Tag Archives: Mercer

Global Workforce Gender Diversity: It’s Not Happening

Data Point Tuesday

Focusing on diversity in the workplace is an essential step in building a great culture. Advancing gender diversity is a key focus area that organizations should look to, armed with the knowledge that there is still significant progress to make before most workplaces achieve true gender equality. Women are still significantly underrepresented at all levels in the workforce worldwide. Mercer’s 2013 Human Capital Report found that only 60%-70% of the eligible female population participates in the global workforce, while male participation is in the high 80’s. In a recent diversity study by Mercer based on 178 submissions from 164 companies in 28 countries covering 1.7 million employees, Mercer explores this issue and proposes solutions. Three key facts emerged from Mercer’s data:

  • Women continue to trail men in overall workforce participation and in representation at the professional through executive levels
  • Current female hiring, promotion, and retention rates are insufficient to create gender equality over the next decade
  • Current talent flows will move more women into top roles over the next decade but not in North America

Labor Force ParticipationHow can organizations change their approach to diversity in a way that effectively combats these gaps? Mercer’s study highlights the current key drivers of gender diversity, aiming to help organizations understand what drives diversity the most and help focus their approach.

The data show that organizations who have broad and holistic approaches to support female talent have more comparable talent flows for women and men than those who do not. Additionally Mercer finds that formal accountability has little significance on increasing gender diversity when removed from real leadership engagement. At organizations where leaders are active and engaged in diversity programs, more women are present throughout the organization, in top leadership roles, and there is more equality in talent flows between men and women. Another key driver of gender diversity is that active management of talent creates more favorable results than traditional diversity programs that are put in place to support women’s needs. Organizations that actively manage pay equity vs. making passive commitments ensure that women and men have equal access to profit and loss responsibilities, and proactively support flexible work arrangements driving gender equality at a greater rate than those with traditional diversity programs. Nontraditional solutions and innovative programs impact organizations long- term ability to retain female talent. Specifically, customized retirement solutions and health related programs have been successful in helping organizations to better attract, develop and retain female talent.

Mercer points out a disappointing statistic from the World Bank, which reports that global labor force participation rates for women ages 15-64 have actually declined over the last two decades. The discrepancy between female and male representation is even higher in top roles. Women make up less than 5% of CEOs at Fortune 500 companies, hold less than 25% of management roles, and just less than 19% of board roles globally. Since the 1980’s leap in pay equality for women things have since stagnated. Clearly new strategies are required. Making sure that women are equal participants in the workforce has broader implications than just fostering great culture. Economists have predicted that eliminating the gap between male and female employment rates could boost GDP in the U.S by 5%, in Japan by 9%, in the UAE by 12%, and in Egypt by 34%.

Organizations can take reports such as Mercer’s and use them as a roadmap. The key drivers of gender diversity listed there can easily be leveraged as a reference when identifying you own diversity strategies and areas of focus. For a more expanded list of ways organizations can create greater diversity, take a look at Mercer’s full report.

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Filed under China Gorman, Data Point Tuesday, Diversity, Gender Diversity, Gender equality, Mercer, Workplace Studies

Who Knows More About Culture than HR?

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The importance of culture in making or breaking a merger/acquisition has long been an interest of mine. After spending 25 years at the top outplacement/career transition business, I’ve seen the best and worst of people practices in M&A – and the best and worst of culture awareness in M&A. So I read with interest the recent whitepaper by Mercer, Culture in M&A: We Know It’s Important, So Now What? And I found some interesting nuggets.

We all know this, but Mercer’s survey data show that “failure to address corporate culture is the key barrier in up to 85% of failed M&A transactions.” 85%. I’ll bet even your gut is surprised by that high percentage. Good to have hard data on that one, right?

This is a short report, as whitepapers go, so if there’s a merger or acquisition in your future, I encourage you to download the report here because the data are pretty compelling that culture should be a primary driver during due diligence and integration execution in a successful integration.

And who knows more about culture than HR?

