DoCoMo - The Japanese Wireless Telecom Leader: The Tsunami in Trouble
In May 2002, NTT DoCoMo (DoCoMo) Inc., Japan's largest mobile phone company, announced a net loss of ¥ 116.19 billion1 and a goodwill write-off of ¥ 624.6 billion for the fiscal ending March 2002. Though the company registered an increase in operating revenues from ¥ 4,669.37 billion in 2000-01 to ¥ 5167.14 billion, the revenue growth was stated to be well below its company expectations. Company sources attributed this to the general decline in Average Revenue Per User (ARPU) for voice services and slower growth in new cellular subscribers across the country (Refer Exhibit I for DoCoMo's financials and ARPU data).
DoCoMo's announcement did not come as a major surprise to industry observers, as media reports had been forecasting losses for the company since early 2002 itself. What was noteworthy about this development, however, was the fact that the company was largely believed to be performing exceptionally well in the recent past. The fact that DoCoMo had roped in as many subscribers as the leading US-based media company AOL, but much faster, was often cited as a proof of Japan finally waking up to the challenges of the 'new' economy.
Analysts claimed that DoCoMo was paying the price for its aggressive overseas expansion drive during 1999-2002, in the form of these losses. DoCoMo had to take a huge write-off in its books on account of a decline in the value of its foreign investments and the slump in the global telecommunications market in 2001. While some analysts felt that DoCoMo should revamp its global strategy, a few others said that the company should take measures to increase ARPU. In the words of Hironobu Sawake, an analyst at J P Morgan (leading global financial services firm), "The question is whether we can see a rise in profitability."
DoCoMo announced that its commitment towards globalization was intact. The company also brushed off analysts' view that the focus should be on increasing the ARPU. Instead, it announced that it would focus more on 3G (Refer Exhibit II for a note on 3G) initiatives (developing and launching more innovative and new 3G technology products). While DoCoMo was still lauded for its well designed and executed strategic and marketing game plan that had helped it build a huge subscriber base over the years, these developments had raised many doubts about its future prospects and its ability to turn itself around.
Sunday, September 26, 2010
CASE STUDY 1 - IMPLEMENTING A COMPREHENSIVE PERFORMANCE APPRAISAL SYSTEM FOR INDIA'S LEADING RETAIL CHAIN
IMPLEMENTING A COMPREHENSIVE PERFORMANCE APPRAISAL SYSTEM FOR INDIA'S LEADING RETAIL CHAIN
About the customer:
The customer is a leading retail chain in India with outlets in all the states and clients across USA, Europe and Japan. A large conglomerate with interests in various ventures, the company pioneered the concept of customer-oriented retail stores in the country. Over the years, it has successfully promoted a number of brands, products and events using innovative tactics. The company had a handful of stores for the first 5 years of its operations; today it is India’s largest retail chain with a distinct brand identity that appeals to the Indian youth.
Customer challenges:
When the customer conducted an internal Employee Satisfaction Survey, the results indicated that employees were highly dissatisfied with the performance appraisal system. The appraisal and goal sheets were manual, resulting in a huge drain on employee resources in terms of time and effort. Additionally, there was no system to post employee KRAs (Key Result Areas). Employees wanted the company to maintain rosters of employee KRAs, with a flexible KRA setting process that allowed for detailed mid-year review and interactions between HR, employees and the respective managers. Thirdly, due to the manual nature of the appraisal process, the company found it difficult to generate MIS reports. Finally, there was a strong need for an online central repository of employee data.
Employee dissatisfaction with these elements was strong and was reflected in rising attrition rate, decreasing employee morale and loss of faith in the company’s systems and its ability to manage them.
In consideration of these factors, the customer was looking to implement a complete solution for performance management that could be customized as per its needs and mapped to existing processes. This system would have to be implemented within a short time frame.
Saigun solution:
The customer evaluated a couple of products (SAP HR being one of them) before choosing Saigun’s EmpXTrack for its comprehensive and flexible features that were available at a reasonable cost. EmpXtrack was faster to implement and offered a user-friendly, web-based interface that could be accessed anytime, anywhere. It had ready-to-use and yet, customizable, templates in every module. The product offered a wide variety of options, being available in five different editions, with each edition offering a different set of HR modules. Each edition, in turn, comprised different options based on the number of features available. This variety made EmpXtrack easily configurable and customizable for the customer’s needs. Finally, it was cost-effective, offering a flexible pricing model and low front-end cost.
The customer chose to implement two modules of EmpXtrack that fit its requirements: the Goal Setting System and the Appraisal System. The solution was required for 500 users and was to be implemented within one and a half months. To meet the stringent implementation deadline, all the stakeholders from Saigun worked in parallel with each other, effectively handling both the qualitative and quantitative aspects.
Both modules were deployed smoothly though there were challenges in collecting the customer’s data. This was resolved through constant communication with the stakeholder at the customer site, with Saigun team working relentlessly to collect the customer data till all the requisite information was collected in the format that it was needed in.
Results:
This engagement was completed within the expected timelines. With the automation of HR processes, the organization and functioning of HR systems have become smoother and timeline-driven, resulting in a huge saving on time, efforts and resources. The solution allows the company to generate any kind of MIS report demanded by the management, and this ready availability of data has had a positive impact on non-HR processes as well. Most importantly, with the Goal and Appraisal Sheet being readily available to all employees and managers, employee satisfaction has increased and employees’ faith restored in the company’s capability to meet their expectations. The HR team in charge of the project on the customer side has won kudos for completing this engagement within such a short timeframe.
Saigun’s product and flawless implementation has resulted in complete customer satisfaction, with the customer opting for three more modules from EmpXtrack – HRIS (Human Resources Information Systems), Employee Self Services and Payroll. This will be a bigger engagement covering 6000 employees.
“The Saigun team worked within a tight schedule to meet our appraisal cycle requirements. EmpXtrack is easy to use and offered some comprehensive features that were customized to meet our specific requirements. We found the Saigun team very proactive and quick to help during a crucial implementation phase where they provided us with 24/7 support.” – HR Manager
SOURCE - WWW.EMPXTRACK.COM
About the customer:
The customer is a leading retail chain in India with outlets in all the states and clients across USA, Europe and Japan. A large conglomerate with interests in various ventures, the company pioneered the concept of customer-oriented retail stores in the country. Over the years, it has successfully promoted a number of brands, products and events using innovative tactics. The company had a handful of stores for the first 5 years of its operations; today it is India’s largest retail chain with a distinct brand identity that appeals to the Indian youth.
Customer challenges:
When the customer conducted an internal Employee Satisfaction Survey, the results indicated that employees were highly dissatisfied with the performance appraisal system. The appraisal and goal sheets were manual, resulting in a huge drain on employee resources in terms of time and effort. Additionally, there was no system to post employee KRAs (Key Result Areas). Employees wanted the company to maintain rosters of employee KRAs, with a flexible KRA setting process that allowed for detailed mid-year review and interactions between HR, employees and the respective managers. Thirdly, due to the manual nature of the appraisal process, the company found it difficult to generate MIS reports. Finally, there was a strong need for an online central repository of employee data.
Employee dissatisfaction with these elements was strong and was reflected in rising attrition rate, decreasing employee morale and loss of faith in the company’s systems and its ability to manage them.
In consideration of these factors, the customer was looking to implement a complete solution for performance management that could be customized as per its needs and mapped to existing processes. This system would have to be implemented within a short time frame.
Saigun solution:
The customer evaluated a couple of products (SAP HR being one of them) before choosing Saigun’s EmpXTrack for its comprehensive and flexible features that were available at a reasonable cost. EmpXtrack was faster to implement and offered a user-friendly, web-based interface that could be accessed anytime, anywhere. It had ready-to-use and yet, customizable, templates in every module. The product offered a wide variety of options, being available in five different editions, with each edition offering a different set of HR modules. Each edition, in turn, comprised different options based on the number of features available. This variety made EmpXtrack easily configurable and customizable for the customer’s needs. Finally, it was cost-effective, offering a flexible pricing model and low front-end cost.
The customer chose to implement two modules of EmpXtrack that fit its requirements: the Goal Setting System and the Appraisal System. The solution was required for 500 users and was to be implemented within one and a half months. To meet the stringent implementation deadline, all the stakeholders from Saigun worked in parallel with each other, effectively handling both the qualitative and quantitative aspects.
Both modules were deployed smoothly though there were challenges in collecting the customer’s data. This was resolved through constant communication with the stakeholder at the customer site, with Saigun team working relentlessly to collect the customer data till all the requisite information was collected in the format that it was needed in.
