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Capturing Talent: How Companies Are Keeping Up with a Changing Workforce

An employee multitasks at a treadmill desk at ReedGroup.
 

Employees nationwide are demanding more than just a good paycheck. How are Denver-area human resources departments adjusting to the changing talent landscape?

 

The U.S. economy is booming, and Denver is on the front end of the growth. But there are growing pains, too, including a notable labor crunch in the metro area. With unemployment at 2 percent, it's a worker's market, and that means hiring companies need to stand out.

 

According to Talent Trends 2017 Global Study, a report by worldwide consulting firm Mercer, a full 92 percent of employers expect increased competition for talent this year. The study, which surveyed more than 5,400 employees at a diverse mix of companies in 37 countries, highlights a human resources world in flux. As recruiting and retaining talent is inextricably tied to a company's success, the fight for employees has intensified. Denver is a microcosm of this phenomenon.

 

Don Bobo, a Mercer partner and market leader for the firm's 100-employee Denver office, has witnessed it firsthand at both clients' offices and his own workplace. Since Bobo arrived in Denver 2013, the office pivoted from specializing primarily in benefits consulting to delivering on the broader Mercer portfolio of health, wealth and career consulting services.” he says, and hired more than 20 new employees in 2017 as Mercer grew to about 30,000 people worldwide.

 

Mercer's recent growth is similar to that of many Denver-area companies. In this context, the competition for top talent is more important than ever, and Bobo says Mercer offers its clients – from larger companies to growing smaller and mid-size businesses – an edge.

Don Bobo, market leader for Mercer's Denver office, will be part of a free, public discussion on strategies for creating a vibrant 21st century workforce, "The Future of Work: Quality of Living and Working in Denver in 2018," on Oct. 19 at RedLine in Denver.

A shift in what we value

 

Mercer's Talent Trends report reveals a big shift in what employees want: It's not all about pay anymore. Stability, transparency and leadership have emerged as rival demands; navigable career paths and a sense of purpose are also critical.

 

Take Westminster-based ReedGroup, a disability management company that works with Fortune 100 customers. Competitive salaries are nice, "but it goes way beyond that," says Tony Panariello, ReedGroup's director of total rewards. "Talent's tight here. It's not just about money. It's about what ReedGroup does."

 

And that's a key part of the company's message to potential employees. "What we do as an organization is very laudable: We help people who are out on disability. It's not just a job."


Tony Panariello oversees total rewards at ReedGroup.
 

Lifestyle and corporate culture are also big selling points for ReedGroup. "Denver lends itself to that; Denver's almost a vacation town," says Panariello, "I've worked on both coasts, and it's a lot different."

 

A modern workplace is a related lure. Panariello points to adjustable desks, treadmill desks, and other features at the company's headquarters. "It's a beautiful building. It's soft, but it's important." Beyond the bricks and sticks, there are complementary intangibles. "It's a relaxed atmosphere. It's casual dress. Everybody from the CEO down walks around in jeans."

 

Alongside this shift, there's a parallel trend moving away from numeric performance ratings to more qualitative systems: A full 61 percent of organizations eliminated the former last year or plan to do so by the end of 2017. "It becomes a check-the-box exercise," says Bobo. "The quality is the question."

 

It's a case-by-case decision. "Ratings may not serve a purpose for some companies, but in other cases ratings are justified," says Bobo. Though a good plan needs to be developed before making the leap away from numeric ratings. "Take away that rating and what are you going to use to determine pay outcomes?" He says making opaque decisions in the proverbial "smoke-filled room" is the worst-case scenario.

 

Team-based reward systems are a popular alternative, as are multi-year systems that track performance over several business cycles. The goal is to "redefine the way pay is done to balance the demands of the business and its people," says Bobo.

 

The key to delivering on any pay and performance processes is “managerial skill and will,” he adds. "That takes skill and frankly takes some guts."

Data from Mercer Talent Trends 2017 Global Study.

 

Growth by design

 

Headquartered in downtown Denver, Welltok is one of the fastest growing companies in the U.S. A pioneer in consumer health enterprise SaaS platforms, the 400-employee business has acquired several peer companies since 2013, leading to a logistical headache.

 

"We had three different benefit plans on three different calendar years with three different carriers," says Chief People Officer Chaz Hinkle.

 

To streamline the plans, Welltok consolidated the three benefits packages into one. "There was definitely some Band-Aid ripping," says Hinkle. "Some people were happy, some people were unhappy. We found a good place in the middle."

