Using Job Rotations For Improving Development And Retention

© Dr. John SullivanAuthor, Professor & Advisor to Management

www.DrJohnSullivan.com

2009

EFFECTIVE JOB ROTATION PROGRAMS

Development & Implementation

Dr. Sullivan’s current books

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Global reach of Dr. John Sullivan

(43 countries)

(32 countries)

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My two goals for today

1.To make you think about… whether your current “reactive” approach to internal movement is… hurting your firm

2.To answer your questions

Please submit questions at anytime!

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Topics for today

Today we will cover four broad areas:

1. Some quick definitions

2. Common problems with existing processes

3. “Next generation” rotation program features

4. Metrics & making the business case to managers

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Some quick definitions

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Some definitions

An internal movement program:

A broad term for any internal movement program that is designed for improving development, “right job fit,” productivity, employee retention or promotion.

There are 3 possible focus areas…to increase the amount of internal movement, the speed of movement and the impact of those moves.

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Some more definitions

Job-posting / job bid systems – employee driven permanent movement for retention & motivation

Redeployment – the permanent movement of a large number of surplus employees for business impact

Job rotation program – shorter term movement for development or sudden business needs

Stretch assignments – providing more difficult tasks/ goals in a hi-po’s current job (generally without movement), for assessment and development

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Definitions of two more advanced approaches

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Some definitions

Intraplacement:

Primary focus – the proactive movement of individuals to increase their business impact and retention.

An advanced corporate process that utilizes an internal team of recruiters to proactively select and then move key employees to roles where they can deliver greater value

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Some definitions

“Right job” fit:

You can maximize the productivity, innovation and retention of a high value individual… when they are moved into a new job that is a better “fit” (there are 10 “right fit” characteristics or elements)

Characteristics of the person (2)

1.Right experience, temperament, motivation, and relationships

2.Right skills (technical and leadership)

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“Right” job characteristics

Characteristics of the job (8)

3. Right responsibilities/assignment

4. Right manager and managerial approach

5. Right motivators

6. Right team and co-workers

7. Right resources, information and tools

8. Right business unit/business cycle

9. Right expectation of innovation

10.Right time where position has the max impact

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Let’s look at current IM processes

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There are six typical internal

movement processes

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Current internal movement processes

Commonly found current IM processes include:1.“Fill in” rotations – employees are temporarily

shifted to fill in for sudden turnover or absent ee’s2.Job bid processes – employees “bid” on jobs

based on a point system3.Job-posting processes – employees apply for open

jobs and are selected based on interviews4.Succession plan rotations – those on the

succession plan are given short-term assignments5.Development rotations – high potentials are given

rotations for assessment and development6.Redeployment of surplus ee’s – to avoid layoffs

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Reasons why people don’t move “naturally”

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Nine reasons why people don’t move naturally

Restrictions on the free flow of talent:1.Lack of information about openings – there is

no easy way for EE’s to find out about open projects/opportunities

2.Managers hoard talent – they discourage top talent from becoming more "visible". Some managers have “veto power” over losing an EE

3.The appearance of disloyalty – a rotation could cause peers or managers to treat the EE differently

4.Fear of rejection – many EE’s fear rejection and won't even apply

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Reasons why people don’t move naturally

(More) Restrictions on the free flow of talent

5.Lack of self-confidence – not all employees believe they can handle a new assignment outside their normal “comfort zone.” They might also be afraid because… failing during a job rotation can negatively affect their career.

6.Insufficient time to prepare – heavy workload leaves them no time for resumes/interviews

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Reasons why people don’t move naturally

(More) Restrictions on the free flow of talent

7.No career focus – many ee’s lack the desire to even consider a move or a rotation assignment.