Results:
This engagement was completed within the expected timelines. With the automation of HR processes, the organization and functioning of HR systems have become smoother and timeline-driven, resulting in a huge saving on time, efforts and resources. The solution allows the company to generate any kind of MIS report demanded by the management, and this ready availability of data has had a positive impact on non-HR processes as well. Most importantly, with the Goal and Appraisal Sheet being readily available to all employees and managers, employee satisfaction has increased and employees’ faith restored in the company’s capability to meet their expectations. The HR team in charge of the project on the customer side has won kudos for completing this engagement within such a short timeframe.
Saigun’s product and flawless implementation has resulted in complete customer satisfaction, with the customer opting for three more modules from EmpXtrack – HRIS (Human Resources Information Systems), Employee Self Services and Payroll. This will be a bigger engagement covering 6000 employees.
“The Saigun team worked within a tight schedule to meet our appraisal cycle requirements. EmpXtrack is easy to use and offered some comprehensive features that were customized to meet our specific requirements. We found the Saigun team very proactive and quick to help during a crucial implementation phase where they provided us with 24/7 support.” – HR Manager
SOURCE - WWW.EMPXTRACK.COM
ARTICLE 22 - A STORY ABOUT PEAK PERFORMANCE
A story about peak performance
Very insightful story on a number of levels related to HR and Performance Management,
A Japanese company (Toyota) and an American company (General Motors) decided to have a canoe race on the Missouri River. Both teams practiced long and hard to reach their peak performance before the race. On the big day, the Japanese won by a mile.
The Americans, very discouraged and depressed, decided to investigate the reason for the crushing defeat. A management team composed of senior management was formed to investigate and recommend appropriate action. Their conclusion: The Japanese had 8 people rowing and 1 person steering, while the American team had 8 people steering and 1 person rowing.
Feeling a deeper study was in order, American management hired a consulting company and paid them a large amount of money for a second opinion. They advised, of course, that too many people were steering the boat, while not enough people were rowing.
Not sure of how to utilize that information, but wanting to prevent another loss to the Japanese, the rowing team’s management structure was totally reorganized to 4 steering supervisors, 3 area steering superintendents and 1 assistant superintendent steering manager.
They also implemented a new performance system that would give the 1 person rowing the boat greater incentive to work harder. It was called the ‘Rowing Team Quality First Program,’ with meetings, dinners and free pens for the rower. The new change initiative also included plans for getting new paddles, canoes and other equipment, plus extra vacation days for practices and bonuses.
The next year the Japanese won by two miles.
Humiliated, the American management laid off the rower for poor performance, halted development of a new canoe, sold the paddles, and canceled all capital investments for new equipment. The money saved was distributed to the senior executives as bonuses and the next year’s racing team was outsourced to India.
Sadly, The End.
Sad, but oh so true! Here’s something else to think about: Ford has spent the last thirty years moving all its factories out of the US, claiming they can’t make money paying American wages. Toyota has spent the last thirty years building more than a
dozen plants inside the US. The last quarter’s results: Toyota makes 4 billion in profits while Ford racked up 9 billion in losses. Ford executives are still scratching their heads.
Very insightful story on a number of levels related to HR and Performance Management,
A Japanese company (Toyota) and an American company (General Motors) decided to have a canoe race on the Missouri River. Both teams practiced long and hard to reach their peak performance before the race. On the big day, the Japanese won by a mile.
The Americans, very discouraged and depressed, decided to investigate the reason for the crushing defeat. A management team composed of senior management was formed to investigate and recommend appropriate action. Their conclusion: The Japanese had 8 people rowing and 1 person steering, while the American team had 8 people steering and 1 person rowing.
Feeling a deeper study was in order, American management hired a consulting company and paid them a large amount of money for a second opinion. They advised, of course, that too many people were steering the boat, while not enough people were rowing.
Not sure of how to utilize that information, but wanting to prevent another loss to the Japanese, the rowing team’s management structure was totally reorganized to 4 steering supervisors, 3 area steering superintendents and 1 assistant superintendent steering manager.
They also implemented a new performance system that would give the 1 person rowing the boat greater incentive to work harder. It was called the ‘Rowing Team Quality First Program,’ with meetings, dinners and free pens for the rower. The new change initiative also included plans for getting new paddles, canoes and other equipment, plus extra vacation days for practices and bonuses.
The next year the Japanese won by two miles.
Humiliated, the American management laid off the rower for poor performance, halted development of a new canoe, sold the paddles, and canceled all capital investments for new equipment. The money saved was distributed to the senior executives as bonuses and the next year’s racing team was outsourced to India.
Sadly, The End.
Sad, but oh so true! Here’s something else to think about: Ford has spent the last thirty years moving all its factories out of the US, claiming they can’t make money paying American wages. Toyota has spent the last thirty years building more than a
dozen plants inside the US. The last quarter’s results: Toyota makes 4 billion in profits while Ford racked up 9 billion in losses. Ford executives are still scratching their heads.
Thursday, September 23, 2010
ARTICLE 21 - 25 TRENDS THAT WILL CHANGE THE WAY YOU DO BUSINESS
25 Trends That Will Change the Way You Do Business
From e-mail to health care, and from artificial intelligence to the end of HR as we know it, here are forecasts of how different the world of workforce management will be 10 years from now.
workforce-management decisions aren’t made with crystal balls. What they do demand is a clear sense of the landscape on the far horizon. As a human resources executive, you probably know what health care will cost your company next year.
But you’re far less certain whether or not legions of workers will be full-time telecommuters five years from now, or if defined benefits will even exist in 2013. Fortunately, there are forward-thinkers and trend-spotters out there who make it their business to suss out the future for us.
Our visionaries don’t always agree with each other, as you’ll see. Still, their predictions of what factors will alter the world of workforce management are provocative, and may serve to inform and intrigue all of us who manage people.
1 E-Mail
It has taken less than a decade for electronic mail to emerge as the heart and soul of corporate communication. Yet while e-mail has made it faster and easier for people to swap words and data, it also has unleashed inbox overload and a seemingly endless stream of spam. Future e-mail systems will attempt to remedy today’s problems--but also add new capabilities.
One possibility is that senders will have to match a predetermined list--either by name, company, or IP (Internet provider) address--or find themselves blocked. In addition, better anti-spam programs will help sift out the junk.
Powerful information-management and collaboration tools are also likely to emerge. They will link associated messages and track message streams more efficiently. Internet pioneer Vinton Cerf predicts that automatic language translation will take hold. Finally, unified messaging will allow workers to check e-mail, voice mail, mobile messaging, and fax machine from a single inbox.
2 Organized Labor
Despite declining membership and overwhelming odds, labor unions aren’t in danger of dying any time soon. They do, however, face the future with these grim facts: Membership dropped from 20.1 percent of the labor force in 1983 to 13.2 percent in 2002. The decline in U.S. manufacturing cost union members 1.5 million jobs in the 1990s. The Bush administration has eliminated collective bargaining rights for large numbers of federal employees.
Still, more than 500,000 workers formed new unions last year. Union members make on average $150 a week more than non-union workers. Pharmacists and physicians, faced with alarming shifts in the medical marketplace, will join unions in growing numbers in the coming years.
But to retain their power, unions must reverse the shrinkage, experts say. "Unions have been doing a better job than ever," says Kate Bronfenbrenner, director of Labor Education Research at Cornell University. "It’s just that the bar is a lot higher."
3 Business Goes to Kindergarten
All signs indicate that corporate involvement in public schools--already redefining kindergarten-through-high-school education--will continue to increase over the next decade. Alarmed by under performing public schools and students poorly equipped for the job market, business is getting directly involved. Corporate sponsors are popping up on campuses from Washington, D.C., to Stockton, California, as a new generation of students prepares for college, and for jobs such as auto mechanics, Internet specialists, and hotel workers. School-to-business field trips start in kindergarten. Internships, meetings with top executives in office settings, and even paychecks are available for older students.
"We’re saying, ‘See, there is a reason to go to school,’" says Knute Momberg, director of Stockton’s Weber Institute of Applied Sciences and Technology. The school has more computers than students, and GM provided the new cars that teens take apart in squeaky-clean service bays.
4 Going Euro
In Europe, snooping at employees’ e-mail isn’t only considered bad form. It’s often flat-out illegal. And as American companies increasingly enjoy their reputations as global trendsetters in business practices, they may have to reverse some key employee policies, says Andy Boling, a partner and employment-law expert in the Chicago-based law firm Baker & McKenzie.
One obvious area is workplace privacy, where U.S. companies may be compelled to reduce their monitoring of e-mail and Internet use. "Multinationals are finding that it’s too cumbersome to have one set of privacy policies for Europe, another for Hong Kong and Australia, and a third standard for the United States," he says. With U.S.-based employees communicating increasingly via e-mail with their European counterparts, Americans also will begin to covet their liberal vacation policies and parental-leave benefits. "These things may not be implemented here to the extent of the privacy regulations," Boling says, "but American workers and organized labor may increasingly look to Europe as the standard."
