Accelerate Your Ambition With… One Small Step For Employees… One Giant Leap For Dimension Data… Introduction What have we really been “hearing” from our executives? Are we positioning ourselves to meet our Strategic Objectives in the long term? 1. Have great people – Are we investing enough in our people, and are we handling “talent” in the right way? 2. Build client value – Are we maximizing our potential? 3. Accelerate service growth – Are we doing enough to prepare ourselves for new opportunities? 4. Be Operationally Efficient (GSC) - Are we being operationally efficient over the long term, or just the short term, with long term repercussions? Do we really feel positively about what we do? Are we really the CEO of our own career? What Is Important To Employees, and What Makes Them Stay? Patterns Seen in Large Companies ($500 Million+ in Revenue), and Accompanying Data Data on Potential Employee Churn Deloitte published it’s biennial global study on employees working for large companies in January 2013, with the following findings: – – 80% of employees plan to stay with their employer for at least the next year, compared with only 35% in 2011 - a 45% swing. However, 46% of the surveyed employees have either moved to new jobs (9%), received a promotion (22%), or changed roles (15 %) with their current employers during the past year. Employee turnover intentions vary by industry, but according to survey results, the industry with the second highest risk of losing talent is ‘technology, media, and telecommunications’ with 23% of employees stating that they intended to leave their employer. - ‘Surveying the Talent Paradox from the Employee Perspective’; Deloitte What Makes Employees Stay or Go? Overall, 31% of surveyed employees reported they were not satisfied with their jobs. With 31% unsatisfied and only 20% planning to leave, there is an 11% delta of unsatisfied employees planning to stay. Employees who are planning to switch companies cited “Lack of Career Progress” (37%) and “Challenge in their Jobs” (27%) as the two top factors influencing their career decisions.” Of all employees surveyed, “Lack of Career Progress” (27%) would be their top reason for leaving. WHAT WOULD ENCOURAGE YOU TO LOOK FOR NEW EMPLOYMENT? FIGURE 2. MY JOB MAKES GOOD USE OF MY TALENTS AND ABILITIES Retention by Tenure Data from Deloitte’s study indicates that employee tenure is negatively correlated to turnover intentions, and that the longer employees stay with a company, the less likely they are to look for a new job: • • 85% of employees who have been with their current employers for 5< years plan to stay for the next year. Only 66% of employees who have been with their company for <2 years say that they intend to stay for the next year. Job satisfaction also was lowest during the one-to-three year range: • • • 27% of employees in their first year strongly agreed that they are satisfied 13% in the 1-2 year range said they were satisfied 18% in the two-to-three year range. That data positively correlates to data on how employees feel their skills and abilities are being used: • • • 29% of employees in their first year agree that their skills are being utilized. 13% 1-2 year range agree that their skills are being utilized. 18% 2-3 year range agree that their skills are being utilized. - ‘Surveying the Talent Paradox from the Employee Perspective’; Deloitte FIGURE 5. DO YOU EXPECT TO STAY WITH YOUR CURRENT EMPLOYER FOR THE NEXT 12 MONTHS OR LONGER? Generations, Turnover, and Trust Age itself also appears to be negatively correlated with turnover: – 26% of Millennials stated that they were planning to leave their current employers over the next year. – 21% of Generation X employees (ages 32–47) said they planned to leave. – 17% of Baby Boomers said they planned to leave. However: “While Millennials have the strongest turnover intentions, they are not the most aggressive job seekers. Generation X employees are the most active in the talent market, with 58% of those who intend to leave reporting that they are currently seeking new employment and another 22% reporting they have been looking during the past year. “ Furthermore, these results were reversed when discussing trust in leadership: – 62% of Millennials reported that they trust their corporate leaders. – Only 52% of Generation X and 54% of Baby Boomers said they trust their corporate leaders. Based on this data, the X and Y generations effectively balance out. Thus, the primary indicator remains tenure, not age. The Importance of Leadership and Coaching “To unlock a team’s abilities, a manager at any level must spend a significant amount of time on two activities: helping the team understand the company’s direction and its implications for team members, and coaching for performance. Little of either occurs on the front line today.” - ‘Unlocking the potential of frontline managers’; McKinsey & Company Leading People, Day-to-Day In one of McKinsey & Company’s recent studies on the state of frontline management, managers were asked where they were spending their time. The overwhelming response was that most managers felt that they were not effectively leading and coaching their teams, and were too mired in other tasks to do so effectively: Why Are Managers Having Difficulty? That same survey revealed a unanimous lack of approval in front line management’s performance, but Senior and Middle/Lower management proved divided on the cause: • • Nearly 70% of senior executives are only “somewhat satisfied” or “not at all satisfied” with the performance of their companies’ frontline managers. 