8.Corporate restrictions – some firms require new-hires to stay in their position for a set period of time

9. No one will ask you – most organizations prohibit internal recruiting and as a result, there is no formal process to "recruit" from other teams (leaving external rec as their only call)

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The typical problems associated with

formal corporate rotation programs

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Typical rotation program weaknesses

No clear goals or plans – goals are not clear or measurable. No written strategic plan

Un-targeted movement – “uninformed” employees are allowed to determine where and when to move

Frustration with the placement process – it’s slow, no reasons given for rejection and it’s wired

Lack of recognition & rewards – home manager & rotation supervisor are not measured or rewarded

Weak monitoring of rotations – rotatees are overworked, underworked & no support from HR

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Typical rotation program weaknesses

A headquarters focus – low participation or few opportunities outside of HQ or internationally

Selection problems – often rely on other selection processes designed for executives (development/ succession). They need special criteria for selecting both rotatees and projects

Ignoring contingent workers – few processes include the growing % of contingent workers

A lack of information – most rotation processes have little available information and “how-to” templates

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Typical rotation program weaknessesA lack of measures and success metrics – no

assessment of the cost of slow/wrong job placement. No comparisons between OJT and classroom/Internet

A lack of integration – the different movement programs operate as independent silos

Weak program management – processes are not coordinated, little technology & under resourced

No short-term capability – they are designed primarily for “whole job” transfers

Ignoring internal “passive “ job seekers – processes are designed for “actives”

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Now let’s begin looking at…

next generation programs

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Typical second-generation business impact goals

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Typical program goals

13 possible business impact goals

1.Improving employee performance and workforce productivity

2.Accelerating leadership development efforts

3.To retain rotatees

4.Speeding up best practice sharing

5.Increasing rates of innovation (in departments with high participation rates)

6.To increase promotion speed

7.Skill improvement

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Typical program goals

(More) Business impact goals

8.To increase learning speed

9.Improving motivation

10.Improving recruiting & employer brand image

11.Increase corporate capability and capacity

12.Better understanding and cooperation between diverse business units

13.Continuous improvement as a result of rotatees asking the “why? question”

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Key design features of next generation programs

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Design elements of 2nd generation programs

19 Key design elements

1. Proactive –individuals are approached to increase both the volume and the frequency of transfers

2. Targeted movements – individuals are provided with education and guidance on what is the best placement based on their career aspirations… as well as where they will have the most business impact

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Design elements of 2nd generation programs

(More) Key design elements

3. Dedicated intraplacement recruiters – there is a dedicated and trained team of recruiters that proactively identify and help move employees

4. Prioritized – the rotation function focuses its resources and efforts on high priority SBU’s, individuals and projects. Development is focused on mission critical skills

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(More) Key design elements

5.Part-time rotations – the process includes the capability of part-time placements, because most are too busy during tough times to accept a full-time assignment

6.Project opportunities – internal movements often include assignment to short-term projects to fit rapidly changing business needs (Whirlpool)

7.Overload assignments – it offers placements for short-term business “overload” needs (this might include seasonal needs or overloads due to product or advertising promotions)

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Design elements of 2nd generation programs

(More) Key design elements

8. Global – the process involves business units from around the world

9. Remote capability – the rotations or movements can include "virtual" working from anywhere assignments

10."Outside the organization" placements – it provides opportunities to place employees in joint ventures, at strategic partners or even within a large customer's organization

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Design elements of 2nd-generation programs

(More) Key design elements

11.Non-obvious placements – the process is designed to increase the movement of individuals into “non-obvious” positions (diverse and outside their current organizational chart, functional area or business unit)

12.Technology usage – the entire process is electronic and paperless. Social networks, forums and Wiki’s are used to enhance learning and communications

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Design elements of 2nd generation programs

(More) Key design elements

13.Employee involvement – some of the assignments and projects are generated and developed by employees. Rotatees are expected to take ownership of their development and learning

14.Program ownership – rather than being considered an "HR program,” the managers and employees feel that they "own" the rotation process. As a result of this ownership, they invest more time in commitment in its design and operation

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Design elements of 2nd generation programs

(More) Key design elements

15.Rewards – the process recognizes and rewards (both in the form of bonuses and promotions) managers for finding, developing and "releasing" talent to other parts of the business

16.Metric driven – the rotation process continually improves its results based on metrics and data. Most program decisions are based on facts and data.

