The Case for Intelligent Talent Management Disrupt, or be disrupted. Donna Morris, SVP of HR at Adobe White Paper
White Paper > The Case for Intelligent Talent Management Change is a given in business. But change is different now. According to Gartner, Change has become fluid because of digital business technologies that is, it s non-stop, unpredictable and is spreading everywhere. 1 Change not only affects how businesses operate, but what customers want and how they buy. And what their employees expect. This white paper explores how organizations can quickly adapt their talent management strategies and actions to win in a world of non-stop change with Intelligent Talent Management. The Business Challenge: Underlying Disruptive Forces Are Changing How Companies Succeed Organizations today are facing disruptive changes in every aspect of their business. But two stand out as having the greatest potential to change the game technology disruption and talent disruption. Technology Disruption. Disruptive technologies are enabling businesses to create new products at an accelerating rate with dramatically faster development and testing cycles. For example, 3D modeling and 3D printers are enabling virtually instant prototyping and manufacturing in many product categories. At the same time, technology innovations are enabling marketers to target, reach, convert and activate their prospects more effectively and efficiently than ever before. Figure 1 captures the breadth of marketing technology offerings in 2011. 2 In just four years, the number of companies offering marketing technology products grew 1800%, from 100 in 2011 to 1,876 in 2015. And this number is still growing dramatically (click here to see 2015 Marketing Technology Landscape). How will companies react to these accelerating technology breakthroughs? Do they have the necessary skills to harness them? How will their competitors utilize them? Marketing is just one example of a technology-disrupted function, but HR and every other function are feeling it too. 100 350 947 1,400 1,876 Figure 1. In just four years, the number of companies offering marketing technology products grew 1800%, from 100 in 2011 to 1,876 in 2015. Talent Disruption. As HR professionals know all too well, the dramatic shift in the makeup of the workforce is causing enormous business disruption. Nothing paints the problem more clearly than the mass exodus of baby boomers at leadership levels and the mass inflow of millennials at almost every level. (By 2015, 48% of supervisors and above in the U.S. will be at retirement age 3 and more than 50% of U.S. workers will be millennials. 4 ) The direct implication is that there s a huge leadership gap in companies across the globe. 2
Just-published Saba research shows that 53% of companies don t have an adequate pool of talent to fill new leadership roles in their companies. 5 On the inflow side, millennials are bringing very different life experiences and expectations into the workplace. They want to work for organizations that foster innovative thinking, develop their skills and make a positive contribution to society. 6 They look for constructive, frequent (even weekly) feedback and coaching, and they care deeply about the culture and values of the company they work for. As a result of these talent disruptions, HR leaders and CEOs see culture and engagement, leadership and learning and development as the top three challenges to organizations in 2015. 7 Most companies understand the urgency to address these challenges, but few feel they are far enough along. Bersin found in its 2015 Human Capital Trends study that HR leaders and CEOs saw major capability gaps (the difference between importance and readiness) in these top three challenges, and in each case the capability gaps increased from 2013 to 2014. The Talent Challenge: Re-Skilling Fast Enough to Harness Change and Get Out in Front The dizzying rate of change from both outside and inside of companies is causing the need to constantly re-skill the workforce to harness new technology advances, keep up with customer expectations, and get out in front of competitors. Re-skilling requirements will be so pervasive that 45% of America s occupations are projected to be obsolete within 20 years, 8 and new jobs requiring new skills will take their place. The challenge becomes how best to add these new skills. In today s world, searching for new talent is frictionless. Every person and every skill is findable. Massive social networks and job search sites such as LinkedIn, Facebook and Glassdoor make everyone s skills instantly searchable. This benefit, however, is shared by every company competing for the same skill set, making the already competitive talent market dramatically more competitive (and time compressed). With the hyper-competitive state of the job market, there is no way to cover all re-skilling needs through external hiring. But well-managed companies already have a built-in pool of available talent their employees. It s been well established that internal mobility drives retention. It s not only possible to develop new skills with existing employees 3
