Five Types Of Talent Behind The Great Resignation

Last summer, Shannon Harrell left a marketing role at Nestlé to work in the then booming telehealth industry at Teladoc Health. Several months later, as her new employer’s stock was falling amid disappointing results, Harrell switched her LinkedIn status to “open to work.” By April, she’d been recruited to run strategic communications and channel marketing at pet insurer PetPartners.

“I saw the writing on the wall,” Harrell says. “The growth of that category looked a little uncertain, so I was—as anyone would be—concerned.”

Harrell is what McKinsey would call a traditionalist, one of five types of talent that has spurred The Great Resignation—and may be key to defeating it. In a new study released Wednesday, the consultancy analyzed data and surveyed more than 13,000 workers worldwide to determine what motivated people in different industries to quit over the past two years in order to figure out what might make them stay.

One thing that cuts across all types of workers is a persistent sense of optimism. Three-quarters of respondents felt it would not be difficult to get a job that’s comparable to, or better than, their current role. “People are confident enough that they don’t even need the other job in hand when they do move,” says Aaron De Smet, a senior partner and co-author of the report. “They’re like, ‘I’ll just quit and go find another job,’ and they’re not worried about it.”

Quitting Trend That Just Won’t Quit

With record-low U.S. unemployment and 11.3 million open jobs, it’s easy to understand the optimism. High demand has enabled more than half of those who quit to not only move into new jobs but also move into new industries. Only 6% made what could be considered a lateral move within their industry. The public and social sector had the greatest attrition rate in the survey, with 57% leaving the sector, while healthcare and pharma had the least.

What matters is that many of them aren’t returning to their former industries or even the job world anytime soon. Of those who quit without a new job in hand, only 47% have returned to the workforce, with 29% returning to traditional full-time employment. “Some companies are waiting for those people to come back,” De Smet says. “And they might be waiting a long time.”

The Five Personas of Quitters

That means employers have to recognize who is open to new jobs—and figure out what it will take to hire and retain them. In the study, McKinsey identified five personas:

  • Traditionalists — Like PetPartners’ Harrell, these are career-oriented workers who are willing to make some trade-offs for the right price. They’re less likely to quit without a job to go to and more likely to stay if they get enough money.
  • Do-it-yourselfers — They emerged as the largest cohort in the study, a group that tends to value flexibility, meaningful work and compensation. Typically 25 to 45, they can be self-employed or doing gig work or part-time jobs. They want flexibility and a friendly work environment.
  • The caregivers and others — These are the people at home but are wanting more. Typically 18 to 44, with more women than men, they decided to sit it out at home and are looking for roles with flexibility that allow them to still continue their caregiving and responsibilities outside their jobs.
  • The idealists — Typically a younger cohort of students and younger part-timers, 18 to 24, this persona wants flexibility, strong organization culture and clear career advancement trajectories. They ranked belonging to an inclusive and welcoming community more highly than the other personas.
  • The relaxers — These are a mix of retirees, those not looking for work and others who might return to traditional work if the job is right. They want meaningful work and balance. Many retired workers are increasingly returning to work following a surge in retirement during the onset of the pandemic.

To appeal to these cohorts and address the attrition-attraction issue, companies need to double down on their value propositions—both traditional, which includes pay, title, benefits and career paths, and nontraditional, which involves flexibility, company culture and personalization, McKinsey outlines.

“There are some super talented people out there sitting on the bench because the offer is still the traditional offer,” De Smet says.

Source: Five Types Of Talent Behind The Great Resignation

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Facebook Rethinks News Deals and Publishers Could Lose Millions

Meta Platforms Inc.’s Facebook is re-examining its commitment to paying for news, people familiar with the matter said, prompting some news organizations to prepare for a potential revenue shortfall of tens of millions of dollars.

The company has paid average annual fees of more than $15 million to the Washington Post, just over $20 million to the New York Times, and more than $10 million to The Wall Street Journal, according to people familiar with the matter. The Journal fee is part of a broader Facebook News deal largely negotiated by parent company Dow Jones & Co., including annual compensation worth more than $20 million, people familiar with the partnership said.

At the heart of these deals is Facebook’s dedicated News section, which curates a selection of free articles for readers. Facebook, which pays news publishers to feature their content without a paywall, in 2019 agreed to three-year deals with various publishers that are set to expire this year.

Facebook hasn’t provided publishers with any indication that it plans to re-up the partnerships in their current form, or at all, according to people familiar with the matter. The company is looking to shift its investments away from news and toward products that attract creators such as short-form video producers to compete with ByteDance Ltd.’s TikTok, according to some of the people. The company is also investing heavily in the metaverse, as highlighted by its recent name change to Meta.

