HUMAN CAPITAL DEVELOPMENT

STRATEGIES

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 Sneak Preview:

Malaysian
Resourcing and Initiatives
Retention
Succession
Planning
Talent
Management

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Issues Regarding Our Workers
The education system is not producing the skills demanded by
firm – the Department of Statistics reports in 2013, 80% of
Malaysia’s workforce received education only up to SPM

Between 1990 and 2005, foreign labor contributed more than

a third of the increase in total labor supply, and over 98%
were low-skilled contract migrant workers;
Source:
EPU, 2013 Only 25% of Malaysia’s labor force is composed of highly
skilled workers, compared to Singapore (49%), Taiwan (33%)
and Korea (35%)

In some cases, employers do not pay for skills; relying instead

on a readily available pool of unskilled foreign workers and
underpriced resources;

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HC Development Strategies:
Key Concepts

• Talent Management
• Succession Planning
• Resourcing and Retention

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 What is Talent Management?
Talent management has been
described as “a deliberate and on-
going process that systematically
identifies, assesses, develops
and retains talent to meet
current and future business needs
and objectives.” It begins as soon as
a potential hire is identified, and
continues throughout the person’s
entire tenure as an employee.
Talent management is a
conscious, deliberate
approach undertaken to
attract, develop and
retain people with the
aptitude and abilities to
meet current and future
corporate organizational
needs.
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 Talent Management Components

•Who are our •What kind of talent • Are we attracting •Are there on-the-job
potential leaders? does the organization the right talent to development
• What are their need? meet current and opportunities?
career interests? •What talent does the future business •Is executive coaching
• Do we have organization have? objectives? an option?
emergency back-ups? •What are the top • Can we identify •Should they attend
• What are we going roles? external and internal Leadership
to do to develop and expertise? Development
retain them?

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 6 Dimensions of Talent Management
Talent Management Description
Dimensions

Develop Strategy Establishing the optimal long-term strategy for attracting, developing,
(Identification/Development) connecting and deploying the workforce.

Attract and Retain Sourcing, recruiting and holding onto the appropriate skills and
capabilities, according to business needs.

Motivate and Develop Verifying that people’s capabilities are understood and developed to
match business requirements, while also meeting people’s needs for
motivation, development and job satisfaction.
Deploy and Manage Providing effective resource deployment, scheduling and work
(Management) management that matches skills and experience with organizational
needs.
Connect and Enable Identifying individuals with relevant skills, collaborating and sharing
(Engagement) knowledge and working effectively in virtual settings.

Transform and Sustain Achieving clear, measureable and sustainable change within the
(Retention) organization, while maintaining the day-to-day continuity of operations.

Source: IBM Institute for Business Value/Human Capital Institute. 9

 Impact of Talent Management on
Employee Engagement (1/4)

Talent Management Process
Workforce Planning
Talent Acquisition (Recruiting and hiring lifecycle from
Hiring)
Succession Planning
Impact on Employee
Description
Engagement
Plans, schedules, Engaged employees
budgets, tracks and require the proper
allocates employee resources to effectively
resources execute their jobs
Streamlines the entire Ensure the “right” person
is hired and processed the
requisition to required job competencies
candidate selection to be successful
Identifies, prepares, Career advancement
and tracks high opportunities are a top
potential employees driver of employee
for promotion engagement

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 Impact of Talent Management on
Employee Engagement (2/4)

Talent Management Impact on Employee

Description
Process Engagement
Provides competency-based Empowers employees to take
Career Development development and career an active interest in their own
plans development
Simplifies and standardises
Engaged employees require
the planning, modelling,
fair, equitable, and consistent
Compensation budgeting, analysis, and
compensation practices;
Management execution of global
Strong performers must be
compensation and reward
rewarded appropriately
policies

Motivates employees and Pay-for-performance is a

Incentive Compensation managers financial rewards strong motivator (and strong
within an organisation performers must be rewarded)

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 Impact of Talent Management on
Employee Engagement (3/4)

