Beyond the Top & Bottom Line - People Performance Erik Berggren Director of SuccessFactors Global Research Chris Lozaga Principle Analyst, SuccessFactors Global Research Agenda Who we are Why smart HCM Matters People Challenges in the Public Sector Getting Results Revolutionizing the World of Work We work with recognized thought leaders that share our vision of productivity improvement, all while creating a better place for people to work. successfactors.com/research/thought-leaders 650+ Years of Research Dr. Laurie Bassi CEO of McBassi & Company and Chair of Bassi Investment Inc. Dr. David Sirota Founder of the Sirota Survey Intelligence Charles Grantham Co-founder of the Work Design Collaborative Ken Greer Leader of Greer & Associates, Inc. Nov Omana Board member and Former Chairman of IHRIM Dr. Peter Cappelli Professor of Management at the Wharton School of UPENN Jason Corsello Vice President of the Center of Excellence at Knowledge Infusion Catharine Larkin President of MICA Consulting Partners Nick Bontis Director of the Institute for Intellectual Capital Research Rob Bernshteyn VP of Global Marketing and Management of SuccessFactors Dr. Jim Ware Co-founder of the Work Design Collaborative Dr. Jesse Harriot Vice President of Research for Monster Worldwide Charles Coonradt Chairman and CEO of The Game of Work and accredited author Dr. Kim Ruyle Vice President of Product for Lominger International Dr. Kirk Hallowell Senior Consultant for Personal Decisions International Josh Bersin President and founder of Bersin & Associates Dr. R.J. Heckman VP and general manager of PDI's Leadership Assessment Products Lexy Martin Lead author and manager of the CedarCrestone HCM Survey Doug Klein Sirota's President of Consulting Amy Lyman Co-founder and Chair of Board of Directors of Great Place to Work Institute Dr. Jac Fitz-enz CEO of Workforce Intelligence Inc. Karen Beaman Co-founder and Editor-inChief of the IHRIM Journal Tom Olivo President of Success Profiles Inc. Bob Paladino Founder and Managing Partner of Paladino & Associates Paul Falcone VP of HR of a Fortune 500 firm and accredited author SuccessFactors Primary Research 1(2) succes Smart HCM investment drives financial results How investment in people drives top and bottom line results Transparency is key to driving strategy execution successfactors.com/research 5 SuccessFactors Primary Research 2(2) Competencies matter for growth & profit and varies across industries Predictive HCM helps companies manage tomorrow today Changes in attitude and environment drive changes in HCM successfactors.com/research 6 Agenda Who we are Why smart HCM Matters People Challenges in the Public Sector Getting Results Talent Is A Global Issue 40% Source: The Economist, Society of Human Resource Management, SF Research & Monster webinar Jan-08, SF Research Analysis Huge Shortage of Skilled Workers Looming Shortage – Education plus baby boomer retirement enforces predictions of a skills shortage SKILLED JOBS 190 180 Projected gap in skilled workers by 2020 = UNSKILLED JOBS 14 Million 170 WORK FORCE 160 150 140 2000 2010 2020 Numbers of jobs and workers, in millions (adjusted for multiple job holding) Source: Hudson Institute, Educational Testing Service, Kaplan, BLS, American Demographics, SF Research & monster webinar Jan-08 Employee potential is not being recognized FACT: 84% of large organizations say they are not using their workforce to its full potential Saratoga Institute Study Organizations are not getting the most from their employees These Trends Add Up The 500 largest Training departments see The average same companies will lose 50% 1) aligning with HR employer tenure 2) allocating budget based of their senior for U.S. on business impact management in 5 years. employees is 3 70% of companies report moderate to severe leadership shortages. Unemployment for U.S. workers with a graduate degree is under 2%. years. For 18-24 year-olds it is 18 months. 3) accurate measurement …as areas where they are least effective. Replacement costs for management level positions can exceed 150% of annual salary. The U.S. will face a 10 million worker shortage in 2010. 60% of internal recruiters plan to “significantly increase” use of social networking technology in ‘06 to target passive candidates 11 Source: Bersin and Associates & SuccessFactors Research, The Role of Competencies in Financial Performance, Webinar 2007, www.bersin.com So HCM Matters… No skills Talent is a scarce resource around the world Mobile & disloyal People are unaligned, unproductive, underutilized and disengaged Only difference Talent is the greatest and sometimes only competitive differentiator remaining Not Just a Problem for Private Business Talent Shortage Affects the Public Sector Too 13 Agenda Who we are Why smart HCM Matters People Challenges in the Public Sector Getting Results People Challenges in the Public Sector Motivation Attrition • How can we make our current workforce more effective? • What can we do if pay scales are preset? • How can we retain our best contributors? • Are we ready for their departure? 