Also, Meta CEO Mark Zuckerberg has been disappointed by regulatory efforts around the world looking to force platforms like Facebook and Alphabet Inc.’s Google to pay publishers for any news content available on their platforms, people familiar with the matter said. Such moves have damped Mr. Zuckerberg’s enthusiasm for making news a bigger part of Facebook’s offerings, they said.

Last month, Campbell Brown, the former NBC and CNN journalist who was the architect of Facebook News, announced she took on a new, broader role overseeing global media partnerships, which encompasses tie-ups with everything from sports leagues to film studios.The Information earlier reported that Facebook was reconsidering its payments to publishers and shifting its emphasis.

If Facebook pulls back on its payments to U.S. news publishers, it would represent the end of a certain detente in the fraught relationship between online content makers and the social-media giant.

Publishers that have struggled to compete for digital ad revenue with Google and Facebook have criticized the tech giants for not paying for the news content that is featured and shared on their platforms. Dow Jones parent News Corp. was among the most vocal critics.

The Journal gets the bulk of the Dow Jones payments, which are made up mostly of cash but also include other forms of compensation, such as credits for marketing on Facebook, according to people familiar with the matter. The deal encompasses other Dow Jones publications as well as the New York Post, which is owned by News Corp.

Many other U.S. news publishers are getting payments from Facebook to have their content featured in its news tab, but they only get a fraction of the sums paid to the Washington Post, the New York Times and Dow Jones, according to people familiar with the matter. Facebook is paying more for access to paywalled content, while publishers whose stories are accessible for free are getting less money, a person familiar with the deals said. The smaller deals usually are for less than $3 million a year, the people said.

Dow Jones, the New York Times and the Washington Post declined to comment. The Times last year had revenue of $2.1 billion, while Dow Jones reported $1.7 billion in revenue for its last fiscal year, which ended June 30, 2021.

Facebook announced the launch of Facebook News—which users can find as a tab on the mobile app or website, similar to the Facebook Watch tab for video—in the fall of 2019, on the heels of widespread criticism about the impact that Facebook and Google’s growing share of the digital ad market was having on news organizations—particularly local ones. By 2018, Facebook and Google were getting 77% of the digital advertising revenue in local markets, and 1,800 U.S. newspapers had closed down since 2004.

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All the while, Facebook was facing a continuing regulatory onslaught around the world. Regulators in the European Union, France, the U.K., Australia and the U.S. took steps aimed at forcing the platforms such as Google and Facebook to pay publishers for news content available on their services. Facebook opposed a law that passed in Australia so vehemently that it moved to block the publication of any news story on its platform in the country.

In the process, it also ended up shutting down the Facebook pages of many of Australia’s health, charity and emergency services for five days—a move that whistleblowers allege was deliberate and that Facebook described as an accident.

This spring, a revamped version of the U.S. legislation aimed at forcing the platforms to negotiate payment with publishers began circling in Congress, this time with a provision that would require the platforms to engage in baseball-style, “final offer” arbitration—the same measure that prompted Facebook to pull news in Australia. Canada, meanwhile, recently proposed a law modeled on Australia’s.

Source: Facebook rethinks news deals and publishers could lose millions | Fox Business

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Why Chief Human Resources Officers Make Great CEOs

For decades the corporate HR department was seen as a back-office function, a cost center focused on mundane administrative tasks such as managing compensation and benefits plans. But over the past 15 years Ellie Filler has noticed a dramatic change. Filler, a senior client partner in the Swiss office of the executive recruiting firm Korn Ferry, specializes in placing chief human resources officers (CHROs) with global companies. For years many of the HR chiefs she recruited reported to the COO or the CFO and complained that they lacked real influence in the C-suite.

Today, she says, they often report directly to the CEO, serve as the CEO’s key adviser, and make frequent presentations to the board. And when companies search for new CHROs, many now focus on higher-level leadership abilities and strategy implementation skills. “This role is gaining importance like never before,” Filler says. “It’s moved away from a support or administrative function to become much more of a game changer and the person who enables the business strategy.”

To investigate the CHRO role within the C-suite, Filler worked with Dave Ulrich, a University of Michigan professor and a leading consultant on organization and talent issues. In looking at several sets of data, they found surprising evidence of the increasing responsibility and potential of CHROs.

First, in order to understand the importance of the CHRO relative to other C-suite positions, including CEO, COO, CFO, CMO, and CIO, Filler and Ulrich looked at salaries. To identify the best performers, they found the top decile of earners in each role. Then they averaged the annual base compensation of each group. No surprise: CEOs and COOs are the highest-paid executives. But CHROs are next, with an average base pay of $574,000—33% more than CMOs, the lowest earners on the list. “Great CHROs are very highly paid because they’re very hard to find,” Ulrich says.