5 Companies Won't Sleep
In a quest to reach new customers in foreign time zones and to speed up production and services, more and more companies in the future will be open for business around the clock, seven days a week. Already about 24 million Americans work in the 24/7 culture, according to Circadian Technologies, a Massachusetts-based consulting firm. While the 24/7 worker used to be an assembly-line worker, today he or she may well be a college-educated computer-tech-support specialist working nights in San Francisco, providing Japanese-language advice to a customer who calls from Tokyo during his lunch hour.
The migration to a 24/7 workplace will make human resources managers’ jobs far more complex, says David Mitchell, Circadian’s director of publications. "You may have to offer nighttime child-care providers, who watch kids while they sleep," he says. "And you may have to be much more creative in terms of scheduling--for example, if you’re running a call center for a retailer, you may have to have more staff on hand right after the 2:30 a.m. infomercial." Employers also will have a trickier time dealing with disability claims, since some mental health conditions may be exacerbated by a shift to nighttime work.
6 Artificial Intelligence
Making computers think more like people is an idea that persists. In the workplace, software already predicts customer behavior and machine failures on the factory floor. These capabilities will continue to evolve. As the Web and data warehouses grow, artificial intelligence will solve problems that are beyond the reach of the human brain.
AI’s strength is that it can uncover patterns and spot problems amid a mountain of data. That might translate into detecting financial fraud by examining billions of transactions, says Pepperdine University business professor Owen P. Hall Jr. Meanwhile, agents and bots--tiny pieces of software--will use real-time data to make decisions about how to maximize the efficiency of trucking fleets, machinery, and network resources.
"AI will bring advances but also usher in ethical concerns," Hall says.
7 The Simmering Malaise
For several years, employees have had a very tough time. They’ve lived with the fear of downsizing. They’ve watched benefits and retirement savings shrink. And they’ve been forced to work harder and longer, with fewer opportunities for promotions or raises. Even when the economy eventually recovers, experts say, pervasive dissatisfaction and anger aren’t likely to evaporate.
Only 25 percent of workers feel a strong attachment to their employers, and 4 in 10 feel trapped in their jobs, according to Walker Information, an Indianapolis-based research firm. Walker vice president Marc Drizin says employee loyalty was on the decline even before the economy stalled, and that pattern is likely to continue. "I think most organizations still don’t understand why you need to be good to your workers," he says. Employers who ignore workplace discontent run the risk of periodic productivity slumps as skilled staffers depart for higher-paying positions whenever the labor market surges. Smart companies that make employees feel valued will gain a crucial competitive edge.
8 Office Design
In the coming years, most cubicle-dwelling employees probably won’t have a room--or a door--of their own. There is an office movement toward more shared work space coupled with private desk areas, especially in creative industries, says Gervais Tompkin, a lead designer with the San Francisco-based Workplace Practices Group at Gensler Architecture, Design and Planning Worldwide.
What’s more, workforce managers will play a key role in office design, serving as a critical link between the personal and professional needs of workers and the vision of architects, he says. "When we analyze what makes our best designs successful and keeps those clients coming back to us, it is the active involvement of human resources managers early on in the process," Tompkin says.
He isn’t prepared to predict the demise of doorless cubicle kingdoms, but says that he is seeing changes. "I personally could never operate with a closed door because people need to interrupt me at will since our work is so collaborative. Lawyers, on the other hand, will always need a way to shut out the world because their work is by nature mostly one-on-one."
9 Defined Benefit Plans
Attracting the best and brightest employees in the future will become nearly impossible without a defined benefit plan. Stewart Lawrence, a senior vice president of The Segal Company in New York, predicts that companies without retirement plans that provide guaranteed benefits will be passed over for employers that do. "Employees now understand the volatility of defined contribution plans and are looking for a balanced program with both the upside potential of a defined contribution plan and the mitigation of downside risk of a defined benefit plan," he says.
Major employers such as Microsoft, Wal-Mart, and Cisco Systems currently don’t offer defined benefit plans because they have been able in recent years to recruit effectively without them. This will no longer be true. As the workforce ages and labor shortages increase, Lawrence says, companies will have to offer retirement plans that provide a floor level of retirement income.
10 Telework Has a Part-Time Future
By the year 2010, more than half of American wage earners will spend more than two days a week working outside the office, reports the Sulzer Infrastructure Services firm in London. Today, 28 million people "telework" under formal company policies--a leap from 4 million in 1990--and millions more work informally out of the office one or more days a week. As inexpensive broadband Internet access and mobile technologies take hold, the number will increase, says Toni Kistner, managing editor of Net.Worker, a division of Network World magazine. "The technology has steamrolled ahead, making it cheaper and easier to work from anywhere."
It will be rare even 10 years from now, however, to find people in any profession who telework five days a week. When teleworking took off in the 1990s, people talked about how the workforce would be dispersed and offices would shut down. That hasn’t happened, Kistner says. As the economy improves, companies may reduce their real estate, encouraging employees to share offices. That will create open work spaces that accommodate a flexible part-time telework environment. But there will always be a central location where people come to work, she says. "Some people need to come to the office to stay connected."
In professional jobs, teleworking is already common. With technological upgrades and guidance, the trend soon will take hold in fields such as nursing and call-center management. New kinds of work that combine technology and service also will be more feasible as technology improves, says Sirkka Heinonen, senior research scientist at VTT Communities, the biggest technological research center of the Finnish government. As the number of senior citizens in the industrial world rises, for example, many will want to live at home as long as they can. "Some kind of telework service providers to monitor these people at home will likely grow up around this need," she predicts. "These won’t be traditional nurses, who are always on-site, but they will be telepresent and will probably visit [patients] physically from time to time."
11 Consumer-Driven Health Care Reigns
Despite exploratory moves toward consumer-driven health care, most American companies aren’t exactly blasting into this new benefit area--not quite yet. Ten years from now, however, the notion of health-care dollars that employees can spend as they see fit will be routine, say benefits experts.
Consumer-driven plans take many forms. All are designed to make employees more aware of, and responsible for, the cost consequences of their health-care choices. Roger Vaughn, president of Aon Consulting U.S., says that employees will benefit from the hard bargains that employers drive with health-care providers, so they won’t have to bear the expense of buying health care on the open market. And thanks to the Internet and a push for greater openness about corporate finances, employees will be able to see exactly what health care will cost them, and they’ll also be able to make comparisons to other plans, Vaughn says.
The other critical pieces for the success of consumer-driven programs are "education, advocacy, and assistance," says Richard A. Travers, CEO of Travers, O’keefe, a New York-based benefits consulting and brokerage firm. Those elements aren’t entirely present yet, but five years from now they will be, and "we’ll be well on our way," he says.
12 Child Care
Child care is and will continue to be a major, often heartrending subject for working parents. As the national workforce ages and the number of women of childbearing age levels off in the next five years, the demand for child care may lessen. But access to quality child care will continue to be a major issue for working moms and their employers.
Susan Seitel, president of Work & Family Connection, Inc., a Minnesota-based consulting firm, says one of the major problems for working parents is what to do when the babysitter is sick or doesn’t show up, or the regular preschool is closed for a holiday or vacation break. She expects that an increasing number of companies will offer backup-care arrangements that employees can use in the event of emergencies. "Employees often are willing to pay a fee for the care, so all the company may have to provide is the space," Seitel says. A related trend may be the rise of contractors that provide innovative activities for company-sponsored day care, such as theater classes for kids, she says.
13 Help Wanted: Ten Million Workers
The convergence of several trends--declining births, retiring baby boomers, and expected business growth--will create more jobs than there will be workers to fill them by 2010, experts predict. The math is relatively simple. The civilian labor force will increase by 17 million, reaching 158 million in 2010, reports the Bureau of Labor Statistics. But by then, the BLS says, the number of jobs will reach 168 million.
Roger Herman, a futurist specializing in workplace issues, says pressure on baby boomers wanting to retire will be so great that they will be pulled back into the labor market. Even so, he says, older workers won’t show up in large enough numbers to fill the millions of jobs available. Herman says the problem will be aggravated by the shortage of skilled, educated workers already occurring in manufacturing, health care, and various technical fields.
14 Outsourcing
Outsourcing is to in-house human resources what Pac-Man is to dots. Double-digit growth is expected in the multibillion-dollar outsourcing market, dramatically gobbling up traditional human resources tasks and significantly altering people management. Companies spent $61.2 billion worldwide in 2002 on human resources management outsourcing, an amount expected to jump 11 percent annually, to $103.3 billion by 2007.
