Why Social Good is Good for Your Bottom Line

Benefits for when companies incorporate social good:

1. Millennial retention- Millennials want to work for companies with a "higher purpose". Eventually, if the Millennial quits the company that hired them, the company loses 1 1/2 that employee's salary due to the recruiting, training & development costs, & that doesn't even start to address the intangibles like culture fit, dominoe effects, etc. Also, with 10,000 Baby Boomers retiring daily, that turnover contributes significantly to the shortage in the company's workforce, let alone the Succession Pipeline development.

2. More sales- There's a higher likelihood people will buy more products with social missions because customers will feel they're helping a greater cause rather than just buying another gadget.

3. Oranges to oranges comparison = differentiator- People will buy these products because of the induced peer pressure that follows a "gadget without good" purchase- they may be perceived as selfish/"like a jerk" if buying a similar equal value product because that product's only going to make the executives wealthier- not help people in need.

4. People buy not only based on product value but also on experiences- A social good element helps a person connect better with the product because he/she has an emotional connection; thereby, higher propensity for product stickiness.

5. Eventually, after all basic expenses are covered, a person will leave a job or buy a new product because of the natural psychology of hedonic adaptation. Tying in a social good element and subconsciously integrating a purpose will retain the workforce and propel thoughtful purchases, since the social good subconsciously encourages the reverse of hedonic adaptation.

6. People want to be good examples to their kids- Most parents like the opportunity to shine in their child's eyes while finding a way to give a lecture, so buying a social good product will help them accomplish those goals.

7. Investors can sleep a little better at night knowing at least they invested in a product for good- considering that sometimes the majority of their investments don't produce a ROI.

http://m.fastcompany.com/3053510/innovation-agents/four-strategies-for-measuring-social-impact-leaders-in-the-field

Talent and What it Means to the Bottom Line

Periodically, Talent software is overlooked as an unnecessary company expense. However, if strategic leaders acknowledged the rise of costs associated with replacing employees, they may reconsider that mindset.             

Most of the non-tangible assets such as training, culture assimilation, teamwork and morale are accounted for in expenses associated with employee departure. However, the catastrophic expenses to the bottom line should really trigger a leader’s attention. According to “Hold on tight –retention is now the issue, An in-depth look at engagement and retention in changing economic times” by Fuel50,

Replacing an employee is generally estimated to cost between one-half and five times that employee’s annual salary, the cost to the organization of such churn is staggering. As the average salary within the US was estimated at $48,000 per annum in 2013, and overall attrition rates are estimated at 23.4%, a 100-person-firm could reasonably expect to spend between $600,000 and $6 million in one year if 25% of their workforce decide to leave. Not to mention the time, skills and organizational know-how that walk out the door with employees.

With this insight, perhaps more companies will recognize the need for a system to help identify potential issues before they arise. Fual50 also notes, “65% of all organizations now budget for engagement initiatives and another 18% are considering formal budgets for it”, which indicates they’re catching on to the severity of this oversight.  Imagine how much less revenue a company may need to make if they just saved on these avoidable expenses.

This futuristic planning doesn’t even take into account a company’s succession planning and the overall impact to an organization if a key leader leaves….

Talent, Technology and Taking it to the Next Level

Workday Talent and Performance and the Emerging Workforce:

            It’s evident the workforce is changing and successful companies are recognizing they can strategically plan for the changes. A portion of planning is to understand that there’s a war for talent. Recently, I attended the Workday Altitude Conference where experts in the industry provided insights to the ever-changing workforce and future demands. Their session was very informative and helped connect workforce statistics with technological uses (Cale Hamer, Garrett Plante). A few statistics:

·         Labor growth is slowing sharply- attrition rate increasing because of baby boomers

·         Need to focus on developing internal development

·         6% labor force will slow down each year for the next 50 years

·         There’s a retirement explosion

·         Next 50 years- 76 million people will retire so we need to develop 2030; 55 median age for retirement

·         Generation X is the smallest generation

·         Millennials will fill management roles early in their career

·         There must be constant development of people in organizations so there’s no knowledge gap

·         Segments of labor force are growing more demanding

·         New generations want multiple feedback- not once

·         Skill shortage: 60% of skills needed for future jobs, only 20% are ready

How are we ready for change with this?