81% of frontline managers say they are not satisfied with their own performance. - ‘How Companies Manage the Front Line Today’; McKinsey & Company The ‘War for Talent’ vs. The ‘War to Develop Talent’, and the ‘Talent Paradox’ The data displayed in the previous slide displays that Executive management primarily believes the issue is rooted the “Attitudes and Behaviors of Frontline Managers” and “Quality of Available Talent”. “The ‘Talent Paradox’ [is used] to describe talent markets with apparent shortages of skills and leaders in labor markets with available—and willing—workers that do not have the required or expected skills and experiences. That’s the employer view of the talent paradox. The employee view of the same paradox is focused on workers making do where they are, accepting less job mobility and, in some markets, less compensation. At the same time, we are seeing growing employee focus on the meaning and social impact of their work, professional development, and opportunities to attain greater levels of responsibility and challenge.” - ‘Reframing the Talent Agenda; Deloitte What is the Impact on Our Clients? We can’t rely on peer-to-peer coaching, as there are too few rewards and promotions available to most of our employees, and that inspires competition. This is supported by Cornell economist Robert Frank, who was recently quoted: “…many organizations are essentially winner-take-all markets, dominated by zero-sum competitions for rewards and promotions. When leaders implement forced-ranking systems to reward individual performance, they stack the deck against ‘giver cultures’.” - ‘Givers take all: The hidden dimension of corporate culture’, McKinsey & Company The resulting void of coaching and cooperation has profound effects: “The effects of poor frontline management may be particularly damaging at service companies, where researchers have consistently detected a causal relationship between the attitudes and behavior of customer-facing employees, on the one hand, and the customers’ perceptions of service quality, on the other.” - ‘Unlocking the potential of frontline managers’, McKinsey & Company What Is the Alternative? At best-practice companies - the 11% of companies where frontline management spends most of their time directing and managing others, emphasizing coaching, and developing their direct reports: • Frontline managers allocate 60-70% of their time [with their employees], much of it in high-quality individual coaching. • Executives are much more likely to be satisfied (39%, compared with 20% overall) with the performance of frontline managers. • Training is more likely to focus on developing leadership skills, so managers are better prepared to take on those responsibilities. • Managers are empowered to make decisions and act on opportunities. “The bottom-line benefit is significant, but to obtain it companies must fundamentally redefine what they expect from frontline managers, and redesign the work that those managers and their subordinates do.” - ‘Unlocking the potential of frontline managers’; McKinsey & Company Framingham-Specific Data: What our People Think… We surveyed three different demographics in the Framingham office with one of two different anonymous questionnaires, and compared their responses. 1) Survey One was sent to Framingham GSC employees, and non-GSC employees. 2) Survey Two was sent to managers. * We had a 77% participation rate from those in the Framingham office who were sent a survey. We feel this is a substantial enough sample size that we can draw strong conclusions from the numbers, as standard deviation should be minimal, and the impact of the residual population is likely to be on the low side of the standard error scale. Non-Management: Do you feel that Dimension Data is invested in building your career? GSC Staff Non-GSC Staff Non-Management: Do you feel that other Dimension Data offices have more advantages in terms of career growth? GSC Staff Non-GSC Staff Non-Management: If you were offered an opportunity to be coached and/or mentored by a member of Middle or Senior Management, would you participate if it required a time investment of 