Talent Edge Weekly - Best of April Issue # 174

Covers 15 of the most popular resources from April. Topics include workforce planning, succession planning, workforce trends, AI in the workplace, and more.

May 03, 2023

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Welcome to this issue of Talent Edge Weekly—bringing together insights about work, the workplace, and the workforce. Read by human resources practitioners, business leaders, and others interested in the world of work.

This “Best of April” issue includes 15 of the most popular articles and reports from the April issues of Talent Edge Weekly. These resources are organized by:

  • Talent and Workplace Practices— Talent narrative, talent strategy, workforce planning, performance management, internal talent marketplace, high potential employee identification, succession planning, leadership development, and employee data strategy.

  • Workplace and Workforce Trends—10 business shifts impacting talent, leadership, and culture; employee preferences across age groups, the impact of AI on work and jobs, workforce ecosystems of internal and external workers, and implications of regulatory updates on pay equity.

Also included is the 2023 Job Cuts and Layoff Tracker and the Chief HR Officer Hire of the Month.

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I hope you enjoy the collection of ideas and practices from this issue, and I look forward to sharing more resources with you throughout May!

Brian 

Brian Heger is an internal human resources practitioner with a Fortune 150 organization and has responsibilities for Strategic Talent and Workforce Planning. You can connect with Brian on Linkedin, Twitter, and brianheger.com

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THIS WEEK'S EDGE

I. TALENT AND WORKPLACE PRACTICES

Talent narrative, talent strategy, workforce planning, performance management, internal talent marketplace, high potential employee identification, succession planning, leadership development, and employee data strategy.

Organizational stakeholders—investors, current and prospective employees, customers, and strategic partners—are increasingly interested in understanding an organization's talent practices and strategies. As such, Chief HR Officers continue to be called upon to help articulate their organizations’ talent narrative—from how workforce risks are managed to how talent initiatives deliver value. Against this backdrop, these three resources provide ideas that can inform multiple aspects of an organization’s talent narrative: 1) The Conference Board’s report— Telling the Human Capital Management Story. This 20-page report includes ideas on how organizations can communicate and tailor the messages of their talent narrative to different stakeholder groups while still drawing from a single source of truth. Page 19 (image used for this post) shows a visual of seven stakeholder groups and the parts of the talent narrative in which they are most likely interested. 2) An 85-page MercerMarsh Benefits report that covers five pillars of 25 people-risks that can pose a threat to an organization if not managed. Each section of the report provides a set of actions organizations can take to manage risks most relevant to their business. 3) Dave’ Ulrich’s article, Eleven Evolutions in Human Capability That Accelerate the Business, which covers how HR delivers value to the organization and its stakeholders through four different pathways (talent, leadership, organization, and HR). Each resource can serve as a helpful reference for thinking through aspects of an organization's talent narrative.

Most organizations have a talent strategy to enable their business strategy. However, the tactics supporting a talent strategy can vary by organization. As leaders determine the right mix of buy, build, borrow, and bot tactics to help meet their organizations’ talent needs, this editable template includes a list of 11 talent strategies that I sourced from Gartner. The strategies range from acqui-hire (acquiring skills through acquisition), redesign work (change structure, workflows, role designs, etc.), and use rotations or temporary assignments (move existing employees with needed skills on a short-term, time-bound basis). The template provides a space to type in your initial thoughts on talent strategies you might consider. A few suggestions for using this template is to a) define 2-3 business scenarios your organization might face (e.g., 15% growth in China, FDA approval of drug Y, etc.), b) identify the talent implications of each scenario (e.g., an increase of X # of sales representatives in regions A, B, C, etc.) and c) define the mix of talent strategies that could address the talent implications. You can also prioritize the strategies based on factors such as: 1) Costs: the strategy’s direct financial or nonfinancial short and long-term costs. 2) Time: The time required to implement the strategy effectively, and 3) Long-term value: The benefit of implementing the strategy beyond the immediate needs. Thinking through these components in advance enables a firm to execute an optimal mix of talent strategies as different business scenarios unfold.

