Get ready for 2014 solve the talent management equation with job competencies

GET READY FOR 2014: SOLVE THE TALENT

MANAGEMENT EQUATION WITH JOB

COMPETENCIES

Gordon Ritchie, October 2013

To us, business is personal

© 2012 Kenexa Corporation 4 4

AGENDA • Introduction • Challenges in defining talent management • Elements in the talent management equation • How a job competency framework can balance the two sides of the

equation • 3 steps to implementing a framework to making sense of the data • Conclusion

– Questions, – Next steps

CHALLENGES IN DEFINING TALENT MANAGEMENT

© 2012 Kenexa Corporation 6 Copyright Kenexa®, 2013 6 Copyright Kenexa®, 2012

“We’re not gonna compete with teams that have big budgets.” “We’re gonna work within the constraints that we have and you’re going to go out and do the best job you can recruiting new players.”

“I want you to go find replacements for the guys we lost with the money we do have.”

WORKFORCE MANAGEMENT SEE ANY SIMILARITIES?


Billy Beane’s mission was to field and reward a team that can win against richer competitors.

Isn’t that what we need to do as well?

© 2012 Kenexa Corporation 8 Copyright Kenexa®, 2013 8

WE KNOW WHAT WE DO IS IMPORTANT BECAUSE THE ANALYSTS TELL US…

“Best-In-Class organizations are more than twice as likely to identify competency data for each employee.”

“If we can apply science to improving the selection, management, and alignment of people, the returns can be tremendous.” Forbes Leadership Article February 2013

SHRM recognized in their 2012 Employee survey, being recognized in using your skills is now the #1 employee job satisfaction issue, above pay, benefits etc.


POLLING QUESTION 1

• What are the obstacles you face to quantifying talent management? A. Disconnected talent management tools B. Poor reporting or analytics tools C. No standard formulas D. No clear definition of what talent it or the results they impact


POLLING QUESTION 1 ANSWERS


WHAT ARE YOU MEASURING FOR RESULTS?

How does your business measure success? • Revenue • Customer retention • Profit • Gross Margin • EBITDA • EBITDA Per Employee • Share price • EPS

How does your HR group measure success? 1. %ge review forms complete 2. Onboarding complete 3. Cost per hire 4. Hours of learning delivered 5. Compensation plan increase 6. Staff turnover 7. Staff tenure 8. Employee engagement

We know what + / X and = means. But how do we balance the equation to solve what affect one item has on the other side?

A+B/TM = DOW($ X PE)

ELEMENTS IN THE TALENT MANAGEMENT

EQUATION


DEFINING A ROLE WE NEED PERFORMED

Job Descriptions, Job Value and Competencies

Business Results

Unified Talent Profile?

• Job Descriptions

• Resumes

• LinkedIn profiles

• Social profiles

• Experience

• Time served

• Self reported

• Assessments

– Cultural, Leadership, Succession,

• Performance ratings

Performance Management, Coaching, Goal Setting,

Assessment, Succession Planning Employee Development, Advancement, Compensation Planning, Affiliation and

Engagement


Job Descriptions, Market Data and Competencies

Business Results


TALENT ANALYTICS: BIG DATA CUBE

Func

tion Com

pens

atio

n

Job Profile

Functional Competencies

Job

Leve

l Core Competencies

Data in: • Disconnected TM tools • Disconnected processes

• Incumbents • Candidate • Self/360/test/SJT

• Performance Appraisals • Compensation Plans • Engagement Surveys • Development plans


IF YOU WANT IT, YOU CAN FIND IT

• Social • Cloud • Mobile • Crowd sourced • Custom/config/off the shelf • Structured/Unstructured • Best of breed vs integrated suite

• ONLY AS GOOD AS THE DATA THAT’S IN THERE.

• OLD DATA CAN BE WORSE THAN NO DATA

System of record… • HRIS, ATS, LMS, • Compensation

survey planning • Performance Analytics tools • Excel • Access • Word • Assessments Etc,…


TALENT SKILLS CULTURAL FIT

PERFORMANCE + x =

ELEMENTS IN THE EQUATION


IT’S ABOUT THE EMPLOYEES

• Employee Engagement Index (EEI) positively correlates to financial returns.

• Higher EEI results in greater discretionary effort.

