Competence management Your key to success. it begins. with people

Transcription

1 Competence management Your key to success it begins with people

2 Introduction Change is the only permanent feature of today s telecommunications industry. What was traditionally a highly regulated industry with limited competition and little technological change has been replaced by a dynamic marketplace, where both convergence and competition with the IT industry present unpredicted challenges. Yet the rate of technological advancement offers new business opportunities and revenue streams to the most creative and dynamic telecom operators. How can HR ensure a steady supply of talent to meet the needs? As telecom operators deal with this massive change, their HR professionals face a daunting task in reconciling human capital requirements with shifting business priorities. For example, they have to cope with: Intense competition in attracting and retaining talent, especially from the IT industry, which is often perceived to be more dynamic and rewarding Changing expectations from a Generation Y workforce, which consists of new recruits who can rank potential employers on their carbon footprint as much as their possibilities for career progression The need for new technical and professional skills that are difficult to find on the open market. In these circumstances, how can HR ensure a steady supply of talent to meet the needs of a successful telecommunications provider? 2 IT BEGINS WITH PEOPLE

3 the key to success We believe the way forward for operators who want to succeed is to have a strong focus on the business dimension of career and competence management, and in parallel, to ensure that all competence related activities support key business strategies. Devising such an approach is easier said than done. Ericsson s experience from working with operators worldwide indicates that those who succeed have two vital characteristics: They have flexible career models in place that are based on robust competence frameworks Their investments in competence development are systematically planned to support key business priorities. What defines a flexible career model? A job for life is a thing of the past. New recruits expect variety in their career, and this places employers under an obligation to provide transparency and flexibility in their career model framework. Across many industries, career models have traditionally been linear, with low transparency between job roles, even within the same company. Specifically within the telecommunications industry, career models are not well defined and are not standardized. Operators tend to go their own way, with varying degrees of success. In comparison, a flexible career model offers clarity to employees regarding both the responsibilities of their current job and the different stages or levels they can aspire to. More importantly, it also offers transparency regarding the career stages of other jobs that may interest an employee. Empowering employees with a career model that clarifies the key skills, competencies and experience needed to move within the organization can go a long way toward managing the talent at a company s disposal. What is a robust competence framework? A competence framework is a systematic way of grouping key skills and competencies. These could be broken down into different dimensions for example business, technological and human dimensions. As new technologies and services are introduced new competencies should be added to the framework and distributed across relevant jobs and career stages. Again transparency is important, so employees can see what skills, competencies and experience they need to move up a career stage or between job roles. Combining career model, competence framework and business cases Having the two foundation stones of flexible career models and robust competence frameworks in place is not enough. They must be backed up by sound business case models that enable an organization to make strategic use of both the career model and the competence framework. A methodology to plan investments in competence based on business case realities, together with a robust career model and competence framework can provide HR executives with the ammunition they need to lead strategic talent management initiatives in order to manage change. Without such a methodology it is very difficult to plan for the future. For example, if you don t have a reliable mechanism for assessing how many engineers with specific IP skills you have at a particular level, how can you justify investing in a program to improve IP skills for the Engineering Department? IF YOU DON T HAVE A MECHANISM FOR ASSESSING Your ENGINEERS, HOW Do YOU JUSTIFY the competence Investment? IT BEGINS WITH PEOPLE 3

4 The business case for competence management Competence management is an investment. And like any other kind of investment, it should be backed up by a business case that is based on sound financial assumptions. If a company doesn t develop and monitor a business case for competence management perhaps they are only fooling themselves that they even do any competence management in the first place. Perhaps they are really only engaged in competence administration. Ericsson recently helped to develop a comprehensive career model for the entire engineering department of a major international operator. The entire study covered over 5000 employees under the management of the Chief Technical Officer (CTO). Using this model it was possible not only to estimate the competence level of the organization but also to estimate its relative productivity. How was this done? Competence management should be backed up by a business case Step 1: Defining the career model and competence framework In the study, the first stage was to build a career model based on defined job roles such as engineer or technician. Each job had three career stages; starting with the most junior, these were Assessed, Experienced and Senior. In parallel, a comprehensive competence framework was built that acted as a support for the overall career model. Every member of staff was initially assigned a primary job role but not a career level; this was left to a later assessment stage. Ericsson contributed to the development of both the career model and competence framework through its experience and expertise in developing and implementing career models for 40,000 service delivery personnel managing customer s networks across the globe. Step 2: Estimating the productivity levels for key job roles Building a business case for competence management for HR executives requires a methodology that enables them to forecast the relative productivity of employees at different stages in their careers, and with different competence and experience levels. For the purposes of the study we assumed that the average productivity per employee was at least equal to their cost; in other words that, on average, each employee returned a value to the company at least equal to their fully loaded cost (salary, benefits, IT costs, insurance and so on). Of course, in reality the average return would be much higher; the conservative figure was chosen for illustrative purposes. Connecting productivity to cost in this way enabled us to make a forecast of the potential productivity gains by making strategic changes to the career level mix. See Measuring Productivity on page 6 for more details. The next step was to consider the relative productivity across the Assessed, Experienced and Senior career stages. To be able to compare the relative productivity of different career levels we assumed that the lowest level, Assessed, had a base value of 1. The only meaning of this base value was to enable a comparison with other career levels. It was then assumed that the second level, Experienced, returned twice as much value as an Assessed employee and that the highest level, Senior, returned a value four times that of the lowest level (see Table 1). Of course these relative values can be changed; there is no precise method available today to gauge how productive a senior employee is compared to a more junior colleague. As HR professionals we have to use sound judgment to estimate the relative productivity differential between different career stages. Step 3: Setting career model target levels The real science comes in planning the ideal career pyramid which in this case refers to the desired mix of assessed, experienced and senior engineers required to successfully operate and 4 IT BEGINS WITH PEOPLE

