Online Webinar Series: The Future of Work is Human …infokf.kornferry.com/rs/494-VUC-482/images/EMEA FOW_WebinarSerie… · 6 Facebook 7 Walt Disney ... Senior Consultant, Talent

The Future of Work is Human

Webinar 3:

Retain and Engage Talent Through Reward and Culture

13th September, 2017

Online Webinar Series:

© 2017 Korn Ferry. All rights reserved 2

Our presenters and panellists

Mark Thompson

Head of Reward Consulting,

UK & Ireland

Thomas Gruhle

Country Leader

Steve Newhall

Managing Partner, United Kingdom

Ben Hubbard

Director EMEA, Engagement & Culture CoE


Housekeeping

• All lines are muted.

• Please submit your questions via

the Q&A panel at any time.

• The session will be recorded.

• Your feedback is important:

Please take our 1-minute

survey which will open in your

browser after this session

Online Webinar Series:The Future of Work is Human

• The Future of Work is Human – July 6th

• How to Assess and Acquire Your Future Workforce – July 19th

• Retain and Engage Talent Through Reward, Engagement and Culture

– September 13th

• Leading the Workforce of the Future – September 28th


Paint people out at your peril…..

1Technology (product,

customer channels)

2 R&D / Innovation

2 Product / Service

2 Brand

2

Real Estate (including

offices, factories, owned

land)

CEO’s rating of most valuable

assets (in 5 year)


Paint people out at your peril…..

1Technology (product,

customer channels)

2 R&D / Innovation

2 Product / Service

2 Brand

2

Real Estate (including

offices, factories, owned

land)

CEO’s rating of most valuable

assets (in 5 year)

For every dollar invested in human

capital, $11.39 is added to GDP

Humans: $1,215 trillion

vs.

Technology: $512 trillion:

But….


Part 1: Engaging Employees, Now and in the Future

Ben Hubbard


“Prediction is very difficult, especially about the future.”

Mark Twain


Organisations are being forced to evolve faster than everFortune 500 Firms 1955 V. 2016

Only 12% of Fortune 500 companies in 1955

were still on the list 61 years later in 2016

Fifty years ago, the life expectancy of a firm in

the Fortune 500 was 75 years. Today, it's less than

15 years


World’s Most Admired Companies have changed markedlyThe most highly regarded companies for innovation

Rank 2006

1 Apple

2 Procter & Gamble

3 Walt Disney

4 Tesco

5 Walgreen

6 FedEx

7 Best Buy

8 Texas Instruments

Rank 2016

1 Apple

2 Amazon.com

3 Google

4 Nike

5 Netflix

6 Facebook

7 Walt Disney

8 Starbucks

Source: FORTUNE / Korn Ferry World’s Most Admired Companies Study. Top 8 companies ranked by ‘Innovativeness’ across industries


The robots are coming, the robots are coming!

The least

safe jobs

Chance of

automation

Telemarketer 99%

Loan officer 98%

Cashier 97%

Paralegal and legal

assistant 94%

Taxi driver 89%

Fast food cook 81%

The safest

jobs

Chance of

automation

Mental health and

substance abuse

social worker

0.3%

Occupational

therapist 0.35%

Dietitian and

nutritionist 0.39%

Physician and

surgeon 0.42%

Clergy 0.81%

Source: The Future of Employment / Guardian


Six megatrends are reshaping future societies, economies and the world of work

Globalization 2.0

Environmental

Crisis

Demographic

Change

Individualism

Digitization

Technology

Convergence

Source: Korn Ferry Hay Group Leadership 2030 research

Source: Korn Ferry Hay Group ‘Leadership 2030’ and associated research


What are the mega trend implications for…?

1 Conceptual and strategic thinking

2Ethics: integrity, sincerity, intellectual

openness

3Loyalty creation – meaning and

identity economics

4Leadership of heterogeneous and

diverse teams

5Real, power-sharing team work inside

and outside of the organization

1 Become technologically savvy

2 Become even more strategic

3Understand human limitations

– what is possible and what is not

4Manage expectations (development,

rewards, strategic clarity)

5 Connect people across organisations

Leaders… HR…


Fresh approaches to employee engagement are critical to sustain high

organizational performance.