• ROA = 3X that of those that don’t invest in HCMPs.

• Those not investing are typically less than 1% of payroll on recognition.

Kenexa High Performance Institute, 2013: Human Capital Management Practices, a win-win solution

HCMP-Human Capital Management Practices of Development, Performance and Recognition.

ROA-Return on Asset = profit related to total assets.


WHY COMPETENCIES ARE IMPORTANT.

30%

31%

36%

37%

0% 5% 10% 15% 20% 25% 30% 35% 40%

All Organisations

Weak or limited leadership pipeline

Consistency in employee competence

Excessive first year turnover among new hires

Lack of skills to meet organizational needs

Internal challenges to address via assessments

-12%

-10%

14%

17%

18%

0%

0%

7%

2%

8%

-15% -10% -5% 0% 5% 10% 15% 20%

Not Using Assessments

Using Assessments

Employee performance

Quality of hire

Employee productivity

Overall turnover

Recruiting costs

Impact of Assessments in Talent Management

Source: Aberdeen 2009 Study; Assessments in Talent Management

“The number one strategy used by best in class companies was to develop a competency framework.”


LETS BUILD OUT AN EQUATION

• Start with the big one • Salary Bill = typically the biggest expense for an organization • Average Salary = $100,000

• Cost * productivity = contribution • $10,000,000 * 100% = $10,000,000 • $10,000,000 * 90% = $9,000,000

• $10,000,000 * 110% = $11,000,000 That’s the equivalent of 10 new

staff members.


MAXIMIZE THE POSITIVE

Loaded Salary cost X Avg Tenure X Productivity% = Salary Cost Goal X Avg Tenure X Productivity% = Goal Miss $100,000 X 5 years * 90% = $450,000 = Loss of $50,000 Sales person with a $2million quota $2,000,000 X 5 years X 90% = $1million loss That person is costing the company the opportunity to add 2 sales people which is a $20million opportunity cost.


THE RESULTS ON THE RIGHT HAND SIDE…

• Evaluating

Talent

• Retaining

Talent

• Engaging Talent

• Acquiring Talent

Cost of a poor hire: $300K-$500K

Operational efficiency rate due to poor employee engagement: 30%

Cost of losing a talented employee: $250K-$500K

Value of a top performer: 2-4X performance of average employees

These numbers are consolidation of numbers from the HCI.

Expense management

Sales results Succession

Competitive product results

What did you put on your SEC 10K or Annual report?


CHALLENGES DEFINING COMPETENCIES

Copyright Kenexa®, 2012

Source: Competencies, Compensation and Technology Luncheons.- 2012

0.0%10.0%20.0%30.0%40.0%50.0%60.0%70.0%

Manualprocess

BudgetConstraints

Too difficult todefine

competencies

Too manyjobs

Lack ofexecutivesupport

What prevents you from implementing competencies (or extending the competencies you

have) in your organization?

STANDARDIZING THE FORMULA WITH A

COMPETENCY FRAMEWORK


“COMPETENCIES ARE THE CURRENCY OF TALENT MANAGEMENT” JOSH BERSIN, 2007

• Core

• Leadership

• Functional

• Technical

• Behavioural

• Traits

• CARS

• BARS

• Proficiency levels

• Assessment

• Time consuming

• Hard to do

• Hard to prove ROI

• No impact

• Tried it

• Tried it again,

• Done them

• Someone else did some too

• Too HR

• Not important or relevant

• Fewer = easier

But as soon as I say “competency”, you hear…


WHAT IS A COMPETENCY ?

Kenexa definition of Competency is a combination of knowledge, skills and abilities (KSA) describing the demonstrable indicators of proficiency

Core Competencies = price of admission Leadership competencies = developing the future Functional competencies = executing as a team Technical competencies = impacting performance of the organization today.


COMPETENCIES ARE THE FOUNDATION

Using a Job Competency Framework

provides a Clear, Common and Consistent

language for Talent Management.

It connects processes and enables integration across

HRIS and Talent Management investments, already made.

