RSM361 A.P.

Møller-Maersk Group February 20, 2019

1. What do you think are the critical talent challenges facing Maersk?
o What are the consequences of these challenges?
o Managing change is a priority and organizations must be proactive

 Retention
o Increased voluntary attrition rates
 i.e. of 400 new trainees, 20% stay beyond 5 years
o Consequences: Company has begun to hire more external candidates
 Development
o Current training programs (i.e. 2-year new trainee) are too expensive and provide a low ROI due to rising
attrition rates  removed program now
o Consequences: Benefits of current programs are decreasing
 Need to redevelop programs utilizing needs-based employee training
 Integrating Experienced Hires
o Current integration efforts do not receive positive feedback. Difficult to integrate within the A.P culture
for external, experienced hires. No formal training program in place for experienced hires.
o Consequences:
 Redesign integration efforts so that new hires are more successful in the work environment
 Can decrease morale if senior positions are being filled by external hires
 Integration risks
 Costly to develop a training program for experienced hires
 Practice of Rehiring (Boomerangs)
o No formal policies in place for re-hiring  there are costs to re-hire replacements
 For organizations with lifers, they don’t have policies in place
 Need to decide if they want to re-hire with internal or external members
o Consequences: May decrease employee moral/motivation to progress internally to senior positions.
o Benefits: lower risk, less costly, shorter recruiting process, faster integration, lower training costs, higher
retention rates amongst boomerangs as they have a clearer sense of where they want to be in their career
and A.P.

2. Was Maersk’s increased turnover a problem? Yes

o Recruiting has hits and misses  Want to max hits and avoid misses
o Want to reduce the turnover for people for whom it is not working out for some reason which makes them
want to leave
 Care about turnover, but also care about the type of turnover. Want to keep certain people if
possible.
o Previously company had lifers
o Expensive and extensive 2-year training program in place for new hires
o Currently, of 400 new hires within the trainee program, only 20% remained with the company after 5
years
o Annual voluntary attrition rates for energy department increased by 3-4 percentage points
RSM361 A.P. Møller-Maersk Group February 20, 2019

3. How do “boomerang” hires differ from external hires and internal promotions?
o Should Maersk rehire its former employees? Why or why not?
 Pro:
o Background experience for easier integration
o Fresh perspectives and skill sets
o Lower risk
o Less costly
o Shorter recruiting process
o Faster integration
o Lower training costs
o Higher retention rates
o Advantage in dealing with group level functions and establishing networks
 Cons:
o Decrease employee motivation to move up within the organization
o Questionable loyalty showcased by boomerangs – unless they left on good terms
o Threat of them leaving again – unlikely though

4. Should Maersk continue to invest heavily in its development programs? Yes/No?

 Yes, Maersk should continue to invest in development programs BUT in a needs-based manner
o i.e. executive training should be given to people who need it to perform better in their jobs, instead of as a
bonus.
 To address development challenges
o Implement personalized training that offers talent specific skills
o Provide other means of incentives to motivate employees (pay-for-performance initiatives like TIAA-
CREF)
 Divert focus away from new hires to mid-level management with experience

Video
 Training and development strategy: Focusing more compared to before to bring in the best applicants.
 80% of senior roles, top 120 positions are internal hires.
o For the 20%, have skills we don’t have which is why they are hired. Through the hiring managers, rule of
thumb for external hires, should be classified within 2 years as top 30% of the 120 senior positions.
 Pursuing boomerangs: Positively received by alumni. Previously not hiring but changed this policy for good high
performers who left on a good standing. Haven’t seen too many boomerangs yet for stats but know that those
hired are rehired and progress well in the company and is taken as a positive overall within the company.
 Want to change policies and other factors to not become biased in achieving diversity – look at the “hardware”
o Look at the software of diversity which entails looking at individual employees and helping them
progress in the company. 1 young world program to help individuals develop.
 Talent management is working well b/c integrate business and project strategy well.
 Talent Intimacy: Understanding not only which individuals were qualified to do a particular job, but also which
were willing to do it. Is the candidate willing to relocate? What family and personal commitments might prevent
them from accepting a new position?
o Focus on understanding the needs of employees and how they learned best.