Growing even faster will be in the one-stop shopping market, where companies bundle different human resources management services into one large contract rather than serving it up piecemeal. Industry analyst Marc Pramuk of IDC in Framingham, Massachusetts, says U.S. companies packaging end-to-end services did $6 billion of business in 2002. That business will more than double in five years, to $15.4 billion, a 21 percent annual growth rate, he says.
Newer companies like Exult, a late-1990s start-up that is enjoying phenomenal growth, will battle it out for this business with older, established companies like Fidelity Investments, which has gone beyond its mutual fund and 401(k) business into human resources administration. A sample of things to come: Part of a broad deal with IBM called for the transfer of 700 IBM human resources employees into a Fidelity employer-services company.
15 Recruiting Older Workers
With the graying of the workforce, American business is going to have to pay attention to what older workers want and how to recruit them, says Deborah Russell, manager of Economic Security and Work at the American Association of Retired Persons. "Terms such as ‘fast-paced,’ ‘high-energy,’ ‘young,’ and ‘vital’ are often signals to older workers that they need not apply," she says. AARP encourages companies to use terminology that better reflects age diversity such as "experienced workers" and "age-diverse."
A recent AARP-sponsored study, using a nationally representative sample of 1,500 workers age 45 to 74, shows that 69 percent plan to work in some capacity during their retirement years. They work not only for money but also for intangible benefits such as enjoyment and a sense of purpose. Poll participants focused on "soft benefits" such as adequate time off and flexible schedules as well as "hard benefits," including health-care benefits and insurance and good pension benefits as "absolutely essential parts of their ideal jobs."
16 Mergers
Mergers and acquisitions are like courtships and marriages, says Ira Wolfe, a Leola, Pennsylvania, workforce consultant. Like human couples, companies "fall in love, and then later decide they can’t live with the other."
In the coming years, people management will play a far more pivotal role in corporate mergers. Wolfe estimates that company purchases conducted for the purpose of buying another company’s people could represent as many as half of all acquisitions. Now, he estimates, only about 15 to 20 percent of acquisitions are completed because one organization wants another company’s workforce.
One of the principal reasons why mergers and acquisitions have failed in the past is that workforce management isn’t brought into negotiations until the deal is consummated. No one studies the compatibility of the two cultures. Worse yet, the buyer often tries to change its partner, rather than adopting the ways of working that made the acquiree attractive in the first place.
17 Freelancers and Consultants
Today, some 30 million Americans are self-employed, and with companies increasingly enamored of outsourcing as a way to control costs and increase flexibility, the use of freelance contractors and consultants is likely to grow. Dan Pink, author of the 2001 book Free Agent Nation, predicts that corporate workplaces will evolve into a continually shifting mix of employees and freelancers, "to the point where it will become difficult to distinguish one from the other."
That may lead to profound changes. Company health plans may begin to disappear, as workers on the move opt for their own portable health coverage, possibly subsidized by an employer. "Companies may not be hiring people for jobs," Pink says. "Instead, they may be saying, ‘We definitely want this person around for 10 years to accomplish these particular tasks, and after that, we’ll see.’" The concepts of retention and career development, he says, may be supplanted by an emphasis on maintaining long-term connections to workers who manage their own rise, moving in and out of corporate positions with increased freedom.
18 Pay for Wellness Performance
Instead of waiting to pay for the treatment of sick employees, some employers will soon turn to the concept of wellness management--with a twist. They’ll give employees a concrete financial incentive to participate, says Tom Lerche, senior vice president of Aon Consulting.
The process, which is handled through an outside organization to preserve privacy and HIPAA compliance, begins by having employees and their covered spouses take a voluntary health-risk appraisal each year. These questionnaires identify factors that lead to such chronic diseases as asthma, heart disease, and diabetes, which can account for 20 to 35 percent of a company’s medical expenses, Lerche says. If the appraisal identifies two or more risk factors that point to a potential health problem, the employee or spouse is a candidate for health coaching with a nurse, health educator, dietitian, or exercise physiologist. The coach sets up a plan for the health risk and keeps track of the employee’s progress via weekly phone calls. The incentive for the employee is a reduction in insurance premium payments--$55 instead of $75 per month, for instance, Lerche says. And if the employee stops participating, the insurance discount can be suspended until he gets back on track.
"Too much of what we do is a short-term approach," he says. "Fifty percent of disease is ultimately preventable," and this approach can head off many major health problems.
"It’s for the employer that has low turnover, wants to invest in employees, and wants to see to it that they’re productive and in good health" in the working years ahead, Lerche says.
19 Spirituality at Work
Americans eat too much. They spend too much money. They are obese and in debt and worried about personal safety and job security--especially since 9/11 and the economic downturn, says Harriet Hankin, president of CGI Consulting in Malvern, Pennsylvania. And those are some of the reasons they’re increasingly looking for spiritual comfort, she says. "The biggest change in the workplace is the interest in spirituality. It’s about doing the right thing. It’s not about religion. It’s about job satisfaction. Jobs in the future will have to be more meaningful. Pay won’t be as important as a good job."
Referring to the rising number of books on spirituality and business and in subjects such as work/life balance, Jeffrey Pfeffer, professor of organizational behavior at the Graduate School of Business at Stanford University, says he’d agree that spirituality in the workplace is a noteworthy trend. Workers are looking for meaning and purpose, he says. "The word ‘spirit’ comes from the word ‘to breathe.’"
20 Women at Work
With steeply mounting numbers of educated women, glass ceilings are going to shatter in the coming years, says John A. Challenger, CEO of international outplacement firm Challenger, Gray & Christmas, Inc. Between 1979 and 1999, the number of women earning four-year college degrees jumped 44 percent, from 444,000 to 640,000, he says. At the same time, the number of men receiving four-year degrees is declining--from 532,000 in 1993 to about half a million in 1999.
As women earn more college degrees and ascend more corporate ladders, Challenger says, they "will make further inroads into management and exec ranks, and the workforce will have to create an environment where a balance between work and home life is more valued. Temporary and part-time work and job sharing will be more common." There also will be more re-entry opportunities for women who leave the workplace for a few years and then return.
At the same time, more men will be moving into "women’s jobs" like nursing and teaching, Challenger adds. The result won’t be that women are crowded out of the job market. "The major change will be this: The line between men’s and women’s work will blur and fade."
21 Skills Shortage
A job-skills shortage is already reality in the manufacturing industry, and is likely to spread to other industries over the next 10 to 15 years as baby boomers retire. Despite a recession that cost 2 million manufacturing jobs, a recent study by the National Association of Manufacturers warns that "manufacturing could experience a shift from merely having a talent shortage to facing a serious labor crisis."
That’s just manufacturing. Warnings also are forecast about the need for savvy, well-trained workers in job categories such as information technology and the global-energy and electrical-utility industries. Shortages are expected in the global competition for managers, engineers, technicians, skilled craftspeople, and front-line workers, mostly jobs requiring a college degree or technical education. Experts say changes must come on a broad front, from better technology and skills training in secondary schools to aggressive recruitment to a coordinated national workforce policy.
22 Security vs Privacy
As technology becomes more sophisticated, the ability of those who administer company--and government--computer networks to monitor the comings and goings of workers will grow exponentially. While privacy experts shudder, cameras, keystroke logging, biometric devices, and network monitoring are becoming de rigueur within many organizations.
In the future, the cat-and-mouse war between businesses and crooks will lead to more sophisticated surveillance, the standard use of data encryption, and sophisticated data-mining techniques that spot potential problems and risks by analyzing patterns. "Increasingly, companies are realizing that security is not an option, it’s a basic requirement," says Alan Brill, senior managing director at security consulting firm Kroll Inc., New York.
Not surprisingly, the threat of terrorism is raising the stakes. For example, the U.S. government’s Terrorist Information Awareness program proposes to sift through vast quantities of business and government data to detect suspicious activity. "The dangers are greater than ever," Brill says. "It’s clear we’re living in a new era."
23 Accounting for People
Let’s say you took up the hobby of collecting every annual report from public companies over the last 40 years. You’d be shocked at how little you’d learn about what organizations often say are their "most important assets"--their people.
A few--like the Atlanta Braves, EDS, and Deutsche Bank--have gone out of their way to tell people what their workforces are worth or how much value their training will bring in the long run. In the years to come, however, human resources executives will start to see many more statistics on turnover, absenteeism, and revenue per employee in corporate publications.
