1. Investing in HRD in Uncertain Times Wayne F. Cascio UFHRD Conference, Brighton, UK June 6, 2013

2. We Live in Uncertain Times

3. Why the Uncertainty? Global Economic Turbulence Global Economic Turbulence High ratios of debt/GDPHigh ratios of debt/GDP Financial market volatilityFinancial market volatility Regulatory uncertaintyRegulatory uncertainty Consumers reluctance to spendConsumers reluctance to spend Structural changes in labor marketsStructural changes in labor markets Developments in technologyDevelopments in technology

4. Global Interdependencies Countries, companies, and workers interconnected as never beforeCountries, companies, and workers interconnected as never before Global labor markets are fueling both company and worker mobilityGlobal labor markets are fueling both company and worker mobility Competition for talent comes not only from the company down the street, but also from the employer on the other side of the worldCompetition for talent comes not only from the company down the street, but also from the employer on the other side of the world Challenge: Become an employer of choiceChallenge: Become an employer of choice

5. Three More Big Changes Increasing workforce flux Increasing workforce flux more roles automated or outsourcedmore roles automated or outsourced more workers contract-based, mobile, or work flexible hoursmore workers contract-based, mobile, or work flexible hours More diversity as workers come from a greater range of backgrounds More diversity as workers come from a greater range of backgrounds uccessful managers less defined by technical skills, more defined by the ability to work across cultures and to build relationships with many different constituentsS uccessful managers less defined by technical skills, more defined by the ability to work across cultures and to build relationships with many different constituents

6. Structural Changes in LM s Workers coming from a variety sources - a splintered supply of laborWorkers coming from a variety sources - a splintered supply of labor Labor-market intermediaries (LMIs) facilitate thatLabor-market intermediaries (LMIs) facilitate that LMIs: temporary-help services, online job boards, social media sites, executive-search firms, outplacement firms, professional employer organizations (PEOs)LMIs: temporary-help services, online job boards, social media sites, executive-search firms, outplacement firms, professional employer organizations (PEOs)

7. Bonet, Cappelli, & Hamori (2013) The growth and increasing prominence of LMIs is important for all research associated with the workplace because we can no longer do a study of workers in an organization and assume that they are all employees. Some may be temps under contract to an agency, some may be employed by a PEO, some may work for vendors(p. 340)The growth and increasing prominence of LMIs is important for all research associated with the workplace because we can no longer do a study of workers in an organization and assume that they are all employees. Some may be temps under contract to an agency, some may be employed by a PEO, some may work for vendors (p. 340)

8. Examples LinkedIn – largest profl social-networking site LinkedIn – largest profl social-networking site >175 million members in >200 countries.>175 million members in >200 countries. About 2.6 million companies worldwide have LinkedIn pagesAbout 2.6 million companies worldwide have LinkedIn pages Temporary-help agencies – 81% of orgs. worldwide use them to manage fluctuations in demand Temporary-help agencies – 81% of orgs. worldwide use them to manage fluctuations in demand In Europe, estimates of percentage of the workforce not regular employees is > 30%In Europe, estimates of percentage of the workforce not regular employees is > 30%

9. Rethinking Existing Paradigms About the Workplace - HRD Orgs. that trained workers less were more likely to use non-standard workers, including agency temporary workers and PEO workers(Cappelli & Keller, in press)Orgs. that trained workers less were more likely to use non-standard workers, including agency temporary workers and PEO workers (Cappelli & Keller, in press) Unwilling to provide firm-specific training, companies tend to assign workers from these sources to simpler jobs, which gives the workers little chance to learn on the jobUnwilling to provide firm-specific training, companies tend to assign workers from these sources to simpler jobs, which gives the workers little chance to learn on the job

10. Implications for HRD Who is most likely to receive opportunities for continued skill development? Who is most likely to receive opportunities for continued skill development? Workers with longer-term relationships with employers Workers with longer-term relationships with employers Whose skills are valuable or essential to achieve an organizations strategic objectivesWhose skills are valuable or essential to achieve an organizations strategic objectives

11. Dramatic Changes in Spending on HRD In 2008 and 2009, annual training expenditures plummeted by 11% in each yearIn 2008 and 2009, annual training expenditures plummeted by 11% in each year It rebounded a positive 2% in 2010, but then rose sharply, increasing by 10% in 2011, and then by another 12% in 2012It rebounded a positive 2% in 2010, but then rose sharply, increasing by 10% in 2011, and then by another 12% in 2012 Lesson: Firms cut training expenditures dramatically during the GFC, but as the economy began to rebound, expenditures on HRD simply could not waitLesson: Firms cut training expenditures dramatically during the GFC, but as the economy began to rebound, expenditures on HRD simply could not wait For full-time, core employees, HRD is not a competitive nicety. Its a competitive necessity and firms know itFor full-time, core employees, HRD is not a competitive nicety. Its a competitive necessity and firms know it