Strategic workforce planning (SWP) is a priority for many organizations. Yet practitioners often struggle to implement SWP in their firms. According to a Boston Consulting Group (BCG) study of 32 HR practices, SWP is among the top three practices with the most significant gaps between the importance organizations place on the capability and their ability to deliver it effectively. At the same time, HR Teams are increasingly encouraged to leverage data to inform their talent and workforce strategies, including SWP. This 16-page Gartner reference provides three steps for how HR Leaders and their teams can effectively use data to assess talent risks to business strategy and use the findings to guide SWP: 1) Build a catalog of talent risks most likely to affect the business. 2) Evaluate the talent risk catalog to determine which are currently risks to strategy execution. 3) Share top talent risks with relevant stakeholders in a visually compelling way to drive action. Table 1 on page 5 shows 11 of the most common talent risks to executing business strategy in SWP. For example, Development Risk is when not enough internal talent is developing critical skills to meet the organization’s needs. Pipeline Risk refers to not having enough engaged talent in the recruitment pipeline to meet critical skills needs. Table 2 on page 7 shows the top metrics to use as key risk indicators for each of the 11 most common talent risks. The reference provides examples for communicating talent risks to stakeholders, including the image used for this post.

As organizations use performance management (PM) as one enabler of business performance and stakeholder value, this one-page reference provides five resources to help answer questions related to PM. The five questions include:1) What PM practices do organizations use (and don’t use) today? 2) How can employee well-being be integrated into PM? 3) What are the triggers for when employee goals might be adjusted? (see image of this post) 4) How can we mitigate bias in PM? 5) How can we use PM to enable collaboration across business units and cross-functional silos? The reference includes links to the five source documents from Gartner, Deloitte Insights, Harvard Business Review, and The Talent Strategy Group. I also provide a few points made in each resource. For example, The Talent Strategy Group’s 2023 report on the PM practices of over 300 organizations shows that 90% use performance ratings, nearly 50% ask employees to assign themselves a rating, and 17% enforce a rating distribution. Regarding integrating well-being and PM, Gartner mentions how performance feedback discussions can incorporate three types of well-being conversations, including disruption-focused conversations, which address how employees are coping with disruptions that can affect performance (e.g., change in responsibilities, loss of key team members, etc.). Before digging into these five resources, start with the foundational questions: what is the purpose and objectives of our company's PM? What is our PM trying to solve? From there, determine the PM practices that enable those goals and outcomes.

Internal mobility is a critical component of a talent strategy. And according to an Extraordinary Women on Boards and i4cp survey, corporate boards of directors are increasingly interested in understanding the internal mobility rate of their organizations. The survey found that internal mobility rate — the degree to which employees move throughout an organization (lateral moves, promotions, transfers, etc.)— ranked number two of the top 10 talent and workforce data sources that boards want to receive but that are not shared with them. As organizations strengthen their internal mobility practices, many are turning to the internal talent marketplace (ITM)—usually, an AI-enabled platform that helps match employees (and their skills) to opportunities in their organization. This new HBR article provides ideas for implementing an ITM and covers topics such as determining what ITM data to leverage and how to incentivize participation. I believe one of the most overlooked success factors of an ITM are the non-tech components. Far too often, firms approach an ITM as a technology initiative and lose sight of the non-technological barriers that detract from ITM (e.g., policies that restrict internal movement (e.g., the employee must be in a role for a certain amount of time before moving to another internal role or opportunity), talent hoarding—where managers intentionally or subconsciously attempt to retain their best employees to the detriment of the employee’s personal development and what's best for the company. With this as the backdrop, I am resharing this one-page reference I created that includes 6 non-technological barriers to internal mobility. There are other barriers, but this list of 6 will get you started.

Many organizations conduct a talent review process—where one goal is to accurately identify (and develop) employees with the greatest leadership potential. However, identifying high-potential employees can be challenging for several reasons, ranging from a lack of objective criteria to limited visibility into the skills of these employees. Since I have received many inquiries on this topic, I've compiled this one-page playlist of four resources from three thought leaders: Allan Church, Rob Silzer, and Marc Effron. Sample questions explored include: 1) What are the indicators of potential? 2) Should we change how we define and measure potential to align with the changing nature of work and the workplace? 3) Are there different types of potential? 4) What are examples of how high-potential employees can go undetected? Regarding whether the indicators of potential have changed, Marc Effron notes that the core components of potential, such as intellect and personality, still have the same power to predict potential; intellect accounts for 35 to 45%, and personality covers up to 25% of variances in potential. One factor that has likely changed in some individuals is their “motivation to invest discretionary time at work.” While many practitioners might want to focus on “the number of boxes” or categories used for assessing potential in a talent review, what is most important is that the categories allow for differentiation and that the criteria used for determining potential are informed by the body of research on this topic.

