Executive Insight

Released: Fortune Magazine’s Best Companies to Work For, 2013

The list of good employers on Fortune’s prestigious annual list stays consistent this year with Google retaining the top spot and just a couple of newcomers to the top 10.

Rank	Company	Job Growth	# of Employees
1	Google, Inc.	N.A.	53,546
2	SAS	5.6%	6,373
3	CHG Healthcare Services	4.7%	1,378
4	The Boston Consulting Group, Inc.	18.6%	2,314
5	Wegmans Food Markets, Inc.	8.3%	43,927
6	NetApp	7.8%	7,426
7	Hilcorp Energy Company	47.7%	1,012
8	Edward Jones	-0.9%	35,114
9	Ultimate Software	18.7%	1,440
10	Camden Property Trust	13%	1,896

See Full List

Source: CNNMoney

Education to Employment: Designing a System That Works

• Globally, seventy-five million youth are unemployed and young people are three times more likely than their parents to be out of work.
• Half of youth are not sure that their postsecondary education has improved their chances of finding a job
• Only 43 percent of employers can find enough skilled entry-level workers and estimates suggest that by 2020 there will be a global shortfall of 85 million high- and middle-skilled workers

Around the world, governments and businesses face a conundrum: high levels of youth unemployment and a shortage of job seekers with critical skills. How can a country successfully move its young people from education to employment? What are the challenges? Which interventions work? How can these be scaled up? These are the crucial questions.

A new report from McKinsey attempts to answer them. To do so, it developed two unique fact bases. The first is an analysis of more than 100 education-to-employment initiatives from 25 countries, selected on the basis of their innovation and effectiveness. The second is a survey of youth, education providers, and employers in nine countries that are diverse in geography and socioeconomic context: Brazil, Germany, India, Mexico, Morocco, Saudi Arabia, Turkey, the United Kingdom, and the United States.

The report’s findings include the following six highlights:

• Employers, education providers, and youth live in parallel universes – or to put it another way, they have fundamentally different understandings of the same situation.
• The education-to-employment journey is fraught with obstacles - not least of which are cost, work relevancy and job access.
• The education-to-employment system fails for most employers and young people – positive outcomes are the exception rather than the rule.
• Innovative and effective programs around the world have important elements in common – most particularly when education providers and employers step into each others’ worlds.
• Creating a successful education-to-employment system requires new incentives and structures – distributed information, collaborative endeavor and systems integration.
• Education-to-employment solutions need to scale up – leveraging interactive technologies and employer-valuable curricula.

McKinsey started this research recognizing the twin crises of a shortage of jobs and a shortage of skills. In the course of it, though, it realized the need to take into account another key shortage: the lack of hard data. This deficiency makes it difficult to even begin to understand which skills are required for employment, what practices are the most promising in training youth to become productive citizens and employees, and how to identify the programs that do this best.

The authors conclude, “The journey from education to employment is a complicated one, and it is natural that there will be different routes. But too many young people are getting lost along the way”.

Read the report

Source: McKinsey Center for Government

Ostrich or Eagle? The Stark Choice Facing Organizational Leaders

Peter Drucker was once asked about the accuracy of predictions.

“I don’t predict,” he responded, “I look out of the window and identify what is most visible, but not yet seen.”

In 1987 the Hudson Institute published its seminal report, Workforce 2000. Ten years later it reprised the analysis with the publication of Workforce 2020. In between several important Harvard Business Review articles covered similar ground, though taking more of a global view. By the end of the decade, McKinsey’s War for Talent was capturing considerable executive attention.

Each took a long-term view of the confluence of societal trends, demographics, education sector deficiencies, globalization, technological advances and workforce supply & demand. Each warned advanced-economy government, business, labor and education leaders that, absent the collaborative development of fresh solutions, trouble lay ahead. In parallel, business thought-leaders like Peter Senge, Meg Wheatley, Charles Handy and Gary Hamel were challenging conventional wisdom and urging that new realities required fresh thinking.

The rest is history.

Fast forward to 2012. Several substantive and insightful new reports have been published this year that center on contemporary and impending global labor market discontinuities. They all cover somewhat related ground from different vantage points and paint a picture of the present that is quite consistent with that of the earlier forecasts. Importantly, each warns leaders in both advanced - and now also in developing economies - of the considerable economic and societal consequences of failing to act to solve the challenges ahead:

• Help Wanted: The Future of Work in Advanced Economies, The McKinsey Institute, March 2012
• Better Skills, Better Jobs, Better Lives - A Strategic Approach to Skills Policies, OECD, May 2012
• The World at Work – Jobs, Pay and Skills for 3.5 Billion People, The McKinsey Institute, June 2012
• False Summit – The State of Human Capital 2012, The Conference Board and McKinsey & Company, October 2012

This 2012 body of work is serious stuff. Its antecedents were serious too, but in the end issue-avoidance and short-term-ism - regretfully – brought the future home to roost.