5 maintain the network at the right quality levels. For this customer, as for many other customers, Ericsson was able to forecast a career pyramid distribution based on its experience of managing networks for over 400 million subscribers. Using this expertise the desired target levels for the organization are then set. This can be done at overall enterprise level or applied to a specific department. In this case a critical Technical Operations Department under the control of the CTO was given a specific target career path distribution (see Table 2). Step 4: Assessing the organization s current competence Once the career and competence model is in place and the benchmarking to compare relative productivity levels has been agreed the process of assessing the current status of the organization starts. In the study, Ericsson provided a Competence Gap Analysis (CGA) framework to assess the current competence and career level situation. The CGA consisted of a mixture of one-to-one assessments of key personnel to set the benchmark levels, as well as cost/efficiency online tests to capture specific technical skill levels. Based on the productivity guidelines agreed by HR and senior management, this department was deemed to be 35 percent below the required productivity level (see Step 2 for details). This was mainly due to low levels of competence as visualized in the wrong career path distribution: facts & figures table 1. Relative Productivity Per Career Stage Senior 4 Experienced 2 Assessed 1 table 2. Target Career Path Distribution Senior Experienced Assessed Technical Operators department 65% 25% 10% table 3. Actual Career Path Distribution Senior Experienced Assessed Technical Operators department 20% 77% 3% In this case the assessment revealed that the actual career path distribution and competence levels were wrong (see Table 3) Senior 80 The real science comes in planning the ideal career pyramid Experienced 70 Assessed It should be noted that in other departments it was found that the staff was overskilled, hence a gain could be achieved through job rotation programs to utilize the available competence in an optimal way As is To be Step 5: Conducting competence transfer programs In the case of the Technical Operations Department in the study a strategic competence development program was put in place to improve the skill level (and career stage) of the assessed staff. The following targets were set: Increase the percentage of senior engineers from 20% to 65% Increase the percentage of assessed engineers from 3% to 10%. IT BEGINS WITH PEOPLE 5

6 Targeted competence transfer programs, such as task-based mentoring, were put in place to improve specific on-the-job skills, along with traditional instructor-led training to improve basic skills in key areas. An added bonus was that because all departments and jobs were using a common catalog for describing skills and competencies, individuals with sought-after skills could be identified and transferred from departments oversupplied with Experienced and Senior employees. Measuring Productivity Assumptions: Average salary is 60,000 per employee Each employee returns, on average, their total cost in productivity terms Total Productivity As-Is : 25 Million Total Productivity To-Be : 33 Million Potential Productivity Gain: 8 Million Benefits of employing a competence framework A robust competence framework and career model will allow for a systematic approach to certification and other promotion and succession-planning initiatives. Thus it becomes an important retention tool for mapping and career guidance, which in turn improves productivity by providing all employees with the means to increase their competence. The competence framework and career model, if accurately scoped and methodically implemented, can lead to increased learning effectiveness through strategic and short-term competence planning based upon business and performance objectives. This reduces risk by ensuring that competence is available for both existing and new technology in alignment with the rollout of equipment and services. Employee retention is improved through increased visibility of competence development options and paths. Lastly, by taking a commercial approach to competence management investment an operator can increase cost effectiveness through optimized training flows, less time out-of-office and reduced travel expenses. This has the knock-on effect of increasing management s control of competence development progress and performance, which in turn leads to greater flexibility in handling challenges through an increased ability to rapidly implement change. 6 IT BEGINS WITH PEOPLE

7 conclusion The risks involved in not implementing a competence framework are also notable and include: An outdated and cumbersome approach to competence identification and management leading to poor performance and customer dissatisfaction Subjective decision making in relation to compensation and benefits An inconsistent approach to assessing performance and potential for promotion. A poor connection between performance and rewards leads to dissatisfaction among employees. It then becomes difficult to retain employees, since there are no welldefined career paths and structured competence development Potential lack of visibility of high performers within the organization, with no common metrics to measure their effectiveness. There is no single solution for managing complex competence requirements but there are helpful tools, one of which is the career model and competence framework backed up by a sound business case. If designed and implemented correctly, business decisions related to competence management can be made on a sound financial basis. In other words competence can be managed, rather than purely administered. The main benefit of this systematic approach to career and competence management is that HR executives and senior manage ment can work proactively to secure the right talent to ensure success in today s fast-paced telecommunications industry. Remember, it begins with people! The main benefit of this approach is that you can work proactively to secure the right talent IT BEGINS WITH PEOPLE 7

8 Ericsson is shaping the future of Mobile and Broadband Internet communications through its continuous technology leadership. Providing innovative solutions in more than 140 countries, Ericsson is helping to create the most powerful communication companies in the world. Ericsson AB SE Stockholm, Sweden Telephone asq.us@ericsson.com ericsson-academy/learning-services 2/ FGB A Uen Ericsson AB 2010