Talent Management: New Generation Reward Strategy SARA Conference: October 2013
Who is Talent? The Discovery view: We attract great people everyone has talent and the potential to do great things the leaders role is to enable them to live up to their potential, and liberate their best selves While everyone is talent, we have identified key talent pools that require specific focus: Core Capabilities: Critical Roles / People: Equity: Core skills that underpin Discovery s current and future success and competitiveness Key roles or individuals who may not be in core capability roles but are vital to retain May have deep institutional knowledge and experience Specific focus on equity talent to ensure we support our transformation goals
Talent management process Close the Gaps Buy Understand business needs (current and projected, local and international) Review current talent mix and identify gaps Leverage the EVP to recruit the best talent Build Learning and development On the job and project experiences Executive exposure Career moves Track progress Enable Effective performance management Visible career opportunities Supporting reward and recognition structures
Using remuneration to differentiate talent: four key elements: 1. Guaranteed Pay 2. Short Term Incentives Attraction Broad bands for professional roles allow for differentiation Tighter bands for non-critical roles Annual Increases Limited flexibility (CPI+ small %) Higher increases linked to: Market alignment Change in role Promotion Qualification Limited scope to reward top talent Target vs Actual Distribution: 0 to CPI-% Target (CPI+%) CPI +++% Production and Monthly Incentives Reward performance of today s talent, not necessarily future talent Management Incentives Limited differentiation (budgeted and calibrated) Collective vs individual vs Group Profit Pool Company does well, all participants do well Company does not meet targets all are affected No differentiation CPI Target (CPI+%) CPI++ %
Using remuneration to differentiate talent: four key elements: 3. Long Term Incentives 4. Non-Monetary Rewards Attraction and Retention of Critical Talent Allocations based on level, performance, current and future criticality Top talent clearly differentiated Longer term wealth creation share in the success of the company Impact of performance conditions Hyperbolic discounting of long term payouts The longer you wait, the less it s worth Cost vs value Career Opportunities and Advancement Project assignments Executive mentoring Promotion Change in role International opportunities Career opportunities are open to all, but more active investment is made in top talent Focus is on making opportunities visible, rather than explicit career paths Time Uncertainty Learning and Development Leadership development Skills development Perceived Value Leaders need insight into what matters to their people, and what is likely to retain and inspire them not a one size fits all solution
Limitations of pay as a talent tool Good remuneration is necessary but not sufficient to win the war for talent Market benchmarking who pays at the 50 th percentile? It s a moving target Someone will always pay more: Work out: what s the stickiness factor? It s all relative! Which would you prefer 1. R100 knowing your peer is also getting R100? 2. R120 knowing your peer is getting R150? Fairness and consistency are fundamental
Other reward mechanisms Recognition matters as much as financial incentives Stand the chance to earn up to double your salary
What might the future hold? Pay will always be important but not sufficient Customised total reward packages: PERSONAL LEARNING & DEVELOPMENT FINANCIAL FREEDOM (WITH OPPORTUNITIES FOR WEALTH CREATION) CAREER GROWTH (MAY BE NON-LINEAR) WHAT ELSE? FLEXIBLE WORKING (ABLE TO DO IT ALL!) GIVING BACK SABBATICALS FOR COMMUNITY OUTREACH MAKE AN IMPACT VALUED AND CARED FOR AS A PERSON