The researchers also studied proprietary assessments administered by Korn Ferry to C-suite candidates over more than a decade. They examined scores on 14 aspects of leadership, grouped into three categories: leadership style, or how executives behave and want to be perceived in group settings; thinking style, or how they approach situations in private; and emotional competency, or how they deal with such things as ambiguity, pressure, and risk taking. The researchers then assessed the prevalence of these traits among the different types of executives and compared the results.

Their conclusion: Except for the COO (whose role and responsibilities often overlap with the CEO’s), the executive whose traits were most similar to those of the CEO was the CHRO. “This finding is very counterintuitive—nobody would have predicted it,” Ulrich says.

The discovery led Filler and Ulrich to a provocative prescription: More companies should consider CHROs when looking to fill the CEO position. In the modern economy, they say, attracting the right talent, creating the right organizational structure, and building the right culture are essential for driving strategy—and experience as a CHRO makes a leader more likely to succeed at those tasks.

The advice comes with some caveats. First, Filler and Ulrich studied only the best performers, so they’re pointing to a small subset of CHROs as having corner-office potential. They don’t see a path to the top job among people who have spent their careers in HR; instead, they are touting the prospects of executives who have had broad managerial experience (and P&L responsibility) that includes a developmental stint running the HR department. They emphasize that any CHRO who aspires to become a CEO must demonstrate capabilities in a host of skills required of top leaders.

“The challenge for CHROs is to…acquire sufficient technical and financial skills, in early education and in career steps along the way, if succession to CEO is a desired outcome,” they write in a white paper about their research. Indeed, some companies, including Zurich Insurance, Nestlé, Philip Morris, and Deutsche Bank, do put high-potential executives through a developmental rotation in a high-level HR job. (For one view on facilitating such developmental opportunities, see “It’s Time to Split HR,” by Ram Charan, HBR, July–August 2014.)

Filler and Ulrich highlight two examples of prominent CEOs who had developmental stints in HR earlier in their careers. Mary Barra, the CEO of General Motors, served as the carmaker’s vice president of HR for 18 months, and Anne Mulcahy, Xerox’s CEO from 2001 to 2009, ran that company’s HR operations for several years in the early 1990s. It’s no coincidence that both are women: According to the researchers’ data, 42% of high-performing CHROs are female—more than double the share in the CMO position, the next highest (16%). One implication: If more companies envisioned CHROs as potential CEOs, the number of female CEOs could dramatically increase.

In their white paper Ulrich and Filler also report on what CEOs and CHROs have to say about the changing nature of the top HR role. Several CEOs see the CHRO as C-suite consigliere. “It is almost impossible to achieve sustainable success without an outstanding CHRO,” says Thomas Ebeling, the CEO of the German media company ProSiebenSat.1 Media AG and a former CEO of Novartis. “[The CHRO] should be a key sparring partner for a CEO on topics like talent development, team composition, [and] managing culture.”

Peter Goerke, the London-based group director for HR at Prudential, agrees with Filler and Ulrich that although deep skills in marketing or finance might once have given CEO aspirants a significant competitive advantage, today a broader set of people-focused skills can be more useful. “Succession to a CEO role requires a balance of technical and people skills,” he says. “For all C-suite roles, and often at least one level down, there has been a gradual shift in requirements toward business acumen and ‘softer’ leadership skills. Technical skills are merely a starting point.”

In spite of the historic bias against the CHRO function, the rising status of HR leaders is not entirely surprising. Over the past 20 years Jim Collins and other management theorists have focused on talent strategy as the prime determinant of corporate success—an idea Collins popularized in phrases such as “Get the right people on the bus” and “First who, then what.”

In her work recruiting CHROs, Filler has seen a growing recognition that those aphorisms hold true. “If you don’t have the right people in the right places—the right talent strategy, the right team dynamics, the right culture—and if you don’t proactively manage how an organization works from a culture and a people perspective, you’re on a serious path to disaster,” she says. Conversely, a top-notch CHRO can help a company plot a more successful future.

Source: Why Chief Human Resources Officers Make Great CEOs

Critics: by MasterClass staff

A chief human resources officer (CHRO) is an executive-level position that oversees human resources management for a business or organization. The CHRO—sometimes referred to as the chief people officer (CPO) or executive vice president of human resources—directs the HR department and carries out HR policies. Some of the HR functions that CHROs oversee include talent acquisition and retention, performance management, and employee engagement. As the chief HR officer, a CHRO also helps to develop the workplace culture and supports business goals and diversity, equity, and inclusion initiatives.

As a leadership role, the CHRO job description includes overseeing the HR directors and HR team carrying out the company’s employee-based initiatives. The CHRO reports directly to members of the top C-suite executive team—often the chief executive officer (CEO) or chief operating officer (COO)—and works to align the HR strategy with the company’s strategic plan and business objectives.