Here’s the rub. Unless we pay attention and do something proactively to respond to these dynamics, organizations will increasingly struggle and competitiveness will continue to erode.  Form will follow function, we know this. The pivotal question is who will be ostriches and eagles this time around?

Clearly, we have a Point of View. We hope that executives earnestly examine the strategic implications of these forces and build out strategies and capabilities to future-proof their enterprise.

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Charlesmore Partners International specializes in organizational strategy. We have a track-record of building high performance organizations and experientially-developed methodologies that help organizations get ready for the future.

More information:  +1 215.353.6472 or [email protected].

Frameworks Can Limit Our Mindset

An inspiring Tedx talk by Nilofer Merchant on inclusivity. Important insights on choices, inclusion and value creation.

As they say, never mistake the edge of the rut for the horizon.

More: NiloferMerchant.com

Video at Work

What’s it like to work at REI, the outdoor gear company and #8 in Fortune’s 2012 list of best companies to work for? Watch the video. Want a job as a systems engineer at a software company? Watch the video (and take a look at your prospective boss, hear him describe the team and talk about what is important for success).  What’s a day in the life of a Cisco employee like? Watch the video. It’s apparently pretty exotic and doubles as an almost endless product promotion platform. Tired of trying to get an employee newsletter off the ground?  Try using video. Philips News Networks educates employees on its business and company news, and uses employee “Roving Reporters” to capture and generate news stories.

Video is now ubiquitous in society, with – according to MIT’s Technology Review - smartphones outpacing any other technology in history in terms of mainstream adoption. While teenagers might one day regret those videos they post on Facebook, the ease and immediacy of use and the medium’s ability to garner attention and draw viewers in is nothing short of phenomenal.

Can companies make more use of video technologies in their organizations? Certainly. Can they piggyback on its popular appeal to engage employees more viscerally into the business? We think so.

Here’s the rub. Somewhere between 70%-80% of enterprise value in most companies now considered to be intangible - knowledge, methods, capabilities, relationships, brand. All people derived. Yet, studies abound regarding the lack of engagement that employees feel for their jobs and their companies. Clearly there are many factors that compound to create an under-engaged workforce, but companies that create workplace excitement tend to attract a better crowd and inspire them to over-perform.

Video can be one way to create a sense of excitement and engagement in a workforce, particularly if employees are involved in the design and generation. Showcase model employees. Highlight case studies of business and customer success. Bring customers to life for employees. Use video to explain and reinforce company values. Do walking tours of different company facilities. Humanize top executives by showing them less formal and relaxed modes. Give employees from different functions and locations their voice. Use videos to celebrate milestones or special events – employment anniversaries, birthdays, engagements. You can always organize a “spontaneous” flash mob to build camaraderie and get employee adrenalin pumping. Watch the video. Sure beats abseiling down a fake mountainside.

Knowledge-sharing, technique demonstrations, policy or benefit program explanations, even job descriptions can all scale and be more recipient-receptive through the use of video. The options are somewhat limitless once you let your imagination and creativity run and decide to incorporate the visual into your employee communication and engagement toolkit. Mix it up between more formal, stylized productions and user-generated and less scripted media. It can help change the tone of your employee relations.

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Edward Ferris is Managing Partner of Charlesmore Partners International, a consulting firm specializing in organizational strategy and employee engagement.

Originally posted on CommPro.biz a destination portal for public relations, marketing, advertising, investor relations, corporate communications and social media professionals by Larry Thomas, editor of the Latergy Social Media Channel.

Why America Is Losing the Race for Entrepreneurial Talent

In 2005, immigrant entrepreneurs launched 52% of all startups in Silicon Valley. Today, the number has dropped to 44%, and America is not only losing the opportunity to create new jobs but also losing its competitive edge, argues Vivek Wadhwa in his short, passionately argued book, The Immigrant Exodus: Why America Is Losing the Global Race to Capture Entrepreneurial Talent. Unlike during the 1980s, when skilled immigrants could get green cards (that let them become permanent residents of the U.S.) in as little as 18 months, today it can take as long as 17 years. Failure to fix this problem, says Wadhwa in an interview with Knowledge@Wharton, is killing American innovation and entrepreneurship.