12. Two current Trends Public-Private partnershipsPublic-Private partnerships Airbus and State of AlabamaAirbus and State of Alabama Building a workforce in remote areasBuilding a workforce in remote areas Mining industry, Anglo American PLCMining industry, Anglo American PLC

13. Aligning HRD with Evolving Trends Workplaces are becoming more transient, more mobile, and more focused on self-serviceWorkplaces are becoming more transient, more mobile, and more focused on self-service They have become seamless, and also endless, as they roll through a 24/7/365 cycle They have become seamless, and also endless, as they roll through a 24/7/365 cycle Organizations have become borderless to their customers as well as to their employeesOrganizations have become borderless to their customers as well as to their employees

14. Developments in Technology Rise of the Internet Rise of the Internet % of the world population with Internet access has increased from 18 to 35%, from 2006 to 2011% of the world population with Internet access has increased from 18 to 35%, from 2006 to 2011 Growth in cloud computing Growth in cloud computing Gives consumers and companies cheap, unlimited access to cutting-edge computing power and applicationsGives consumers and companies cheap, unlimited access to cutting-edge computing power and applications By 2015 a projected 2.5 billion users and 15 billion devices will be accessing cloud services

15. Implications for 21 st - Century Orgs. 20 th -century organization : hierarchical 20 th -century organization : hierarchical 21 st century organization : flat - a web or network that links partners, employees, external contractors, suppliers, and customers in various collaborations 21 st century organization : flat - a web or network that links partners, employees, external contractors, suppliers, and customers in various collaborations Players are becoming more and more interdependent ; managing this intricate network will be as important as managing internal operations Players are becoming more and more interdependent ; managing this intricate network will be as important as managing internal operations

16. Doing More With Fewer Workers 95% of net job losses during the GFC were in middle- skill occupations - office workers, bank tellers, and machine operators95% of net job losses during the GFC were in middle- skill occupations - office workers, bank tellers, and machine operators HRD challenges associated with reskilling, or upskilling these individuals: a major public policy issue, and also a significant opportunity for HRD specialists to contribute to the betterment of human welfareHRD challenges associated with reskilling, or upskilling these individuals: a major public policy issue, and also a significant opportunity for HRD specialists to contribute to the betterment of human welfare This is not a one-shot opportunity; the MIT Center for Digital Business predicts that the next 10 years will be more disruptive than the last 10 This is not a one-shot opportunity; the MIT Center for Digital Business predicts that the next 10 years will be more disruptive than the last 10

17. Innovations in HRD Design/Delivery Responses to massive changes wrought by globalization and technologyResponses to massive changes wrought by globalization and technology Two trends:Two trends: Technology-delivered instruction (TDI)Technology-delivered instruction (TDI) HRD using social-learning toolsHRD using social-learning tools

18. Technology- Delivered Instruction (TDI) TDI is the presentation of text, graphics, video, audio, or animation in digitized form for the purpose of building job-relevant knowledge and skill TDI is the presentation of text, graphics, video, audio, or animation in digitized form for the purpose of building job-relevant knowledge and skill

19. Technology- Delivered Instruction (TDI) Whether training is Web-based or delivered on a single work station, on a PDA, or on an MP3 player, TDI is catching on Whether training is Web-based or delivered on a single work station, on a PDA, or on an MP3 player, TDI is catching on

20. Why TDI Will Boom Both demand and supply forces are operating Both demand and supply forces are operating There is growing demand for: There is growing demand for: Just-in-time training delivery Just-in-time training delivery Cost-effective ways to meet the learning needs of a globally distributed workforce, andCost-effective ways to meet the learning needs of a globally distributed workforce, and Flexible access to lifelong learningFlexible access to lifelong learning

21. Why TDI Will Boom (cont. ) On the supply side: On the supply side: Internet access is becoming standard at work and at home Internet access is becoming standard at work and at home Advances in digital technologies now enable training designers to create interactive, media-rich content Advances in digital technologies now enable training designers to create interactive, media-rich content Increasing bandwidth and better delivery platformsIncreasing bandwidth and better delivery platforms There is a growing selection of high-quality products and servicesThere is a growing selection of high-quality products and services

22. BOEINGS 787 DREAMLINER Mechanics going through Boeings 25-day training course for the 787 Dreamliner learn to fix all kinds of problems Mechanics going through Boeings 25-day training course for the 787 Dreamliner learn to fix all kinds of problems

