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Cincinnati Chapter European American Chamber of Commerce 27 September 2012

Cross-Border Executive Mobility as a Strategic Advantage People Risk Mitigation And Leadership Development Lessons from the Top Companies for Leaders. Cincinnati Chapter European American Chamber of Commerce 27 September 2012.

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Cincinnati Chapter European American Chamber of Commerce 27 September 2012

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  1. Cross-Border Executive Mobility as a Strategic AdvantagePeople Risk Mitigation And Leadership Development Lessons from the Top Companies for Leaders Cincinnati Chapter European American Chamber of Commerce 27 September 2012

  2. AON: The Global Risk Advisor and Human Resource Solutions Provider Aon Total Colleagues: 59,000 Aon Hewitt Aon Risk Solutions Aon Benfield (Reinsurance) ~29,000 Colleagues • Consulting • Benefits Administration • HR Business Process Outsourcing ~26,500 Colleagues • Retail Brokerage • Risk Assessment and Advisory • Claims Advocacy and Administration • Captive Management • Affinity Programs ~3,500 Colleagues • Analytics and Technical Services • Facultative Reinsurance • Investment Banking • Practice Groups • Client Services • Treaty Reinsurance 120 Countries 500 Offices

  3. Agenda • People Risk • What is People Risk and What is Measured? • High and Low Risk European Cities • Recruitment, Employment and Redeployment Risks • Case Study • Top Companies for Leaders About Our Research Global Mobility Overview- Key Trends Global Mobility Philosophy and Process: -How Top Companies Develop Leaders through Cross Border Assignments

  4. What is People Risk and Why is it Important? • As companies become more global, there is an increasing need for understanding location profiles for talent. • Talent pools vary across locations and thus companies have to adjust their talent strategies to address the risks associated with talent in those locations. 1 Best Practices in Risk Management: A Function Comes of Age: A report from the Economist Intelligence Unit Sponsored by ACE, IBM and KPMG Human capital risk is seen to be the most significant threat to global business operations1.

  5. Key People Risk Issues Manage the risks of relocation to lower-cost locations? Identify the appropriate leader for a new operation? Cope with talent and skills shortages? Improve workforce planning for global expansion? Source qualified and experienced talent globally? How Can We…

  6. Measuring People Risks – The 30 Factors https://aonpeoplerisk.com/

  7. People Risk Index 2012 Covers 76 Countries …

  8. …and 131 Cities

  9. 10 Lowest Risk Cities Overall People Risk: European Cities 10 Highest Risk Cities 1 Out of 131 cities worldwide in People Risk Index 2012 2 Based on a rating of 30 factors across 5 categories of risk

  10. Symptoms of People Risks

  11. Comparative Risk Associated with Recruitment • Shrinking workforce due to ageing population across Europe • Decrease supply of future talent as the cities are projected to have negative growth in working age population in the next 10 years • Insufficient education spending further increases risk as it reduced the capacity of education system to keep up with market demands for talent

  12. Comparative Risk Associated with Employment • Lower employment risk for cities in Western Europe Greater availability of good quality management training institutes (e.g. MBAs) compared to high risk cities • Lower workforce productivity impacts the ability of high risk cities to invest and develop its workforce Further affected by the insufficient good quality technical and managerial training facilities which increases employment risk.

  13. Comparative Risk Associated with Redeployment • Lower redeployment risk due to more positive labor relations environment • Transparent government, positive government relations, clarity in employment regulations reduces the risk • Onerous redundancy restrictions and rigidity in reducing personnel costs for organizations facing downsizing or restructuring situations increase the risk of redeployment

  14. People Risk Case Study • Global (European HQ’d) Transportation Company with 20,000 employees. • Respond to global economic downturn with reductions in overall headcount, shifting work to lower cost locations and reducing number of mid and senior level managers. • Staff costs drop but operational efficiency nose-dives. Low-cost sourcing strategy results in higher overall costs. • Hire Aon Hewitt to redesign talent sourcing strategy to increase talent quality, sustain low cost structure and mitigate location risks. • Incorporate client’s quality and performance measures with industry comparatives and the Aon Hewitt People Risk Index.