Source: Knowledge@Wharton

Additional Reading

BusinessWeek: Why More Immigration, Not Less, Is the Key to Economic Growth

Financial Times: U.S. Immigration Policy is Killing Innovation

The Economist: People Power -- America Needs to Rethink Its Immigration Policy

The State of Human Capital

A new report by The Conference Board and McKinsey & Company concludes that human capital professionals are struggling to meet the needs of an-ever changing global business landscape. Specifically, as global markets and technology evolve, “people processes are failing to keep pace”. The authors go on to report that “while tremendous strides have been made over the past decade in areas like workplace diversity and flexibility, the human capital function has largely lagged behind in effecting organizational success. As a consequence, human capital leaders must work harder — and smarter — to cement their place as a key business partner on decisions central to the present and future success of their organizations”.

The State of Human Capital 2012 report examines four specific opportunities that HC executives must seize if they are to effectively manage the global talent pool in an unpredictable business environment. These include:

1. Look ahead: anticipate and plan for the human capital of tomorrow– From the increased presence of the highly connected millennial generation to the proliferation of the virtual office, tomorrow’s workplace will look very different from today’s.
2. Secure a steady, reliable pipeline for today’s skilled workers, and tomorrow’s leaders – The war for talent continues, spurred by relatively high growth in emerging markets and the mismatch between worker skills and jobs in most regions of the world.
3. Develop strategies to reenergize your employees about what they do, and about what the organization stands for – An engaged workforce can drive financial performance. Studies have shown that employees who are truly engaged are more likely to stay and contribute to the organization.
4. Ensure that the HR/HC function becomes more agile than the organization as a whole – Organizational agility is an essential response to the volatility of today’s business environment. An MIT study shows that agile organizations grow revenue 37 percent faster and generate 30 percent higher profits than non-agile organizations.

With many human capital departments today paralyzed in the face of seemingly monumental challenges — such as accelerating leadership development, acquiring talent, and retaining  key players  in a world of constant change across borders, cultures and challenges — the report offers a way forward.   Based on a survey of hundreds of practitioners as well as focus groups with senior leaders in human capital around the world, the report offers an overview of the current state of the human capital function, key strategies and approaches executives can implement immediately to reach the summit.

Source: The Conference Board, McKinsey & Company

Download the report

China’s 12th Five-Year Plan – Implications for Human Capital

China’s 12th Five Year Plan (FYP) emphasizes the “human factor” in economic development more than any previous FYP. As such, the plan is important from a human capital strategy and planning perspective. A special briefing paper from the Conference Board’s China Center distills out the plan’s implications for human capital practitioners and executives concerned about human capital issues in China.

Some of the many key takeaways outlined in the report are:

• Planning should assume an increasingly tight labor market as powerful demographic forces take hold.
• Job creation targets remain paramount (even despite a tightening labor market), suggesting intensifying competition for labor and talent – in part due to the service sector becoming a key focus for development and expansion.
• Plans for education reform may gradually improve graduate workforce readiness – many leading MNCs are pro-active in contributing to the readiness process.
• Planning should assume that wages and welfare entitlements for rank and file employees will increase substantially and continually, via regulatory mechanisms, throughout the 12th FYP period. (It is assumed that increases at the managerial and senior ranks will be left to market forces, and will likely be less pronounced given China’s comparatively high remuneration levels at MNCs.)

The report also summarizes and enumerates the key data points, targets, and projections in the FYP related to human capital, providing a concise and easy-to-use reference resource

Source: The Conference Board

Strengthening the Global Leadership Pipeline

By 2030 more than one-half of the world’s GDP will be generated in what are currently classified as “emerging markets.”

In a new study of its membership base, CEB (previously the Corporate Executive Board) examined the leadership challenge of this intensifying reconfiguration of the global business marketplace. It found that 60% of its member companies plan on significantly increasing their global footprint during the next three years but that a lack of globally capable leaders was likely to become a significant impediment to growth and sustaining success.

In the study CEB analyzed the business performance of more than 12,000 senior global leaders at 90 companies and discovered a striking difference between businesses with what it termed “Great Global Leaders”—those who can successfully operate across multiple and diverse geographies—and those without. It reports that Great Global Leaders are almost three times more likely than their peers to be guiding a business that is achieving its performance objectives three years in a row. “Unfortunately, Great Global Leaders are rare, as fewer than one in five senior leaders in the organizations surveyed qualify as Great Global Leaders. Without an adequate pipeline of effective global leaders, most organizations will struggle to be successful—and many will ultimately fail,” the study concludes.