Mercer Org Culture Tops Elements Critical to Deal Success

The relative importance of corporate culture as a driver of deal success as compared to customer relationship management, human resources, IT and regulatory compliance could be shocking to some – but not to leaders who have been on the wrong end of one of these deals. And by wrong end I mean a due diligence process and integration execution plan that ignored the importance of culture and people, focusing solely on “cost synergies” and “accretive” value; a due diligence process and integration plan that didn’t have HR’s fingerprints all over it.

And if you need any more convincing, there’s this to consider:

Mercer Paving the Way for Deal Success

So even if your focus is on achieving operational efficiencies, addressing culture in deals is a critical success factor.

And who knows more about culture than HR?

Other topics covered (briefly) in the report include:

  • Identifying company culture

  • Understanding target company culture

  • Analyzing data on culture

  • Using surveys to engage leaders

  • Planning for integration

  • Soliciting employee feedback

  • Tracking the integration process

As you prepare for the deal, remember that although your CEO, CFO, Chief Communications Officer and head of corporate strategy may talk the talk about culture in an acquisition or merger, it’s HR (you!) that usually ends up having to walk the talk for the increasingly critical dynamic of integrating cultures. And by the way, the “cost synergies” and “accretive” value never happen if culture isn’t the centerpiece of the due diligence and integration plans.

Mercer Leadership Plays Key Role in Culture

So look at it this way:  since most organizations make HR largely responsible for the cultural integration piece in M&A activity, and failure to address corporate culture is the key barrier in 85% of failed transactions, HR has an enormous opportunity to drive up the success rate of M&A activity, quantify its value and participate as a full member of the organization’s strategic leadership.

As the economy improves and M&A activity begins to ratchet up at home and globally, HR is uniquely positioned to lead real bottom- and top-line impact by taking the culture integration mantle and running with it. And by running I mean creating the business case with hard data to ensure that culture issues are pro-actively dealt with even before due diligence begins.

Because who knows more about culture than HR?

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Filed under China Gorman, Culture, Data Point Tuesday, M&A Planning, M&A Success, Mercer

Is Talentism the New Capitalism?

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“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.

Mercer Strategic Workforce Planning Infographic

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?

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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

Fighting for a Pessimistic Workforce

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OK.  So there’s an awful lot to be pessimistic about these days.  That goes for Baby Boomers, Millennials and Xers.  That goes for your workforce.

There’s the economy, the unemployment rate, cost of benefits, the fiscal cliff, taxes, the soaring price of college educations, the high school dropout rate…  There’s a lot. And Mercer has captured some critical information about how this pessimism – that isn’t going away – is coloring the views of the future held by many of your employees.

The questions we need to ask ourselves are:  how do I engage and motivate a workforce mired in pessimism, and, how do I (we) counteract a perceived environment of scarcity?

The recently published 12th annual 2012 Mercer Workplace Survey provides results that should give any HR professional more than a momentary woah! as we think about these questions. The survey has a cross-section of active 401(k) participants who were also enrolled in their employer’s health plan.  1,656 participants were interviewed online in June of this year.

The high points include:

  • US employees are still concerned about saving enough for retirement
  • Workers over 50 are more concerned than their younger counterparts about their job security and have much lower retirement expectations
  • Workers perceive that the value of their benefits has dropped

If you haven’t surveyed your workforce lately, this report’s results might just motivate you to start asking some questions.  Questions beyond, would you recommend our organization as a good place to work?

Other nuggets from the survey:

  • 36% of the respondents over 50 are still concerned about losing their jobs, its highest level since 2007 (25%)
  • a survey record 44% of all respondents have considered delaying their retirement – with 59% of those aged 50+ considering delaying their retirement, up four points from last year
  • 62% of those over 50 believe they will have to work at least part time when they do retire vs. 48% of younger workers

Mercer Putting Off Retirement

Data like this can be helpful in knowing what questions to ask yourselves and your workforce as you deal with the talent challenges that face most organizations.

  1. If Baby Boomers are putting off retirement indefinitely, how do we keep the Millennials who want those jobs engaged and continuing to develop their skills?
  2. If all workers – and Baby Boomers in particular – are concerned about job security how do collaboration and innovation fare in a culture of perceived scarcity?
  3. If Baby Boomers believe that they’ll have to work part time once they do retire, how can we harness that experience in a win-win solution?