"What’s the basis for competition in the 21st century?" asks Thomas P. Flannery, the director of Ernst & Young’s human capital practice. "It’s your ability to think through complex problems, serve the customers better, and be more creative." All these qualities come down to the capabilities of human beings, he says. Wall Street analysts will want to see what corporations know about the people who are winning patents for the company and closing big deals. And when companies show what people are worth, it also reminds shareholders how vulnerable those "important assets" are. Machines stay put, but as Flannery says, "People can walk at any time."
24 Universal Health Care
As costs soar and the number of uninsured Americans--both employed and unemployed--rapidly expands, there are about as many predictions about where health care is headed as Carter’s little pills. Employers are paying an increasingly large share of the cost--and so are employees. And almost everyone acknowledges that some dramatic change in health care is likely, perhaps even inevitable, in the next decade.
The country is indeed moving toward some form of universal health care system, says Jeffrey Pfeffer, professor of organizational behavior in the Graduate School of Business at Stanford University. He points out that the United States is the only industrialized country where access to health care is dependent on employment. Says Pfeffer, "In other countries, access to health care is a fundamental human right."
25 The End of HR As We Know It
Conventional wisdom says that human resources finally has achieved its sought-after seat at the table. But the ability of human resources to add value at a strategic level "is currently more promise than reality." That’s the sobering finding of Creating a Strategic Human Resources Organization (Stanford Business Books, 2003), a long-term study of human resources by Edward E. Lawler III and Susan Albers Mohrman.
The authors found that today’s people managers still are most comfortable with traditional human resources activities. "If they want to be effective business partners, they need to change their skill set," Lawler and Mohrman say. Almost 30 percent of the companies in the study promote human resources executives who come from the business side, not human resources.
"In essence, some companies may have decided that the HR strategic-partner role is too important to leave to someone with an HR background." The study’s conclusion: Human resources must reinvent itself. "The old approaches and models simply are not good enough."
From e-mail to health care, and from artificial intelligence to the end of HR as we know it, here are forecasts of how different the world of workforce management will be 10 years from now.
workforce-management decisions aren’t made with crystal balls. What they do demand is a clear sense of the landscape on the far horizon. As a human resources executive, you probably know what health care will cost your company next year.
But you’re far less certain whether or not legions of workers will be full-time telecommuters five years from now, or if defined benefits will even exist in 2013. Fortunately, there are forward-thinkers and trend-spotters out there who make it their business to suss out the future for us.
Our visionaries don’t always agree with each other, as you’ll see. Still, their predictions of what factors will alter the world of workforce management are provocative, and may serve to inform and intrigue all of us who manage people.
1 E-Mail
It has taken less than a decade for electronic mail to emerge as the heart and soul of corporate communication. Yet while e-mail has made it faster and easier for people to swap words and data, it also has unleashed inbox overload and a seemingly endless stream of spam. Future e-mail systems will attempt to remedy today’s problems--but also add new capabilities.
One possibility is that senders will have to match a predetermined list--either by name, company, or IP (Internet provider) address--or find themselves blocked. In addition, better anti-spam programs will help sift out the junk.
Powerful information-management and collaboration tools are also likely to emerge. They will link associated messages and track message streams more efficiently. Internet pioneer Vinton Cerf predicts that automatic language translation will take hold. Finally, unified messaging will allow workers to check e-mail, voice mail, mobile messaging, and fax machine from a single inbox.
2 Organized Labor
Despite declining membership and overwhelming odds, labor unions aren’t in danger of dying any time soon. They do, however, face the future with these grim facts: Membership dropped from 20.1 percent of the labor force in 1983 to 13.2 percent in 2002. The decline in U.S. manufacturing cost union members 1.5 million jobs in the 1990s. The Bush administration has eliminated collective bargaining rights for large numbers of federal employees.
Still, more than 500,000 workers formed new unions last year. Union members make on average $150 a week more than non-union workers. Pharmacists and physicians, faced with alarming shifts in the medical marketplace, will join unions in growing numbers in the coming years.
But to retain their power, unions must reverse the shrinkage, experts say. "Unions have been doing a better job than ever," says Kate Bronfenbrenner, director of Labor Education Research at Cornell University. "It’s just that the bar is a lot higher."
3 Business Goes to Kindergarten
All signs indicate that corporate involvement in public schools--already redefining kindergarten-through-high-school education--will continue to increase over the next decade. Alarmed by under performing public schools and students poorly equipped for the job market, business is getting directly involved. Corporate sponsors are popping up on campuses from Washington, D.C., to Stockton, California, as a new generation of students prepares for college, and for jobs such as auto mechanics, Internet specialists, and hotel workers. School-to-business field trips start in kindergarten. Internships, meetings with top executives in office settings, and even paychecks are available for older students.
"We’re saying, ‘See, there is a reason to go to school,’" says Knute Momberg, director of Stockton’s Weber Institute of Applied Sciences and Technology. The school has more computers than students, and GM provided the new cars that teens take apart in squeaky-clean service bays.
4 Going Euro
In Europe, snooping at employees’ e-mail isn’t only considered bad form. It’s often flat-out illegal. And as American companies increasingly enjoy their reputations as global trendsetters in business practices, they may have to reverse some key employee policies, says Andy Boling, a partner and employment-law expert in the Chicago-based law firm Baker & McKenzie.
One obvious area is workplace privacy, where U.S. companies may be compelled to reduce their monitoring of e-mail and Internet use. "Multinationals are finding that it’s too cumbersome to have one set of privacy policies for Europe, another for Hong Kong and Australia, and a third standard for the United States," he says. With U.S.-based employees communicating increasingly via e-mail with their European counterparts, Americans also will begin to covet their liberal vacation policies and parental-leave benefits. "These things may not be implemented here to the extent of the privacy regulations," Boling says, "but American workers and organized labor may increasingly look to Europe as the standard."
5 Companies Won't Sleep
In a quest to reach new customers in foreign time zones and to speed up production and services, more and more companies in the future will be open for business around the clock, seven days a week. Already about 24 million Americans work in the 24/7 culture, according to Circadian Technologies, a Massachusetts-based consulting firm. While the 24/7 worker used to be an assembly-line worker, today he or she may well be a college-educated computer-tech-support specialist working nights in San Francisco, providing Japanese-language advice to a customer who calls from Tokyo during his lunch hour.
The migration to a 24/7 workplace will make human resources managers’ jobs far more complex, says David Mitchell, Circadian’s director of publications. "You may have to offer nighttime child-care providers, who watch kids while they sleep," he says. "And you may have to be much more creative in terms of scheduling--for example, if you’re running a call center for a retailer, you may have to have more staff on hand right after the 2:30 a.m. infomercial." Employers also will have a trickier time dealing with disability claims, since some mental health conditions may be exacerbated by a shift to nighttime work.
6 Artificial Intelligence
Making computers think more like people is an idea that persists. In the workplace, software already predicts customer behavior and machine failures on the factory floor. These capabilities will continue to evolve. As the Web and data warehouses grow, artificial intelligence will solve problems that are beyond the reach of the human brain.
AI’s strength is that it can uncover patterns and spot problems amid a mountain of data. That might translate into detecting financial fraud by examining billions of transactions, says Pepperdine University business professor Owen P. Hall Jr. Meanwhile, agents and bots--tiny pieces of software--will use real-time data to make decisions about how to maximize the efficiency of trucking fleets, machinery, and network resources.
"AI will bring advances but also usher in ethical concerns," Hall says.
7 The Simmering Malaise
For several years, employees have had a very tough time. They’ve lived with the fear of downsizing. They’ve watched benefits and retirement savings shrink. And they’ve been forced to work harder and longer, with fewer opportunities for promotions or raises. Even when the economy eventually recovers, experts say, pervasive dissatisfaction and anger aren’t likely to evaporate.
Only 25 percent of workers feel a strong attachment to their employers, and 4 in 10 feel trapped in their jobs, according to Walker Information, an Indianapolis-based research firm. Walker vice president Marc Drizin says employee loyalty was on the decline even before the economy stalled, and that pattern is likely to continue. "I think most organizations still don’t understand why you need to be good to your workers," he says. Employers who ignore workplace discontent run the risk of periodic productivity slumps as skilled staffers depart for higher-paying positions whenever the labor market surges. Smart companies that make employees feel valued will gain a crucial competitive edge.
8 Office Design
In the coming years, most cubicle-dwelling employees probably won’t have a room--or a door--of their own. There is an office movement toward more shared work space coupled with private desk areas, especially in creative industries, says Gervais Tompkin, a lead designer with the San Francisco-based Workplace Practices Group at Gensler Architecture, Design and Planning Worldwide.
What’s more, workforce managers will play a key role in office design, serving as a critical link between the personal and professional needs of workers and the vision of architects, he says. "When we analyze what makes our best designs successful and keeps those clients coming back to us, it is the active involvement of human resources managers early on in the process," Tompkin says.