It’s a challenging task. But failure is not an option, because the ability to

attract and retain talent will either be a competitive advantage or a fatal

flaw.

Senior Consultant, Talent Management, Kimberly-Clark

“

”


Becoming an employer of choice has never been so simple!

‘How to become an Employer of Choice’

70,800,000 results

Source: Bersin


Shifting candidate priorities when choosing an organization

7%

15%

39%

19%

2%

1%

16%

1%

23%

22%

19%

16%

9%

5%

5%

1%

Company culture

Career progression

Benefits package

Company brand / reputation

Company mission / values

Flexible working

Job stability

Focus on corporate social responsibility

5 years ago Today

Source: The Talent Forecast, Futurestep’s global survey of more than 1,100 hiring professionals, Jan. 18, 2017

What is the main reason candidates are choosing organizations…

No 15 years from now


Attracting and retaining the best young talent will be challenging

44%

48%

60%

70%

74%

61%

26%

26%

20%

15%

14%

19%

31%

27%

20%

15%

12%

20%

Under 20

20 to 29

30 to 39

40 to 49

50 to 59

Over 60

Percent intending to stay with company... >5 years 3-5 years 0-2 years

AGE

Source: Korn Ferry Hay Group Engagement & Culture normative database


Employee expectations and needs differ by generation

Engagement Driver Millennials Gen X Baby Boomers Veterans

Respect &

Recognition 1st 2nd

Professional

Development 2nd 1st

Purpose &

Strategy 2nd

Pay &

Benefits 1st 2nd

Performance

Management 1st



Our smart and flexible ways of working means we can attract highly

talented people who have something else in their life more important

than work.

Having a flexible approach to when, where and how work is done is

part of our commitment to supporting people to be the best they can be

– inside and outside work.

Group Executive, Suncorp Human Resources

“

”


Companies often don’t live up to early expectations

55

60

65

70

75

80

85

Tenure:< 1 yr

Tenure:1 yr to < 2 yrs

Tenure:2 yrs to < 5 yrs

% e

mplo

yees g

lobally

agre

e

Recommend the company as a good place to work

55

60

65

70

75

80

85

Tenure:< 1 yr

Tenure:1 yr to < 2 yrs

Tenure:2 yrs to < 5 yrs

% e

mplo

yees g

lobally

agre

e

Good opportunities to achieve career goals at company

-11

-13



To organize the world’s

information and make it

universally accessible and

useful.

To bring inspiration and

innovation to every athlete

in the world.

Our purpose is to help

create lasting solutions to

the injustice of poverty.

Source: Dan Pink, Drives

“Authenticity is everything—

you can’t fake purpose.”

John Replogle, CEO

Purpose led organizations put people first and outperform the market

Example mission statements


Engagement Survey results at large global bank

Clear evidence that pay is a necessary but not sufficient determinant of employee engagement

Work Environment Factor Rank impact on Employee Engagement

Career Development 1st

Collaboration 2nd

Enablement 3rd

Respect & Recognition 4th

Client Focus 5th

Reputation 6th

Confidence in Senior Leaders 7th

Trust & Empowerment 8th

Strategy & Direction 9th

Senior Leader Behavior 10th

Tools & Support 11th

Corporate Responsibility 12th

Performance Management 13

Ethics and Control 14th

Direct Manager 15th

Pay & Benefits 16th

Brand Perception 17th

Work Life Balance 18th


There’s no such thing as one-size-fits-all engagement. And because

we’ll all go through our own personal transition, we’ll need different

kinds of support from our leaders and the business throughout the

journey.

Global specialist, organization and culture, Telenor

“

”


Part 2: Rewards & Benefits

Mark Thompson


The future of work – is reward fit for purpose?