We are told that “understandably” organizations are rethinking, retooling, and (in some cases) reinventing their leadership development programs to create more and better leaders. Yet the review of organizations’ strategies for strengthening their global leader pipeline shows that most approaches are “deeply flawed”. CEB report that some organizations “mistakenly” assume global leadership is the same as other forms of leadership and produce leaders who lack the special skills required for cross-market management. “Others make the opposite mistake”—assuming global leadership is an entirely unique set of skills and capabilities— “producing leaders with profiles inconsistent with the organization’s overall leadership needs.” The survey found that the best companies build Great Global Leaders by striking a balance between these two extremes—identifying, improving, and building leaders’ important core skills and capabilities while also enabling them to be more effective in complex global environments.

Key findings include:

• Many great leaders do not want global roles. CEB finds that only 35% of successful global leaders aspired to be in global roles. Global leadership roles may be unattractive to many leaders for two reasons. First, the link between most global assignments and the long-term career opportunities for leaders is frequently unclear. Second, the relocation, travel, and personal disruption costs of taking on global roles are often significant deterrents, especially for rising leaders.
• Executives should challenge the long-held assumption that to be successful, leaders need to live in the markets they manage. A review of leader performance shows that relocation is not always necessary for success.
• With global leaders likely having responsibility for individuals and teams over which they lack direct authority, the leader’s success or failure often hinges on his or her ability to work through others. A leader’s capacity to influence—being a compelling force or producing effects on the actions, behavior, and opinions of others— increases the probability that someone is a Great Global Leader by 27%.
• Being a successful global leader does not require increasing time spent working; rather, it requires working in a different way. Great Global Leaders spend more time networking with two important groups—clients and peers.

Read the report

Source: CEB

Youth Labor Market Still Critical in G20 Countries

Data presented at a G20 meeting in Geneva recently shows that youth unemployment rates remain alarming, ranging from about 8 per cent to over 50 per cent in 17 of the 20 member countries.

The G20 Task Force on Employment agreed to promote quality apprenticeships.

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The youth jobs situation remains critical, with 17.7 million young people - or just over 16 per cent - unemployed in 17 of the G20 countries for which data is available, the International Labor Organization (ILO) reported.

Over the last 12 months the youth unemployment rate has increased in 10 countries whereas the employment to working age population has declined in 12 countries, according to an ILO document presented at a G20 Task Force on Employment meeting.

Youth unemployment rates

8-11 per cent in Australia, Germany, Japan, the Republic of Korea, Mexico.

15-18 per cent in Argentina, Brazil, Canada, the Russian Federation, Turkey, the United States.

21-23 per cent in France, Indonesia, the United Kingdom.

35-52 per cent in Italy, South Africa, Spain.

The data does not include figures for China, India or Saudi Arabia.

The task group expressed commitment to promoting and strengthening apprenticeships as a proven means of transitioning soundly between learning and work.

The General Secretary of the International Trade Union Confederation (ITUC), and the Secretary-General of the International Organization of Employers (IOE), both expressed strong support for the goal of promoting apprenticeships and said they planned to lead national consultations.

The share of young women and men in apprenticeships varies greatly from country to country. Germany leads in this field, with close to half of all 16-24 year olds in apprenticeships, while other countries achieve levels of below 20 per cent, according to another ILO document presented at the meeting: Overview of Apprenticeship Systems and Issues.

The ILO’s call for action

The ILO call for action on youth employment calls on governments and the social partners:

• To foster pro-employment growth and decent job creation through macroeconomic policies, employability, labor market policies, youth entrepreneurship and rights to tackle the social consequences of the crisis, while ensuring financial and fiscal sustainability.
• To promote macroeconomic policies and fiscal incentives that support employment and stronger aggregate demand, improve access to finance and increase productive investment – taking account of different economic situations in countries.
• To adopt fiscally sustainable and targeted measures, such as countercyclical policies and demand-side interventions, public employment programs, employment guarantee schemes, labor-intensive infrastructure programs, wage and training subsidies and other specific youth employment interventions. Such programs should ensure equal treatment for young workers.

Read the press release

ILO document presented at a G20 Task Force on Employment meeting.

Overview of Apprenticeship Systems and Issues