He isn’t prepared to predict the demise of doorless cubicle kingdoms, but says that he is seeing changes. "I personally could never operate with a closed door because people need to interrupt me at will since our work is so collaborative. Lawyers, on the other hand, will always need a way to shut out the world because their work is by nature mostly one-on-one."
9 Defined Benefit Plans
Attracting the best and brightest employees in the future will become nearly impossible without a defined benefit plan. Stewart Lawrence, a senior vice president of The Segal Company in New York, predicts that companies without retirement plans that provide guaranteed benefits will be passed over for employers that do. "Employees now understand the volatility of defined contribution plans and are looking for a balanced program with both the upside potential of a defined contribution plan and the mitigation of downside risk of a defined benefit plan," he says.
Major employers such as Microsoft, Wal-Mart, and Cisco Systems currently don’t offer defined benefit plans because they have been able in recent years to recruit effectively without them. This will no longer be true. As the workforce ages and labor shortages increase, Lawrence says, companies will have to offer retirement plans that provide a floor level of retirement income.
10 Telework Has a Part-Time Future
By the year 2010, more than half of American wage earners will spend more than two days a week working outside the office, reports the Sulzer Infrastructure Services firm in London. Today, 28 million people "telework" under formal company policies--a leap from 4 million in 1990--and millions more work informally out of the office one or more days a week. As inexpensive broadband Internet access and mobile technologies take hold, the number will increase, says Toni Kistner, managing editor of Net.Worker, a division of Network World magazine. "The technology has steamrolled ahead, making it cheaper and easier to work from anywhere."
It will be rare even 10 years from now, however, to find people in any profession who telework five days a week. When teleworking took off in the 1990s, people talked about how the workforce would be dispersed and offices would shut down. That hasn’t happened, Kistner says. As the economy improves, companies may reduce their real estate, encouraging employees to share offices. That will create open work spaces that accommodate a flexible part-time telework environment. But there will always be a central location where people come to work, she says. "Some people need to come to the office to stay connected."
In professional jobs, teleworking is already common. With technological upgrades and guidance, the trend soon will take hold in fields such as nursing and call-center management. New kinds of work that combine technology and service also will be more feasible as technology improves, says Sirkka Heinonen, senior research scientist at VTT Communities, the biggest technological research center of the Finnish government. As the number of senior citizens in the industrial world rises, for example, many will want to live at home as long as they can. "Some kind of telework service providers to monitor these people at home will likely grow up around this need," she predicts. "These won’t be traditional nurses, who are always on-site, but they will be telepresent and will probably visit [patients] physically from time to time."
11 Consumer-Driven Health Care Reigns
Despite exploratory moves toward consumer-driven health care, most American companies aren’t exactly blasting into this new benefit area--not quite yet. Ten years from now, however, the notion of health-care dollars that employees can spend as they see fit will be routine, say benefits experts.
Consumer-driven plans take many forms. All are designed to make employees more aware of, and responsible for, the cost consequences of their health-care choices. Roger Vaughn, president of Aon Consulting U.S., says that employees will benefit from the hard bargains that employers drive with health-care providers, so they won’t have to bear the expense of buying health care on the open market. And thanks to the Internet and a push for greater openness about corporate finances, employees will be able to see exactly what health care will cost them, and they’ll also be able to make comparisons to other plans, Vaughn says.
The other critical pieces for the success of consumer-driven programs are "education, advocacy, and assistance," says Richard A. Travers, CEO of Travers, O’keefe, a New York-based benefits consulting and brokerage firm. Those elements aren’t entirely present yet, but five years from now they will be, and "we’ll be well on our way," he says.
12 Child Care
Child care is and will continue to be a major, often heartrending subject for working parents. As the national workforce ages and the number of women of childbearing age levels off in the next five years, the demand for child care may lessen. But access to quality child care will continue to be a major issue for working moms and their employers.
Susan Seitel, president of Work & Family Connection, Inc., a Minnesota-based consulting firm, says one of the major problems for working parents is what to do when the babysitter is sick or doesn’t show up, or the regular preschool is closed for a holiday or vacation break. She expects that an increasing number of companies will offer backup-care arrangements that employees can use in the event of emergencies. "Employees often are willing to pay a fee for the care, so all the company may have to provide is the space," Seitel says. A related trend may be the rise of contractors that provide innovative activities for company-sponsored day care, such as theater classes for kids, she says.
13 Help Wanted: Ten Million Workers
The convergence of several trends--declining births, retiring baby boomers, and expected business growth--will create more jobs than there will be workers to fill them by 2010, experts predict. The math is relatively simple. The civilian labor force will increase by 17 million, reaching 158 million in 2010, reports the Bureau of Labor Statistics. But by then, the BLS says, the number of jobs will reach 168 million.
Roger Herman, a futurist specializing in workplace issues, says pressure on baby boomers wanting to retire will be so great that they will be pulled back into the labor market. Even so, he says, older workers won’t show up in large enough numbers to fill the millions of jobs available. Herman says the problem will be aggravated by the shortage of skilled, educated workers already occurring in manufacturing, health care, and various technical fields.
14 Outsourcing
Outsourcing is to in-house human resources what Pac-Man is to dots. Double-digit growth is expected in the multibillion-dollar outsourcing market, dramatically gobbling up traditional human resources tasks and significantly altering people management. Companies spent $61.2 billion worldwide in 2002 on human resources management outsourcing, an amount expected to jump 11 percent annually, to $103.3 billion by 2007.
Growing even faster will be in the one-stop shopping market, where companies bundle different human resources management services into one large contract rather than serving it up piecemeal. Industry analyst Marc Pramuk of IDC in Framingham, Massachusetts, says U.S. companies packaging end-to-end services did $6 billion of business in 2002. That business will more than double in five years, to $15.4 billion, a 21 percent annual growth rate, he says.
Newer companies like Exult, a late-1990s start-up that is enjoying phenomenal growth, will battle it out for this business with older, established companies like Fidelity Investments, which has gone beyond its mutual fund and 401(k) business into human resources administration. A sample of things to come: Part of a broad deal with IBM called for the transfer of 700 IBM human resources employees into a Fidelity employer-services company.
15 Recruiting Older Workers
With the graying of the workforce, American business is going to have to pay attention to what older workers want and how to recruit them, says Deborah Russell, manager of Economic Security and Work at the American Association of Retired Persons. "Terms such as ‘fast-paced,’ ‘high-energy,’ ‘young,’ and ‘vital’ are often signals to older workers that they need not apply," she says. AARP encourages companies to use terminology that better reflects age diversity such as "experienced workers" and "age-diverse."
A recent AARP-sponsored study, using a nationally representative sample of 1,500 workers age 45 to 74, shows that 69 percent plan to work in some capacity during their retirement years. They work not only for money but also for intangible benefits such as enjoyment and a sense of purpose. Poll participants focused on "soft benefits" such as adequate time off and flexible schedules as well as "hard benefits," including health-care benefits and insurance and good pension benefits as "absolutely essential parts of their ideal jobs."
16 Mergers
Mergers and acquisitions are like courtships and marriages, says Ira Wolfe, a Leola, Pennsylvania, workforce consultant. Like human couples, companies "fall in love, and then later decide they can’t live with the other."
In the coming years, people management will play a far more pivotal role in corporate mergers. Wolfe estimates that company purchases conducted for the purpose of buying another company’s people could represent as many as half of all acquisitions. Now, he estimates, only about 15 to 20 percent of acquisitions are completed because one organization wants another company’s workforce.
One of the principal reasons why mergers and acquisitions have failed in the past is that workforce management isn’t brought into negotiations until the deal is consummated. No one studies the compatibility of the two cultures. Worse yet, the buyer often tries to change its partner, rather than adopting the ways of working that made the acquiree attractive in the first place.
17 Freelancers and Consultants
Today, some 30 million Americans are self-employed, and with companies increasingly enamored of outsourcing as a way to control costs and increase flexibility, the use of freelance contractors and consultants is likely to grow. Dan Pink, author of the 2001 book Free Agent Nation, predicts that corporate workplaces will evolve into a continually shifting mix of employees and freelancers, "to the point where it will become difficult to distinguish one from the other."
That may lead to profound changes. Company health plans may begin to disappear, as workers on the move opt for their own portable health coverage, possibly subsidized by an employer. "Companies may not be hiring people for jobs," Pink says. "Instead, they may be saying, ‘We definitely want this person around for 10 years to accomplish these particular tasks, and after that, we’ll see.’" The concepts of retention and career development, he says, may be supplanted by an emphasis on maintaining long-term connections to workers who manage their own rise, moving in and out of corporate positions with increased freedom.
