts to the priorities thatmake the most impact to the strategic imperatives ofthe organization

Starbucks Confidential – INTERNAL USE ONLY 24

Questions

MERCER 2525

Welcome and Introductions

Concept of Talent Mobility

Case Study: The Starbucks Corporation

Q&A

Agenda

MERCER

Resources Available – Mercer Workshops

Workforce analytics & planning workshops at client locations or inpartnership with the American Management Association

26

MERCER

Resources Available – Mercer Workshops

Date City Topic

3/18 NYC Strategic Workforce Planning: Defining and Fulfilling Business Requirements

4/22 NYC Moving from Data Smog to Cloud 9: Assembling a Relevant Data Engine

4/23 NYC Workforce Analytics and Planning Execution: Building a Center of Expertise

5/13 Chicago Workforce Metrics and Analytics: Driving Business Results with Data

5/20 Wash D.C. Strategic Workforce Planning: Defining and Fulfilling Business Requirements

6/7 San Fran Workforce Analytics and Planning Execution: Building a Center of Expertise

7/1 San Fran Moving from Data Smog to Cloud 9: Assembling a Relevant Data Engine

7/8 Wash D.C. Workforce Metrics and Analytics: Driving Business Results with Data

AMA/Mercer Workshops – http://www.mercer.com/mercer-amaworkshops

Date City Topic

5/1 Houston Driving Business Results with Data

Client On-Site Workshops – http://www.mercer.com/mercer-workshops

27

MERCER 28

For more information…

• Mercer “be in the know’ blog– Mercer subject matter experts and guests will help you discover tips and

trends, and will offer advice to questions you may have.– http://www.mercer.com/mercer-blog

• Mercer Analytics website– Next generation metrics and analytics solution that combines disparate

data and Mercer’s intellectual capital, consulting services andtechnology.

– http://www.mercer.com/merceranalytics

• Mercer Webcast series– http://www.mercer.com/webcastseries

MERCER 29

Speaker Biographies – Brian J Kelly

• Brian is a Partner at Mercer and is the global leader for the Workforce Analytics & Planning Practice.Brian recently served as the Co-Chair the Institute of Human Resources Workforce Planning &Analytics Working Group and Vice Chair of the Society of Human Resource Professional's (SHRM)workforce metrics taskforce.

• Prior Mercer, Brian was the President, North America of Infohrm, the recognized industry leader inworkforce reporting, analytics and planning solutions across the globe. Brian led Infohrm's NorthAmerican operations and was responsible for the firm's global sales, marketing and partner strategyleading to the firm's acquisition by SuccessFactors in July 2010. Prior to leading Infohrm, Brianserved in a variety of management and leadership positions in the software, services and investmentmanagement industries with such firms as DoubleStar, Inc. and SEI Investments.

• Brian is a graduate of Boston College

• +1 215 350 2641brian.j.kelly@mercer.com

MERCER 30

Speaker Biographies – Lacey All

• Lacey All leads the Strategic Initiatives Team function at Starbucks Coffee Co. which includesstrategic workforce planning, global employer brand and sourcing initiatives teams for StarbucksCoffee Co.

• Lacey began the workforce planning function in 2006 and drives both operational and strategicworkforce planning to help enable better business decisions by connecting and directing workforcemanagement activities and decision making. The strategic workforce planning team conductsresearch and analysis to support workforce planning and is responsible for developing market,business and financial modeling for talent forecasting in addition to the formulation of strategicworkforce plans for individual roles and business units. In addition to the workforce planning teamLacey leads the employer branding team and strategic sourcing teams.

• Lacey is responsible for the global employment value proposition (EVP) and employment brandcampaign and oversees talent acquisition channels, Internet tools, social media and web 2.0platforms (e.g Facebook, Twitter, Linkedin, SEM/SEO, mobile) with a laser focus on ROI forrecruiting and diversity initiatives. Lacey has also established global sourcing processes across thebusiness as well as lead the effort around business-line sourcing frameworks and candidatesegment specific outreach efforts.

• Lacey has held a variety of positions within Starbucks including roles within the retail, operationsand partner resources organizations. Lacey also serves as the founding President of the StarbucksPride Alliance Partner Network and sits on the Board of Directors for the Human Rights Campaign.

MERCER 31