This one-page editable PDF includes 10 succession planning metrics that organizations can refer to as they track and measure the effectiveness of their succession management practices. While 10 metrics are provided, organizations can select the vital few (or include others) for which they want to track progress. Sample metrics include:% of non-ready now successors with a development plan; % of successors deemed high retention risk; % success rate of successors after assuming the role (e.g., one-year mark). For each metric, there is space to insert a baseline (what is your current state) and the desired state (where you want to be). Then, four additional columns can be used to help you track your organization’s progress over specific time periods. For the time periods, you can type in whatever time reference you want to use, such as quarterly, biannually, yearly, etc. Aside from providing a way to track your organization’s progress on succession management, you can use the information you collect to inform aspects of your organization’s talent strategy and narrative. The metrics included are intended to help generate ideas on the types of succession metrics you can track. They are not an exhaustive list, and they may not be the right metrics for your organization. You should determine which talent outcomes you are trying to achieve and then identify the metrics (whether or not on this list) that are the best indicators of progress in those areas.

Identifying, developing, and retaining future leaders is a perennial priority for many organizations. To help gauge how firms are progressing toward this goal, this 25-page report is part of the longest-running global study of leadership to understand current and future leadership practices. Topics range from how well firms develop their leadership benches, skills that leaders need for the future, and the retention of high-potential leaders. Regarding retention, page 23 mentions how three years seems to be the critical tipping point for high-potential leaders to start showing an interest in moving on: for high-potential employees within the first three years of their tenure, only 12% said they intend to leave their companies within the year. By contrast, high-potential employees who have been with the company for three years or longer are 25% more likely to be at risk of departure. Of those high-potentials who plan to depart within one year, lack of career growth opportunities and leaders lacking effective interpersonal skills are among the top reasons for their intention to leave. These data points reinforce the importance of continuously assessing the retention risk of high-potential employees and successors and developing retention strategies to mitigate risk. Page 8 touches on the importance of spotting leadership potential earlier and more broadly (cast a wider net).

Organizations collect and manage various types of employee data for different purposes. And as many firms increasingly seek to use artificial intelligence (AI) for different talent practices (e.g., talent marketplace platforms, internal mobility, employee experience, etc.), they are making decisions about the type of employee data these AI platforms can leverage. As organizations make these employee data decisions (whether for AI use or other purposes), they must take a responsible approach to using employee data—considering the potential risks and taking appropriate measures to mitigate them. This new article by members of the Gartner HR team shares four foundational principles for leaders to consider as they articulate how workers’ data will be collected and used in their organization. They include: 1) The right to purpose— there’s a legitimate business purpose of collecting the data. Employers should ask themselves: Why are we collecting this data? How will we process it? How long will we retain the data in order to accomplish the core purpose? 2) The right to minimization—the employer won’t collect more data than it needs to achieve the purpose outlined in principle #1. 3) The right to fairness—that data will be used to reinforce equity in the workplace (e.g., use data to ensure an inclusive applicant pool, detect where bias could exist, etc.), and 4) The right to awareness—the employer will be clear about what data is being used for what purpose (e.g., employee skills data is used to have AI recommend career opportunities to employees). I have also found that being clear about how the data won’t be used is critical (e.g., data will not be used to measure employee performance). Other ideas are discussed.

II. WORKPLACE AND WORKFORCE TRENDS

10 business shifts impacting talent, leadership, and culture; employee preferences across age groups, the impact of AI on work and jobs, workforce ecosystems of internal and external workers, and implications of regulatory updates on pay equity.