White Paper > The Case for Intelligent Talent Management it s the best way to retain, re-engage and inspire them with new challenges and growth opportunities. The challenge is how to build a thoughtful talent management strategy and system that balances hiring new talent with developing existing talent and keeping the workforce engaged enough to fuel aggressive innovation and growth. Matching the Technology to the Challenge There has been much discussion about the effectiveness of talent management in organizations today both their practices and systems. In HCM research over the last several years from Gartner, Deloitte and others the consensus is that talent management practices and systems are falling further behind in delivering and measuring value to their business. 9 Here are some of the reasons why: Recruiting management was built to filter down from a large supply of candidates, based on a time when there was a surplus of candidates, and business conditions were relatively predictable. Today, candidates are in control, and companies need to market to them while genuinely appealing to their need for purpose and professional growth. Performance management was focused on annual goal setting and performance appraisals. Yet the majority of workers today are motivated by regular, constructive feedback, weekly coaching and frequent revision of goals almost diametrically opposite of the systems in place with most companies. Compensation planning was developed to reward top performers (i.e., those highly rated on performance appraisals) on an annual basis, without proactive, regular assessment of market disparities between annual performance periods, leading to unexpected departures from high-impact employees. Succession planning was conceived to replace departing senior executives (dating back to the Civil War to replace generals who were lost in action). Today, businesses depend on critical talent at all levels, especially in key functions, such as engineers, sales executives, product designers and marketing technologists. The traditional binder-based process and even many succession systems require manual, time-consuming input and maintenance, and don t lend themselves to scaling beyond the senior executive ranks. It is no wonder that HR and business leaders are frustrated trying to meet these critical challenges. Intelligent Talent Management Both a Disrupter and an Enabler In this world of rapid change and opportunity, the talent management platform can be the engine that enables strategic talent initiatives to take flight and talent processes to scale. It becomes, in effect, the engine of change, enabling organizational leaders to become the agents that drive that change while engaging their employees and empowering them to grow and thrive. Five years ago, Saba embarked on a path to harness the latest science in Machine Learning to move talent management from a manual, rules-driven, one-tomany process, to a proactive, self-evolving, oneto-one process. Saba has been a pioneer in a new generation of talent management systems we call Intelligent Talent Management. To bring intelligent technology to life, here s a familiar consumer problem and an intelligent solution to that problem. This story is about Darren. 4
Darren is an avid reader of books. He reads a book about every six weeks while working out on a stationary bike to distract him from the pain of staying healthy. When he finishes his current book, he will need another one equally engaging to keep him from falling off the bike (figuratively speaking). What should he select this time? The largest bookstore on Earth Amazon carries 32.8 million books. That s a healthy universe of choices. But it s completely overwhelming to decide which one to buy. Thank goodness, Amazon applies machine learning to its massive pile of books, and uses the data about Darren s previous book selections and actions (and those of millions of others like him) to narrow his choices to six. Voila! Darren now has a fully personalized, intelligently curated set of books to choose from. He chooses Fully Charged? and successfully stays on the bike. The corollary to this story in talent management is that Darren works a lot more than he read books. He confronts the daily problem of sorting through emails, task lists, creative briefs, training materials, tweets and blog posts. He goes to meetings, more meetings, and an occasional lunch. That s his do now list. Then there s his longer horizon ( do by next Friday ) list, requiring creative thinking and deep immersion. Then there s the really long-term list, keeping his career on track. OK, Darren is overwhelmed! Let s look at three scenarios in the evolution of Darren s job where Intelligent Talent Management can simplify his work and guide him to make better decisions faster. Ramping Up Darren starts a new job as a product marketer at a 30,000-person multinational brand. All the things mentioned above are compounded by the fact that Darren doesn t know the people, products, processes, places, customers, competitors and tools. But he is expected to deliver value in weeks. He s now way more than overwhelmed. 5
White Paper > The Case for Intelligent Talent Management Intelligent Talent Management acts as a guide in their career the same way an expert Sherpa acts as a guide for seasoned explorers trying to reach new heights. On Darren s first day, he is greeted by a friendly welcome message with four recommended actions set your initial goals, watch the marketing orientation video, take the deepdive product line course, and follow a recommended list of people. As happens in most large companies, these actions were triggered by rules set up by the HR department based on the employee s job, department and location. It was timeconsuming for them to tune the rules to the degree Darren s company did, but he found the recommendations helpful and inviting on his first day. Given the fast-moving nature of most businesses, however, after the first few weeks and months, a person s goals change, critical content evolves, new courses are launched, allied teams are reorganized and new experts appear, making it nearly impossible for HR professionals (or even managers) to constantly track the people, content and courses that are most useful to Darren s growth and effectiveness. This is where