Hay Group_A total reward approach to graduates
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The document discusses approaches organizations are taking to attract, retain, and develop the right graduates. It summarizes interviews with three major clients on their graduate programs. Many organizations now focus on assessing values fit and offering flexible career paths and development opportunities to align with graduates' priorities. Effective communication of total reward packages including benefits, career support, and culture fit are emphasized as important to attracting and keeping the graduates organizations need.
Hay Group_A total reward approach to graduates
- 1. impact A total reward approach to finding and keeping the right graduates We’ve been doing lots of research on the topic of young people in work recently (including “Talking about their generation” and “Managing a multi-generational workforce: The myths vs the realities”). In this month’s IMPACT, we take a look at the role reward can play in attracting, keeping and getting the best out of graduates. What are graduates looking for from their reward package? And how important are non-financial rewards in keeping them happy? we take a look at the role reward can play in attracting, keeping and getting the best out of graduates. As part of our research, we interviewed three of our major clients – one of the world’s leading ICT solutions providers, a global engineering company, and a global Brazilian mining company. We asked them about their approach to graduate recruitment, development and retention to find out what they’re offering. © 2015 Hay Group. All rights reserved. Finding the right graduates can be difficult. Keeping them can be more difficult. When we conducted a survey of managers last year, 86 per cent said that retaining graduates with people skills was a concern.
- 2. These factors have not only meant an increased demand for graduates, but an increased need for them to have “soft” people skills and international experience (or to be able to gain them quickly). Some organizations are finding that they’re attracting more interest than they need, with hundreds or even thousands of applicants for each position. These organizations increasingly need to make sure that the applicants they select are the right ones. They need graduates who will fit their culture and stay with them in the future, helping to fill their leadership pipeline. But on the other hand, many other organizations are having difficulty attracting candidates. As one global engineering company said when we asked them about changes in graduate recruitment, “it is becoming harder to recruit graduates in the electrical engineering or IT areas, so we’ve focused on recruitment marketing that targets graduates in those areas, to raise awareness”. As a result of this, organizations are taking new approaches to help them find the right talent. More and more employers are going out of their way to meet graduates on their own ground, using online recruitment methods and advertising on social media. The leading global ICT solutions provider we interviewed told us they’re increasing their investment in Wechat, Weibo and other online advertisements, to “cater to the new generations’ styles”. This is just one example of the way organizations are willing to change how they approach recruitment and retention. More organizations are beginning to use competency and values testing as part of their graduate recruitment selection programs to help improve retention. As the Brazilian mining company we spoke to described it, “We’re looking for graduates with entrepreneurial spirit. However, this spirit must be aligned with our company’s values.” With 53 per cent of graduates we surveyed saying that they “considered leaving their job because they didn’t ‘fit in’”, making sure that their values and your values are aligned is vital. This is where employee value propositions can be really useful – helping your graduates to clearly understand where and how they can align. And with the growth of the individualization megatrend, we’re seeing more people basing their life and career decisions on their personal motives, rather than just economic necessity. FINDING THE RIGHT GRADUATES – FAMINE OR FEAST? With megatrends like digitization affecting work and management, the number of complex jobs has been increasing. Leadership and management roles increasingly involve juggling multiple skills, often on an international basis. “we’re looking for graduates with entrepreneurial spirit. however, this spirit must be aligned with our company’s values.” A Brazilian mining company © 2015 Hay Group. All rights reserved. 2
- 3. top performers are 127 per cent more productive, yet only a third of the difference is down to hard skills; the rest is down to emotional and social competencies. where are the soft skills? As Daniel Goleman found, "Top performers are 127 per cent more productive, yet only a third of the difference is down to hard skills; the rest is down to emotional and social competencies.” And these soft skills are currently perceived to be lacking. In fact, 81 per cent of leaders we surveyed said that the current state of people skills in their graduates and entry-level professionals made them concerned for the future of their business. And all the companies we interviewed in this article agreed that soft skills were important to them, with the global ICT solutions provider describing them as “integral”. Organizations are placing more value on graduates with experience, who are likely to have gained some of these soft skills already. Since universities and colleges tend to concentrate more on the technical side of their skills, more and more graduates have been taking on intern work where possible, trying to gain experience before applying. Another approach is to develop these emotional and social skills as part of helping new graduates settle into your organization. Remote and e-learning can resonate with young people. Eighty two per cent of graduates want to learn at their own pace, and 85 per cent are downloading apps to help them learn. Moving graduates between new and challenging roles is also key to building their learning – especially as 70 per cent of learning is experiential. These are some of the reasons we’ve developed our Journey app, which helps graduates and new starters to develop. As they make their way through the virtual journey, they’ll use gamification to learn how to build and improve their soft skillset. © 2015 Hay Group. All rights reserved. 3