▪ More agile working,

▪ Team-based organization forms

▪ Flexible work-force

▪ The development of career/experience pathways that typically involve cross lateral as well as hierarchical career progression

There is an acceleratingtrend towards:

▪ They are job-based and work on the premise that the job is fixed and relatively timeless

▪ They are hierarchical – there’s little incentive to develop a portfolio of skills when the quickest way to increase pay is a promotion to the boss’s job

Most reward structures are not aligned to these approaches to work and career design


There is an old joke in

consulting about the

client who rings up and

says he urgently needs

to develop a new reward

strategy to show his

CEO.

The Consultant replies

that he will e-mail one

over within the hour.

Duncan Brown


Reward strategy review at a retail bank – the case for change

• The current reward system is predicated on the idea that it is a ‘good

thing’ to retain people over the long-term. This isn’t necessarily in

the best interests of Bank or its people going forward.

• Career progression through functional siloes is the quickest and

easiest way for individuals to achieve higher pay and recognition.

More cross-functional mobility and the development of ‘portfolio’

careers are likely to be more important in the future work environment.

• Performance measures tend to encourage risk aversion. Clearly

taking calculated risks is the core competence of the Bank, but

evidence for this is not an absence of failure. The current approach

may reward the faint-hearted.


Reinventing reward at a retail bank

1. Encourage mobility but break the entitlement culture of more money for every move (cash awards for moving encourage bidding wars for internal talent and if we have to bribe people to move around the business then we have failed in communicating the message that building a portfolio career is the best way to develop a career whether within the Bank or outside it.)

2. Focus on skills that are needed to drive the Bank’s success. Skills are much more important than job accountabilities as a driver of reward because jobs are constantly changing whilst skills are transferable.

3. Break the link with organisation hierarchy – the current system acts as a block to mobility because the best prizes are gained through vertical progression ‘through the ranks.’ Mobility in all its forms - horizontal and lateral and both up and down needs to be seen as a critical contributor of career and personal development.

Objectives of the new reward strategy 1- 3


Reinventing reward at a retail bank - 2

4. Redefine loyalty – away from tenure and towards ‘brand advocacy’. Whether people have applied for a job at the Bank and been rejected, currently work at the Bank on a permanent or contract basis, have left to pursue their career elsewhere or are pensioners, they are all in the Bank club and there should be benefits for being so. Their advocacy will provide a significant boost to the reputation of the Bank brand.

5. Stop locking people in with reward systems. If the highest-paid people are also those who have been in post for the longest, they are likely to be blocking career paths for others and paid more than equivalent roles in other organisations.

6. Measure performance based on achievement. Great performance will include the bravery to make mistakes and this should be recognised.

Objectives of the new reward strategy 4- 6


Pay at the bottom

KFHG Reference Level Benelux Retail Bank Consumer Products Retailer Multinational Bank

6

17 1

1 18 2

29 3

2

2

10 4 3

11 5

3

4

12 6

3

13 7

414

15

Pay structures at the lower levels of organisations are in flux, changing in response to

automation, higher minimum wages and changes to organisation and job design and the

strive for higher productivity.

European Pay grading structures examples: 2017


Pay at the bottom


6

17 1

1 18 2

29 3

2

2

10 4 3

11 5

3

4

12 6

3

13 7

414

15

This is a

traditional job-

based reward

structure. Best

if you want tight

control of pay

linked to the

market.






Impact of pay structures at the bottom


6

17 1

1 18 2

29 3

2

2

10 4 3

11 5

3

4

12 6

3

13 7

414

15

This is a

flexible

structure which

can link pay to

the individual,

but it’s not so

good for

controlling the

pay bill






Keeping talent – predictors of employee retentionAs we know, it’s not always about pay

Employees planning to

stay for > two years

Employees planning to

leave within two years Gap

Confidence in ability to achieve career objectives 64% 31% 33%

Trust and confidence in company senior management 60% 35% 25%

Opportunities for learning and development 71% 45% 25%

Benefit that meet employee needs 68% 45% 23%

Company demonstrates care and concern for employees 62% 39% 23%

Company is effectively managed and run well 73% 51% 23%

Adequately authority to do job 73% 51% 23%

Employees paid fairly for the work they do 53% 31% 22%

Supervisory coaching for development 67% 45% 22%

Support for employee creativity and innovation 70% 48% 22%

Cross-work unit collaboration and support 63% 41% 22%

Direction and goals are the right ones for the company 73% 51% 22%

To work, reward strategy has to a fully integrated part of talent management

Source: Hay Group Employee Opinion Norms (2017)


