Investing in HRD in
Uncertain Times
Wayne F. Cascio
UFHRD Conference, Brighton, UK
June 6, 2013
We Live in Uncertain
Times
Why the Uncertainty?
• Global Economic Turbulence
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High ratios of debt/GDP
Financial market volatility
Regulatory uncertainty
Consumers’ reluctance to spend
Structural changes in labor markets
Developments in technology
Global Interdependencies
• Countries, companies, and workers interconnected as
never before
• Global labor markets are fueling both company and
worker mobility
• Competition for talent comes not only from the
company down the street, but also from the employer
on the other side of the world
• Challenge: Become an “employer of choice”
Three More Big Changes
• Increasing workforce flux
• more roles automated or outsourced
• more workers contract-based, mobile, or work flexible
hours
• More diversity as workers come from a greater range
of backgrounds
• Successful managers less defined by technical skills,
more defined by the ability to work across cultures
and to build relationships with many different
constituents
Structural Changes
in LMs
• Workers coming from a variety sources - a splintered
supply of labor
• Labor-market intermediaries (LMIs) facilitate that
• LMIs: temporary-help services, online job boards,
social media sites, executive-search firms,
outplacement firms, professional employer
organizations (PEOs)
Bonet, Cappelli, &
Hamori (2013)
• “The growth and increasing prominence of LMIs is important
for all research associated with the workplace because we can
no longer do a study of ‘workers’ in an organization and
assume that they are all employees. Some may be “temps”
under contract to an agency, some may be ‘employed’ by a
PEO, some may work for vendors” (p. 340)
Examples
• LinkedIn – largest prof ’l social-networking site
• >175 million members in >200 countries.
• About 2.6 million companies worldwide have LinkedIn
pages
• Temporary-help agencies – 81% of orgs. worldwide
use them to manage fluctuations in demand
• In Europe, estimates of percentage of the workforce
not “regular” employees is > 30%
Rethinking Existing Paradigms
About the Workplace - HRD
• Orgs. that trained workers less were more likely to use
non-standard workers, including agency temporary
workers and PEO workers (Cappelli & Keller, in press)
• Unwilling to provide firm-specific training, companies
tend to assign workers from these sources to simpler
jobs, which gives the workers little chance to learn on
the job
Implications for HRD
• Who is most likely to receive opportunities for
continued skill development?
• Workers with longer-term relationships with employers
• Whose skills are valuable or essential to achieve an
organization’s strategic objectives
Dramatic Changes in
Spending on HRD
• In 2008 and 2009, annual training expenditures plummeted
by 11% in each year
• It rebounded a positive 2% in 2010, but then rose sharply,
increasing by 10% in 2011, and then by another 12% in
2012
• Lesson: Firms cut training expenditures dramatically during
the GFC, but as the economy began to rebound,
expenditures on HRD simply could not wait
• For full-time, core employees, HRD is not a competitive
nicety. It’s a competitive necessity and firms know it
Two current Trends
• Public-Private partnerships
• Airbus and State of Alabama
• “Building a workforce” in remote areas
• Mining industry, Anglo American PLC
Aligning HRD with
Evolving Trends
• Workplaces are becoming more transient, more
mobile, and more focused on self-service
• They have become seamless, and also endless, as they
roll through a 24/7/365 cycle
• Organizations have become “borderless” to their
customers as well as to their employees
Developments in
Technology
• Rise of the Internet
• % of the world population with Internet access has
increased from 18 to 35%, from 2006 to 2011
• Growth in cloud computing
• Gives consumers and companies cheap, unlimited access
to cutting-edge computing power and applications
• By 2015 a projected 2.5 billion users and 15 billion
devices will be accessing cloud services
st
21 -
Implications for
Century Orgs.
• 20th-century organization: hierarchical
• 21st century organization: flat - a web or network that
links partners, employees, external contractors,
suppliers, and customers in various collaborations
• Players are becoming more and more interdependent;
managing this intricate network will be as important as
managing internal operations
Doing More With Fewer
Workers
• 95% of net job losses during the GFC were in middleskill occupations - office workers, bank tellers, and
machine operators
• HRD challenges associated with reskilling, or
upskilling these individuals: a major public policy
issue, and also a significant opportunity for HRD
specialists to contribute to the betterment of human
welfare
• This is not a one-shot opportunity; the MIT Center for
Digital Business predicts that the next 10 years will be
more disruptive than the last 10
Innovations in HRD
Design/Delivery
• Responses to massive changes wrought by globalization and
technology
• Two trends:
• Technology-delivered instruction (TDI)
• HRD using social-learning tools
• TDI is the presentation of
text, graphics, video, audio,
or animation in digitized
form for the purpose of
building job-relevant
knowledge and skill
• Whether training is Web-based
or delivered on a single work
station, on a PDA, or on an
MP3 player, TDI is catching on
Why TDI Will Boom
• Both demand and supply forces are operating
• There is growing demand for:
• Just-in-time training delivery
• Cost-effective ways to meet the learning needs of a
globally distributed workforce, and
• Flexible access to lifelong learning
Why TDI Will Boom
(cont.
• On the supply side:
• Internet access is becoming standard at work and at
home
• Advances in digital technologies now enable training
designers to create interactive, media-rich content
• Increasing bandwidth and better delivery platforms
• There is a growing selection of high-quality products and
services
)
• Mechanics going through
Boeing’s 25-day training
course for the 787
Dreamliner learn to fix all
kinds of problems
787 Dreamliner
(cont.)