 

That's particularly important in Denver right now, he adds. "If we're not offering it, somebody down the street is."

 

And if companies like Amazon enter metro Denver in a big way, Hinkle predicts "a lot of turbulence” in the local talent market. "We're really thinking ahead on that one."

 

Welltok's recent growth isn't unusual for Front Range companies. ReedGroup has tripled in size over the past year and a half. The company has quickly grown from about 500 employees to 1,600, with 500 in Colorado. "We like to say we're in the adolescent stage," says Panariello. "We're a small company that's not so small anymore. We have a lot of manual processes that used to work well that don't work so well now."

 

That means Panariello is tasked with developing scalable processes to attract and retain employees. "We looked at it more tactically [in the past]," he says. "We need to be more strategic now." He adds, "We've grown very quickly and it's easy to get lost in the woods and just handle day-to-day issues. But if no one is putting on the brakes for a high-level view, we'll never get out of the woods."

 

That means a new 401(k) vendor and payroll administrator, a new compensation structure and well-defined career paths. "It's looking at processes and streamlining them, and it's about attracting and retaining talent," says Panariello. "There's an awful lot to do. It's fun."

 

As ReedGroup has matured from toddler to adolescent, Panariello says that the company's relationship with Mercer has matured in parallel. "Now it's more of a strategic partner," he explains, noting that Mercer helped ReedGroup find scalable vendors and improve the compensation system.

 

A workplace for me

 

The Talent Trends report details a major turning point for HR: The one-size-fits-all era is over. Employees are demanding flexible schedules, customizable benefits and other personalized perks. Bobo notes the demand for "real time off" where there are no expectations of being on call or replying to emails.

 

Comcast encounters these issues across its workforce, about 9,000 people strong in Colorado, says Lisa de la Garza, VP of human resources for the cable giant's West Division. Mercer helps Comcast "understand competitively what's going on in the market we're working in," she says. "I use them a lot around compensation analysis and total rewards."

 

In Colorado, that means understanding the mindset of younger generations. "The majority of our hires are Millennials or Generation X, Generation Y folks," says de la Garza. "They're coming in with different needs and wants." They're looking for careers, not jobs, and they prize work-life balance, she says. "They have a higher sense of wanting to be involved in the community more."
Comcast's Lisa de la Garza says community service and flexible schedules top employees' wish lists.

 

It follows that the company organizes company-wide events like Comcast Cares Day and allows for flexible scheduling in order for employees to participate in philanthropic causes. That's part of a broader initiative to accommodate different schedules, says de la Garza. "We've established core work hours, but people can come and go as they please."

 

Implementation varies from region to region and department by department. "You have to be consistent in how that's managed and offered," she says. At Comcast, it tends to work better in technical jobs -- four 10-hour shifts have emerged as the norm in several regions -- than it does for call center employees. "We don't micromanage those types of things," says de la Garza. "We teach managers to handle that."

Data from Mercer Talent Trends 2017 Global Study.

 

At Welltok, Hinkle has seen a similar demand for personalized schedules and benefits. "What we're finding -- and it's not necessarily a bad thing, but it is the reality -- there is a 'me model’ with how employees view the world," he says.

 

"People are very vocal," adds Hinkle, noting that it largely comes back to the aforementioned shifting values. "If something is important to them, they're going to let you know. The big things they're saying are: 'Is my work interesting?' and 'Do I feel valued and do I feel appreciated?'"

 

The quest for insight

 

In the era of Big Data, predictive analytics are one of the guiding business trends of the new millennium. It's typically bigger companies in bigger industries.

 

ReedGroup uses predictive analytics in its broader business, says Panariello. "From an HR standpoint, we're starting to look at that, too," he says. "What type of talent should we be looking at? We're in the throes of that."

 

At Comcast, HR has moved into using predictive analytics after the company reaped rewards from data-driven decisions in other areas. Cable "is a business that's heavily dependent on predictive analytics for our customer base," says de la Garza. "The entire organization heavily bases its strategy on that." In HR, she says analytics allow the company to develop "more proactive" strategies. "We've made a lot of big decisions based on those analytics."

 

Exit interviews are nice, de la Garza adds, but they're often too late. Comcast instead has implemented a "stay interview," with questions like, "What would cause you to leave and what benefits do you really like?" The interviewees are typically employees in their first 120 days on the job.

 

De la Garza describes a "deep dive" into design thinking that's helped reshape hiring and onboarding Comcast's processes.