- 4. The global engineering company we interviewed has an international program for graduates with high leadership potential, allowing them to build up their network and knowledge of different business areas more quickly. It’s important to remember that career planning and development is a key part of a graduate’s total reward package. It shows new graduates how you think they’ll fit into your organization, how they can be successful in their role and what the future might hold. Most young people are trying to build their CVs quickly, looking for interesting and challenging experiences – undertaking what Reid Hoffman of LinkedIn calls “tours of duty” to boost their CVs. If you’re not providing the potential for these experiences, they’ll likely look elsewhere – and with the arrival of digital recruitment and social media, it’s easier than ever for them to find something else. Pay is obviously an important part of the reward package, but it’s more of a hygiene factor. If the pay isn’t right, it’s likely to be a problem. But it’s unlikely to hold them if they don’t feel like the job is the right fit. As the global ICT solutions provider points out, “They’re not only satisfied with material abundance, so we’ve offered more flexibility in the selection of positions and locations to suit those needs.” This flexibility also shows how more organizations need to change in order to make themselves more attractive to graduates as well. Flexibility isn’t just about the hours they work, or the role that they perform either. It’s also about how they work, and how they are managed and developed. The key points are to treat them with respect, take their views into account, and focus on their development. TAKING A TOTAL REWARD APPROACH As organizations become larger and more complex, many develop more of a need for their high potential graduates and future leaders to gain international experience quickly. most young people are trying to build their cvs quickly, looking for interesting and challenging experiences. © 2015 Hay Group. All rights reserved. 4
- 5. 5 As well as listening, you should be clear about how you communicate the total value of your reward package, from clear career-pathing to an explanation of the employee value proposition and a breakdown of the benefits you offer. This is particularly important with younger people, as without much experience of the workplace, they may not have a strong understanding of various benefits, and will feel more valued once they do. The organizations that are most likely to retain the graduate workforce they want will be those that view employment more as a partnership. That means people’s personal aspirations and values are considered, and they can select the career path that works best for them. At the start of their careers, this needs to be considered most strongly. The organizations that do this best will be those that are clearest about communicating the value they place on their graduates, listen to them and act on what they hear. COMMUNICATING THE TOTAL VALUE Using online survey tools and new starter forums can help you find out how your graduates are adapting culturally and socially. Acting on the results shows that you’re listening to them as well, helping to improve your employer brand. you should be clear about how you communicate the total value of your reward package using online survey tools and new starter forums can help you find out how your graduates are adapting culturally and socially. © 2015 Hay Group. All rights reserved.
- 6. 1 client interview 2 We interviewed a global Brazilian mining company. How many graduates are you recruiting this year? Roughly around 150. What are you looking for in your graduates? We’re looking for graduates with entrepreneurial spirit. However, this spirit must be aligned with our company’s values. A key one is to respect and value people and people management. Also, we’re looking for intercultural and international vision. We value experience in other countries. Language – especially English – is key. Do you have a specific reward program for graduates? There is no specific reward program. Graduates go through the same assessment, appraisal and recognition processes as the rest of the company. Do you consider soft skills with regard to reward? They’re considered in our talent management systems. How do you onboard and career path your graduates? Along with mentoring, they rotate jobs and areas and are given clear projects and challenges, such as project management or six sigma. They also receive specific training in hard and soft skills to accelerate the development. Over the last few years, what changes have you noticed, and what changes do you expect, with regards to graduate recruitment? In the last two years, there were changes and improvements. Future changes are hard to predict, but as the market and companies face huge change and dynamics, changes or improvements may come – for instance, even more involvement of top management in the program. 1 client interview 1 Based in China, this is one of the world’s leading ICT solutions providers. How many graduates are you recruiting? We recruit about 10,000 graduates each year. What are you looking for in your graduates? We look for those graduates with good qualifications and with related academic background. We’d want them to be part of our talent pool for the next five to ten years. How do you reward your graduates, and what’s the thinking behind it? Graduate compensation starts from RMB 10,000 to 11,000. Undergraduates receive around RMB 1,000 less*. Most jobs will vary to about another RMB 3,000 on top of that – the final interviewer will have the right to decide. They’ll also have benefits that include legal items and additional insurance policies such as accidents and casualty. (*These figures are highly competitive in the Chinese market). Do you consider soft skills with regards to reward? Yes, we do consider soft skills, such as communication skills and logical thinking, integral parts to consider. How do you onboard and career-path your graduates once you’ve hired them? Firstly, there’s a one-week culture orientation for fresh graduates to get an overview of the company’s basics, and to understand its core value and culture. Secondly, for sales, services and research and development positions, we will have specific trainings to equip fresh graduates with the essential knowledge and skills