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Podcast: Rewarding talent in the digital age.

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Once an organization has defined its digital strategy and identified the type of talent needed to drive and deliver it, it then needs to attract and retain key digital talent as well as get the best out of the legacy workforce. This podcast focuses on the important role reward can play in achieving this.

Press play to listen to the podcast. Duration: 17:03.

Hosted by Simon Constable, with speakers: 

 

Vincent Milich

Senior Client Partner for Korn Ferry Hay Group in the US

vincent.milich@kornferry.com

Marc Gasperino

Managing Director for Korn Ferry's Digital Executive Search practice in North America

marc.gasperino@kornferry.com

Podcast transcript.

 

Simon Constable: I'm Simon Constable, columnist for the Wall Street Journal, Barons and other leading publications. Welcome to our podcast series on digital transformation. This audio series offers advice and insights from a range of Korn Ferry experts on the talent management areas that are crucial for organizations to get right in order to successfully digitally transform.

 

Today's podcast focuses on rewarding talent in...

CONTINUE READING...

Podcast transcript.

 

Simon Constable: I'm Simon Constable, columnist for the Wall Street Journal, Barons and other leading publications. Welcome to our podcast series on digital transformation. This audio series offers advice and insights from a range of Korn Ferry experts on the talent management areas that are crucial for organizations to get right in order to successfully digitally transform.

 

Today's podcast focuses on rewarding talent in the digital age. Today's speakers are Vince Milich - Senior Client Partner for Korn Ferry Hay Group in the U.S and Marc Gasperino - Managing Director for Korn Ferry's Digital Practice in North America. Thanks for joining us gentlemen.

 

Vincent Milich: Great to be here Simon. 

 

Marc Gasperino: Pleasure to be here, thank you.

 

Simon Constable: Vince, let's start with you. How can organizations develop a reward package that will attract key digital talent, even if they're not Google or Tesla?

 

Vincent Milich: Yeah, I know, sometimes it can feel like a challenge if you are not one of those emerging brands that is seen as a sexy place to work and be able to attract the top talent you need. In part, it's an answer that has been the case for reward professionals over time, but I think it's increasingly becoming important in this digital age and in digital transformation. That is, thinking in terms of a portfolio of rewards, not just paying more in base pay but there is a wide range of things that attract people to an organization and keep people with an organization that are both quantifiable and non-quantifiable.

 

So, things like the organization’s culture and the balance between work and play. The opportunity for career advancement, for being able to obtain additional skills and capabilities and work with mentors and key leaders in the area. I think we have to think broadly about reward and try and tailor a package of reward options that meet the needs and interests of the employee population.

 

That being said, I know there is still going to be a concern about getting key people with data analytics skills and a key data scientist here or there, and that may in fact result in a war for talent and a need to challenge your current reward guidelines and go outside-the-box to pay the right people.

 

But I think a lot of folks can think about internal resources and sourcing strategies from their current capabilities, as well as coming up with that kit bag of resources to provide more ways of attracting and retaining key talent through rewards. 

 

Simon Constable: Vince, let's talk about the being creative thing, because sometimes corporations have very rigid structures, that if you are of a certain rank in the organization you cannot be paid outside certain bounds in compensation. So, how do you deal with that being at odds with the entire rest of the organization when you are trying to do this digital transformation?

 

Vincent Milich: Sure, as a programmatic response - we are developing more expert paths and career opportunities within organizations, this used to be called a dual career ladder, now it's more of a multiple career ladder because there are so many different paths to higher levels of rank and compensation in organizations based on different skill sets and different ways you can add value to the organization. So, creating a framework like that, that allows people to progress up to high levels in the organization - both in terms of job title, prestige and compensation based on criteria that are established and a process, a governance process, that ensures that the wheels don't come off and it doesn’t get overused but that it’s used appropriately for the key roles.

 

So, that expert career ladder, with both criteria and a governance process to manage it. If you are still constrained because of internal equity concerns or others, to pay within a certain range, for a certain job, obviously I would encourage the use of variable pay wherever is possible to make up the gap. So, that might be using your current incentive or long-term incentive programs and even things like extended hiring bonuses. I have worked with organizations where they have had to put in a premium for key skills and what they have done is, instead of giving a person a higher base salary, or giving them a higher bonus at the end of the year since the end of the year is a long way off, they have awarded this market premium in quarterly instalments for a period of time. So, that is one of those creative ways of getting around it.