A few of the responsibilities of a CHRO include:

  1. Benefits and labor relations management: A CHRO oversees the implementation of HR software to streamline healthcare and retirement programs, government compliance requirements, and employee relations. They explore partnerships to offer employees new benefits such as wellness programs or professional development opportunities.
  2. Guides company culture: This role in HR leadership includes helping to define and develop company culture for the workforce, executive leadership team, and other stakeholders. Maintaining employee engagement and productivity through incentives, clearly defined career paths and equitable compensation packages, and a commitment to diversity in hiring practices are core components of this human resources function.
  3. Oversees talent recruitment and retention: Talent management is another cornerstone of human capital management and the CHRO role. A CHRO develops and adopts a talent strategy that outlines how to recruit, hire, develop, and retain employees. The talent strategy includes offering equal opportunities to all candidates, employee training initiatives, career development programs, and succession planning, which is a strategy to identify potential leaders when companies change management.

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Russia Debt Default Could See the US Seize the Country’s Assets

The impending Russian debt default is likely to be one of the most difficult in history to resolve, and could even lead the US to permanently seize assets from the country’s central bank, according to a report from the consultancy Oxford Economics.

Russia is facing its first default on its foreign-currency debt since the aftermath of the Bolshevik revolution in 1918.

The US Treasury earlier this month blocked Russia from paying $650 million due on two bonds using funds held at American banks. Russia has instead tried to pay in rubles, but credit ratings agencies have said this would constitute a default.

Russia has a 30-day grace period from April 4 in which to pay in dollars. But thoughts are now turning to the next steps, and how bondholders might recoup their money.

Tatiana Orlova, lead emerging markets economist at Oxford Economics, said investors face a “very long and difficult” legal road. “Russia’s debt crisis will be among the most difficult in history to resolve, since the default has its roots in politics rather than finance,” she wrote in a report that was sent to clients Thursday.

One of the key problems is that political and financial relations between Russia and the West have completely broken down. That makes the usual default process, whereby bondholders and the government enter negotiations and thrash out a deal, seem unlikely to happen.

Orlova said another problem for bondholders is that Ukraine may lay a claim to Russian assets in international courts to pay for the rebuilding of the country. In that case, investors would have to weigh up whether they want to compete with the Ukrainian government for Russian assets.

The economist said the US might eventually end up seizing the money from the Russian central bank’s foreign currency reserves. Western governments have already frozen the bulk of the roughly $600 billion stockpile. Joe Biden earlier this year ordered that half of Afghanistan’s central bank reserves, which were also frozen, be made available as possible compensation for victims of 9/11 and to fund humanitarian support in the country.

“The US administration could possibly find a stronger moral cause for splitting the US-denominated portion of Russia’s FX reserves between Ukraine and bondholders,” Orlova said. Russia’s Finance Minister Anton Siluanov has said the government has fulfilled its obligations by paying in rubles. He said last week Western governments are forcing Russia into a default and threatened to take legal action.

It’s not just holders of Russian sovereign debt who may have to take to the courts to try to get their money. Orlova’s report said there is likely to be an “avalanche” of Russian corporate debt defaults, given that the US is taking a hard line and banning American banks from processing payments.

An international committee of banks last week deemed state-owned Russian Railways to be in default, after sanctions stopped the company from making bond payments.

There were roughly $98 billion of Russian corporate foreign-currency bonds outstanding as the war began in February, according to JPMorgan, with $21.3 billion owned by foreign investors.

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Source: Russia Debt Default Could See the US Seize the Country’s Assets: Economist

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Critics:

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A default would make Russia more of a pariah in the global economy. Selling bonds is a critical way that countries raise foreign currencies to fund projects and raise reserves of foreign currencies, among other purposes.

But the European Union is considering a ban on energy imports from Russia, which would further limit Russia’s ability to raise money in foreign currencies.Countries that have defaulted on their bonds have eventually been welcomed back to global debt markets, but memories of a default linger and Russia may have to pay more to borrow from foreign investors in the future.

A default would also be historically significant and fraught with symbolism. It would mark the first time Russia has defaulted on foreign bond payments in more than a century (though it did default on local currency debt in 1998). Russia’s predicament is yet another consequence of its invasion of Ukraine, according to Tim Samples, a professor at the University of Georgia who specializes in foreign investment.

“This is a reflection of just how far and how fast Russia has fallen from favor in Western capital markets,” he said. Not necessarily, but most investors will need to go through a protracted legal battle to try to get the money they are owed.

Although Russia was not a big seller of foreign debt, major hedge funds and asset managers, including Invesco and PIMCO, bought bonds. Russia has 15 bonds outstanding that are denominated in dollars and euros, and altogether, they are worth around $40 billion, according to Morgan Stanley.

Much of Russia’s debt was registered in the United Kingdom, which is where it’s likely that most of the court fights will take place. It can be a complicated process, and it will take a long time to resolve. After Argentina defaulted in 2001, several efforts were made to restructure the country’s debt. All told, negotiations lasted longer than a decade.

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