·         Employees must learn faster, work faster and master more skills to productivity

·         Employees knowledge becomes quickly outdated

·         There are more flexible hours and remote workers put more demand on measuring performance and potential and developing accordingly

o   Look at people and develop people as much as monetarily possible

o   Need to find the right people and put them in the right position so they succeed

Why is Talent Important?

·         A key indicator of a business is going up and headed down

·         Differentiates between companies who succeed and those who do not

·         Perceived lack of talent focus negatively impact employee engagement retention and productivity

o   Companies that use talent have 20% higher stock

o   Companies are worth 30% more

·         Millennials will fill management roles earlier in their careers

·         Segments of the labor force are growing more demanding

·         Skill shortage

o   Employee output raised by 20% if you engage them, provide feedback, etc.

·         Talent management is important to CEO

Workday allows HR to monitor the Talent Demographics.

 With this information, how do companies plan for future growth? According to a Bersin study, by Deloitte, it all comes down to the companies planning for the future Talent, Leadership and HR Technology changes for 2014. Below is the study from Bersin with screen shots and short descriptions of how Workday Talent and Performance Management can provide solutions to the projected issues.

The Year of the Employee: Predictions For Talent, Leadership, And HR Technology In 2014

In 2014 the world of Talent, Leadership and HR will undergo dramatic change.   (Download our 66 page Predictions Report here.)

Global economic growth will create a new level of competition for people. People will change jobs. HR organizations will shift their focus from cost reduction to retention and engagement. Technology will continue to make the world a smaller place, forcing companies to improve their employment brand in every possible way. Data will become a new currency. Leadership will continue to be in short supply. And HR organizations will have to innovate to stay ahead.

In this blog I summarize our ten predictions for 2014, detailed in the report linked here. This is our tenth year publishing these predictions, and I hope you find them educational and valuable as you plan your strategies for the year ahead.  And to keep you current, look at my most recent presentation on 21st Century Talent Management for guidance.

2014: Empowering People and Focus on the Employee

Attraction, Retention, and Engagement Will Really Matter

For the first time in nearly a decade, this year you will find the issues of retention, engagement, and “attraction of talent” to be top on your priority list. We are just completing a major global study (Deloitte’s Human Capital Trends 2014, coming soon) and found that the top two people issues facing organizations in 2014 are leadership and retention. These are the problems we face in a dynamic, growing global economy.

Workday provides customized reports to display valuable information to managers and HR professions, quick, timely and visually appealing. This information provides key data and insight into what’s really going on in an organization and helps HR professionals avoid foreseeable issues before they occur.

“The war for talent is over, and the talent won.”

This year, for the first time in more than five years, employees are in charge. Companies have reduced costs, restructured, rationalized spending, and pushed people to work harder than ever. More than 60% of organizations tell us one of their top is dealing with “the overwhelmed employee.”

This year the power will shift: high-performing employees will start to exert control. Top people with key skills (engineering, math, life sciences, energy) will be in short supply. Thanks to the US healthcare laws, people will feel more free to change jobs. And companies who can’t engage and attract Millenials will lose out.

Workday shows who the top talent is within the organization. From this data, HR professionals can determine patterns in their organization. These patterns could be, which managers are hiring the top talent and what are they doing differently? Is there more turnover within a certain organization and why could this be? Why is there a higher flight risk in one organization than another- could it be we aren’t paying them within the salary for their industry? Should we worry that some of our key positions may not have enough succession candidates on their plans? What could result if a key position leaves and there aren’t any other succession candidates ready? What would this mean to the overall morale of the company?

While there will still be high levels of unemployment in places, generally people have changed their perspectives. They want work which is meaningful, rewarding, and enjoyable. Top performers will seek out career growth. Mid-level staff will strive for leadership development. And you, as an HR organization, will have to compete, adapt, and innovate to stay ahead.