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Design elements of 2nd generation programs

(More) Key design elements

17.Competitive advantage – the process is designed to provide a measurable advantage over competitors in recruiting, development and retention

18.Performance-based – follow-up rotation projects are only provided to managers and individuals that have previously completed successful assignments

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Design elements of 2nd generation programs

(More) Key design elements

19. It includes all types of labor – in addition to full-time employees… part-time employees, contractors, vendors, outsourced work and even interns are all included in the internal movement process.

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Unusual types of job rotations

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Unusual rotation options

Unusual rotations to consider:Strategic partner or subsidiary job rotation “Understanding the customer” rotations Rotations to universities, government or NFP’sVirtual rotationsGeographic or global job rotations“Free time” assignments (Google) Variable duration rotations Benchmarking assignmentsTwo in a box “Gear down” rotations

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Functional types of rotation options

Functional - rotations between inter-related functions:Between interdependent unitsLiaison assignmentsOverhead to lineTactical to strategicProduct design into customer serviceProduction into qualityBetween HR and financeTechnical to HR

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Best practice examples by leading firms

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Best practice program examples

Proactive Intraplacement – assigning a team of recruiters to recruit for key roles (Booz Allen and Microsoft)

Redeployment – a permanent process that works to redeploy valuable talent from areas where it is not needed… to areas of high need (US Army and Marine Corps rapid deployment forces and Intel)

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(More ) Best practice program examples

Movement related to the business cycle – most large organizations have business units in various life cycle stages from start up to commodity. What is needed is a program that directs talent to the most appropriate stage of the business life (Microsoft)

Competition for employees – while every firm competes externally for talent, few have brought the same level of competition inside (National Oilwell Varco)

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(More ) Best practice program examples

Right job placement – Motorola, Valero and Microsoft have in the past developed an internal movement process for "right job" movement

Return ticket for internal transfers that don’t work out – employees fear that should an internal job change be too much of a stretch, they may lose seniority, friendships and “ding” their career with the organization. (Becton Dickinson)

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(More ) Best practice program examples

Rotate idle employees into line jobs – firms that have no layoff policies can temporarily reassign idle employees to line positions including sales and customer service jobs (Southwest Airlines)

Project marketplace – a critical element is the ability to make the available projects "visible" to your employees. The most advanced approaches are to use internal contests or an internal webpage to make employees aware of these projects and assignments (Google, MGM Grand and Whirlpool)

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Best practice firmsGE Google

Booz Allen Microsoft

HP Becton Dickinson

Eli Lily General Mills

IBM Intel

National Oilwell Varco U.S. military (rapid deployment forces)

EDS Aviall

U.S. Census Bureau Henkel

Air Products RJR Nabisco

Motorola American Greetings Corporation

Mobile Valero Energy

Intuit Dell

MGM Grand

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Tips for improving program participation rates

Improving management participationMake the business case Show the impact on retention and attraction Distribute reports Get a program championAuto notify/ post available assignments/ee’s Provide how-to materials and FAQ’s Reward and recognize them Make it a promotion criteriaExternal exposure – get your program written up

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Tips for improving employee participation ratesShow the impact Use social networks to communicate Hold educational events and rotation fairsProactively notify them Have an employee referral processProvide mentorsStart with part-time rotationsOffer a no fault divorce and Mid course correctionLet them develop their own rotation Prequalify employees Remote assignments Buddy participation

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Measuring next generation program performance

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Process metrics

11 Strategic metrics for IM programs

1.Improved employee performance – the percentage increase in the actual performance, forced-ranking placement or performance appraisal ratings of those that complete rotations versus those that don‘t