  15. Location Analysis Strategy Shift from its low-cost sourcing strategy to a “balanced sourcing” strategy Outcome Increase in talent quality by more than 15% Talent cost did increase slightly Overall savings to the company’s operations were estimated to be more than USD $5 million over the next five years Quality & Risk

  16. Aon Hewitt’s Top Companies for Leaders Research • Most comprehensive, global research on leadership in the market, examining the link between leadership practices and financial results • Explores how organizations set strategies, assess, select, develop, and reward leaders • Examines the execution of leadership practices, as well as the strategy that guides it • Thousands ofdata points and 900 executive interviews in 2011 • Research has been conducted in 2002, 2003, 2005, 2007, 2009, and 2011 marks the 6th iteration • Study results published in the November edition of FORTUNE Magazine • Regional studies in North America, Europe, Asia-Pacific, and Latin America, using a consistent methodology and global rollup • 2011 Partners: Fortune Magazine and The RBL Group

  17. 2011 Top Companies for Leaders Selection Process • 478 Global Participants • 43 countries • Participants completed detailed questionnaire • Aon Hewitt analyzed responses for strong leadership practices • 182 Global Finalists • In-depth interviews with HR leaders • Senior executives interviewed • Aon Hewitt scored data by assigning points to questions and responses • Companies screened for financial performance relative to industry • 18-month bad press scan 57 Top Companies Panel of judges gathered in each region to select and rank Top Companies Global (Top 25) North America (Top 25) Asia-Pacific (Top 20) Europe (Top 7) Latin America (Top 5)

  18. 2011 Global Top Companies for Leaders Europe Top Companies Banco Bilbao Vizcaya Argentaria (BBVA) L’Oréal Unilever plc ArcelorMittal Siemens AG Raiffeisen Bank International AG Novartis AG

  19. What Differentiates The Top Company for Leaders—The Four Disciplines Practical and Aligned Programs and Practices Leaders Lead the Way 1 3 2 4 When Leadership Becomes a Way of Life Unrelenting Focus on Talent 18

  20. Top Companies Understand the Linkage Between Investing in Leaders and Financial Results Top Companies All Others Source: Aon Hewitt’s Global Top Companies for Leaders Study, 2011

  21. Top Companies’ Portfolio Approach to Accelerating Leadership Development

  22. Top Companies Actively Work to Build Diversity and Cultural Agility Into Their Development Strategies Actively taking steps to increase representation of the following groups: Top Companies All Others Source: Aon Hewitt’s Global Top Companies for Leaders Study, 2011

  23. Global Mobility Overview Key Trends in Global Mobility at Top Companies For Leaders 2011

  24. Of the top 3 skills most critical for future success, global agility occupies the center-stage for developing leaders Global Top Companies Global All Others Data reflects responses of organizations who are developing these skills well (4) to very well (5) Europe Top Cos Europe All Others Source: Aon Hewitt’s Global Top Companies for Leaders Study, 2011

  25. Global Mobility Philosophy Assess Global Mobility potential at recruitment Structure & Processes designed to Enable Mobility Global Assignment as part of Career Plan Conversations about Life Stage & Emotional Needs Glopats: Career as a series of International Moves Mobility early-on to develop Global Perspectives

  26. Global Mobility Process Recruit talent considering mobility needs Think global, act local Cultural Training Thinking beyond the next assignment On-the job support Identify talent pool for global mobility Knowledge Transfer Global exposure enabled career path International HR Mobility Set-up Capability Development Supported Learning Sync with life stage Time-bound expectations and next steps Global assignments as steps of career development Developing global mobility competencies Identify destination jobs

  27. Identify Identify talent pool to staff on global assignments

  28. Top Companies Identify and Strategically Deploy Global Talent Pool Source: Aon Hewitt’s Global Top Companies for Leaders Study, 2011 27

  29. Orient Develop global perspective by building on diverse experiences

  30. Top Companies Nurture Future Leaders for Global Assignments Source: Aon Hewitt’s Global Top Companies for Leaders Study, 2011

  31. Top Companies Nurture Future Leaders for Global Assignments Source: Aon Hewitt’s Global Top Companies for Leaders Study, 2011

  32. On-board Deploy talent pool on global assignments Align employee's individual development plans and company's strategic goals

  33. Top Companies Support the Employees to Deliver High Performance on Global Assignments Source: Aon Hewitt’s Global Top Companies for Leaders Study, 2011

  34. Top Companies Support the Employees to Deliver High Performance on Global Assignments Source: Aon Hewitt’s Global Top Companies for Leaders Study, 2011

  35. Deploy Leverage global talent pool for critical and strategic assignments Place talent with extensive global exposure to long-term leadership roles

  36. Top Companies Use Global Assignments to Prepare Leaders for Destination Jobs Source: Aon Hewitt’s Global Top Companies for Leaders Study, 2011

  37. Key Questions for Your Organization Where are you on the leadership journey? Have you clearly articulated a talent or leadership strategy for the organization? Does your current leadership strategy fully support and help drive your business strategy? What are the key obstacles that impede your leadership practices today? How do you mitigate these? Is your organization identifying the right talent for the right roles, and then providing them with the appropriate differentiation and development? How is the organization accelerating the development of talent to strengthen your pipeline and retain top talent? Are you measuring the impact of your leadership processes and investments to ensure successful outcomes and continuous improvement?

  38. Thank You Aon Risk Services| September 2012

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