“Is talentism the new capitalism?”
Klaus Schwab, Founder and Executive Chairman of the World Economic Forum, thinks so and said as much as he opened this year’s event in Davos.
Mercer chose this quote to open the executive summary of its new report, Talent Rising: High-impact Accelerators to Global Growth. It includes some great survey data from more than 1,250 HR and talent management executives in 65 countries around the world. It includes important and useful data about how organizations are or are not expanding their definition of capital to include talent.
Forever, it seems, organizations’ primary sources of value and competitive advantage have been financial in nature: money, lands, buildings and machines – all the values carried on the balance sheet. Mercer’s observation that with human capital being the main determinant of success today, it is troubling that so many organizations leave the development of their talent “largely to external systems and forces, with resulting gaps in their talent portfolios.”
(One could also position that if, indeed, human capital is the main determinant of organization success today, then there should be an entry on the balance sheet to capture its importance. But that’s for another day.)
This report is a huge call to action – not just for HR, but for the entire C-suite. And it is a great roadmap for HR to initiate the discussion of talent as capital.
Central to this discussion is the definition of strategic workforce planning. We hear about this all the time in HR. And BCG, funded by the World Federation of Personnel Management Associations together with SHRM, has observed that there is low current capability worldwide in strategic workforce planning. Perhaps that’s because we know it when we see it, but we can’t really define it.
Mercer’s done a great job of defining strategic workforce planning and published a great infographic along with the Talent Rising executive summary.
This 7 step virtuous circle seems simple enough, but I think we all know that sometimes the most simple things are the hardest to achieve. And that certainly would be true for strategic workforce planning. Identifying accelerators on which to focus might help organizations begin to break the process down into manageable chunks. Just knowing where to begin will undoubtedly help some make progress.
“Talentism is the new capitalism.” Well, maybe in 5-10 years. When HR is seen as a business function and not an overhead function. And human capital is valued on the balance sheet.
We can dream, can’t we?
Filed under Boston Consulting Group, C-suite, CEOs, China Gorman, Connecting Dots, HR Credibility, Human Capital, Mercer, SHRM, Strategic Workforce Planning, Talentism, World Economic Forum
The report of a global CEO survey by the Economist Intelligence Unit sponsored by IBM and Oracle (an interesting pairing) just crossed my desk. The report, CEO perspectives: How HR can take a on a bigger role in driving growth, is not very encouraging. Either CEOs are talking out of both sides of their mouths (HR’s choice, I’m sure) or global CHROs are in bigger trouble than we thought.
The survey – conducted in May 2012 – included 235 C-level executives, 134 of whom are CEOs. A total of 38 countries were represented from North America (47%), Western Europe (40%), Eastern Europe (8%) and the Middle East (4%). A range of industries were included and half of the companies had $500 million or more in annual revenues. Additionally, 6 in-depth interviews were conducted with 4 CEOs and 2 respected academics.
While the Economist Intelligence Unit authors tried to spin the results in a positive way, there’s just no getting around the conclusion that even big company CHROs are having a hard time getting access to the strategic business discussions at the top of their organizations. While 76% of the surveyed CEOs say their relationship with the head of HR is close and trustful, only 55% report that the head of HR is a key player in strategic planning.
What I found really interesting was the perception by the authors that the way to greater inclusion in strategic decision making is to become “a confidante and informal executive coach” to the CEO. “If the CEO has repeatedly relied on the head of HR for certain important matters, and they still see eye to eye, he or she is more likely to invite the HR head to participate in other areas as a matter of course.” So, developing a personal, “therapeutic” relationship with the CEO is the first best practice the report’s authors recommend. But you’re doomed, I guess, if you don’t see eye to eye.
Becoming liked and trusted by the CEO is the way forward to weighing in on strategic business decisions. This, despite the finding that 50% of the surveyed CEOs spend 5 hours or less a month – in either one-on-one or group settings – with their head of HR. I wonder how you figure out if you even see eye-to-eye in less than 5 hours a month.
