ORC Sightlines

May 2007

R&D Organizations Focus on Talent Planning and Development

Members of ORC’s Human Resources in R&D Network (HRRD) saw a theme emerge from discussions during their spring meeting last month. Challenged to build and preserve a highly skilled workforce in the face of mass retirements, changing technologies, and aggressive business strategies that require scientists and engineers to play new and unfamiliar roles, many companies are implementing new talent management strategies or going back and reworking existing tools and processes.

The venerable practice of job description, for example, is being revisited by a number of the Fortune 500’s R&D organizations. In their latest incarnations, however, the definitions of technology jobs are often stretched to include new roles, such as business developer, new business incubator, or innovation scout, and competency models have been revised to capture the skills demanded by these roles. In fact, competency models, or “frameworks,” as we’re more often hearing them called these days, seem to have returned to a position at the center of HR systems. Several companies at the meeting described how they are mapping their revised competencies not only to staffing, performance management, and development processes, but to sophisticated strategic planning exercises.   

Much of this intense effort has been fueled by an aging workforce and the impending retirements of a large segment of technical staff in many industries. R&D managers and their HR partners are undertaking comprehensive reviews to anticipate losses of key talent, identify possible successors, and plan for the systematic transfer of knowledge to the new guard.  The need to backfill technology management positions has led to innovative accelerated development programs in several HRRD companies, usually combining action learning, mentoring, classroom training, and cross-functional assignments. In some cases, these programs target a subset of technologists carefully selected for their management potential. At least one company, however, has decided that every entry-level scientist and engineer will go through a program that stretches over several years and is designed to prepare the organization to plug the holes that retirements will tear in the ranks of both management and individual contributors.

Executives heading up HR in the R&D organizations of Fortune 500 companies compose the membership of the Human Resources in R&D Network. Highly committed to mutual support and networking, these HR leaders share best practices and learnings in meetings, conference calls, surveys and bulletin board queries, and one-on-one phone calls throughout the year. For more information, contact Michal Fineman or Ivor Mulligan at +1-212-719-3400.

Diversity = Profit: Making the Link

B&Q, the UK-based home improvement retailer, has shown that diversity management, if closely linked to business strategy, really can lead to higher profits. Last month B&Q’s Tara Brady shared some of the secrets of their success with fellow members of the Vanguard Network, ORC’s community of practice for diversity leaders in British companies.

The largest do-it-yourself retailer in Europe and the third largest worldwide, B&Q has more than 330 stores in countries as diverse as Taiwan, China, Poland, and Turkey. A few years ago, however, the company was facing a business downturn. High operating costs were eating into the chain’s profits and ability to compete. Management put together a three-year plan to turn the business around, but implementing the plan was going to require the support and all-out efforts of the entire workforce, many of whom had become disenchanted with the direction the business had taken and had lost confidence in the leadership.

In large part, B&Q’s future rested on its ability to engage the workforce. The math, in theory, was simple: engaged employees would work harder to satisfy customers; satisfied customers would return to B&Q’s stores again and again, and both sales and profits would increase. In order to reach out to employees and get their buy-in, B&Q returned to its core values, especially those labeled “Can Do” and “Respect for People.”

Management talked to employees about how those values translate into everyday interactions with suppliers, coworkers, and customers. A diversity education program based on the values demonstrated how a diverse workforce and respect for differences can enhance the B&Q brand. Efforts were renewed to recruit great employees who reflect the demographics of the stores’ customers. Managers’ ability to engage employees began to weigh heavily in decisions about their salary, bonuses, and promotions. The diversity strategy and associated actions plans were updated to reflect the renewed focus and key business sponsors were allocated for each strand.

Looking back, Brady can identify one or two things the company could have improved during the process—simplifying messages, for example, and checking back more frequently with employees to make sure communications were having the anticipated impact—but overall the strategy has paid off handsomely: costs are down, sales and profits are up, and the empirical evidence indicates that employee engagement has been a key contributor to the turnaround. Analysis of employee survey results and business metrics show that those stores with higher employee engagement scores also have higher customer satisfaction and higher sales. 