Talent Management Impact on Employee

Description
Process Engagement
Employees goals are clearly
Optimises performance
articulated and workers
management processes
have a better understanding
Performance Management and aligns employee
of how their efforts impact
development and goals
the company (line-of-sight
with corporate objectives
visibility)
The company is actively
Automates and manages
investing in employee
Learning Management employee training and
learning and skills
learning
development
Consistent feedback and
Automates the entire 360
resulting development
360-Degree Feedback coaching and personnel
plans drive employee
development process
growth
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 Benefits of Talent Management
Programs
• Provide comprehensive approach to company-wide talent
management
• Align talent plans with business and strategic plans
• Meet critical talent needs and minimize talent gaps across the
company
• Increase knowledge about skills, capabilities and talent across
the company
• Allows for a unified and comprehensive approach to acquiring,
developing and retaining talent
• Comprehensive knowledge about skills and experience
employees
• Create a useful talent plans for all “critical talent” in the
organization
• Target development for internal critical talent “back-ups”

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Sample of Talent Management
Initiative by Organizations

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 global and
As a
diversified business entity,
PETRONAS continuously
seeks for capable people
to drive the company towards
realising our vision to
be a leading oil and gas
multinational of
choice.We welcome talents
of diverse backgrounds
and cultures to join our team
and grow with us.

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 One AirAsia
Our people are our greatest asset. They make all the differences in the world.

Our driving force has always been our people. From our humble beginnings to the
present family size of 5,000 people, we stand united and share one common culture:

Fun & Friendly

Be the nicest, most happening person in the world. Be one of a kind.

Attitude
Put our hearts into it and everything is possible.

Quality
Low fare and high quality is an unbeatable product

This means regardless of our different cultures and nationalities, we all ascribe to the same values and
practices where each of us strives to provide our guests, shareholders and colleagues with a service that
is uniquely AirAsia throughout 20
 Pay Exception is a procedure at FedEx, which allows managers to
recommend and give exceptional pay increases to their highly
performing employees when it is not covered by normal policy;
FedEx has Personality Development Systems, amount of USD3 000
anually as education reimbursement and an Online training library
with 600 courses

Formal individual/group recognition at

Departmental/Organisation levels
Intel Technologies has cash bonus plans and
performance based bonuses for employees

In Whirlpool Appliances, there are highly selective leadership

development mentor programs. Managers selected to
participate as mentors go through a rigorous selection process
and are then monitored closely to ensure that only managers
who consistently produce results remain in the programs
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Johnson & Johnson conducts a Strategic Roadmap
Meeting which is a large-scale interactive process
(LSIP) of communicating with employees and getting
their buy-in on the strategic goals set by the company.
This is a theme based motivational event.

• Friendly service and excellent value

• People are #1- treat them well, expect a lot, and the rest will
follow
• Work hard, yet keep it fun
• Continual self-improvement

De-motivation to work on holiday.

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 Succession Planning

Defined as the process of

identifying, preparing, and
tracking high potential gaps in
leadership employees for
promotion and advancement –
(Whitepaper SumTotal – Succession Planning: Rise of the Talent
Ecosystem, 2010)

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Top Talent Challenges in Succession Planning

#1 Gaps in
leadership pipeline

#3 Difficulty filling key

# 2 Retention employee positions
problem

Source: Bersin & Associates, July 2008

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 RESOURCING AND RETENTION
Why employees leave ?
What is meant by
“employee retention”?
•It is the extent to which an
organisation is able to hold on to
its employees for a specified time
(Kalema Richard, 2007).
• Not being made to feel like a
valued part of the company
• Lack of training/education
• Non-competitive compensation
packages
• Lack of responsibility/challenging
work
• Lack of recognition and rewards
• Lack of advancement
opportunities
• Family obligations
• Lack of feedback/communication
from management
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 Top Drivers of Attraction, Retention and Engagement

Top Attraction Top Retention Top Engagement

Drivers Drivers Drivers
Competitive base pay Organisation’s reputation as Senior management
a great place to work sincerely interested in
employee well-being
Career advancement Satisfaction with the Improved my skills and
opportunities organisaion’s people capabilities over the last
decisions year
Challenging Work Good relationship with Organisation’s reputation
supervisor for social responsibility
Convenient work location Understand potential Input into decision making
career track within in my department
organisation
Flexible schedule Ability to balance my Organisation quickly
work/personal life resolves customer
concerns

Source: Towers Perrin 2007-2008 Global Workforce Study 27

 WHY FOCUSING ON RESOURCING AND
RETENTION?