Intelligent Talent Management comes in. It tracks all of Darren s actions on the Intelligent Talent Management system and any changes in his goals to learn more and more about what will help Darren grow and succeed. of the business. The system also helps him build his network, breaking down information and communication silos that often cause organizations to lose their agility. Engagement After 18 months at the company, Darren is at a high level of proficiency in product marketing. But he s starting to wonder, What s next? and Where am I going? He s not sure where to explore these questions. And he s uncomfortable talking to his boss, as he doesn t feel he has permission to talk with her about his career, as she might question his commitment to her team. With the changing makeup and expectations of the workforce, today s relationship between companies and employees has changed. Similar to the evolving relationship between Brands and consumers (where the power has shifted to the consumer), the power in companies has shifted Six months later Darren is starting to hit his stride. And so is the Intelligent Talent Management system. Much like Netflix has determined over time that Darren likes romance and not action thrillers on Saturday nights, the Intelligent Talent Management system has used every action Darren took on the system, such as updating goals, taking classes, uploading content and following conversations, to understand his career goals and professional interests. And the system has started to recommend content and courseware based on these growth interests. Darren is broadening his skills in ways that make him more valuable in his current role by being able to quickly relate to other areas 6
to the employee. And millennials have much shorter tenures at companies (91% of millennials expect to stay in a job for less than three years 10 ), as they seek an environment where they are learning and growing their market value. If they don t find it, they move on. In the book The Alliance, Reid Hoffman acknowledges these changes and proposes that companies treat employees more like allies and create tours of duty where the company explicitly invests in the skills development and market value of that employee in return for a commitment by the employee to invest in the success of that company. In effect, this approach tells employees that the company respects them as individuals, and acknowledges their personal and career aspirations. Companies that embrace this philosophy will have significantly more engaged employees than those who don t. One very effective way to engage and invest in employees is to empower them with a career planning tool to help answer the Where can I go? and How can I get there? questions. And, importantly, to give them the tools and encouragement to help them get there. Intelligent Talent Management acts as a guide in their career the same way an expert Sherpa acts as a guide for seasoned explorers trying to reach new heights. Intelligent Career Planning Using an Intelligent Career Planning tool, Darren can explore a variety of career paths, both in the short and long term. If he has a long-term goal in mind, the intelligent system will fill in the likely career steps necessary to get there. Intelligence comes into play here because the career steps are based on actual employees real job changes instead of a traditional career ladder that was built by an HR team. The system will highlight Darren s skill gaps for succeeding in these roles, and will proactively recommend a development plan to fill those gaps. Plus, it will recommend experts in the skill areas of the targeted roles. Darren can then increase his chances of getting those roles by nominating himself into the respective talent pools. The whole experience is like a simulation game about his future super engaging, thought provoking and empowering. For HR professionals, Intelligent Career Planning provides automatic talent pools for newly opened positions and formal succession planning. In addition, it helps build a more engaged workforce that is likely to stay longer to explore and expand their careers. Retention Darren has been at the company three years. He moved to Product Management with the help of the Intelligent Career Planning tool, and now manages a six-person Product Management group responsible for the division s flagship product line. His rock star Product Manager (Karen) sticks her head in the door and asks if he has a minute to talk. She asks to sit down, and he starts to worry. She blurts out, I m giving my two-week notice. His worst fear is confirmed, and he didn t see it coming. He scrambles to think of ways to address her reasons for leaving. Then she cuts to the chase, saying, I accepted the other job. I made a commitment. The chances that Darren can turn Karen around at that point are extremely low. So how could Darren have prevented this from happening? Certainly, having more frequent check-ins and giving her more interesting and challenging assignments would have helped. In addition, he could have been more proactive about finding out if her compensation was on par with her industry peers. But how many managers stop to think about potential risks on a regular basis? It s not really something humans do well. This is where intelligent systems excel. How many managers stop to think about potential risks on a regular basis? It s not really something humans do well. This is where intelligent systems excel. 7