Part 3: Future measurement

of reward, engagement

effectiveness and ROI

Thomas Gruhle


4.88

0.25

2.03

(4.05)

(0.85) (1.04)

People drive performance: multi-client study illustrates engagement and enablement are leading indicators

Return on Equity

Average % change

Year 1-Year 2

Return on Assets

Average % change

Year 1-Year 2

Return on Investment

Average % change

Year 1-Year 2

Source: Korn Ferry Hay Group multi-client study comprising over 400,000 employees.

Companies that did

increase engagement

and enablement in

proceeding 18

months

Companies that did

not increase

engagement and

enablement in

proceeding 18

months


Companies are using new techniques to put the voice of their people at the heart of strategy execution

Focus Expectations

Speed Rapid and real-time feedback

Power to the User Self-service tools to trigger and explore feedback

Mobile Options Digital and mobile feedback channels

Beyond the Annual Survey Continuous listening and feedback

Unsolicited Feedback Monitoring sentiment via internal and external social media

Connection Linking multiple data sources through advanced analytics

Impact Linking engagement, culture and organisation health to performance outcomes

The Engagement Journey Understanding engagement across the talent lifecycle

Text Analytics Mining qualitative feedback and data for hidden meaning


Establishing insights across the employee life cycle

Attract

On-board

DevelopRetain

ExitIN

TE

RN

AL

RE

AL

ITY

EX

TE

RN

AL

PE

RC

EP

TIO

N

POTENTIAL GAP = RISK

Engagement &

Mobility Surveys

New Joiner

Surveys

Voluntary

Leaver Surveys


PrescriptiveHow to make it

happen?

DiagnosticWhy did it

happened?

DescriptiveWhat happened?

PredictiveWhat will happen?

Advanced talent analytics for smarter decision making

HINDSIGHT FORESIGHT INSIGHT


Measuring the employee journey with interconnected surveys

☺Positive onboarding

experience

Neutral onboarding

experience

Negative onboarding

experience:

85%

68%

57%

7%

11%

18%

Onboarding survey category Subsequent Engagement Score % Voluntary Turnover in 3 Years


Aligning actual pay with perceived pay

LOWHIGH

Market Pay

53% 47%

LOWHIGH

Perceived Pay

50% 50%

LO

W

LOWHIGH

27%23%

Market Pay

Perc

eiv

ed

Pay

30% 20%

Risk?All good?

Immediate riskNeed for

communication

Potential

flight risk


Key Takeaways

1. Link multiple data sources through advanced analytics and get workforce segmentation right

2. Understand engagement and enablement across the talent lifecycle

3. Use engagement metrics in performance criteria

4. Be transparent: Explain your (reward) policies and get on the front foot to explain the underlying trends at work

5. Ensure that financial rewards are fair and competitive without overstating the importance of rewards as a motivator

6. Measure total rewards including structure and composition of the organization

7. Include employees and managers in reward design and launch

8. Quantify the actual cost of voluntary turnover and corresponding replacements

9. Communicate the value of what you have

Questions?

Online Webinar Series:The Future of Work is Human

• The Future of Work is Human – July 6th

• How to Assess and Acquire Your Future Workforce – July 19th

• Retain and Engage Talent Through Reward, Engagement and Culture

– September 13th

• Leading the Workforce of the Future – September 28th

Please complete the brief survey that will be on your screen after this webinar.

Thank you for joining us today!

Documents

Online Webinar Series: The Future of Work is Human …infokf.kornferry.com/rs/494-VUC-482/images/EMEA FOW_WebinarSerie… · 6 Facebook 7 Walt Disney ... Senior Consultant, Talent