2.Increased promotion speed – the percentage increase in promotion rates of those that complete rotations versus those that don't (alternative: the percentage of promoted employees that had a rotation during the last three years)

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Process metrics

(More) Strategic metrics

3.Internal hiring percentage – the percentage of all vacant positions that are filled internally. This ratio is important based on the premise that external hiring is at least a partial indication of poor leadership development

4.High rotatee retention rates – the average percentage of rotatees that remain with the firm for at least three years following a rotation compared to the retention rate of non-participants

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Process metrics

(More) Strategic metrics

5.High participation rates – the average percentage of employees, managers and departments that participate in the rotation program each year, compared to the % that wanted to move

6.Increased speed of placement – the average number of days it takes to place an individual in a job or assignment after the position becomes open

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Process metrics

(More) Strategic metrics.

7.High satisfaction rates – the average percentage of “rotatees” and managers that rate the experience as “very effective” or above, when asked “How effective was your rotation in improving their knowledge, skills, contacts and performance?”

8.% of non-obvious selected – the average percentage of rotatees that are diverse, international or non-obvious choices

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Process metrics

(More) Strategic metrics.

9.High “right job” placement rates – the % of top performers that are not currently rated to be in their “right job” and to decrease the number of “wrong job” placements.

10.External publicity – the amount of external media exposure that the program receives

11.Overall program ROI – the dollar costs compared to the dollar benefits (impact on revenues) of the program

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Making the business case to managers

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Making the business case to managers

Four potential impacts on corporate revenues

1. The % of performance increase of rotatees

2. The value of faster time to fill in key positions

3. The lower cost of internal hires

4. Lower turnover costs of rotatees

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Calculating the impacts on corporate revenues

The % of performance increase of rotatees Identify jobs where performance is easily

quantified (sales, customer service etc.) Compare the average individual employee

performance the year before the rotation… to the year after (you may have to go back two years)

Take the average percentage performance increase and multiply it by the average revenue per employee

The resulting number is the average revenue per employee increase per rotatee (multiply it by the number of rotatees)

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Calculating the impacts on corporate revenues

The value of faster time to fill in key positions Track the average time to fill days in positions

filled internally by past rotatees Compare it to the average time to fill days in

all other positions Determine the average revenue per employee

per day by dividing the number of workdays into the average revenue per employee

Multiply the shorter average time to fill days by the revenue per employee per day

The resulting number is the value of decreasing the time to fill due to faster internal placements

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Calculating the impacts on corporate revenues

The lower cost of internal hires Calculate the average salary differential in $

between internal hires and external hires in the same position (65%)

Calculate the average cost per hire difference between internal and external hires

Track the number of internal hire filled by a rotatee, and multiply it by the cost per hire and the salary differential savings

The resulting number is the lower costs associated with internal hires

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Calculating the impacts on corporate revenues

Lower turnover costs of rotatees Calculate the average turnover costs for losing an

employee (or use a 3X their salary number) Compare the turnover rate of rotatees to those

of non-rotatees in the same job families Multiply the improved turnover differential by

the costs The resulting number is the reduced cost of

turnover of rotatees

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Calculating the total $ impact

1. The average revenue per employee increase per rotatee - 101 rotatees X $65,000 = $7,000,000

2. The value of decreasing the time to fill is… 49 internal rotatee hires X 32 fewer vacant days at $1k per day = $1,560,000

3. The lower costs associated with internal hires is 49 internal rotatee hires X $2k lower CPH and average salary savings of $30k = $1,600,000

4. The reduced cost of rotatee turnover is $304k X 9 fewer turns = $2,700,000

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Calculating the impacts on corporate revenues

The total revenue impact of the rotation program during this year is

$12,860,000

The program budget this year was $1,200,000

The program ROI was nearly 10 - 1

Did I make you think?

Provide you with some new ideas?