White Paper > The Case for Intelligent Talent Management Intelligent Compensation Intelligent Compensation dynamically assesses the risk that Karen (and every other employee at the company) might leave the company, and alerts the person s manager and compensation manager when the risk of flight is high. That would have happened in Karen s case. The intelligent system also computes the cost of replacing Karen and recommends the compensation adjustment that would likely lower the risk she would look for new opportunities. With this data, Darren would be armed to make the case for Karen s bonus or raise with those who approve those requests. Compensation isn t the only driver of retention, but with good coaching, meaningful work and an engaging culture, getting out in front of compensation gaps will help prevent early departures of stars like Karen. Four Critical Attributes of an Intelligent Talent Management System How can you tell if you are dealing with a truly Intelligent Talent Management system that will help you address the technology and talent disruptions of today and tomorrow? There are four critical attributes that represent the next generation of talent management systems, and each of Darren s stories incorporates all of them: 1. Proactive: Forward-looking, anticipating potential issues and opportunities 24/7. When it finds either, the system alerts you immediately (or sets up a trigger to alert you at the first point it becomes relevant). 2. Dynamic: Actively tracks all data associated with each employee, including every action the employee takes, at hyper speeds that enable near-instant responses to issues, risks and opportunities. 3. Personalized: Focused on the specific, unique needs and goals of each employee. No two people get the same set of recommendations. 4. Engaging: Becomes increasingly accurate, personalized and helpful over time. Creates a positive feedback loop with every interaction, making employees want to use the system to get useful suggestions for improving their skills and performance. A talent management system with these attributes will become a significant differentiator for companies in the near term, as it will enable them to attract, engage and inspire their people in a world of constant technology and talent disruption. Find out how Saba delivers a cloud-based Intelligent Talent Management solution. 8
References 1. Gartner Study, Digital Business Technologies Are Changing the Nature of Change, Aug 2014. https://www.gartner.com/doc/2817317 2. ChiefMartec, Marketing Technology Landscape Supergraphic, January 2015. http://bit.ly/technology-disruption 3. Social Security Report Annual Performance Plan 2013. http://bit.ly/social-security-report-retirement 4. Bureau of Labor Statistics, Wired.com The Rise of the Millennial Workforce. http://bit.ly/millennial-workforce/ 5. Saba Software and WorkplaceTrends.com, Global Workforce Leadership Survey, Nov 2014, n = 2001. http://bit.ly/saba-leadership-survey 6. 2015 Delloite Millennial Survey, N = 7,800 worldwide. http://bit.ly/deloitte-millennial-survey-2015 7. Bersin Delloite 2015 Human Capital Trends Report. http://bit.ly/human-capital-report-deloitte 8. Oxford Martin School s Programme on the Impacts of Future Technology, MIT Technology Review, Sep 2013. http://bit.ly/mit-technology-review 9. Gartner, Get the Most from your HCM Technology. https://www.gartner.com/doc/2258815/hcm-technology-technology Deloitte Reinventing HR, 2015. http://bit.ly/reinventing-hr 10. Future Workplace Multiple Generations @ Work survey of 1,189 employees and 150 managers. http://futureworkplace.com/wp-content/uploads/multiplegenatwork_infographic.pdf Additional Resources Product Video: Meet TIM Making Talent Management Personal, Proactive and Engaging Product Data Sheet: Intelligent Talent Management Featuring TIM, The Intelligent Mentor Customer Video: Equity Residential Teaching People How to Fish with Intelligent Talent Management Customer Video: Guitar Center How To Use Social and Intelligence to Invent the Future of Retailing 9
www.saba.com Worldwide Headquarters Saba 2400 Bridge Parkway Redwood Shores CA 94065 United States Tel: +1-650-581-2500 Fax: +1-650-696-1773 EMEA Headquarters Saba Software (UK) Ltd. Circa The Ring Bracknell, Berkshire RG12 1AA United Kingdom Tel: +44 (0) 1344 382950 Fax: +44 (0) 1344 382951 India Headquarters Mumbai 506, 5th floor, C wing, Trade Star Andheri Kurla Road, JB Nagar Andheri East, Mumbai 400059 Tel: (+91-22) 66977222 Fax: (+91-22) 66978087 India Headquarters Pune Level 5, Muttha Tower Don Bosco Road Yerwada, Pune 411006 Tel: + 91 22-6706-6687 Japan Headquarters Saba Software K.K. 8F, Kayabacho Ekimae Bldg 2-11-8 Kayabacho Nihonbashi Chuo-ku Tokyo 103-0025 Japan Tel: +81-3-5649-1201 Fax: +81-3-5649-1202 http://japan.saba.com Asia-Pacific Headquarters Saba Software Pty. Ltd. Level 6, 61 York Street Sydney NSW 2000 Australia Tel: +61-2-8622-7563 Fax: +61-2-8622-7550 São Paulo, Brazil Saba Edificio Rochaverá Corporate Towers Marble Tower Av. das Nações Unidas 14171 15º andar Morumbi São Paulo Cep 04794-000 Brasil Tel: +55 11 3568-2419 Fax: +55 11 3568-2200 Toronto, Canada Saba Software (Canada) Inc. 100 King St, West 56th Floor Toronto, Ontario M5X 1C9 Tel: +1-416-847-1868 Saba delivers a cloud-based Intelligent Talent Management solution used by leading organizations worldwide to hire, develop, engage, and inspire their people. Intelligent Talent Management uses machine learning to offer proactive, personalized recommendations on candidates, connections, and content to help your employees and organization lead and succeed. 2015 Saba Software, Inc. All rights reserved. Saba, the Saba logo, and the marks relating to Saba products and services referenced herein are either trademarks or registered trademarks of Saba Software, Inc. or its affiliates. All other trademarks are the property of their respective owners. Saba 2400 Bridge Parkway Redwood Shores CA 94065-1166 USA (+1) 877.SABA.101 or (+1) 650.779.2791 www.saba.com wp_05/15