The report has lots of interesting – and depressing – data, and you should probably take a look. But I think this gets filed under: Duh!
The Economist Intelligence Unit’s bottom line appears to be that CHROs whose CEOs like them get more involvement in the business. I hope IBM and Oracle didn’t spend big bucks on this research.
*Here’s Sally Field’s famous Oscar acceptance speech:
The Career Engagement Group from New Zealand recently conducted an online survey of over 1,000 employed people ages 18-65. The focus of the survey was to understand the career aspirations, agility and drivers of the current workforce across key demographics such as gender, age and career stage.
Maybe because the survey originated in New Zealand, some different questions were asked than the usual employee engagement surveys we see so routinely today. It’s always good to get a different take on what’s important.
One of the subjects covered that seemed out of the ordinary was Leadership Aspiration. Now that I think about it, I’m not sure I’ve ever been asked – in the many engagement and career development surveys I’ve taken – if I wanted to lead at the most senior level in an organization. It’s a great question. And the answers surprised me. How about you?
Leadership Aspirations & Gender & Generations
- Only 11% of all respondents want to lead at the most senior level in an organization.
- Women report lower leadership aspirations than men – 15% of all males aspire to senior leadership positions, while only 9% of all females had similar aspirations.
- Younger people have higher leadership aspirations overall.
Hmmm. Only 11% of all respondents want to lead at the most senior level in an organization! That surprises me. A lot. I would have loved to have seen the breakdown in responses by age group as well as gender. Because I might have thought that the younger generations might be less interested in the stress and costs of leadership at the top than their older colleagues, but the results say otherwise according to the Career Engagement Group.
And women being less interested in leadership at the top than men? That’s kind of a show stopper, don’t you think? With more and more women entering the workforce around the world, this finding should be concerning. Many industry-leading organizations are working hard to keep women in their organizations – maybe they should also be more encouraging about the value and rewards of life at the top. According to this survey, there aren’t a lot of people — male or female –dreaming about being the CEO and making plans to get to the top.
When the demographics are already working against us (see my posts here and here) and the C-Suite is justifiably concerned about where the next generation of leaders is coming from, perhaps what’s needed is a marketing campaign to encourage workers to reach for the top.
What do you think?
Filed under C-suite, Career Development, Career Planning, CEOs, China Gorman, Connecting Dots, Demographics, Engagement, HR Data, Leadership Aspiration, Talent development, Talent pipeline
Last year I wrote about the HR Technology Conference and titled my post “HR people doing business. Wait. What?” I attended this event for the first time last year and was struck by the business activity going on at the conference. It wasn’t about swag; it wasn’t about recertification credits; it wasn’t about getting autographed books. Some of it was attendees really having buying conversations with vendors; some of it was vendors doing business with other vendors; and some of it was organizations having hiring discussions with candidates who happened to be attendees, vendor employees, speakers, etc. And all that was happening this year as well. You just can’t escape the feeling that business is going on when you walk the halls and floor of this conference.
There was an added dimension to the floor this year. And maybe it was there previously and I just wasn’t aware. But there was lots of money at this conference looking for investment opportunities. I talked with a number of VC and other investors who came to see what was new and to make relationships for investment purposes!
There’s a lot of money flowing into the HCM space these days – untold numbers of VC outfits; strategic buyers like IBM, Oracle, Salesforce; the public markets with IPO offerings like Workday. With talent issues being top of mind for every business leader with a Chief in their title, it’s no wonder that money is seeking opportunity in this field.
And you could absolutely feel it at HR Tech which concluded in Chicago yesterday. Investments were being poised to happen in start-ups as angel investments, start-up investments, series A, B and C investments as well as outright purchases. The talent management issues of organizations all over the world are creating opportunities for innovative solutions that will help us get better talent more efficiently with a great likelihood of longevity. That’s what we want as business leaders. And money was there looking for opportunities to make that happen.