 

Simon Constable: Let's bring Marc in now. Marc, key things in the reward package to attract that digital talent?

 

Marc Gasperino: Sure. Well look, just to add to what Vince said, and I think there were some great points – many digital professionals claim that they work for a passion, that it's a passion of theirs. They want to make a difference, they want to work for a purpose, but they still need to get compensated for it. Salary and benefits are still important, but they are not the only way to reward your staff. Start-ups have long used equity as a way to incentivize their employees. Even traditional companies offer bonus schemes tied to company performance, but the most successful way of rewarding digital talent is something more personally focused.

 

If you look at the businesses that are transforming and that have successfully digitally transformed, the traditional businesses out there, bonus plans and equity and pay-out is based heavily on the success of the whole company or maybe the success or failure of a particular division of an organization, not as much weighted on the work of the individual.

 

Digital talent is often faced with the task of transforming a business, and they often need to rely on the abilities of their current workforce to succeed and reach their goals. So, we've seen these companies who are experiencing some sort of success in their digital transformation now, are starting to reward the newer digital employees, based on the work that they do. The things that they can have an impact on themselves, their accomplishments, and their individual successes a little bit more so than that of the larger entity – at least for a period of time, to allow them to achieve the sort of income they require, while the rest of the company gets up to speed, and that might be up to a year or two and then the compensation may change.

 

Also keep in mind that rewards don't always need to be financial, especially with a digital talent base. Personalized gifts can often be much more rewarding sometimes: personal development classes, weekend getaways, theatre tickets, a new set of golf clubs for the golf enthusiast out there, donations to a favorite charity or cause. Because this talent base really likes to make a purpose and work towards a purpose and make an impact in an environment or a community, these all impact one’s personal life and bring a more intimate relationship with your employee and that attracts the digital workforce.

 

Simon Constable: Let's go back to Vince. How can you use reward to get that movement of an existing workforce that may be somewhat familiar with digital to being really sort of right there where they need to be? 

 

Vincent Milich: Yeah, so most of the change in organizations that are going through digital transformation is not from those handful of people who you hire that have those core skills and the emerging capabilities, most of the change is happening with your existing workforce. 

 

So, in a word I think the answer to your question is around clarity. It's clarity around those roles and how roles are changing.

 

We are working with a large hospitality organization now where people in customer facing roles are going to have a lot more data in their hands around customer preferences and what they can do to help enhance the customer and give them an optimum experience and it's really changing how jobs right on the front lines are going to have to behave and make decisions and work differently and we are helping to redefine those roles.

 

The roles are still doing what they've always done, but they are using different tools and ways of accessing information in order to support the customer and trying to help the employee understand what their expectations are going to be like in the new environment, helping managers to coach employees through the change and ensure that they are going to be supported in their use of information differently, is the change that's required.

 

So, and partially that's the reward system because in some cases these jobs are growing and you're going to have to potentially pay more or get people with different skill sets and capabilities in those roles, but in the large part its people doing the same thing they've always done but using different tools and capabilities and really (they) just need to be supported and coached through the change if you are really going to get a sustainable change in your organization. 

 

Simon Constable: This is a great segue because there are of course a minority of jobs that are completely new that you've never seen before, so when the HR Director goes to the book of comparables, there's nothing there, there is no benchmark there. What advice do you have for people in that position where they don't have a whatever it is in the book – what would you say to that? 

 

Vincent Milich: So, compensation surveys by their nature are lagging indicators of the jobs in the world and they are by no means comprehensive. Jobs that are benchmarked in compensation surveys are jobs that you can get a lot of data for. It’s easy for people to match to them, there are a lot of them in the world and a lot of organizations have them. The jobs we're talking about here today are exactly the opposite of that. They are emerging, some organizations might have a lot of them but most don’t have many, and so there's a challenge in terms of getting good market data.

 

I would say that this is a case where understanding the internal value of the job to the organization is really pre-eminent. In cases when you don't have access to good market data, understanding how that job adds value to the organization and ranking it within your structure appropriately I think is the right answer and the right way to go.