they need. Once they start in their new positions, internal mentors will be arranged at departmental level to guide their routine work until they have passed their probation. After that, they will enter into the common career path designed for all employees. They can apply for promotion once they’ve met the qualifications and they will also have the opportunity for internal mass training and e-learning. Over the last few years, what changes have you noticed, and what changes do you expect with regards to graduate recruitment? With the rise of social media, we have enhanced our investment in Wechat, Weibo and other online advertisements when recruiting. At the same time, we will consider more innovative contents in campus recruitment to cater to the new generations’ styles. Another change is on the graduates’ side. The new generation has shown more diversified needs. They are not only satisfied with material abundance, so we’ve offered more flexibility in the selection of positions and locations to suit those needs. 6
- 7. 1 client interview 3 We spoke to a global German engineering company about their graduate approach. How many graduates are you recruiting? We don’t publish specific numbers regarding graduates, but we recruited 2,000 employees in 2014, of which a high number were graduates. What are you looking for in your graduates? First of all, we’re looking for soft skills like communication skills or the ability to work in a team, as well as the professional knowledge they’ve gained through their studies. That professional knowledge is particularly important in areas like electrical engineering or IT. Internships and practical experience can be a big plus as well. Finally it’s important that graduates can think outside the box. We consider interdisciplinary thinking as the basis of creativity and connection, and we want to keep innovating. How do you reward your graduates, and what’s the thinking behind it? When allocating the level of reward, we don’t consider the final degree as an important criterion. In particular this means that it does not matter if a graduate has completed a bachelor’s or master’s degree – the pay will be similar in the long run. In contrast to that the evaluated value of the job plays an important role when allocating a graduate job to the pay grade. Although profit sharing is in place for graduates, a classic incentive plan is not. Do you consider soft skills with regards to reward? If not, is it something you’re considering for the future? We consider soft skills to be essential, but it doesn’t play an important role in reward. We have a collective wage agreement, and rewarding soft skills could have some equality issues. How do you onboard and career path your graduates once you’ve hired them? We introduced two different onboarding processes – one for international trainees and one for direct entrants. The international process is for graduates with high leadership potential, and allows them to work in different locations over 15 months. It also gives them a chance to build up their network and their knowledge of different areas. The onboarding process for direct entrants is rather classical, concentrating on their own departments and the departments which they’ll be working with. We want to make sure they understand the importance of interconnected departments. Career paths are important for us. Graduates can pursue careers that are either specialist or management. The work experience they gain is an essential factor for them to progress for either path. What changes have you noticed with regards to graduate recruitment? All in all the most successful recruiting channels have been established focusing on graduates who have completed internships or done project work with us. Our recruiting channels for graduates are the most successful we have, but we have still noticed changes. For example, it is becoming harder to recruit graduates in the electrical engineering or IT areas, so we’ve focused on recruitment marketing that targets graduates in those areas, to raise awareness amongst graduates who might not have considered us yet – not all of them know we employ about 1,200 people in the IT area. What changes do you expect with regards to graduate recruitment? In the future, graduate recruitment will become more international. We already see international diversity as an important part of recruitment as the market is becoming more competitive. Also lifelong learning is becoming more and more important. We target this issue by establishing a targeted talent management program, and building up talents from the inside out. Do you need help to communicate the total value of your reward package? Are you hoping to improve how you on-board graduates? Talk to one of our reward experts at rewardservices@haygroup.com to find out more about how we can help. Want to help graduates develop the soft skills they need? Our new Journey app can help. © 2015 Hay Group. All rights reserved.
- 8. Hay Group is a global management consulting firm that works with leaders to transform strategy into reality. We develop talent, organize people to be more effective and motivate them to perform at their best. Our focus is on making change happen and helping people and organizations realize their potential. We have over 4000 employees working in 86 offices in 49 countries. Our insight is supported by robust data from over 125 countries. Our clients are from the private, public and not-for-profit sectors, across every major industry. For more information please contact your local office through www.haygroup.com ©2015HayGroup.Allrightsreserved. w www.haygroup.com b blog.haygroup.com africa cape town johannesburg asia bangkok beijing guangzhou gurgaon ho chi minh city hong kong jakarta kuala lumpur mumbai seoul shanghai shenzhen singapore tokyo europe amsterdam athens barcelona berlin birmingham bratislava brussels bucharest budapest dublin edinburgh enschede frankfurt helsinki istanbul kiev lille lisbon london madrid manchester milan moscow oslo paris prague rome stockholm strasbourg vienna vilnius warsaw zurich latin america bogotá buenos aires caracas lima mexico city rio de janeiro san josé santiago são paulo middle east abu dhabi doha dubai riyadh north america atlanta boston calgary chicago dallas edmonton halifax kansas city los angeles montreal new york metro ottawa philadelphia regina san francisco toronto vancouver washington dc metro pacific auckland brisbane melbourne perth sydney wellington