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1 H E A L T H W E A L T H C A R E E R F U T U R E O F W O R K Milan Taylor Partner, Mercer
2 G E O P O L I T I C A L V O L AT I L I T Y
3 G L O B A L T R E N D N O T J U S T U S What is on our employees minds?
4 W E FAV O U R O U T S P O K E N P O L I T I C I A N S Q10 Politicians should be able to say what s on their minds regardless of what anyone else thinks about their views Strongly Agree/Tend to Agree Total Argentina Hungary Israel Spain Peru Poland France South Korea Belgium India Mexico Germany Great Britain United States Australia Italy Sweden Canada Turkey Brazil South Africa Japan 53% 51% 49% 47% 60% 59% 59% 58% 57% 64% 74% 72% 71% 70% 68% 66% 66% 64% 64% 64% 79% 79% 79%
5 W E W O R R Y A B O U T B R E A K I N G R U L E S Q10 To fix [country], we need a strong leader willing to break the rules Strongly Agree/Tend to Agree Total France Israel Italy South Korea Turkey India Poland Belgium Peru Australia Great Britain Brazil South Africa Hungary Mexico Canada United States Japan Argentina Spain Sweden Germany 21% 23% 42% 42% 41% 41% 40% 39% 36% 35% 49% 54% 51% 50% 50% 48% 60% 69% 68% 66% 66% 65% 80%
6 W H E R E I S O U R O P T I M I S M?
7 W H AT D O E S I T A L L M E A N? 1 World is round Internet and MNCs are making us all more global 2 World is changing We are looking for new answers 3 World is diverse Not one global village, but many local villages
8 D I S R U P T I O N T O W O R K A U T O M AT I O N / R O B O T I C S M A C H I N E L E A R N I N G G L O B A L I Z AT I O N 3 D P R I N T I N G D I G I TA L I Z AT I O N
9 D I S R U P T I O N T O W O R K Over 7.1 million jobs lost and 2 million jobs created D E C L I N E G R O W T H Office and Administrative Manufacturing and Production Construction and Extraction Arts, Entertainment and Media Installation and Maintenance -4, % -1, % % % % % Business and Financial Operations % Management % Computer and Mathematical +339 Architecture and +2.71% Engineering +303 Sales and Related +0.46% Source: Future of Jobs Report, World Economic Forum G L O B A L E M P L O Y M E N T O U T L O O K (JOBS CHANGE IN THOUSANDS, )
10 I M PA C T O N S K I L L S Only 50% of skills needed today will be applicable in 2020 Current stable jobs will require different skill sets in just a few years Skills instability will be high for all industries regardless of the employment outlook Current roles are already hard to recruit for
11 F O U R T H I N D U S T R I A L R E V O L U T I O N Lifelong-learning from education for employment to education for employability and from job security to career security Innovating the Education Ecosystem Developing modern curricula Intra- and cross industry collaboration Dynamic Re-Skilling Incentivize re-education and training among existing workforce Digitization Promote digital fluency Learnability Learn and teach through internships and externships
12 F O U R T H I N D U S T R I A L R E V O L U T I O N Gender-balanced, diverse, inclusive, inter-generational workforce Deformalization of Work Recognize diversity of work models (on-demand / contract / seasonal work, etc.) Increased Flexibility Agile implementation of new regulations Adjusting Cultural Norms Close the gender gap Develop careers for different generations Empowerment of the Individual Increased Personalization Employees treated as customers
13 R E S P O N D I N G T O T H E N E W W O R L D O R D E R FUTURE OF JOBS FUTURE OF TALENT
14 A B O U T M E R C E R S G L O B A L TA L E N T T R E N D S S T U D Y 400+ executives 5,400+ employees 37 countries 1,700+ HR professionals 20 industries Agriculture/Forestry Insurance/Reinsurance Automotive Internet Based Services Construction Life Sciences Consumer Goods Logistics/Supply Chain Education Manufacturing Energy Mining Financial Services Professional Services Healthcare Retail High Tech Telecommunications Hospitality Utilities
15 K E Y TA L E N T T R E N D S I N GROWTH BY DESIGN A SHIFT IN WHAT WE VALUE A WORKPLACE FOR ME THE QUEST INSIGHT FOR A T T R A C T I N G & R E T A I N I N G T O M O R R O W S T A L E N T B U I L D I N G F O R A N U N K N O W N F U T U R E C U L T I V A T I N G A T H R I V I N G W O R K F O R C E
16 G R O W T H B Y D E S I G N D I S R U P T I O N O N T H E H O R I Z O N INTERNET OF THINGS DIGITALIZATION Business model disruption New ways of working MACHINE LEARNING Value creation opportunities A more symbiotic relationship between man and machine will emerge ORGANIZATIONS CONSIDERING THEMSELVES DIGITAL TODAY 8% Digital 77% On digital journey MERCER 2017
17 G R O W T H B Y D E S I G N ORG. REDESIGN BEING PROPOSED C-suite: How are you planning to change your organization design over the next two years? 41% 33% 31% 31% 93% Moving support functions to shared services Flattening the organization structure Decentralizing authority Eliminating roles, functions, departments of executives are planning a redesign in the next 2 years WHAT IS DRIVING THIS CHANGE? Greater efficiency Increased agility Greater customer intimacy Reduced costs Increased innovation