As Mark Hurd, President of Oracle, told the conference attendees, “I want the best people at the lowest cost that I can get them.” Exactly. As an organization leader who “gets” HCM’s value, Hurd is no longer in the minority of C-suite leaders. And that means greater emphasis on productivity and efficiency and cost. And that opens the door wide to innovation and investment.
The HR Technology Conference is the one conference to attend to find out how to make your HCM infrastructure more productive, more efficient, more cost effective and more future oriented. It’s the one conference to attend to meet senior business leaders who are focused on winning through talent and systems to manage that talent. It’s the one conference to attend to get a glimpse of what will be possible in the future to ensure organization success. If it isn’t on your agenda for next year, it should be.
Mercer and WorldatWork have collaborated again on a survey and report about current total rewards/compensation trends in metrics and analytics. The focus of the research was to understand what types of analytics are currently being conducted and what technologies are being used to conduct them.
It’s an interesting report – especially from the vantage point of what it says about the relationship between HR and data and HR and analytics. The survey was fielded in February, 2012 to compensation leaders who are WorldatWork members (the dataset held 560 scrubbed responses , a final 10.9% response rate), so they all have more than a passing knowledge of the total rewards function.
The big takeaways of the survey data are that:
- Rather than use sophisticated analytical approaches like projections, simulations and predictive modeling to support decision making, organizations are more likely to use ongoing reports and benchmarking from internal and external peer groups.
- Survey respondents report lack of access to and confidence in data regarding education competencies/capabilities and training investments – critical to workforce analytics.
- Compensation professionals may be falling behind their colleagues in other HR functional areas in their adoption of more sophisticated analytics methodologies.
The report discusses why adoption of more powerful analytics is low despite 67% of respondents indicating adequate skill levels to engage in higher level analytics and almost half (47%) having 1 -2 FTEs tasked with HR-related analytics. More important, 75% of the respondents reported that C-suite executives in their organizations have asked for workforce projections, simulations or predictive modeling.
Mercer and WorldatWork point out that while respondents report that some data is not available or of poor quality, 75% of respondents say their organizations are working to improve the consistency of their data. Paradoxically, 52% are unclear where responsibility for data integrity lies.
I found it interesting that the researchers suggest that “unavailable” data may result from a lack of interest in the data rather than an ability to access it. A compelling point.
From the responses outlined in the exhibit above, one could readily agree with the researchers that critical workforce information about education, competencies, prior work experience and investments in training aren’t top of mind for compensation professionals. It could easily be that compensation professionals believe these datasets and their analysis more naturally belong to other HR functions: learning/development and talent management/acquisition.
The writers argue that rewards/compensation professionals have a preoccupation with the behavioral side of rewards and overlook the “asset side” – the impact of rewards on the ability of the organization to acquire appropriate talent.
The bottom line for the researchers is to encourage rewards/compensation professionals to begin to think more expansively – and use higher levels of analytics – on the role of rewards in driving human capital development and business success and focus a little less on salary competitiveness and pay-performance sensitivity as performance drivers.
A very interesting report and very useful data as you begin to plan your 2013 budget. Stepping up your workforce analytics sophistication could be a game changer for your organization.
Filed under C-suite, China Gorman, Employee Benefits, Engagement, HR Analytics, HR Data, HR Technology, Mercer, Rewards & Recognition, Talent Management, Total Rewards, WorldatWork
Booz & Company recently published its 12th annual CEO Succession Survey. It’s fascinating reading:
- As the economy gets stronger, the numbers of CEOs leaving their jobs are rising to pre-recession rates
- CEO turnover is highest at the largest companies
- CEO turnover is highest in market sectors that face the most challenges
- Outsider CEOs returned to historical averages
- Insider CEOs bring higher returns
- Insider CEOs serve longer
- The combined chairman-CEO model continues to decline
With average CEO tenure declining, the survey’s data are clear that new CEOs – whether they come from the inside or the outside – are under historically high pressure to perform quickly. (Can you say Leo Apotheker?) And concerned boards are more frequently appointing the outgoing CEO as board chairman to provide a sort of “apprenticeship” experience in the early months of a new CEO’s tenure. Interesting stuff.