Functional Job & Competency Framework

Career & Succession

Planning

Learning Needs

Analysis

Risk Analysis

Recruitment & Selection

Resource Planning

Compensation

Performance Management

“Conclusion: The most successful organizations rely on a talent infrastructure that encompasses the right competencies and job profiles as a basis for integration.” Integrated Talent Management: A roadmap for success. Bersin and Associates, 2012


ITS ABOUT ALIGNING THE JOB NEEDED TO THE JOB DONE

Functional Job Analysis • Library • Custom • Professional • 3rd party • Business results

Outcomes Research • Assessment • Survey • Compensation • Performance • Core High

Performance Behaviors

Application • Performance • Pre-hire • Post hire • Development • Engagement • Succession (tactical) • Succession (Executive) • Compensation • Workforce capability

=

• HR Impact and respect

• Employee job satisfaction

• Operational success • Business results

Kenexa definition of Competency is a combination of knowledge, skills and abilities (KSA) describing the demonstrable indicators of proficiency.

Core Competencies = price of admission

Leadership competencies = develop the future management line of succession

Functional competencies = execute as a team and ensure operational succession

Technical competencies = impact performance of the organization today.


THE KENEXA JOB MODEL

Job Description – Code – Title – Summary – Responsibilities – Compensation

Competencies (KSA’s) (Core, Leadership, Functional and Technical)

– Definition – 4 Proficiency Levels

• Behavior statements by level • Target Proficiency level

– Application Accelerators • Learning References • Development Statements • Coaching Tips • Performance Rating Writing

Assistants • Interview Questions

Matrix

Job Function

6 Job Levels (IC, Supervisor, Manager, etc)

Primary Job Focus (tech, Prof, Admin,

Mgmt, etc)

© 2012 Kenexa Corporation 30

WORKING ACROSS ORGANIZATIONAL LEVELS

1. Identify Levels within Organization using job bands

2. Define the scope of responsibility in each Level


Target proficiency levels Benchmark expectations Provide complete view of the job. Identify key candidates Help organizations focus on who they need.

Sales Representative, Snr


Interview Questions aligned to the competencies aligned to the job. Enable consistent selection over time for positions. Improve the tools in interviewers hands


SMART Goals: Both Quantitative, and Qualitative Consistent, clear and customizable Engage new employees in onboarding and longer term objectives.


Help Coaches step back from “Unconscious Competence” Help apprentices have a focal point, not football or weather. Focus productive relationship focused on the behaviours and experiences that need to be shared.


PERFORMANCE over time, not just proficiency: 1 = Bad, 5 = Good. Granular feedback, that is not provided if I don’t have time, or can’t think of how to write a politically correct, defensible statement. Focus on key areas and Recognize skills being performed.


Multiple Learning Styles: OJT, Professional Curriculum, In-house SOP, etc. Mapped to specific competencies Customizable. External learning catalogue mapping.


Behavioral, Demonstrable, Observable levels of proficiency setting clear expectations or what good looks like. Set expectations for Onboarding. Critical in accelerating time to performance in a job. Basis for Skills Gap analysis Foundation for “big data” formula for analysis in HR that drives business impact.


WHERE YOU CAN APPLY IT Where it helps How it helps What you need Attracting candidates

Set expectations of who will be successful in the job beyond a job description

Demonstrable behaviours of what you expect

Hiring Decisions Smarter hiring decisions based on capability to do the job

Interview questions tied to the competency behaviours required

Onboarding Improve chance of success and retention with accelerated time to productivity

Demonstrable expectations of what good looks like

Managing Support managers development discussions with tools to improve trust and impact.

Skill focused coaching tips, SMART goals, and extended expectations for growth

Engagement Provide clear view of portable/mobile skills to engage the engageable.

Reusable competencies across roles, levels and functions to provide skills based career matrix.

Performance Management

Provide job specific performance criteria for evaluation and contribution.

Job specific competencies and expected levels of demonstrable behaviour

Development Drive up learning as its easier to find content in your LMS

Learning catalogue mapped to competencies

Compensation Planning

Understand the jobs you are matching beyond just the salary survey job title.

Match jobs based on skills, tied to excellence as performance to pay.