 

Simon Constable: Marc, let me turn to you now and talk about culture and how that can be reinforced for collaboration and innovation within an organization using reward.

 

Marc Gasperino: Well I think first of all, companies who are looking to sustain digital success have likely already developed a certain culture in an environment that encourages innovation, we've found that as a common trait when we've studied these organizations. And many organizations have installed a tiered approach to innovative projects. The first tier would concentrate on new ideas that could make an impact over a short period of time, say within 12 months. The second tier would concentrate on improvements that could be realized within one to three years and the last time would be a classification of longer-term improvements or projects of innovation that could impact the business maybe three years out.

 

And this type of business planning allows employers to budget and also reward more effectively and be able to keep innovative projects alive, not shut them down even if there is a situation where they may not be profitable for the upcoming quarter in the results. So, we've found that these organizations think about innovation and they think about it long-term. The ones who fail in transformation and sustaining digital success, shut down projects and they don't reward people for out-of-the-box thinking and innovation.

 

The ones who are successful are actually planning it that way and saying there's a lot of great ideas out there and some are going to impact us in the next quarter, some might in the next year or two some might be further down the road but we shouldn't shut them down prematurely, we need to keep those alive and we need to keep the process going, we need to keep the rewards accompanying to those great ideas, making sure people are actually incentivized for those and those organizations are continuing that trend.

 

Simon Constable: And Marc, within that, that would include ideas that in fact die their own death without the management having to shut them down. Correct? 

 

Marc Gasperino: Correct yes, I think if you look at the most innovative companies out there, say like a Google, they actually encourage their employees to take a certain period of their work day out and just come up with as many ideas as they can, knowing that one out of ten may hit and they get incentivized to come up with great ideas overall not just the percentage of the ones that are hits and which ones are misses.

 

Simon Constable: Vince, how important is it to take a ‘total rewards’ approach when thinking about how to incentivize a workforce going through this digital transformation?

 

Vincent Milich: Yeah, so I guess, we've touched a little bit on that already but it's essential. People are different, people are motivated by different things. For some people, it may be that work-life balance may be the pre-eminent concern or benefits for their family. For somebody else, it might be opportunity to learn new skills, opportunity to progress in their career and for other people it may be just cash on the barrel head. So really thinking in terms of what you have as a portfolio of options to attract and retain your workforce and getting some insights from the workforce as to what they're interested in.

 

So, we've done surveys, we have a total remuneration survey that we use, where employees can allocate 100% across a variety of reward elements to give the company insights into what are the things that are really valued versus stuff we may be spending money on that people don't really value. So that we can fine tune our reward program to really attract and retain the kind of talent we want and we need to keep.

 

So, you know, it's essential. Need to think out-of-the-box. Cash is always the most expensive response and you know, doing other things. I keep focusing on career development but that's an area where you can get big bang for your buck. It's a place where most folks in this space are really concerned about, really want to know where they can go in the organization, how they can get there, how they can develop their capabilities to move ahead. And it's a relatively small investment for the organization for a large return in terms of employee satisfaction, engagement and ultimately retaining and getting people who succeed in their roles.

 

Simon Constable: And, Marc, final word to you.

 

Marc Gasperino: Yeah, I agree. It's all critical. And I think when you look at digital talent taking on these types of positions as specifically as within digital transformation, the working environment is really important to them, you know, digital talent wants to be able to make an impact, they want to feel good about the work that they're doing, they're actually driving towards something, they want to work with like-minded individuals so the culture does matter, they want autonomy to make decisions and work quickly, having, you know solid work-life balance like Vince mentioned before.

 

Gaining transparent and frequent feedback on their performance and where things are headed more frequently than they do in traditional businesses. All are critical to supporting and hiring, supporting and maintaining that world class digital workforce. So, I agree with everything Vince said and I think that the working environment is really, really critical.

 

Simon Constable: Thank you for listening to our podcast on rewarding talent in the digital age today. Please check out the rest of the podcasts in this series on the Korn Ferry digital sustainability microsite. Good bye from all of us.

 

Vincent Milich: Thanks Simon, take care.

 

Marc Gasperino: Thank you for having me.

COLLAPSE TRANSCRIPT

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