18 G R O W T H B Y D E S I G N IMPLICATIONS FOR THE FUTURE OF JOBS HR: How do you anticipate jobs changing in the next 3 years? 50% of companies plan to change their job evaluation method this year in response to the changing workplace High value jobs focused on design and innovation Broader span of control for management More focus on sales & delivery, less on management Salaried workforce will be confined to management HOW COMPANIES ARE REDEFINING THE LANDSCAPE 1. Establishing a consistent job architecture aligned with the new structure 2. Evaluating who can do jobs (employee, contingent, robotics, algorithms) 3. Increasing differentiation in the leadership roles that exist 4. Using science to value emerging roles and define reward eligibility 5. Quantifying work in terms of experiences with jobs as anchor points
19 A SHIFT IN WHAT WE VALUE 2016 focus on learning 2017 pay and opportunity for promotion A COMPELLING CAREER PROPOSITION RESPONSIBLE LEADERSHIP PAY DISCLOSURE & TRANSPARENCY UNCERTAINTY AND VOLATILITY FORCES OF CHANGE 24
20 A SHIFT IN WHAT WE VALUE 97% of employees want to be recognized and rewarded for a wide range of contributions W H A T W O U L D M A K E A P O S I T I V E I M P A C T O N Y O U R W O R K S I T U A T I O N? 1. Compensation that is fair & market competitive 2. Opportunity to get promoted 3. Leaders who set clear direction 4. Working with the best & brightest 5. Transparency on pay calculations of companies plan to make changes to 83% increase transparency of executive pay 6. Career path information 7. More flexible work options
21 A SHIFT IN WHAT WE VALUE W H AT E M P L O Y E E S W A N T W H AT ' S H A P P E N I N G W I T H P E R F O R M A N C E M A N A G E M E N T? 83% 81% 81% Changes to goal cascade or calibration Introduction of continuous feedback Shift of focus to careers and future contribution T O R AT E O R N O T T O R AT E 28% of companies eliminated ratings last year About 30% added or removed forced rankings in 2016, but 39% of those are planning to reverse their decision in 2017 Just 14% have disconnected base salary adjustments with performance metrics
22 W O R K P L A C E F O R M E VOICE OF THE EMPLOYEE: Help me invest in myself CARING FOR MY HEALTH 53% of employees want their company to focus more on their health and wellness STEERING MY CAREER 1 in 3 employees do not feel empowered to create their own career success at work BALANCING MY WORK/LIFE 56% want their company to offer more flexible work options Me, Inc. MANAGING MY MONEY Mercer research shows that employees spend 13 hours per month worrying about money matters at work Technology enables individualized choice without adding an undue administrative burden for HR 27
23 W O R K P L A C E F O R ME Employees are seeking ways to make work work for their individual circumstances No.1 asks from employees Offer more flexible work options Canada, Japan, USA Enable quick decision making Australia and Germany Understand my unique interests & skills India, Italy, South Africa, UK Actively support innovation China and Mexico E M P L O Y E E P R I O R I T I E S Focus on my health and wellness Brazil, France, Hong Kong, Singapore HEALTH 61% WEALTH 23% CAREER 16% People who felt that they could not achieve their own career success at work want their organization to take more time to get to know their skill sets
24 Q U E S T F O R I N S I G H T LESS STRATEGIC VALUE MORE Key drivers of engagement Reasons to leave/stay Team performance Effective training EXEC Most valuable Not used Reporting Correlation Cause and effect Predictive Who is likely to leave Risk of burnout Why Join HR Analytics used 27% executives report that HR delivers actionable analytics for business leader decision making 29
25 Q U E S T F O R I N S I G H T TALENT DATA INNOVATIONS Games and tools to source qualified talent or speed up the sifting 86% 86% 82% 73% 66% Personality Cognitive ability Culture fit VAC Games Over 60% use innovative learning methods Social Data Network Analysis Cluster Analysis
26 A F R I C A H A S I T S O W N C H A L L E N G E S HUMAN CAPITAL INDEX Education Health and Wellness Workforce and Employment Enabling Environment North America Europe And Central Asia Asia And Pacific Latin America and Caribbean Middle East and North Africa Sub-Saharan Africa Source: Human Capital Index 2013
27 V I E W S F R O M S U B - SAHARA 1 Leadership but not the hero 2 Source and develop talent locally 3 People strategy for new markets 4 Performance management work is changing 5 Reward in diverse and changing markets 6 Digitize HR to deliver to the individual Preserve brand and culture
28 B E W A R E, A R E W E A L I G N E D? 0% 10% 20% 30% 40% 50% 60% Culture 22% 35% 50% Brand Recognition 6% 13% 40% Business Model 11% 9% 28% Pay/Rewards 14% 33% 38% Benefits Diversity & Inclusion 10% 9% 16% 25% 33% 30% Executives HR Employees
29 C U LT I VAT E A T H R I V I N G W O R K F O R C E T H R I V I N G W O R K F O R C E Diverse and Energized T H R I V I N G O R G A N I Z AT I O N Business Success Resilient and Adaptive Positive Social Impact Inclusive and Growth Focused Committed to Health & Wellness T H R I V I N G E M P L O Y E E Growing and Contributing Empowered and Connected Healthy and Energized
30
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