3 STEPS TO IMPLEMENTING A

STANDARDS FRAMEWORK and help you, help your business solve the

TM puzzles


3 KEY STEPS

1. Start with an existing Job Competency Framework 2. Don’t get it perfect. Get it out there. 3. Engage with managers on workers on how to use it


COMPETENCY IMPLEMENTATION BEST PRACTICES

Model Building • Ensure linkage between competencies and organization strategies • Keep models simple at launch • Add dimensional criteria and keep the momentum • Start with a library or Competency Framework

Applications • Focus on assessment and development first, then evaluation and pay applications • Integrate of the competencies with all processes, even if tools aren’t • Ensure consistency of applications rather than allowing too many variations

Change Management • Clarify and communicate specific objectives of your applications up front • Ensure top management and line management buy-in and ongoing support • Be focused in implementation (i.e., one function, one pilot group first) • Provide training and communication more consistently and carefully (building in training at

all stages of implementation) • Develop and consistently apply a measurement system used to evaluate the effectiveness

of implementation over time


COMPETENCY IMPLEMENTATION – SHORTEN TIME TO IMPACT

Develop and use quickly and update over time. Focus on buy-in and change management processes. Make sure you get to the applications; don’t get stuck

in model development

Get the “big things right”; “don’t dwell on the small stuff”.

Apply existing materials and best practices in developing a rapid draft

Focus on the overall architecture

Key success criteria and themes.

Position models as prototypes for learning how to change behaviors (vs. a perfect output image).

Application Integration

Iteration

Launch & Communication Implementation Kenexa / IBM Competency

Development

80% of the effort Recommended Approach 20% of the effort

Typical Competency Development Application Integration

Iteration

Launch & Communication

Implementation

20% of the effort (if able to move out of development stage)

Typical Approach 80% of the effort


THE KENEXA JOB MODEL AND COMPETENCY LIBRARY

• Function or expertise • 6 Job Bands for employees,

management and executive matrices

• Job descriptions • Job profiles • Job responsibilities • Job focus (ie. Admin, IC, Mgmt, etc ) • Compensation Market Data

Business – 36 Individual – 28 Management – 22 Leadership – 20 Functional/Technical – 1700

− Level 1: Basic understanding − Level 2: Working experience − Level 3: Extensive experience − Level 4: Subject matter depth/breadth

4 Levels of Proficiency with 21 unique behavioral descriptors for action oriented skill evaluation

Competencies (1,800+) Performance Accelerators

Job Model Components

• Learning References- • Development Goals • Coaching Tips • Proficiency Feedback Writing Assistants • Interview Questions

– Banking / Financial Services -- OEM High Tech Software – Construction -- Insurance – Consulting -- Manufacturing –Education -- Media / Publishing – Energy -- Retail – OEM/High Tech Hardware - CRM Outsource Mgmt –Pharmaceutical - Healthcare (Clinical/Admin)

–General Corporate Functions (HR, Finance, Legal, Sales) – Information Technology (IT) Operations –SFIA (Skills Framework for the Information Age)

Kenexa Job Competency models provide: job families, job profiles with competencies critical to each role and the proficiency level recommended for each competency

Job Families (115+)

Jobs (2,500+)

Industry Competency Models General Competency Models

CONCLUSION


IMPROVE RETURN ON INVESTMENTS ALREADY MADE IN TALENT MGMT

JOB COMPETENCY

LIBRARY

18 Industry specific FRAMEWORKS 115+ JOB FAMILIES, 2000+ JOB PROFILES 1,800+ COMPETENCIES

4 PROFICIENCY levels w/21 Behaviors Interview Questions, Learning

Resources, Development Goals, Coaching Tips

Tool agnostic structure proven over 20 + years

Excel

Competency Manager Tool

* Edit existing, * Create new,

* Assemble New, * Compare

Competencies/skills

EXCEL Export


The Sum of the Parts sets IBM apart.

Science that makes it “smarter” Industry-leading insights into the science of human behavior, deep expertise in talent management and predictive analytics that demonstrates value

Delivered how and where people work On smartphones, tablets, laptops, desktops or kiosks to ensure no-one is excluded regardless of where they work or what they do.

Social platform to drive adoption Big data analytics, enterprise content management, plus a social networking, collaboration and web experience platform that integrates with how people work

Flexible service options Expert consulting, experienced outsourcing and financing options to make transformation happen

World-class Talent Management technology Software, best practices, data and research to impact the workforce and deliver exceptional business results


QUESTIONS, NEXT STEPS

• Questions? – Here’s one for you:

what are your 2 most critical job roles and how is their impact measured in your annual report revenue, profit, customer service costs, risk mitigation?

• Next steps: