The Future of Recruiting

New Realities, New Opportunities

Ravin Jesuthasan
September 2013

2013 Towers Watson. All rights reserved.

Headlines: challenges and opportunities

Friction Points. By 2021, a new map of
talent surplus and deficits will emerge

GWS
Talent 2021

Security Minded. Whether it is attraction or

retention, financial security is top of mind

Generation Gap? Not when it comes to payit is

the #1 attraction driver for all ages in the U.S.
Transformative
HR

Engagement at Risk. Only 35% are highly engaged,

stress is increasing and energy is flagging

Structurally Unsound. Businesses are attempting to

reach 21stC heights on 20thC talent and reward platforms

towerswatson.com

2013 Towers Watson. All rights reserved.

Human Capital Research

towerswatson.com

2013 Towers Watson. All rights reserved.

The major themes of Global Talent 2021

Business transformation demands new skills

Mobility from industrialized to emerging markets

Global talent mismatches

Changes in talent management strategies

towerswatson.com

2013 Towers Watson. All rights reserved.

What is driving the talent agenda?

Market shifts that will have the biggest impact on future
talent requirements
Technological and digital change
Globalization of markets
Labor markets shifts
Changes in customer needs and behavior
Increasing competition
Industry consolidation and transformation
Shift of market momentum to emerging markets
Sustainability and the environment
Regulatory changes
Increasing focus on diversity
Geopolitical trends
Generational, social and cultural drivers
0

10

20

30

40

50

% of respondents
Source: Global Talent 2021 Study conducted by Oxford Economics and Towers Watson, 2012.
towerswatson.com

2013 Towers Watson. All rights reserved.

What strategies will most impact talent needs?

Organizational strategies that will have the biggest
impact on future talent requirements
Cost reduction and efficiencies
Improving quality and customer service
Global expansion
Driving innovation
Reinventing business models
Developing digital channels
Extending product and service portfolio
Process improvements
Penetrating new customer segments
Emerging market focus
Supply chain management
Speeding time to market
Downsizing and restructuring
Mergers, acquisitions and alliances
Organizational realignment
Outsourcing and offshoring
Other
0

10

20

30

40

50

% of respondents
Source: Global Talent 2021 Study conducted by Oxford Economics and Towers Watson, 2012.
towerswatson.com

2013 Towers Watson. All rights reserved.

Demand for talent will rise strongly over next decade

Market for talent: Global
% p.a.
6
5

-0.5

-0.5

-0.8

-0.7
5.3

5.3

4
3

0.6

5.0
4.4

4.5

4.5
4.7

4.0

1.8

1.2

0
-1
-2
Global

NA &
Europe
Demand

Americas

Supply

Asia
Pacific

MEA

Talent gap

Source: Global Talent 2021 Study conducted by Oxford Economics and Towers Watson, 2012.
towerswatson.com

2013 Towers Watson. All rights reserved.

But supply to expand even

faster in emerging countries
Market for talent: Asia Pacific
% p.a.
8

-2.1

-0.8

0.0

6
4
2

7.3

5.3

5.2

4.6

4.6

4.5

0
-2
-4
Asia Pacific

India
Demand

Supply

China
Talent gap

Source: Global Talent 2021 Study conducted by Oxford Economics and Towers Watson, 2012.
towerswatson.com

2013 Towers Watson. All rights reserved.

Talent challenge greatest in developed economies

Market for talent: North America and Europe
% p.a.
3
2
2
1

0.8
0.6

1.8

0.7

0.6

0.9
2.2

1.6

1.6

1.4

1.2

0.9

0.5

0.7

0
-1
NA &
Europe

France

Demand

Germany

Supply

UK

U.S.