With Workday Talent reports, HR administrators can identify the skills and potential an employee offers. This can help fill certain gaps.

Our Top Ten Predictions for 2014

1. Talent, skills, and capability needs become global.

In 2014 key skills will be scarce.  Software engineering, energy and life sciences, mathematics and analytics, IT, and other technical skills are in short supply.  And unlike prior years, this problem is no longer one of “hiring top people” or “recruiting better than your competition.” Now we need to source and locate operations around the world to find the skills we need.

You must expand your sourcing and recruiting to a global level. Locate work where you can best find talent. And build talent networks which attract people around the world.

               Workday allows HR professionals to create reports to identify key data that can help alleviate future needs. From their reports, strategic leaders can plan for the future. They can identify employees that are high potential and determine their loss impact. From these reports, they can identify the skills this employee offers, like Engineering, Math and Science, what location they are working, if they’re willing to travel, if they’re willing to relocate and to which areas, and what career interests they have. From this information, key decision makers can start identifying talent within their organization and placing them accordingly based on their skills, strengths and which places they’d like to relocate.

2. Integrated capability Development Replaces Training.

The “training department” will be renamed “capability development.” Companies will find skills short and they will have to build a supply chain for talent. Partner with universities, establish apprentice programs, create developmental assignments, and focus on continuous learning. Companies that focus on continuous learning in 2014 will attract the best and build for the future.

Workday offers HR to identify which employees are on development plans and which skills and competencies still need to be developed. They can begin developing their employees careers from this information.

3. Redesign of Performance Management Accelerates.

The old-fashioned performance review is slowly going out the window. In 2014 companies will aggressively redesign their appraisal and evaluation programs to focus on coaching, development, continuous goal alignment, and recognition. The days of “stacked ranking” are slowly going away in today’s talent-constrained workplace, to be replaced by a focus on engaging people and helping them perform at extraordinary levels.

Workday offers an enjoyable user interface where employees can quickly get feedback from other employees about their performance. This can then be pulled into the Performance Review, so their managers can see what others think about their performance. With the design similar to other social media, like Facebook, LinkedIn, Twitter and Google+, the change management and user adoption rate increases because current generations are already used to this format. Employees can also create Personal Goals from this layout and begin developing their careers.

4. Redefine engagement: Focus on Passion and the Holistic Work Environment.

Engagement and retention will become a top priority. But rather than focus on engagement surveys, you will expand your horizons to look at engagement from a holistic standpoint. Your work environment, management practices, benefits and recognition programs, career development, and corporate mission all contribute to engagement. As you seek to attract and grow Millenials, you will re-imagine employee engagement in a new, integrated way. And rather than survey annually, new tools will let you monitor engagement continuously.

As one HR manager recently put it,

Our employees are no longer looking for a career, they’re looking for an experience.

Your job in 2014 is to make sure that experience is rewarding, exciting, and empowering.

Workday is very intuitive, so employees, managers and HR professionals wont need to take hours away from their current jobs to learn a new system. Additionally, with Workday’s HCM, Time-Tracking, Payroll, Talent and Performance, Compensation and Benefits in one area, it will dramatically decrease the time involved with learning a new system because managers, employees and HR professionals wont have to learn seven different systems. The more systems employees must learn, the lower the user adoption rate as it begins to add more work to their day than improving a more lean process.

5. Take Talent Mobility and Career Development Seriously.

Talent mobility is with us for good:  thanks to tools like LinkedIn, Twitter, and Facebook people can find new jobs in a heartbeat. This means you, as an employer, need to provide internal talent mobility and career growth in your own organization. 2014 is the time to build a “facilitated talent mobility” strategy which includes open access to internal positions, employee assessment tools, interview guides, and leadership values that focus on internal development.

Are your managers paid to “consume talent” or “produce talent?” Remember the best source of skills is within your own organization – if you cannot make internal mobility easy, good people will go elsewhere.