This year, the study focused on the new CEO’s first year. Booz & Co. interviewed a number of CEOs from around the world and asked their advice for incoming CEOs. There were 7 common recommendations:
- Deal with the obvious executive team changes as early as possible
- Be wary of changing strategy too quickly, even if you think the current strategy is wrong
- Make sure you understand how every part of the company operates and how it is performing
- Build trust though transparency
- Be selective in listening to advice
- Find a sparring partner with whom you can discuss plans openly
- Manage your time and your personal life with care
The survey provides a great deal of background data and commentary on these 7 “tips” for succeeding as a new CEO — and I encourage you read it. But I’m thinking this is great advice for any new executive at any level.
And I’m really thinking this list is great coaching for HR.
The furniture conversation (see my post on that subject here) that HR is so fond of having is, at its heart, a lament about HR not having strategic business credibility. I don’t buy that HR lacks strategic business credibility. I do buy that HR isn’t communicating mission critical data to the C-suite and that creates a credibility challenge.
New data will be published shortly by Achievers that highlights the disconnect between what HR and CEOs believe about key elements of employee engagement in their organizations: feedback, managerial communication and recognition. And it’s pretty eye-opening!
When we designed a survey to evaluate how employees rate the current state of these workplace dynamics in their organizations and whether CEOs and HR professionals are in touch with what employees want, we found an added dimension in comparing the differences between the perceptions of CEOs and HR professionals.
- For example, when we asked CEOs and HR professionals whether they agreed that their employees believe that their organization inspires them to do their best work every day, 61% of CEOs strongly agreed or agreed, while only 31% of HR professionals strongly agreed or agreed.
- When we asked CEOs and HR professionals whether they agreed that their employees rated their organization culture as positive, strong and motivating, 67% of CEOs strongly agreed or agreed and 37% of HR professionals strongly agreed or agreed.
Wait. It gets worse.
- When we asked employees if they agreed that the feedback they received from their managers was constructive and useful, 79% of CEOs believed that their employees would strongly agree or agree while only 33% of HR professionals believed that their employees would strongly agree or agree.
- When we asked employees how frequently they received feedback from their manager, 56% of CEOs believed that employees would report receiving feedback immediately or on-the-spot. HR professionals? 11% believed that employees would report receiving feedback immediately or on-the-spot.
These are just four examples in the survey that show the continental divide between how CEOs and HR professionals evaluate crucial aspects of their employees’ engagement. With these results that underscore the CEO – HR disconnect, we could hypothesize that CEOs have a more optimistic view of their workforce because any time they interact with employees, employees are on their best behavior – trying to impress the boss. HR, on the other hand, frequently interacts with employees when they are not at their best: exit interviews, investigations, disciplinary situations, etc. It’s understandable that HR might have a more pessimistic view of their employee population.
Absent data to the contrary, why shouldn’t CEOs be optimistic? If there were issues, surely, they might think, HR would share the data. But when the employee engagement data is consistently less positive than CEOs’ perceptions, it”s clear that CEOs aren’t getting data that informs them of the reality of their workforce. And who has this data? Well, that would be HR.
So why isn’t this data – and their ramifications – being shared with the C-suite? For HR to understand the workforce and know what is working and what isn’t clearly isn’t enough. Communicating mission critical data and serving up cost effective solutions are HR’s opportunity. Heck. Most would say that’s HR’s job! For certain, they are the ticket to strategic business credibility.
If we needed tangible proof of the CEO – HR disconnect, this survey’s results confirm it. You’ll be able to download it on June 12 from the Achievers website.