This newly released 92-page report shares insights on 10 organizational shifts businesses face today—all of which have implications for talent, leadership, and culture. The shifts, which are summarized on pages 6-7, impact talent areas such as employee value proposition, talent attraction and retention, hybrid and remote work, and diversity and inclusion, to name a few. As I reviewed the report, three shifts caught my attention and raise questions for organizations to consider as part of their workforce planning and talent management. (#3) Applied AI in the workplace —organizations report using an average of 3.8 AI capabilities (e.g., natural language generation, computer vision) in 2022, which is double the 1.9 used in 2018. This shift raises the question: Have we identified the impacts of AI on how work is delivered in our organization and by whom? How do these impacts change the skills required of our workforce? (#1) Business shocks, crises, and rapidly changing business situations require quick responses from organizations. This point raises the question: Have we adequately planned for different scenarios we may face as an organization? How will our talent needs shift as a result of those scenarios? (#10) Efficiency is back at the top of the company agenda. This priority raises questions such as: In what ways are our organizational structure and spans of control leading to inefficiencies in the delivery of work? How are unclear roles and responsibilities slowing down decision-making and leading to duplication of work? How does a lack of understanding of the skills of our workforce undermine our ability to quickly redeploy talent? These are just a few questions that might help firms think through the practical implications of these shifts on workforce planning and aspects of talent management. Here is also a summary of the report if you do not want to go through the detailed 92-page report.

As technology continues to be one of HR’s top investments for enabling talent strategy, this new 52-page April issue of Gartner’s HR Leader’s monthly includes seven articles related to this topic. The articles focus on major tech trends HR leaders need to be aware of in 2023, ways HR technology can advance a more human employee value proposition, and how CHROs can promote digital dexterity, to name a few. Beginning on page 10, one article covers five ways AI shifts how organizations think about skills data. It argues that while many organizations continue to explore ways of using AI to understand the skills of their workforce, HR leaders and their teams can face challenges in deciding what types of existing data within different systems (e.g., learning management, human capital management suites, etc.) should be leveraged to help AI platforms infer worker skills. To get better results from an AI platform’s skill inferences engine, the authors recommend feeding the platform more — and better — data from a variety of sources (see Figure 2 on page 12). Several other ideas are discussed across the seven articles. As practitioners evaluate opportunities for utilizing HR and AI-based technology in their organizations, I am resharing this 59-page toolkit by the World Economic Forum that provides ideas to promote the responsible use of HR-based AI tools, tactics for evaluating vendors, and more.

This 20-page paper by Goldman Sachs analyzes the impact of generative AI on the economy and jobs. Based on occupational tasks data in the US and Europe, the report notes that roughly two-thirds of current jobs are exposed to some degree of AI automation and that generative AI could substitute up to one-fourth of current work. The analysis suggests 300 million jobs could be lost or diminished if generative AI delivers on its promised capabilities. As noted on page 7 (Exhibit 5), a few areas most impacted by automation are office administrative support, legal, architecture and engineering, business and financial operations, management, sales, and healthcare. It should be noted that advances in AI will also generate demand for new jobs, types of work, and related skills. The combination of job creation and job loss raises several questions for HR practitioners, such as: What jobs and work tasks in our organization are most exposed to automation by AI? How will these changes affect the skills that our workforce needs? Due to these changes, how will we alter our workforce planning, talent acquisition, and development efforts? In what ways will AI help us to unlock workforce capacity? HR leaders and their teams should answer these and other questions related to how AI will impact their business and workforce strategies. The report includes several other analyses to help understand the work areas most exposed to automation by AI.

Many organizations segment their workforce into various categories to better understand the needs and preferences of workers. One lens through which worker preferences have been viewed is “generation”—the different age groups or cohorts of people currently employed or seeking employment in a particular industry or organization. But as noted in this article, worker preferences appear to be more similar than different across age groups. The data show that employees of all ages are looking for many of the same things at work and largely quit their jobs or start somewhere new for similar reasons: 1) inadequate compensation, 2) lack of career development and advancement, and 3) uncaring leadership. As with their reasons for quitting, workers’ top reasons for taking a new job are consistent across age groups: 1) compensation, career development, meaningful work, and workplace flexibility (Exhibit 2). One notable difference is that once employees are in a job, the retention factors that motivate Gen Zers (those 18-24) to stay aren’t the same as those for other age groups. Gen Z ranks flexibility, career development, meaningful work, and a safe, supportive work environment as more important factors than compensation when they decide to stay with their current employers. This resource can be used as ONE of MANY references to inform an organization's understanding of worker preferences. As a bonus, this 150-page ebook report— Are Generational Categories Meaningful Distinctions for Workforce Management?—by the National Academy of Sciences, provides an overview of the scientific research on the topic.