1. Costs of termination.
Hidden Costs of Turnover
2. The cost of hiring
It is expensive to lose
and training a
good people. It may not
replacement.
always be possible to put
3. The vacancy cost
an exact price tag on the
until the job is filled.
loss of an employee, but
4. The loss of
there are 4 internal
productivity with a
sources to consider.
new hire.

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 Retention Strategies
Buddy
Flexitime
System
Transparent
Performance Counselling
Assessment

Charismatic Expectation
Leadership Management

Telecommuting Mentoring/Coaching

McKeown
(2002)
Sense of
`Retaining Communication
Ownership
Top
Employees’

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 EFFECTIVE RETENTION STRATEGIES
• Culture and Commitment : It is a
common misconception that
retention is the sole responsibility of
a HR Department. In practice, a
successful program includes buy-in
from all departments and levels of
an organization.
• Build a sense of belonging -
Emotional factors are very
important in binding employees to
organizations. It is therefore crucial
that managers take time to engage
employees’ commitment and energy.
• Informal meetings. Managers should hold
regular meetings with their employees.
Meeting is where management and employees
share time discussing goals and strategies, as
well as providing feedback to one another can
go a long way in making employees feel valued.
• Rewards and recognition - another crucial
component to the success of retention
program because they confirm to the
employees that their efforts are meaningful
and appreciated. One of the easiest and best
ways to reward employees is to simply
congratulate employees on a job well done.
Long hours and hard work that go unnoticed
will leave employees feeling deflated.
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 EFFECTIVE RETENTION STRATEGIES
• Be creative with your Remuneration package -
• Integration: Welcoming an
employee into organization may
seem like an easy task, but many
organizations fail to plan
accordingly. Integration must
begin before the employee’s first
day of work.
The inability to step outside set pay and
compensation structures can make your
company uncompetitive, especially when
demand for skills is high.
• Open Communication: An open
line of a communication
between an employee and his or
her manager is a critical goal in
ensuring employee satisfaction.
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 TOP 3 CURRENT ISSUES AND CHALLENGES OF
TALENT MANAGEMENT

2. Retention
1. Recruiting
The study also shows that keeping
Recruiting is the #1 challenge
employees is HR’s next most significant
facing HR executives.
challenge, with compensation more
Problems include the volume
strongly linked to this particular issue.
of applicants (too many or
too few), applicants lacking
the right skills and experience,
applicants lacking qualities 3. Learning
related to a desirable work
Surveyed ranked learning and training as
ethic, location, and
their most pressing talent challenge. The
compensation limitations.
challenge comes with implementing cost-
efficient systems.

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 Possible Reasons for HC Problems in An
Organization

• HR is too busy or lacks decision making

power.
• Weak HR Information/Technology.
• Lack of skills and capabilities of HR staff.
• Negative business perception of HR.
• Insufficient capability of line managers.
• Weak HR and business leadership.

Source: Row Henson, HCM Fellow Oracle, “People, Performance, Profit”, IHRIM
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Global Forum 2008, July 17-8, San Francisco
 HC DEVELOPMENT

The Malaysian Initiatives

The HC Development (HCD) Strategic Reformation
Initiatives (SRI) is a critical component of the
Economic Transformation Program (ETP) cutting
across all NKEAs. A direct offshoot of the New
to
Economic Model (NEM), the goal of this SRI is
enhance human capital capabilities
and address human capital needs to
support the execution of all 12 NKEAs and 7 NKRAs
and thus, contribute towards Malaysia’s aspiration of
achieving high-income nation status by 2020.
 SRI’s 2- Pronged Approach