18 Pay for Wellness Performance
Instead of waiting to pay for the treatment of sick employees, some employers will soon turn to the concept of wellness management--with a twist. They’ll give employees a concrete financial incentive to participate, says Tom Lerche, senior vice president of Aon Consulting.
The process, which is handled through an outside organization to preserve privacy and HIPAA compliance, begins by having employees and their covered spouses take a voluntary health-risk appraisal each year. These questionnaires identify factors that lead to such chronic diseases as asthma, heart disease, and diabetes, which can account for 20 to 35 percent of a company’s medical expenses, Lerche says. If the appraisal identifies two or more risk factors that point to a potential health problem, the employee or spouse is a candidate for health coaching with a nurse, health educator, dietitian, or exercise physiologist. The coach sets up a plan for the health risk and keeps track of the employee’s progress via weekly phone calls. The incentive for the employee is a reduction in insurance premium payments--$55 instead of $75 per month, for instance, Lerche says. And if the employee stops participating, the insurance discount can be suspended until he gets back on track.
"Too much of what we do is a short-term approach," he says. "Fifty percent of disease is ultimately preventable," and this approach can head off many major health problems.
"It’s for the employer that has low turnover, wants to invest in employees, and wants to see to it that they’re productive and in good health" in the working years ahead, Lerche says.
19 Spirituality at Work
Americans eat too much. They spend too much money. They are obese and in debt and worried about personal safety and job security--especially since 9/11 and the economic downturn, says Harriet Hankin, president of CGI Consulting in Malvern, Pennsylvania. And those are some of the reasons they’re increasingly looking for spiritual comfort, she says. "The biggest change in the workplace is the interest in spirituality. It’s about doing the right thing. It’s not about religion. It’s about job satisfaction. Jobs in the future will have to be more meaningful. Pay won’t be as important as a good job."
Referring to the rising number of books on spirituality and business and in subjects such as work/life balance, Jeffrey Pfeffer, professor of organizational behavior at the Graduate School of Business at Stanford University, says he’d agree that spirituality in the workplace is a noteworthy trend. Workers are looking for meaning and purpose, he says. "The word ‘spirit’ comes from the word ‘to breathe.’"
20 Women at Work
With steeply mounting numbers of educated women, glass ceilings are going to shatter in the coming years, says John A. Challenger, CEO of international outplacement firm Challenger, Gray & Christmas, Inc. Between 1979 and 1999, the number of women earning four-year college degrees jumped 44 percent, from 444,000 to 640,000, he says. At the same time, the number of men receiving four-year degrees is declining--from 532,000 in 1993 to about half a million in 1999.
As women earn more college degrees and ascend more corporate ladders, Challenger says, they "will make further inroads into management and exec ranks, and the workforce will have to create an environment where a balance between work and home life is more valued. Temporary and part-time work and job sharing will be more common." There also will be more re-entry opportunities for women who leave the workplace for a few years and then return.
At the same time, more men will be moving into "women’s jobs" like nursing and teaching, Challenger adds. The result won’t be that women are crowded out of the job market. "The major change will be this: The line between men’s and women’s work will blur and fade."
21 Skills Shortage
A job-skills shortage is already reality in the manufacturing industry, and is likely to spread to other industries over the next 10 to 15 years as baby boomers retire. Despite a recession that cost 2 million manufacturing jobs, a recent study by the National Association of Manufacturers warns that "manufacturing could experience a shift from merely having a talent shortage to facing a serious labor crisis."
That’s just manufacturing. Warnings also are forecast about the need for savvy, well-trained workers in job categories such as information technology and the global-energy and electrical-utility industries. Shortages are expected in the global competition for managers, engineers, technicians, skilled craftspeople, and front-line workers, mostly jobs requiring a college degree or technical education. Experts say changes must come on a broad front, from better technology and skills training in secondary schools to aggressive recruitment to a coordinated national workforce policy.
22 Security vs Privacy
As technology becomes more sophisticated, the ability of those who administer company--and government--computer networks to monitor the comings and goings of workers will grow exponentially. While privacy experts shudder, cameras, keystroke logging, biometric devices, and network monitoring are becoming de rigueur within many organizations.
In the future, the cat-and-mouse war between businesses and crooks will lead to more sophisticated surveillance, the standard use of data encryption, and sophisticated data-mining techniques that spot potential problems and risks by analyzing patterns. "Increasingly, companies are realizing that security is not an option, it’s a basic requirement," says Alan Brill, senior managing director at security consulting firm Kroll Inc., New York.
Not surprisingly, the threat of terrorism is raising the stakes. For example, the U.S. government’s Terrorist Information Awareness program proposes to sift through vast quantities of business and government data to detect suspicious activity. "The dangers are greater than ever," Brill says. "It’s clear we’re living in a new era."
23 Accounting for People
Let’s say you took up the hobby of collecting every annual report from public companies over the last 40 years. You’d be shocked at how little you’d learn about what organizations often say are their "most important assets"--their people.
A few--like the Atlanta Braves, EDS, and Deutsche Bank--have gone out of their way to tell people what their workforces are worth or how much value their training will bring in the long run. In the years to come, however, human resources executives will start to see many more statistics on turnover, absenteeism, and revenue per employee in corporate publications.
"What’s the basis for competition in the 21st century?" asks Thomas P. Flannery, the director of Ernst & Young’s human capital practice. "It’s your ability to think through complex problems, serve the customers better, and be more creative." All these qualities come down to the capabilities of human beings, he says. Wall Street analysts will want to see what corporations know about the people who are winning patents for the company and closing big deals. And when companies show what people are worth, it also reminds shareholders how vulnerable those "important assets" are. Machines stay put, but as Flannery says, "People can walk at any time."
24 Universal Health Care
As costs soar and the number of uninsured Americans--both employed and unemployed--rapidly expands, there are about as many predictions about where health care is headed as Carter’s little pills. Employers are paying an increasingly large share of the cost--and so are employees. And almost everyone acknowledges that some dramatic change in health care is likely, perhaps even inevitable, in the next decade.
The country is indeed moving toward some form of universal health care system, says Jeffrey Pfeffer, professor of organizational behavior in the Graduate School of Business at Stanford University. He points out that the United States is the only industrialized country where access to health care is dependent on employment. Says Pfeffer, "In other countries, access to health care is a fundamental human right."
25 The End of HR As We Know It
Conventional wisdom says that human resources finally has achieved its sought-after seat at the table. But the ability of human resources to add value at a strategic level "is currently more promise than reality." That’s the sobering finding of Creating a Strategic Human Resources Organization (Stanford Business Books, 2003), a long-term study of human resources by Edward E. Lawler III and Susan Albers Mohrman.
The authors found that today’s people managers still are most comfortable with traditional human resources activities. "If they want to be effective business partners, they need to change their skill set," Lawler and Mohrman say. Almost 30 percent of the companies in the study promote human resources executives who come from the business side, not human resources.
"In essence, some companies may have decided that the HR strategic-partner role is too important to leave to someone with an HR background." The study’s conclusion: Human resources must reinvent itself. "The old approaches and models simply are not good enough."
Sunday, September 19, 2010
NRI ENTREPRENEUR 7 - VINOD KHOSLA
VINOD KHOSLA
Achievement: One of the co-founders of Sun Microsystems.
Vinod Khosla is an epitome of Indian success story at Silicon Valley. He is a venture capitalist and is better known as one of the co-founders of Sun Microsystems.
Vinod Khosla came from an ordinary middle class background. His father was in army. At the age of 16, Vinod Khosla read about the founding of Intel. This motivated him to nurture dreams of starting his own technology company. At the age of 20, after graduating in Electrical Engineering from IIT Delhi, Vinod Khosla started a soy milk company to cater to those people in India who did not have refrigerators. But his venture failed.
Vinod Khosla went to the US and did his Masters in Biomedical Engineering from Carnegie-Mellon University. His entrepreneurial ambitions attracted him to Silicon Valley and subsequently he did his MBA from Stanford University in 1980.
After graduating from Stanford, Vinod Khosla founded Daisy Systems with two other founders. Daisy Systems was the first significant computer aided design system for electrical engineers. The company went on to make huge profits but driven by the frustration of having to design the computer hardware on which the Daisy software needed to be built, Vinod Khosla left the company.
In Vinod Khosla, started the standards based Sun Microsystems in 1982 to build workstations for software developers. Sun was funded by his long time friend and board member John Doerr of Kleiner Perkins Caufield & Byers. At Sun Microsystems, Vinod Khosla pioneered "open systems" and RISC processors. He left Sun Microsystems in 1985 and joined Kleiner Perkins Caufield & Byers (KPCB) in 1986, where he continues to be a general partner of KPCB funds through KP X.