As the number of contingent workers (e.g., contractors, freelancers, professional services workers, etc.) continues to expand in many organizations, HR leaders play a critical role in helping their firms manage and coordinate their workforce as an ecosystem of both external contributors and internal employees. This challenge is magnified given the impact of artificial intelligence (AI) on how work gets delivered and by whom. This new and in-depth report explores the intersection of workforce ecosystems and AI and the implications for 1) Designing Work, 2) Supplying Workers, 3) Conducting Work, and 4) Measuring Work and Workers. While there are too many insights to summarize from this report, one point made in the “design work” section is how advancements in AI and the growth of the contingent workforce provide opportunities for firms to critically evaluate how they organize work beyond jobs—a topic discussed heavily by John Boudreau and Ravin Jesuthasan in their book Work Without Jobs: How to Reboot Your Organization’s Work Operating System (March 29, 2022). This tactic involves disaggregating existing jobs into tasks and determining how those tasks can be best delivered through various aspects of a workforce ecosystem, including internal employees, external contributors, and AI. Since this practice is new for many organizations, I am resharing this bonus article by Gartner that provides ideas for assessing a role’s “composability”—the degree to which it can be broken down into tasks.

This article summarizes regulatory updates that have implications for how organizations approach various aspects of pay equity. While you can read the details of these regulations (e.g., the European Parliament approved a groundbreaking law, the Pay Transparency Directive, Australia made broad changes to the Fair Work Act, etc.) in the article, one point made is how the Directive requires employers to regularly report pay gap information (including disclosing to employees), and if the gap exceeds 5%, it needs to be addressed with actionable steps. The new directive will require companies to disclose many things – salary ranges, career progression criteria, and pay gaps. This pushes decisions upstream: what are our salary ranges, job families, job levels, career progression criteria, skill requirements, and overall pay philosophies? How do we handle pay for performance? Do we need location-based salary ranges? How do we handle scarce or hard to find skills? How do we structure our jobs? What skills are truly important for us? It is mentioned how some companies, such as Microsoft, Accenture, and Unilever, are being proactive by publicly sharing their pay equity progress in their DEI report. Schneider Electric also includes pay equity as a critical component of its management development program, and companies like Heineken, SAP, Nestle, and Unilever make pay equity a part of its people agenda. Other ideas are discussed. As a bonus, I am resharing this recently published 36-page report by ADP Research Institute that looks at factors influencing how workers feel about pay equity.

JOB CUTS AND LAYOFFS TRACKER

Here you can see the latest updates from a segment of organizations that have announced job cuts and layoffs since the start of 2023. Recruiters, search firms, and hiring managers can use this resource to identify opportunities for recruiting talent from organizations affected by layoffs.

A few firms that announced job cuts in April include Deloitte, The Gap, and Red Hat. Click the table below to see all organizations.

CHIEF HR OFFICER HIRE OF APRIL

As part of CHROs on the Go — a digital platform subscription that provides the easiest, fastest, and most convenient way to stay informed about hires, promotions, and resignations in the Chief Human Resources Officer role— 86 new CHRO announcements have been posted on the platform in April.

The CHRO Hire of April is:

  • PepsiCo, Inc. (PURCHASE, N.Y. ) [NASDAQ: PEP] announced that Ronald Schellekens, EVP and Chief Human Resources Officer, will retire at the end of this year. The company has named Becky Schmitt the new EVP and Chief Human Resources Officer. She will report to PepsiCo's Chairman and CEO Ramon Laguarta and assume full accountabilities, effective October 1st. Ms. Schmitt is joining PepsiCo from Cognizant, where she has been the EVP, Chief People Officer since February 2020.

Do you want to join others getting the EDGE each week in knowing which CHROs are being hired, promoted, and resigning? If so:

Currently, there are +2000 CHROs announcements on CHROs on the Go, with an average of 20-25 new announcements added each week!

If you are already a member of CHROs on the Go, you can log in to access all announcements and site functionality.

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