2-4 hours a month? GSC Staff Non-GSC Staff In our experience, a small, but growing number of companies are recognizing the importance and value of putting development and formal training at the center of their talent efforts. - An observation in ‘Reframing the Talent Agenda; Deloitte Non-Management: If Yes to the previous question, do you feel that you would feel more connected to Dimension Data, and more happy in your job? Choose no if you said no to Question 4. GSC Staff Non-GSC Staff “I have more information and understanding about where I'm going. I want to progress with the organization--and know why--and this program has helped me understand how to progress and what I'm progressing toward.” - A personal account from Helen Cousineau; ‘Mentoring Success: How to Make It Work For You; Deloitte Valuable Considerations For Data Set 1 & 2 External studies show that there are two primary and nearly equal ways to retain key employees: A. Offering promotion/job advancement opportunities B. Offering additional financial compensation Advancement opportunities can help retain talent without providing additional compensation. FIGURE 4. WHAT WOULD KEEP YOU WITH YOUR CURRENT EMPLOYER? Management: Would you be willing to commit 1-3 hours a month to coaching a subordinate on how to pursue a new role? Framingham Managers “A favorite part of my job is helping other succeed in their own jobs, Mentoring is a good way to do this. Also, taking others through situations is like giving myself advice through someone else.” - A personal account from Annette Winkelman; ‘The Mentor and the Protégé: How Mentoring Helps Them Both’; Deloitte Management: Would you only be interested if it was someone pursuing a role in your LOB? Framingham Managers They showed me how to be a good mentor, how to set up the relationships and goals, how to be an advocate. We set up regular meetings and now meet every other Friday.” - Annette Winkelman; ‘The Mentor and the Protégé: How Mentoring Helps Them Both’; Deloitte Management: Do you feel we do enough to enable our staff to be “the CEOs of their career?” Framingham Managers Valuable Considerations For Data Set 3 “The key is to help frontline managers become true leaders, with the time, the skills, and the desire to help workers understand the company’s direction and its implications for themselves, as well as to coach them individually. Such mangers should have enough time to think ahead, to uncover and solve long-term problems, and to plan for potential new demands.” - ‘Unlocking the potential of frontline managers’; McKinsey & Company Introducing… What We Propose For New Hires: Phase 1 – “Starting Blocks” (0-6 Months of Employment) • New Hire goes through “New Hire Training” / On-boarding • New Hire attends Starting Blocks Phase 2 – “Building Blocks” (6-18 Months of Employment) • Employee attends Building Blocks to improve knowledge of LOBs and their functions. • Employee goes through at least one round of PDP with their direct manager, and reviews the DD Job Framework (DDJF). • Employee goes through ratings with their manager, who will suggest any DDU trainings necessary to improve proficiency in current role. Phase 3 – “LaunchPad” (18-36 Months) • Employee completes “Knowing Yourself” and “Exploring Career Paths” on HR portal • Employees enters “Launchpad” Coaching and Mentorship Program 1. Mentors, Coaches, and Apprentices all must “Opt in”. 2. Coaches and Mentors complete “Coaching: Harvard DD11” on DDU. 3. Employees are assigned a Coach based on what role/LOB they are targeting. Coach focuses on recommending qualifications. 4. A Mentor is assigned based on compatible personality traits. Middle Management Lower Management Non-Management Senior Management Mentor Upper Management Coach Middle Management Mentor Coach Mentor Lower Management Coach Conclusion We are giving employees some tools, but not guiding them on how to use them. Our people are our greatest asset, but we are not utilizing the knowledge and experience of our own management. We need to empower them to help “pull up” those under them. This program is not designed to guarantee people promotions, but it is structured to help those who know where they want to be to get there, and to help those who lack direction to find one. Many people are not good at identifying their own strengths. We need to help them do so, and position them to meet our future needs, so that both our employees and company can develop. Furthermore, it is cost ineffective in the long-term to not help our employees grow and expand their ability to contribute to our Strategic Initiatives, and then incur the cost of replacing them when they leave the company because we have not invested in or challenged them. Our employees want this, our management is willing to help us do it, the company benefits in the short- and long-term at no cost, and avoids future losses.