In addition to the Vanguard Network, ORC’s Global Equality, Diversity, and Inclusion practice manages the Breakthrough Network (for public employers in the UK), the Workforce Opportunity Network in the US, and the Global Diversity Forum. For more information, contact:

Managing Talent in Vietnam

Investment in Vietnam is burgeoning. In fact, the country boasts the second fastest growing economy in Asia. According to Collin Tang, HR Director for Intel Products Vietnam, the country shares many of the features of its chief competitor, China. Addressing members of ORC’s Asia MNC Expatriate Roundtable in Ho Chi Minh City last month, Tang ticked off several of the similarities: both economies are transitioning from centralized to capitalist systems, and both countries are experiencing drastic social changes resulting in definitive differences between the generations. People in the two cultures hold some common values, such as a tendency to avoid direct opposition and concern over “face,” that can come into conflict with those of their western partners

However, Tang warned that Western businesses setting up shop in Vietnam need to be aware of many critical differences between the two countries. The Vietnamese are still learning how to work with foreigners. There are fewer experienced managers in Vietnam than in China, and while there is a large supply of college graduates, the curriculum is outdated and few have practical experience. The biggest gap between talent supply and demand is in the middle manager ranks.

Winnie Lam of Navigos Group, an executive search and HR consulting firm in Vietnam, agreed. Among local candidates, she noted, language is often the biggest barrier. Employers also need to be prepared “to invest in soft skills training from day one, especially if providing services to [customers] outside of Vietnam.” The good news is that the “newer generation is highly adaptable, hungry for new skills, and [has an] excellent learning attitude.”

Lam advises several strategies for employers starting up in Vietnam:

As in China, retention is a big issue for employers in Vietnam. Tang advised Roundtable members that Vietnamese expect managers to create a warm, friendly environment and help employees solve problems. Managers who can coach employees, develop them, and manage performance issues without causing the employee to lose face will have a better chance of keeping good employees. But no matter how good the manager, it’s important to have alternate communication channels with employees. Rarely will a Vietnamese speak openly about problems or conflicts; more often managers hear about an issue through a friend of the individual involved rather than the employee herself.

Vietnam poses its own unique set of challenges for expatriate talent posted there. Air and water pollution are high, medical facilities are poor, and the climate can be punishing. Crime is on the rise and corruption is rampant. There is little in the way of entertainment or recreational opportunities. The most common complaint among trailing spouses is boredom. Senior ORC Senior Consultant Kimberly Vierra noted that ORC designates Vietnam as a hardship location, recognizing that companies may need to pay an additional premium to attract employees to assignments there. In addition, she advised Roundtable members to:

The Asia MNC Expatriate Roundtable is just one of ORC’s Networks for managers of international assignment policy and practice in multinational companies. For more information, contact any of these regional offices:

Developing Tomorrow’s HR Leaders: An ORC Resource

How to best prepare the next generation of HR leaders is a topic that has been brought up again and again in many of ORC’s Networks. Members are grappling with how to provide meaningful developmental experiences in a lean HR organization, help high potential HR managers build their personal and professional networks, and teach them to step out of their technical comfort zones into a more strategic mindset. To help our clients address these needs, ORC has started a new Network specifically for high potential HR talent.

The Future HR Leaders Network brings together HR professionals who are considered “high potential” by the HR leaders in their organizations and aspire to one day becoming senior HR officers. They must have at least eight years experience in corporate or divisional roles and hold positions as HR business partners, managers or directors of specialized functions (e.g., compensation, OD, recruiting), or other senior positions. Network meetings and conference calls will stress building strategic awareness and knowledge in areas of concern for senior HR leaders. Members also will have the opportunity to interact with the members of ORC’s Senior HR Officers’ Network.

The next meeting of the Future HR Leaders’ Network will be June 26. If you are interested in nominating a participant, please contact Susan Carter, +1-212-852-0389.

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