From an employee’s Career tab, employees can actively update their relocation preferences. They can update their Job Interests, Career Interests, Travel preferences, start a Development Plan and show leaders their Training capability. Workday's Tablet and Mobile user interface also makes it easier for executives to get to know their employees. If an executive meets an employee at a conference, they can take make notes of the employees for their personal use. This will allow them to start identifying high potential employees and putting them in Talent Pools. The tablet and mobile user interface also makes the performance review cycle easier as many managers commute and can start and stop the review cycles during off-periods.

Hiring source of High Potentials

You can also begin identifying which sources your high potentials are hired to continue that pattern.

6. Redesign and Reskill the HR Function.

Surprise: in our global Human Capital Trends research the need to “Reskill HR” was rated one of the top five challenges in every geography around the world. Why?  Because HR itself is changing dramatically and we need to continuously skill our own teams to maintain our relevance and value.

Our new High-Impact HR research, scheduled for launch in early 2014, shows statistically that high-performing companies invest in HR skills development, external intelligence, and specialization. In 2014 if you aren’t reinvesting in HR, you’ll likely fall behind.

7. Reinvent and Expand Focus on Talent Acquisition.

As the economy improves you will need to more aggressively and intelligently source and recruit. The talent acquisition market is the fastest-changing part of HR: new social recruiting, talent networks, BigData, assessment science, and recruiting platforms are being launched every month.

In 2014 organizations will need to integrate their talent acquisition teams, develop a global strategy, and expand their use of analytics, BigData, and social networks. Your employment brand now becomes more strategic than ever – so partner with your VP of Marketing if you haven’t already.  Today your ability to recruit is directly dependent on your engagement and retention strategy – what your employees experience is what is communicated in the outside world.

8. Continued Explosive Growth in HR Technology and Content Markets.

The HR technology and content markets will expand again in 2014. ERP players (Oracle, SAP, Workday, ADP) are all delivering integrated solutions now.  IBM, CornerstoneOnDemand, PeopleFluent, SumTotal, and dozens of other fast-growing talent management companies are now offering end-to-end solutions. And most now offer integrated analytics solutions as well.

Mobile apps, MOOCs, expanded use of Twitter, and an explosion in the use of video has created a need to continuously invest in HR technology. In 2014 the theme is “simplify” – understand technology but keep it simple. Employees are already overwhelmed and we need to make these tools and content easy to use. The word for 2014 is “adoption” – make technology easy to use and it will deliver great value.

9. Talent Analytics Comes to Front of the Stage.

Talent Analytics is red hot. More than 60% of you are increasing investment in this area and company after company is uncovering new secrets to workforce performance each day. In 2014 you should build a talent analytics center of excellence and invest in the infrastructure, data quality, and integration tools you need. This market is finally here, and companies that excel in talent analytics have improved their recruiting by 2X, leadership pipeline by 3X, and financial performance as well.

10. Innovation Comes to HR. The New Bold, CHRO.

One of the top three challenges companies now face is “reskilling their HR team.” This points to the issue that HR itself, as a business function, is undergoing radical change. Today’s HR organization is no longer judged by its administrative efficiency – it is judged by its ability to acquire, develop, retain, and help manage talent. And more and more HR is being asked to become “Data-Driven” – understand how to best manage people based on real data, not just judgement or good ideas.

As a result of these changes, our research shows a new model for HR emerging – one we call High-Impact HR. In this new world HR professionals are highly trained specialists, they act as consultants, and they operate in “networks of expertise” not just “centers of expertise.” And driving this new world is a strong-willed, business-driven CHRO. In 2014 organizations should focus on innovation, new ideas, and leveraging technology to drive value in HR. This demands an integrated team, a focus on skills and capabilities within HR, and strong HR leadership.

Bottom line:

2014 looks to be an exciting and critically important year for Human Resources. The economy will grow, employees will be in charge, and HR’s role in business success will be more important than ever.

(Click here to download the entire 66 page Bersin 2014 Predictions Report.)

You can follow me to stay up to date on trends, research, and news in all areas of HR, leadership, and talent management on twitter at @josh_bersin or on LinkedIn at http://www.linkedin.com/in/bersin.

For more information on Bersin by Deloitte, please visit http://www.bersin.com .