Talent gap

Source: Global Talent 2021 Study conducted by Oxford Economics and Towers Watson, 2012.
towerswatson.com

2013 Towers Watson. All rights reserved.

Talent friction points in ten years:

Where are your future talent needs?
UK

0.9

Norway

0.5

France

0.7

Sweden

0.5

Spain

0.2

Netherlands

0.4

Switzerland

0.5

Germany

0.6

Austria

0.4

Poland

1.2

Italy

0.8

Czech Rep

-0.8

Greece

0.7

Deficit countries
At equilibrium
Surplus countries

Russia

0.1

China

-0.0

India

-2.1

Canada

0.9

Japan

1.4

USA

0.8

South Korea

0.9

Bermuda

-0.1

Philippines

-0.2

Mexico

0.1

Turkey

0.7

Thailand

0.6

Columbia

-1.1

Morocco

-0.8

Malaysia

-0.1

Brazil

-0.1

Egypt

-0.7

Indonesia

-1.5

Peru

-0.6

Saudi Arabia

-0.2

Singapore

0.6

1.0

United
Arab Emirates

-0.2
Australia

0.5

0.1

Qatar

-0.6

South Africa

-1.0

Chile
Argentina

Source: Global Talent 2021 Study conducted by Oxford Economics and Towers Watson, 2012.
towerswatson.com

2013 Towers Watson. All rights reserved.

The Global Workforce Study 2012 helps us understand

the drivers of attraction, retention and sustainable engagement

Attraction Drivers

Retention Drivers

Sustainable
Engagement Drivers

Base pay/salary

Base pay/salary

Leadership

Job security

Career advancement
opportunities

Stress, Balance and

Workload

Career advancement
opportunities

Relationship with
manager/supervisor

Goals and Objectives

Convenient work location

Trust/confidence in
senior leadership

Supervision

Opportunities to learn
new skills

Manage/limit workrelated stress

Image

Drivers linked to Total

Rewards

towerswatson.com

2013 Towers Watson. All rights reserved.

10

The current status of the global workforce

35%
22%
17%
26%

Source: Towers Watson 2012 Global Workforce Study.

towerswatson.com

2013 Towers Watson. All rights reserved.

11

BY THE NUMBERS

The value of achieving high sustainable engagement

7.3

3x
operating margin

fewer days

High sustainable engagement

companies operating margins are
3x higher compared to those with
the lowest levels of engagement

Higher presenteeism: An average of

6.2 days lost per year for employees
with high engagement vs. 13.5 days
lost per year for the disengaged

49%
lower retention risk
Only 15% of employees with high
engagement are high retention
risks compared to
64% of disengaged employees
towerswatson.com

2013 Towers Watson. All rights reserved.

12

What does this mean for the future of

the workforce?

towerswatson.com

2013 Towers Watson. All rights reserved.

13

A need for new skills in the future

Digital Skills
70%

Digital business skills

60%
50%

Ability to work virtually

40%

Understanding of corporate IT

30%
20%

Digital design skills

10%

Ability to use social media and web 2.0

0%

Total

Americas

APAC

MEA

Europe

Agile Thinking
70%

Ability to consider and prepare for

multiple scenarios
Innovation

60%
50%
40%

Dealing with complexity and ambiguity

30%
20%
10%
0%

Total

Americas

APAC

MEA

Europe

Managing paradoxes, balancing

opposing views
Ability to see the big picture

Source: Talent 2021.

towerswatson.com

2013 Towers Watson. All rights reserved.

14

A need for new skills in the future

Interpersonal and Communication Skills
Co-creativity and brainstorming

60%
50%

Relationship building (with customers,

partners, government, etc.)

40%
30%

Teaming (including virtual teaming)

20%

Collaboration

10%
0%

TOTAL

Americas

APAC

MEA

Europe

Oral and written communication

Global Skills
60%

Ability to manage diverse employees

50%

Understanding international markets

40%
30%

Ability to work in multiple overseas

locations
Foreign language skills

20%
10%
0%

TOTAL

Americas

APAC

MEA

Europe

Cultural sensitivity

Source: Talent 2021.

towerswatson.com

2013 Towers Watson. All rights reserved.

15

Ready for Whats Next...