 

"We've found really causal links around changing people's schedules and turnover," she explains. That's resulted in a training schedule that matches the work schedule, and constant contact with supervisors from interviews through training to work.

 

For the modern workforce, Denver has proven a great hub for Comcast, de la Garza says. "For us, it's such a good supply of folks who are in any role," she explains. "There's a lot of talent."

 

But with frequent new employers entering the metro area's labor market, she adds, "We've got to become more and more creative in what is the value proposition for Comcast." In three to four years, the company could end up in bidding wars without establishing the right framework now.

 

The million-dollar questions: "How do we stay competitive with folks moving in and how does that challenge the talent pool?" says de la Garza. "We want to know what makes them come to us and what makes them stay."

The Comcast workplace balances employee perks and cutting-edge technology.

You're invited: A public discussion on strategies for creating a vibrant 21st century workforce, The Future of Work: Quality of Living and Working in Denver in 2018, will take place October 19th from 5:00-7:30 p.m. at RedLine art center in Denver. Top local professionals will offer insights and advice. It's free. Click here for details.
 

Photos by Kara Pearson Gwinn.

 

Graphic design by Matt Megyesi.

 

This special report was published with support from Mercer.

Q&A with Tauseef Rahman, Mercer
Q&A with Tauseef Rahman, Mercer

Tauseef Rahman is a senior consultant for Mercer in San Francisco. He joined Mercer in 2007 and has worked in the firm's offices in Los Angeles, Dubai, Melbourne and Houston. In that decade, Rahman has worked in many different areas and gained deep experience using predictive analytics in human resources.
 
Confluence Denver: How are predictive analytics impacting the HR world?
 
Tauseef Rahman: Some HR functions have, in my opinion, gotten away with doing things without much fact-based decision making. Decisions are based largely on "gut feel” and things that are accepted to be truths without evidence. The most common example of this is the assumption that pay retains people. HR functions sometimes fail to consider if there is a bad work environment or lack of career opportunities.
 
Other parts of organizations, including finance and marketing, have applied far more sophistication to understanding their customers and the business. With the rise of predictive analytics, one of two things is going to happen to HR: Either it's going to learn how to harness predictive analytics to deliver meaningful insight on the state of the workforce and how the workforce drives business success using hard, fact-based numbers -- or it's going to be out of a job. Functions like IT and finance will begin to run HR, if they haven't already, because they're able to apply analytical rigor. The bar has been raised.
 
CD: What industries and companies are on the front end of the trend?
 
TR: It's organizations competing for scarce talent. Energy and high technology are the two leading industry examples in my mind. Software engineers and petroleum engineers are examples of jobs that I imagine companies have a workforce plan for. Oil and gas companies have been doing this for a while, because they've needed to.
 
CD: What's a good case study or example to illustrate the power of predictive analytics in HR?
 
TR: A client of ours, a consumer goods company, saw most of its products were bought by women. The organization wanted to ensure its workforce reflected the demographic diversity of the markets it was serving, to be more in touch with its customers. This was not driven by goodness-of-the-heart, but rather the desire to remain competitive. Women tended to be in lower-level jobs, but in terms of senior management, they were not moving ahead, so the organization wanted to know why

A predictive model was run to determine the drivers of promotion: Was it tenure? Was it being in a certain location? Was it having an advanced degree? At this organization, we learned that being flagged a "high potential" drove promotion We then looked into this high-potential flag and found that women and non-whites were less likely to receive this designation. So while the organization had a calibrated promotion system, it was not supporting their diversity goals.”
 
 
CD: What do companies need to do in order to start utilizing predictive analytics in HR?
 
TR: There's a disconnect between the analytics that executives want and the analytics that HR conducts. HR needs to focus on answering questions that matter to the business. It sounds so simple, but it's not. Don't do HR analytics for HR's sake. Ask yourself: What is the business problem you're trying to solve? It's sometimes helpful to analyze what you have, but it's really more helpful to figure out what question you're trying to answer first. Don't have analytics in search of a question.

CD: Can smaller and mid-sized companies leverage analytics for HR?
 
TR: Absolutely. To do predictive modeling, you need large enough data sets, but descriptive statistics are a great foundation for organizations of any size. Ask questions like, "At what level are we hiring the most people and losing people?" and "Do we have higher turnover rates among women and minorities compared to others in our organization?"
 
It's a bit of a Venn diagram: What's the data you have, what's the problem you're trying to solve and what level of sophistication makes sense for where you are on your journey? Focus your efforts on the overlap between those three things.