Vinod Khosla also challenged Intel's monopoly by developing Nexgen/AMD. He also conceptualized the idea and business plan for Juniper to take on Cisco's dominance of the router market. Vinod Khosla is also one of the founding fathers of The Indus Entrepreneur (TiE), a not-for-profit global network of entrepreneurs and professionals founded in 1992. In 2004, he formed khoslaventures to fund knowledgeable entrepreneurs in their new "social impact" ventures.
Vinod Khosla has a keen interest in nascent technologies that can have a beneficial effect and economic impact on society. Presently, he is looking into practicality of the use of ethanol as a gasoline substitute.
Achievement: One of the co-founders of Sun Microsystems.
Vinod Khosla is an epitome of Indian success story at Silicon Valley. He is a venture capitalist and is better known as one of the co-founders of Sun Microsystems.
Vinod Khosla came from an ordinary middle class background. His father was in army. At the age of 16, Vinod Khosla read about the founding of Intel. This motivated him to nurture dreams of starting his own technology company. At the age of 20, after graduating in Electrical Engineering from IIT Delhi, Vinod Khosla started a soy milk company to cater to those people in India who did not have refrigerators. But his venture failed.
Vinod Khosla went to the US and did his Masters in Biomedical Engineering from Carnegie-Mellon University. His entrepreneurial ambitions attracted him to Silicon Valley and subsequently he did his MBA from Stanford University in 1980.
After graduating from Stanford, Vinod Khosla founded Daisy Systems with two other founders. Daisy Systems was the first significant computer aided design system for electrical engineers. The company went on to make huge profits but driven by the frustration of having to design the computer hardware on which the Daisy software needed to be built, Vinod Khosla left the company.
In Vinod Khosla, started the standards based Sun Microsystems in 1982 to build workstations for software developers. Sun was funded by his long time friend and board member John Doerr of Kleiner Perkins Caufield & Byers. At Sun Microsystems, Vinod Khosla pioneered "open systems" and RISC processors. He left Sun Microsystems in 1985 and joined Kleiner Perkins Caufield & Byers (KPCB) in 1986, where he continues to be a general partner of KPCB funds through KP X.
Vinod Khosla also challenged Intel's monopoly by developing Nexgen/AMD. He also conceptualized the idea and business plan for Juniper to take on Cisco's dominance of the router market. Vinod Khosla is also one of the founding fathers of The Indus Entrepreneur (TiE), a not-for-profit global network of entrepreneurs and professionals founded in 1992. In 2004, he formed khoslaventures to fund knowledgeable entrepreneurs in their new "social impact" ventures.
Vinod Khosla has a keen interest in nascent technologies that can have a beneficial effect and economic impact on society. Presently, he is looking into practicality of the use of ethanol as a gasoline substitute.
NRI ENTREPRENEUR 6 - VINOD DHAM
VINOD DHAM
Born: 1950
Achievement: Known as the father of the Pentium processor.
Vinod Dham is popularly known as the father of the Pentium processor. Born in 1950 in Pune, he had his initial schooling in Pune. He did his Bachelors in Electrical Engineering from Delhi College of Engineering in 1971. Thereafter he had a brief stint with Continental Devices, a Delhi based semiconductor company.
In 1975, Vinod Dham went to the US and did his Masters in Electrical Engineering from the University of Cincinnati. After completing his Masters in 1977, Vinod Dham joined the National Cash Register (NCR) at Dayton, Ohio. Vinod was a team member of the NCR's memory design group. He received many patents for his work at NCR.
While making a presentation at the IEEE conference in Monterrey, California on re-programmable memory, Vinod Dham received an offer from the Intel to work with them. In January 1990, Vinod was in-charge of developing the 586 or Pentium processor. He worked relentlessly on the project and the Pentium processor was a big hit in the market. Vinod Dham rose up the corporate ladder and reached the position of the Vice President of the Intel's Microprocessor Products Group. He quit Intel in 1995.
Thereafter, Vinod joined NexGen, a start-up firm as Chief Operating Officer and Executive Vice President.. When Advanced Micro Devices Inc. (AMD) acquired NexGen in 1996, Vinod Dham looked after the development of AMD's famous K6 Processor, world's fastest personal computer microprocessor. Later on he quit AMD.
Presently, Vinod Dham is the chairman, president and chief executive officer of Silicon Spice, a communications technology development firm.
Born: 1950
Achievement: Known as the father of the Pentium processor.
Vinod Dham is popularly known as the father of the Pentium processor. Born in 1950 in Pune, he had his initial schooling in Pune. He did his Bachelors in Electrical Engineering from Delhi College of Engineering in 1971. Thereafter he had a brief stint with Continental Devices, a Delhi based semiconductor company.
In 1975, Vinod Dham went to the US and did his Masters in Electrical Engineering from the University of Cincinnati. After completing his Masters in 1977, Vinod Dham joined the National Cash Register (NCR) at Dayton, Ohio. Vinod was a team member of the NCR's memory design group. He received many patents for his work at NCR.
While making a presentation at the IEEE conference in Monterrey, California on re-programmable memory, Vinod Dham received an offer from the Intel to work with them. In January 1990, Vinod was in-charge of developing the 586 or Pentium processor. He worked relentlessly on the project and the Pentium processor was a big hit in the market. Vinod Dham rose up the corporate ladder and reached the position of the Vice President of the Intel's Microprocessor Products Group. He quit Intel in 1995.
Thereafter, Vinod joined NexGen, a start-up firm as Chief Operating Officer and Executive Vice President.. When Advanced Micro Devices Inc. (AMD) acquired NexGen in 1996, Vinod Dham looked after the development of AMD's famous K6 Processor, world's fastest personal computer microprocessor. Later on he quit AMD.
Presently, Vinod Dham is the chairman, president and chief executive officer of Silicon Spice, a communications technology development firm.
NRI ENTREPRENEUR 5 - LORD SWARAJ PAUL
LORD SWARAJ PAUL
Born: 1931
Achievement: Knighted by British Queen in 1978; Awarded Padma Bhushan in 1983.
Lord Swaraj Paul is one of the most famous Indian origin entrepreneurs, based in Britain. He is the founder of multinational company Caparo-the UK-based steel and engineering group.
Swraj Paul was born in Jalandhar in 1931. His father ran a small foundry and used to make steel buckets and farming equipments. Swaraj Paul did his graduation from the Punjab University and subsequently obtained a Master's degree in mechanical engineering from the Massachusetts Institute of Technology (MIT) in the US. After his return to India, Swaraj Paul joined the Apeejay Group, which his father had founded. Destiny took him to London in 1966, where he went for his daughter's Leukemia treatment, and stayed there forever.
Swaraj Paul started his business in Britain in 1968. After acquiring one steel unit, he went on to acquire more units and founded the Caparo group in the year 1978. Caparo developed into one of the leading producers of welded steel tube and spiral-welded pipe in the UK. In 1996, Swaraj Paul stepped down from the management of the Caparo group and handed over the reins to his three sons.
Lord Swaraj Paul has won several honors and awards. He was knighted by the British Queen in the year 1978 and became the Lord Paul of Marylebone and a member of the House of Lords. Lord Swraj Paul wrote the biography of Indira Gandhi and was awarded the Padma Bhushan in 1983. He was bestowed with the Pro-Chancellorship of the Thames University in 1998.
Born: 1931
Achievement: Knighted by British Queen in 1978; Awarded Padma Bhushan in 1983.
Lord Swaraj Paul is one of the most famous Indian origin entrepreneurs, based in Britain. He is the founder of multinational company Caparo-the UK-based steel and engineering group.
Swraj Paul was born in Jalandhar in 1931. His father ran a small foundry and used to make steel buckets and farming equipments. Swaraj Paul did his graduation from the Punjab University and subsequently obtained a Master's degree in mechanical engineering from the Massachusetts Institute of Technology (MIT) in the US. After his return to India, Swaraj Paul joined the Apeejay Group, which his father had founded. Destiny took him to London in 1966, where he went for his daughter's Leukemia treatment, and stayed there forever.
Swaraj Paul started his business in Britain in 1968. After acquiring one steel unit, he went on to acquire more units and founded the Caparo group in the year 1978. Caparo developed into one of the leading producers of welded steel tube and spiral-welded pipe in the UK. In 1996, Swaraj Paul stepped down from the management of the Caparo group and handed over the reins to his three sons.
Lord Swaraj Paul has won several honors and awards. He was knighted by the British Queen in the year 1978 and became the Lord Paul of Marylebone and a member of the House of Lords. Lord Swraj Paul wrote the biography of Indira Gandhi and was awarded the Padma Bhushan in 1983. He was bestowed with the Pro-Chancellorship of the Thames University in 1998.
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