With 43% of the Current Workforce Retiring in 10 years, What’s a CEO To Do?
By Josh Schwede
Chicago is a great setting for TaleoWorld this year - the President, a former Chicagoan just started his re-election campaign, the Chicago Teacher's Union protest is making national headlines, the Chicago Bears just dominated the Colts on Sunday, and Human Capital Management Executives gathered at a conference in the Chicago Hilton to figure out how to keep up with the inevitable change that is happening in the Human Capital market.
It all started with Mark Hurd, President of Oracle Corporation, who brought the point home to the HR management crowd, that to a CEO, data is King. "Holistically you HAVE to get a good view of how much your workforce is costing," Hurd explained. In a role play with Gretchen Alarcon, VP of Human Capital Management Strategy, they portrayed a typical quarterly review between an HR Manager and CEO - the HR Manager explains that turnover for top producers is too high and that the company is hiring just as many people as it is losing every quarter. She has deduced that they need $100 million increase in the HR budget for salaray increases and top performer bonuses. The catch? She doesn't have the data to support or backup her request for an extra $100 million. After sending her back to gather data points, Alarcon discovers that the actual amount needed is $50 million for Salary Increase and $10 million for Recruiting, and the actual budget increase is only $60 million. The basic idea? In a 5-minute meeting, a CEO can save $40 million with good data. The key to good data - well, in this case a plug for Taleo Fusion, and wicked smart HR executives to get the point across.
What keeps Hurd up at night are questions that HR Managers should be asking every day to stay ahead of the curve:
• Do I have the best people?
• Are they at the lowest cost possible?
• Are they familiar with the role?
• Are they able to execute?
• How much is attrition costing me?
• What skills will we need in the next 5 years?
• How will my business be effected by impending retirements?
According to Hurd, 43% of the current workforce will be eligible for retirement in the next 10 years. To help companies stay ahead of the curve he promised attendees, "At Oracle we are going to put more money into Taleo, not less". The need for good data to lower the cost of Human Capitlal will give HR the tools and capabilities no one has ever had before to make the best and most cost effective business decisions.