23. 787 Dreamliner (cont.) Problems range from from broken lights in the cabin to major malfunctions with flight controls. Problems range from from broken lights in the cabin to major malfunctions with flight controls. One thing they wont soon do: touch one of the planesOne thing they wont soon do: touch one of the planes They use laptop and desktop computers inside a classroom with huge diagramsThey use laptop and desktop computers inside a classroom with huge diagrams Computers display an interactive 787 cockpit, as well as a 3-D exterior of the planeComputers display an interactive 787 cockpit, as well as a 3-D exterior of the plane

25. 787 Dreamliner (cont.) Using a mouse, the mechanics walk around the jet, open virtual maintenance access panels, and go inside the plane to repair and replace parts Using a mouse, the mechanics walk around the jet, open virtual maintenance access panels, and go inside the plane to repair and replace parts At the end of the course, the mechanics get all training materials on a tiny memory stickAt the end of the course, the mechanics get all training materials on a tiny memory stick In the field, staring up at an actual Dreamliner, they use tablet PCs to diagnose and solve real problems with the planesIn the field, staring up at an actual Dreamliner, they use tablet PCs to diagnose and solve real problems with the planes

27. Does TDI Pay Off? Meta-analysis results (Sitzmann, 2011) indicate that relative to a comparison group: Meta-analysis results (Sitzmann, 2011) indicate that relative to a comparison group: Post-training self-efficacy (belief that one can succeed) was 20% higher Post-training self-efficacy (belief that one can succeed) was 20% higher Knowledge of facts was 11% higher, Knowledge of facts was 11% higher, Skill-based knowledge was 14% higher, and Skill-based knowledge was 14% higher, and Retention was 9% higher for trainees taught with simulation games Retention was 9% higher for trainees taught with simulation games

28. Does TDI Pay Off? (cont.) Trainees learned more when:Trainees learned more when: Simulation games conveyed course material actively rather than passively,Simulation games conveyed course material actively rather than passively, Trainees could access the simulation game as many times as they desired, andTrainees could access the simulation game as many times as they desired, and The simulation game was a supplement to other instructional methods rather than stand-alone instructionThe simulation game was a supplement to other instructional methods rather than stand-alone instruction

29. Does TDI Pay Off? (cont.) Trainees learned less when:Trainees learned less when: The instruction the comparison group received as a substitute for the simulation game actively engaged them in the learning experience The instruction the comparison group received as a substitute for the simulation game actively engaged them in the learning experience

30. Social- Learning tools Employees have always learned from one another, but technology has made it possible for workers to collaborate in ways that were almost unimaginable a decade ago (OLeonard, 2013, p. 13).Employees have always learned from one another, but technology has made it possible for workers to collaborate in ways that were almost unimaginable a decade ago (OLeonard, 2013, p. 13).

31. Dramatic Growth (OLeonard, 2013) 2007: 7% of U.S. companies were using wikis in a learning environment2007: 7% of U.S. companies were using wikis in a learning environment 2012: 24%2012: 24% 2007: 11% of companies were using communities of practice (CoPs) in a learning environment2007: 11% of companies were using communities of practice (CoPs) in a learning environment 2012: 33%2012: 33% 2012: 26% of U.S. organizations use social media such as Facebook, Twitter, and Yammer in their employee- development initiatives2012: 26% of U.S. organizations use social media such as Facebook, Twitter, and Yammer in their employee- development initiatives

32. Social-Learning Tools (Cont.) 2012: $46,000, on average, spent in large U.S. companies, nearly triple the spending in 20102012: $46,000, on average, spent in large U.S. companies, nearly triple the spending in 2010 Objective : Create the kinds of learning environments that will fit evolving structural changes in the nature of work and in its execution Objective : Create the kinds of learning environments that will fit evolving structural changes in the nature of work and in its execution

33. Caution Traditional, instructor-led classroom training is still popular:Traditional, instructor-led classroom training is still popular: 37% of total training hours in manufacturing; 63% in insurance37% of total training hours in manufacturing; 63% in insurance Trend : combine social-learning tools with more formal training programs. How? Trend : combine social-learning tools with more formal training programs. How? By creating employee networks, connecting novices to experts through online expertise directories, and sharing knowledge through CoPsBy creating employee networks, connecting novices to experts through online expertise directories, and sharing knowledge through CoPs Result: continuous learning environmentsResult: continuous learning environments

34. Research Questions What is the relative effectiveness of alternative social- learning tools?What is the relative effectiveness of alternative social- learning tools? Which features seem to have the greatest impact on long-term learning and positive transfer to the job situation?Which features seem to have the greatest impact on long-term learning and positive transfer to the job situation? What circumstances make social-learning tools more or less effective?What circumstances make social-learning tools more or less effective? Are there interaction effects between social- learning tools and more formal training programs?Are there interaction effects between social- learning tools and more formal training programs?