Pessimism is insidious.  It worms its way into your workforce and destroys your employees’ visions (and expectations) of a bright future for your organization and for them.  While it’s true that many of the concerns that are driving employee pessimism are out of your control (the fiscal cliff, taxes, politics, healthcare costs, etc.), you need to find powerful, positive evidence in the organization that will counteract the pessimism attacking from the outside:  a strong, ethical culture; authentic and transparent leadership; a focus on employee and customer engagement; commitment to learning and development – all of these can convince a workforce that, although the outside world may not be as friendly as it could be or once was, the inside world of your organization is a place worthy of the investment of time, commitment and heart.

Of course, you have to believe that first.

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Filed under Baby Boomers, China Gorman, Connecting Dots, Engagement, GenX, HR Data, Mercer, Millennials, Retirement Planning, Talent Management

If They Want Cake…

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I was reading the results of the recent Making Smart Benefit Choices survey of workers by Mercer and was struck by the confluence of societal issues that are impacting the choices workers are making today.  The key insights from the survey results are these:

  • Workers desire benefits with a decidedly short-term benefit over those with longer-term value
  • Employers need to ramp up their workforce education efforts regarding balancing short- and long-term benefit choices

Employers are not Marie Antoinette.  “Let them eat cake” cannot be an appropriate response when surveys show that cake would be a more popular benefit than, say, fruit or broccoli.  (Mayor  Bloomberg’s foray into the regulation of food options notwithstanding.)

So in the age of disappearing and underfunded defined pension plans and the very real specter of a bankrupt Social Security system in the US (and similar situations in most developed nations), what are the responsibilities of employers to their employees when considering changes in benefit plans?  How much should employers take into account their employees’ preferences for short-term gain over long-term value?

It’s interesting to note this survey’s results.  In part, respondents were asked about their preferences in a trade-off (conjoint) analysis that allowed Mercer to rank 13 core benefits.  A salary increase of $500 was used as the benchmark variable against which to measure how benefits are valued by workers.  Here is the chart with the results:

Mercer Making Smart Benefit Choices 2

I’m fascinated that after a $500 salary increase, the next choice is one week of paid time off.  This certainly synchs with the data that SHRM and the Families and Work Institute are publishing that more flexibility over time is becoming a cultural imperative – and the financial value of a week off is greater than $500 if you’re making more than $26,000 per year.

But given the state of retirement benefits, Social Security, and the general lack of preparedness of the workforce for retirement, the short term focus of the respondents is arresting.

But then again, we live in a business world that measures organization success quarter by quarter, rather than year by year or through business cycles.  We live in a political world that brings the economy to “fiscal cliffs” with some regularity.  We live in a society that appears to value now in ways that leave us unprepared for tomorrow.

So I guess it really shouldn’t surprise us that workers focus on now rather than tomorrow even though an additional $500 402(k) increase would have much greater value over time.  What’s an employer to do in all good conscience?  Give more paid time off or ensure a little more retirement stability?  Give more paid time off or reduce employees’ share of health care costs?

This is a tough one with which HR and Benefits leaders in organizations of all sizes are wrestling.  Employers surely want benefits packages that attract and retain their best and brightest talent.  Employers surely want their employees to be better prepared for an uncertain financial future.  It seems as if these may be in conflict, based on this survey’s results.  So how to decide?

“Let them eat cake” is one way to go:  continue the focus on now and leave the future to the business and policy and political leaders of the future.

I think I’d rather use some of today’s resources to educate my workforce so that they’re making truly educated choices.  I think I’d rather use some of today’s influence to begin to leave behind the now focus for a future focus that might ensure a little more sustainability all around.

While I love cake – especially the chocolate kind – I think that employers have a responsibility to the economy and to the future as well as to the workforce.  What about you?  Are you a cake or a broccoli professional?

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Filed under China Gorman, Connecting Dots, Employee Benefits, Families and Work Institute, HR, Mercer, PTO, SHRM, Sustainability, Workflex

Data Analytics: Too Sophisticated for HR?

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.

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