1. Workplace transformation - 2. Workforce transformation -

Workplace transformation focuses on initiatives which
represents elements complement the Government’s
recommended by the NEM existing measures to enhance
essential to effective human capital. Measures to
functioning of the workplace. transform the workforce,
therefore, stress on the need
for comprehensive labor
market data and up skilling
and upgrading workers.
Malaysian Initiatives For Workplace and
Workforce Transformation
 RMK 11
Accelerating human capital
development for an advanced
nation
Initiatives & Achievements thus far:

• Modernizing Labor Legislation

• Focus on Up-skilling and Upgrading the Workforce
• National Talent Enhancement Program (NTEP)
• MSC Malaysia MyProCert Program
• MSC Malaysia MyUniAlliance Program
• Strengthening HR Management of SMEs
• National HR Centre (NHRC)
• Leveraging Women Talent to Increase Productivity
• Undertake Labor Market Forecast and Survey
Programs
• Institute of Labor Market Information and Analysis
 Talent Corp Malaysia Initiatives:
1. Local Malaysian:
a) Talent Acceleration in Public Services (TAPS)
b) Fast-track
c) Structured Internship Program (SIP)
d) flexWorkLife.my
2. Malaysian Abroad
a) Returning Expert Program (REP)
b) Scholarship Talent Attraction & Retention (STAR)
c) Career Fair Incentives (CFI)
d) Global Malaysians
 Building Networks of Top Talent
 Engaging Eminent Malaysians
3. Expatriates - Residence Pass-Talent
4. Career comeback Programme
 The Prime Minister’s Vision - Transforming Malaysia
The 2 Pillars of the National Transformation Program

1Malaysia – People First, Performance Now

Preservation and Enhancement of Unity in Diversity

Government Economic
Transformation Transformation
Plan (GTP) Programme (ETP)
High
Income

Rakyat
Quality of Life

Inclusiveness Sustainabiliy

New Economic Model

Effective Delivery of
A High Income, Inclusive
Government Services
And Sustainable Nation

10th & 11th Malaysia Plan Roll-Out

Macroeconomic growth targets & expenditure allocation
Implementation of Government’s Development Programmes

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www.neac.gov.my
 Eight (8) Strategic Reform Initiatives (SRIs)
All SRIs have cross-cutting impact over all sectors

Re- 2
energising

Ensuring
Private
Sector Developing
Sustainability
of Growth
8
1 Quality
Workforce
8
Enhancing 7 Strategic Competitive
Sources of Reform 3
Domestic
Growth Economy
Initiatives
(SRIs) 4
6
Building
knowledge 5 Strengthening
base Public Sector
infrastructure Transparent
& Market
Friendly
Affirmative
Action
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www.neac.gov.my
 Strategic Reform Initiatives (1/2)
Policy Purposes and Targets SRI 2
Developing quality workforce and reducing
SRI 1 dependency on foreign labor
Re-energizing the private sector
to lead growth 1. Increase local talent over time
2. Re-skill the existing labor force
1. Target high value added product and
services 3. Retain and Access global talent
2. Remove barriers and cost to doing business
3. Create eco-system for entrepreneurship 4. Remove labor market distortions
and innovation
4. Encourage efficiency through healthy
constraining wage growth
competition 5. Reduce reliance on foreign labor
5. Promote SME growth
6. Nurture regional champions

SRI 3
Creating a competitive domestic SRI 4
economy Strengthening the public sector

1. Improve economic efficiency 1. Improve decision-making process

through competition
2. Build entrepreneurship
3. Remove market distortions leading
to misallocation of resources
2. Improve service delivery
3. Reduce ‘friction costs’
4. To facilitate smooth transition from
periods of disruption
5. Strengthen public finance management

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www.neac.gov.my
Questions to reflect:

• What workforce segments

create most values?
• How will business be impacted
by impending troubled times and are we prepared?
• Where is talent demand outpacing supply?
• What skills will we need in next 5 years that we don’t have
today?
• Turnover? Mass unemployment? How much is it costing in
customers? In productivity? In innovation? In quality?
• Do we have a workforce plan to communicate the broad
strategy to overcome talent outflows from the country?

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