35. Developing Leaders in an Uncertain World Best companies share two features: Best companies share two features: They generate dramatically greater market value over time than the weakestThey generate dramatically greater market value over time than the weakest Their CEOs commit a higher priority to leadership development in spite of uncertain environments and pressures for short-term financial resultsTheir CEOs commit a higher priority to leadership development in spite of uncertain environments and pressures for short-term financial results Source: 2012 study of about 1,000 firms worldwide by CEO.net in partnership with Chally Group WorldwideSource: 2012 study of about 1,000 firms worldwide by CEO.net in partnership with Chally Group Worldwide

36. Developing Leaders: Best Companies Procter & Gamble Procter & Gamble Exercises a razor-like focus on internal succession planning at all levels.Exercises a razor-like focus on internal succession planning at all levels. From its inception 175 years ago, promotion from within has been a hallmark of the company.From its inception 175 years ago, promotion from within has been a hallmark of the company. To encourage managers to develop those below them: your boss cant be promoted until you are ready to be promoted.To encourage managers to develop those below them: your boss cant be promoted until you are ready to be promoted. Each year the CEO personally looks at the top 300-400 executives and reviews their progress with the BoDEach year the CEO personally looks at the top 300-400 executives and reviews their progress with the BoD Most important element: short feedback loops that include 360- degree reviews where the system tries to prevent derailmentMost important element: short feedback loops that include 360- degree reviews where the system tries to prevent derailment

37. Best Companies (Cont.) General Electrics Crotonville, NY Center General Electrics Crotonville, NY Center Reportedly spends about $1 billion a yearReportedly spends about $1 billion a year Offers 13 leadership-skills courses that all senior executives should have, such as presentation skills, project-management skills, and financial literacyOffers 13 leadership-skills courses that all senior executives should have, such as presentation skills, project-management skills, and financial literacy Managed by Crotonville staff, but delivered at GE businesses around the world, including Shanghai, Munich, and BangaloreManaged by Crotonville staff, but delivered at GE businesses around the world, including Shanghai, Munich, and Bangalore Uses a Train-the-Trainer model. GE trains 50,000- 60,000 people a year digitally and an additional 9,000 attend courses at Crotonville.Uses a Train-the-Trainer model. GE trains 50,000- 60,000 people a year digitally and an additional 9,000 attend courses at Crotonville.

38. Best Companies (Cont.) IBM : long history of innovative leadership development and cross-discipline mentoring IBM : long history of innovative leadership development and cross-discipline mentoring Each year it identifies, assesses, and develops some 60,000 high- potential leaders at all levelsEach year it identifies, assesses, and develops some 60,000 high- potential leaders at all levels Sends teams of high-potential employees around the world to work with local organizations on local problems Sends teams of high-potential employees around the world to work with local organizations on local problems Its succession process has been a major reason it is one of the few firms that has lasted a centuryIts succession process has been a major reason it is one of the few firms that has lasted a century

39. Practices in Best Cos. for HRD Top management is committed to HRD; it is partTop management is committed to HRD; it is part of the corporate culture of the corporate culture It is tied to business strategy and is linked to bottom-line results.It is tied to business strategy and is linked to bottom-line results. Internal environments are feedback-rich:Internal environments are feedback-rich: they stress continuous improvement, promote risk taking, offer one-on-one coaching, and afford opportunities to learn from the successes and failures of decisionsthey stress continuous improvement, promote risk taking, offer one-on-one coaching, and afford opportunities to learn from the successes and failures of decisions There is commitment to invest the necessary resources, to provide sufficient time and money for trainingThere is commitment to invest the necessary resources, to provide sufficient time and money for training

40. Conclusions In an uncertain world, HRD expenditures may dip during economic recessions, but there is no evidence of their long-term demiseIn an uncertain world, HRD expenditures may dip during economic recessions, but there is no evidence of their long-term demise Competitive pressures to deploy well-trained workforces that can innovate constantly will not go away Competitive pressures to deploy well-trained workforces that can innovate constantly will not go away

41. Challenges: HRD Design/Delivery Changes in the structure of labor markets (greater use of LMIs) Changes in the structure of labor markets (greater use of LMIs) In the forms of organizations (from vertical hierarchies to networks) In the forms of organizations (from vertical hierarchies to networks) In social trends (explosive growth in the use of social- media tools), and In social trends (explosive growth in the use of social- media tools), and In technology (cloud computing, smartphones, tablet computers) In technology (cloud computing, smartphones, tablet computers) Technology-delivered instruction and social-learning tools are two key innovations, and there is every reason to believe that many others will follow Technology-delivered instruction and social-learning tools are two key innovations, and there is every reason to believe that many others will follow