15 Motivation: Employees don’t get it FACT: 95% of employees don’t understand their organization’s strategy “The Balanced Scorecard: Translating Strategy into Action” - David P. Norton, Robert Kaplan Employees don’t know how they can best help their organization Motivation: Employees wasting time, money FACT: 50% of the average employee’s time is spent on nonproductive work Corporate Strategy Board research; Measures That Matter Half of all employee time is wasted Motivation: Getting Employees Engaged Employee engagement is a heightened emotional and intellectual connection that an employee has for his or her job, organization, manager, or co-workers that, in turn, influences him or her to apply additional discretionary effort to his or her work. 19 Motivation: Getting Employees Engaged 8 Factors that Drive Engagement* Trust and Integrity Relationship with One’s Manager Nature of the Job Career Growth Opportunities Bottom Line: Pay is not the issue, many other opportunities for increasing Line-of-Sight between Individual Employee Development engagement Performance and Company Performance Coworkers/Team Members Pride About the Company *Gibbons, J. (2006), Employee Engagement: A Review of Current Research and Its Implications, The Conference Board, New York, NY. 20 Motivation: Technology Helps Capture these opportunities to engage employees 8 Factors that Drive Engagement* Trust and Integrity Relationship with One’s Manager Nature of the Job Career Growth Opportunities Line-of-Sight between Individual Employee Development Increased Transparency – no surprises Integrated Career Planning – right direction Goal Alignment and Skill Development – link Performance and Company goals toPerformance company goals Coworkers/Team Members– bring people Pride About the Company Open Collaboration together *Gibbons, J. (2006), Employee Engagement: A Review of Current Research and Its Implications, The Conference Board, New York, NY. 21 Agenda Who we are Why smart HCM Matters People Challenges in the Public Sector Getting Results Attrition • Over 50% are not completely satisfied with their jobs • 71% are “poised” for another opportunity if it comes along • 56% regularly look at new job opportunities Source: SF Research & monster webinar Jan-08, Monster Intelligence 3.6 Years on the Job • Average employee tenure is down to 3.6 years for younger workers • Demographics predict accelerated retirement rates as the population ages Source: Manpower Professional Attrition: Tackle Engagement First and they will stay 59% of highly-engaged employees have no plans to leave. 35% of the moderately-engaged employees have no plans to leave. 65% are looking for new employment. 24% of unengaged employees have no plans to leave. 76% are looking for new employment. 25 25 Attrition: Use technology to Bring the Team Together David Sirota, PhD. found a high .36 correlation between employee satisfaction and camaraderie. This is universal factor among all tenure groups, races, genders, and management levels. 49% of employees agreed with the statement “I feel like part of a team” before implementing their HCM solution at a major SF deployment. 81% of employees agreed with the statement “I feel like part of a team” after implementing their HCM solution a major SF deployment. 7% reduction of turnover of employees after implementing their HCM solution a major SF deployment. 26 Attrition: Be Ready for Retirement with Succession Planning Value: Improve talent review with consolidated employee profiles Continuity as successors are ready to step up and perform when required Knowledge doesn’t walk out of the door because skills and competencies are inventoried and any loss is planned for Reduce the search time you need to find replacements, and the associated costly hiring costs 27 Agenda Who we are Why smart HCM Matters People Challenges in the Public Sector Real Results Success at Pep Boys Liviu Dedes Director, Org. Development and Training In the beginning… New Chairman and CEO Shallow talent pool for services business Minimal visibility to individual performance Difficult to reward employees equitably Pep Boys’ Triumph Strong visibility into high potentials across the organization leading to $150,000 savings through internal employee placement Improvement allocation of compensation funds, overall reduced spend 95% compliance with performance evaluations Struggled to effectively manage a highly dispersed workforce Results “SuccessFactors enabled Pep Boys to have our succession planning initiative up and running quickly while the technology is proving to be instrumental in identifying and developing the talent pool necessary to effectively fill business critical positions within our organization” – Liviu Dedes 29 Public Sector Success • Research conducted by thought leader partner Dr. Laurie Bassi proves that HCM matters in the public sector • What drives performance in schools? Socioeconomics? • No, actually how the school was managed, the maturity of their human capital management mattered more http://www.successfactors.com/research/hcm-non-profit/ 30 Massive Impact on Organizational Performance Revenue & Productivity Growth Increase Workforce Engagement & Productivity Retain High Performers & Improve Bench Strength Increase in Operating Results Reduce Turnover Cost Reduction Automate Manager & Administrator Processes Substantial Operating Cost Reduction Thank You!