Shape work
Think more
Embrace the
Environment
broadly and
virtual
that
creatively
workplace and
engages,
about where
maximize
enables and talent is sourced
mobility
energizes
and flexibility
over time

Invest more
heavily
in retraining
and
reskilling
(security in
opportunity)

Engaging
environment

Re-skilling

towerswatson.com

Talent
sourcing

Virtual
workplace

Rethink and
restructure
how
certain work
is
accomplished
Rethinking
work

2013 Towers Watson. All rights reserved.

16

What does this mean for the Future

of Recruiting?

towerswatson.com

2013 Towers Watson. All rights reserved.

17

A shift from delivering services to

educating, enabling and equipping business leaders
Evidence Based Change . . . A Mindset and Approach
1

Logic-Driven
Analytics
Identify the
pivotal issues
associated
with getting
work done and
the revenue,
cost and risk
implications
Robust
analytics to
bring focus to
issues and root
cause

3
Segmentation

Strategically
categorize
workforce
segments

Understand
pivotal
segments to
advance
business
priorities

Manage
unique
segments
holistically

Integration
and Synergy
Understand
how to
leverage the
unique
capabilities of
different Bus
and other
organizations
Focus on
collaborative
production

5
Risk Leverage

Identify and
analyze risk
associated
with alternative
talent pools
Identify the
tradeoffs and
the risks worth
taking

Optimization

Prioritize
investment
where returns
are greatest

Enable the
business to
seamlessly
manage the
entire
continuum of
work

Superior business outcomes are achieved when these principles are evident
towerswatson.com

2013 Towers Watson. All rights reserved.

18

Bring the same level of rigor to

human capital planning as you do to business planning
Ensure common frameworks and mental models for analyzing issues and
defining success
Are you measuring the impact of
your talent decisions relative to
business objectives and results?
Do you measure in single
dimension or focus on the few
critical linkage points?
Do you measure success through
traditional metrics or the desired
business outcome?

Getting the numbers right is just the beginning. The magic happens when
measures and analysis are combined with the logic of knowing where to look for
the important connections and the savvy of knowing when a story is better than
a number (for example, framing a talent problem using the metaphor of a supply
chain would likely motivate managers to think about it more critically)
towerswatson.com

2013 Towers Watson. All rights reserved.

19

The evolution of segmentation:

Limited

Rank and File

vs.
Executives

Traditional

Emerging

Demographics
Performance
Job roles

Potential
Life stages
Attitudinal

Microsegmentation: Two perspectives

Organization:
Key drivers and performance expectations
Pivotal versus proficiency roles
Employee:
Preferences, values, behaviors
Lifestyles and life choices

Granularity and sophistication have greatly evolved, allowing us to

address key questions such as:

What employee behaviors does the business model require, and how
can we effectively elicit those behaviors from different segments?

Where does exceptional talent really make a difference versus where

does good enough suffice?

What behaviors do we need to change (e.g., healthier lifestyles,

increased retirement savings) to improve program effectiveness and
ROI?

towerswatson.com

2013 Towers Watson. All rights reserved.

20

Microsegmentation enables us to identify

the organization requirements for talent in various roles
Pivotal role analysis, a key element of segmentation, helps
organizations determine how talent in different roles contributes to
business value and where having great talent versus good talent can
make a difference
Example: Airline Industry
Airline Pilots

Customer
Loyalty

Having more higher

performing airline pilots
will not yield additional
business value (defined
as customer loyalty) to
the organization

Employee Performance

towerswatson.com

Flight Attendants

Customer
Loyalty

Because airlines maintain

competitive advantage by
differentiating the customer
experience, flight attendants
are a pivotal employee
segment. Higher levels of
performance yield significantly
greater customer loyalty

Employee Performance

2013 Towers Watson. All rights reserved.

21

Create integration and synergy

How to we meet our talent needs without building up cost and

infrastructure

How do we tap into a unique ecosystem that ensures an optimal

supply at the right cost

Transcend the typical organization construct to create integration and

synergy through collaborative production across:

Organizations

Functions and Business Units

towerswatson.com

2013 Towers Watson. All rights reserved.

22

Be prepared to deal with risk in a very different way

Plan for different scenarios

Whats known today

and whats is
unknown
towerswatson.com

2013 Towers Watson. All rights reserved.

23

Optimize the sources of work

How to we seamlessly move work across multiple delivery platforms

and employment relationships to optimize

Capacity and Capability

Cost

Risk (and control)

How does HR exercise governance and control across these multiple

relationships

Full time,
onsite

towerswatson.com

Full time,
virtual

JV/Partner
entity

Outsourced/
Offshored

Independent
contractor /
free agent

2013 Towers Watson. All rights reserved.

24