Key predictions for HR in 2016

Amelore comment on the key predictions for HR made by Bersin of Deloitte. Here is the first part of two blogs with a summary of Bersin’s predictions and our observations.

  1. wheel_of_fortuneDigital HR arrives – we are not talking employee databases here. 8 million have smart phones, 3 billion use internet. Deloitte research says people check their phones 8 billion times a day!

The trend predicted is a design centric digital focus within HR. Apps will become king.  Clouds sit behind scenes. Traditional software will start to fade out. Any new technology need to be as easy as Facebook or Instagram to use.
Organisations are building HR platforms to allow rapidly built solutions, collect data and people and business process – easily. So they can quickly iterate & improve employee digital experience. Eg 2015 Sidekick Commonwealth Bank of Australia – brings together employees HR, collaboration, admin & support apps to their phones. 20,000 users in 2 weeks of roll out. V successful launch.

Think all my HR programs are apps…

“Of course the actual reality in many organisations is no HR database or something clunky that produces data that has inaccuracies.  When we talk to HR leaders about what technology they are investing in, it tends to be an HR system.

Because of poor organisational experience in the past there can be a reluctance to invest. Cross corridors into the Marketing department and you may see a very different picture.  Employees just like consumers are critical to the success of the business.”

  1. Rush to replace outdated HR systems

Why? To improve employee experience.  Harness people data. 60% of large companies are replacing software. Workday, SAP, Oracle, ADP, Ultimate Software, Cornerstone OnDemand, Ceridan etc are popular choices.

Offering solutions for recruitment, on-boarding, learning, performance, talent management compensation, succession, talent analytics.

The global trend is reduction of HR systems (average is 7) modernising with cloud technology sitting behind.

  1. Global rush to replace and re-engineer Performance Management

This is the hottest and most disruptive area of HR – redesign of performance management. 60% of companies are doing this.

Existing process too complex say 88% of managers.

End to end talent management market fairly mature – core HRMS, payroll with talent management module is a core tool on offer from many.

Trend is around check in’s, feedback, and more focus on development. Followship. Moving away from leaders. Building systems and tools to let people work flexibly and network.

“Many fast growing businesses have been practicing followship for a while. Younger and flatter teams without the traditional hierachy. And checking in with their staff. And with a development led focus which is a core retainer. 

In 2015 Amelore conducted some independent research into the cost and effectiveness of appraisals. Results varied but the core message was that it was a disproportionately costly activity at a time when organisations weren’t investing in staff development and losing them.  If you got rid of your appraisal process tomorrow and replaced it with a career development led focus you’d save money and retain more staff.”

  1. Engagement, Retention and Culture persist as top priorities

The job market is hot, hot, hot. Many scare skills are in scare supply, the economy is growing so the employment experience is highly transparent.

Open feedback is increasingly expected – 80% of millennials want to give their bosses an appraisal!  Employment brand a big thing. Staff engagement once a year surveys is old fashioned. Real time and continuous feedback is king.

There are 5 different types of feedback systems emerging:

Pulse survey tools – managers and HR rapidly take the pulse of the people’s feelings and opinions supplemented by annual survey.

Feedback apps – Employees can randomly provide an open suggestion box of comments that can be analysed, filtered, up-voted, down-voted & evaluated at any time.

Performance feedback systems – Give employees an opportunity to provide team or manager feedback as part of the performance management cycle.

New Work Environments – people work in teams through collaboration with tools (Slack, Workboard, Trello, Impraise) & give feedback immediately on anything.

Social Recognition Tools – Employees can give thanks, points & other forms of positive feedback to others in an open and social way.

Trend is towards letting employees “Like” or “Yelp” things at work which provides valuable data about work practices, safety situations, customer service issues and of course management.

“Some organisations are struggling with this new way of working particularly senior teams who seek to impose something that is more familiar to them. This gives the younger CEO the advantage that experience gives someone older.  Resisting large scale changes in the workplace is like attempting to type better internal memorandums as email emerges.”  

  1. Career and Talent mobility continues – investment in Coaching and Mentoring grow rapidly.

Investment in leadership is inconsistent. At highest level this is only £2,600 per leader per year. This is a very modest investment in great leadership.

Roles of leaders have changed. Spans of control have increased by 11 percent for lower-level leaders.  Todays leaders are ‘team leaders’ more than ‘top down executives’ learning how to lead cross functional global teams.

Approximately 50% of all leaders in every company are first or second line leaders – getting younger each year. Coaching and mentoring are therefore critical for their development.

New leadership model is followship – ability to set an example, empower and encourage others, drive change, alignment and inspiration.

Companies still far too attracted to old models of leadership inc long development times, slow progression & traditional HiPo (high potential) programmes. High performing companies promote young leaders at a highly accelerated rate and enable them to learn on the job.

“The smart money is on those with potential. Whatever their age. One of our clients Monica Vinader, who have trebled their turnover in the last 3 years and grown rapidly, have always identified and backed potential. A hallmark of their success has been the dedicated and hands on approach that both Monica and her sister Gabriela have shown in being very clear what is expected of individuals.  This has enabled a number of talented individuals to thrive and flourish along with the company.”

Summarised from Predictions for 2016 – A bold new world of Talent, Learning, Leadership and HR Technology ahead. Bersin by Deloitte with commentary by Amelore.

 

M&A – Assessing People and Cultural Fit

So many factors contribute to success in merger and acquisition (M&A) transactions — and many involve getting the right people into the right jobs. Unless the deal involves nothing more than physical assets — which is the exception to the rule of acquisitions in today’s global business world — the acquirer will need talented, high-performing individuals at all levels in order for the deal to reach its full potential.