• Problems range from from broken lights in the cabin
to major malfunctions with flight controls.
• One thing they won’t soon do: touch one of the planes
• They use laptop and desktop computers inside a
classroom with huge diagrams
• Computers display an interactive 787 cockpit, as well
as a 3-D exterior of the plane
787 Dreamliner
(cont.)
• Using a mouse, the mechanics “walk” around the jet,
open virtual maintenance access panels, and go inside
the plane to repair and replace parts
• At the end of the course, the mechanics get all training
materials on a tiny memory stick
• In the field, staring up at an actual Dreamliner, they
use tablet PCs to diagnose and solve real problems
with the planes
Does TDI Pay Off?
•
Meta-analysis results (Sitzmann, 2011) indicate
that relative to a comparison group:
• Post-training self-efficacy (belief that one can
succeed) was 20% higher
• Knowledge of facts was 11% higher,
• Skill-based knowledge was 14% higher, and
• Retention was 9% higher for trainees taught
with simulation games
Does TDI Pay Off?
(cont.)
• Trainees learned more when:
• Simulation games conveyed course material
actively rather than passively,
• Trainees could access the simulation game
as many times as they desired, and
• The simulation game was a supplement to
other instructional methods rather than
stand-alone instruction
Does TDI Pay Off?
(cont.)
• Trainees learned less when:
• The instruction the comparison group received as a
substitute for the simulation game actively engaged
them in the learning experience
SocialLearning
tools
• “Employees have always
learned from one another, but
technology has made it
possible for workers to
collaborate in ways that were
almost unimaginable a decade
ago” (O’Leonard, 2013, p. 13).
Dramatic Growth
(O’Leonard, 2013)
• 2007: 7% of U.S. companies were using wikis in a
learning environment
• 2012: 24%
• 2007: 11% of companies were using communities of
practice (CoPs) in a learning environment
• 2012: 33%
• 2012: 26% of U.S. organizations use social media such
as Facebook, Twitter, and Yammer in their employeedevelopment initiatives
Social-Learning
Tools (Cont.)
• 2012: $46,000, on average, spent in large U.S.
companies, nearly triple the spending in 2010
• Objective: Create the kinds of learning environments
that will fit evolving structural changes in the nature of
work and in its execution
Caution
• Traditional, instructor-led classroom training is still popular:
• 37% of total training hours in manufacturing; 63% in insurance
• Trend: combine social-learning tools with more formal training
programs. How?
• By creating employee networks, connecting novices to experts
through online expertise directories, and sharing knowledge through
CoPs
• Result: continuous learning environments
Research Questions
• What is the relative effectiveness of alternative sociallearning tools?
• Which features seem to have the greatest impact on
long-term learning and positive transfer to the job
situation?
• What circumstances make social-learning tools more
or less effective?
• Are there interaction effects between social- learning
tools and more formal training programs?
Developing Leaders in an
Uncertain World
• Best companies share two features:
• They generate dramatically greater market value over
time than the weakest
• Their CEOs commit a higher priority to leadership
development in spite of uncertain environments and
pressures for short-term financial results
• Source: 2012 study of about 1,000 firms worldwide by
CEO.net in partnership with Chally Group Worldwide
Developing Leaders: Best
Companies
• Procter & Gamble
• Exercises a razor-like focus on internal succession planning at
all levels.
• From its inception 175 years ago, promotion from within has
been a hallmark of the company.
• To encourage managers to develop those below them: your boss
can’t be promoted until you are ready to be promoted.
• Each year the CEO personally looks at the top 300-400
executives and reviews their progress with the BoD
• Most important element: short feedback loops that include 360degree reviews where the system tries to prevent derailment
Best Companies
(Cont.)
• General Electric’s Crotonville, NY Center
• Reportedly spends about $1 billion a year
• Offers 13 leadership-skills courses that all senior
executives should have, such as presentation skills,
project-management skills, and financial literacy
• Managed by Crotonville staff, but delivered at GE
businesses around the world, including Shanghai,
Munich, and Bangalore
• Uses a “Train-the-Trainer” model. GE trains 50,00060,000 people a year digitally and an additional 9,000
attend courses at Crotonville.
Best Companies
(Cont.)
• IBM: long history of innovative leadership development and
cross-discipline mentoring
• Each year it identifies, assesses, and develops some 60,000 highpotential leaders at all levels
• Sends teams of high-potential employees around the world to
work with local organizations on local problems
• Its succession process has been a major reason it is one of the
few firms that has lasted a century
Practices in Best Cos. for HRD
• Top management is committed to HRD; it is part
of the corporate culture
• It is tied to business strategy and is linked to bottom-line
results.
• Internal environments are feedback-rich:
• they stress continuous improvement, promote risk taking, offer
one-on-one coaching, and afford opportunities to learn from
the successes and failures of decisions
• There is commitment to invest the necessary resources, to
provide sufficient time and money for training
Conclusions
• In an uncertain world, HRD expenditures may dip
during economic recessions, but there is no evidence of
their long-term demise
• Competitive pressures to deploy well-trained
workforces that can innovate constantly will not go
away
Challenges: HRD Design/Delivery
• Changes in the structure of labor markets (greater use of
LMIs)
• In the forms of organizations (from vertical hierarchies to
networks)
• In social trends (explosive growth in the use of socialmedia tools), and
• In technology (cloud computing, smartphones, tablet
computers)
• Technology-delivered instruction and social-learning
tools are two key innovations, and there is every reason to
believe that many others will follow