Consequently, it is critical to assess the target company’s human capital with the same rigor that is applied to the assessment of pension liabilities, inventories, financial statements, and other significant assets. If we agree that people are ultimately a company’s most valuable asset and largely responsible for income generation and revenue growth, identifying and managing people risks and opportunities usually account for the difference between M&A success and failure. In many cases, however, acquirers know very little about the human capital — at least not initially — that may soon be part of their corporate families.

M&A transactions always trigger decisions about individuals. A merger, for example, often produces redundancies; suddenly there are two CFOs, two HR Directors and so on. The question is: Who should go and who should stay (even if in a different role)? In an acquisition, the acquirer must determine whether incumbents from the target are the best people for the job, given the objectives of the new organisation. Talent assessment addresses this important issue.

For each key position, talent assessment aims to answer these questions:

  • Can this individual successfully achieve the business strategy?
  • Has he or she demonstrated leadership that produces results?
  • What is the employee’s industry-specific knowledge?
  • How well does this person manage relationships?
  • Will this individual be able to work within our culture effectively?
  • Does he or she develop the talents of key subordinates?
  • How long will this person stay and remain motivated?
  • Are there any reasons for concern about stability or volatility?

Pre-close pressure

Talent assessment can be completed at any time, but the more information an acquirer has before signing a letter of intent or closing the deal, the better. For many practical reasons, however, this almost never happens. Time is insufficient. Data from the target are spotty or unavailable. Or the target will not give access to its key people. As a result, a big part of talent assessment tends to be done after the closing, when the acquirer has full control.

Thus, organizations should do whatever they can to overcome these barriers as early in the deal as possible. While a full, formal assessment may not be possible in the early stages of a deal, many actions can be taken to begin the assessment process and get an early read on people and potential deal risks that allow for an early determination of whether to proceed with the deal or walk away.

These include observing behaviour during management presentations and meetings, reviewing CVs provided in the data room, conducting internet searches (or “desktop” research), and conducting informal operational or functional meetings as part of the due diligence process.

The target’s deal team can begin compiling a list of business, leadership, and other behavioural attributes that begin to tell the story of whether a key or critical employee will fit into the go-forward organisation or kill the deal.

The figure below describes the assessment approaches and tools that can be utilised for a systematised approach to talent assessment that will ensure thoroughness and save valuable time.

Screen Shot 2016-05-17 at 16.58.11

In our experience, there are five steps in the process.

  1. Clarify the business imperative

Always begin with the objectives of the deal and expectations for the new organisation. Talent, after all, must be measured against its potential to fulfil those expectations. A clear understanding of business objectives should guide the assessment. For example, is quick turnaround of the business needed, are growth objectives very high, or is the acquisition in a stable environment that will need little change?

  1. Define the essential success criteria

The next task is to define the success criteria required by the business objectives. Those criteria typically involve skills, knowledge, behaviours, experience, values, and — for executives — leadership ability and strategic thinking.

For example, to fill the CEO position at a target company, it is important to determine:

  • The level and scope of experience required to successfully lead the organization, depending on its size and complexity.
  • The technical skill/industry knowledge required for success in this position.
  • The intensity of ambition, commitment, and personal interest a person must demonstrate in order to achieve the defined business objectives.
  • The balance of strategic and operational focus needed by the ideal leader.
  • The leadership style and fit with culture and core values

Culture is an important part of this step. The acquirer should define the workplace culture it wants its key people to embrace and demonstrate through their behaviour.

In many instances, acquirers want people whose values are compatible with their culture. They know that conflicting values will make for a bad corporate relationship and impair the deal.

  1. Develop role profiles

In this step, the assessment moves from the general to the specific, documenting the success criteria for each position in terms of job scope and responsibilities; required skills, know-how, and behaviours; and experience the ideal candidate brings to the table. Based on conversations with the acquiring company or hiring managers, the assessment team identifies the level of responsibility and job requirements for the target roles.

From this it identifies the requisite skills, knowledge, and abilities necessary to carry out the role requirements to their fullest extent. In addition, the team examines what experiences have helped other successful individuals in the past that are relevant to the current situation. This enables the creation of a robust, defensible, and detailed description of the requirements of the target roles.

  1. Assess the talent pool

The first three steps set the stage for the detailed work that follows, gathering whatever relevant data are available on candidates for each key position. The goal is to give decision-makers the information they will need in selecting the best people for each role. These data are gathered by interviewing the board (in the case of CEO talent assessment), hiring managers, or others involved in the acquisition and by gathering any past performance information that is available.

For executive and director/manager positions, the typical selection criteria include leadership ability and leadership style, alignment with the culture of the new organization, potential for future personal development, cognitive ability, and motivation. For professional positions, selection criteria are more geared around specific skills and experience in the job; thus, assessment is heavily weighted toward professional competency, work history, past performance, and future skill-development potential.

  1. Review and select talent

The results of the assessment are presented in detailed reports to decision makers, who use them for review and selection. The quality and extensiveness of these results go a long way toward ensuring the full value of the deal.

CONCLUSION

Indeed, M&A transactions are full of risks and opportunities, and many of those reside in the target company’s human capital. Because of this, it is essential to thoroughly evaluate key and critical talent with focus, rigor, and honesty, beginning as soon as possible and continuing throughout the deal phases.

The consequences of getting people decisions wrong could be the difference between winning and losing in the marketplace — something no company should risk in today’s highly competitive market and volatile economic environment.