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SuccessionPlanning-
“Brain-DrainPrevention”
Provo,UTSeptember11,2017
Copyright©2017MercuryAssociates,Inc.Allrightsreserved.
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SteveSaltzgiverCAFS,MAOM
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AbouttheInstructor• More than 40 years’ experience beginning as a truck assembly
worker, commercial driver and fleet maintenance journey technician, local municipal fleet manager and director over two large state government fleets (Utah and Georgia)
• Vice President of fleet operations for two fortune 500 corporate operations (Coca-Cola and Republic Services) and fleet management consultant.
• Recipient of multiple industry awards including, 2000 Honda Motors Environmental Leadership award, 2015 Sustainable Fleet Award, 2017 Government Hall of Fame Inductee and Legendary Achievement Award.
• Successfully transitioned from wrench-tuner to manager of a $1.5 billion (annual capital and operating budget), 50,000-unit fleet.
• Certified Automotive Fleet Supervisor (CAFS) from NAFA Fleet Management Association and currently serving on the NAFA Board of Directors.
• Holds Business Management and a Masters of Organizational Management degrees from the University of Phoenix.
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AboutMercuryAssociates,Inc.
• LargestdedicatedfleetmanagementconsultingcompanyinNorthAmerica
• Morethan600clientsserved,withfleetsof<100to>200,000vehiclesandpiecesofequipment
• Company’smissionistohelporganizationsimprovefleetmanagementpractices,improvefleetperformance,andreducefleetcosts
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KeyMercuryAssociatesServices
• FleetManagementBestPracticesStudies• FleetManagementProgramConsolidationandOrganizationalRestructuringStudies
• FleetCostAnalysis,Reduction,andContainmentStudies• FleetUtilization,Optimization,andRightsizingStudies• FleetManagementInformationSystemRequirementsDefinition,Acquisition,Implementation,Hosting
• OutsourcingFeasibilityStudies
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KeyMercuryAssociatesServices
• DevelopmentofRequirements,Specifications,andTenders–Vehicles,Services,InformationSystems
• SupplierSelection,ContractNegotiation,andPerformanceReviews
• DeterminationofOptimalVehicleReplacementCycles• EvaluationofLeaseversusBuyandotherCapitalFinancingStrategies
• FinancialAuditsofFleetLeasingCompanyandotherSupplierInvoices
• ManagementTraining
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SampleMercuryAssociates,Inc.Clients
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• 3M• Air Products• Aramark• Bell Canada• Carolinas HealthCare
System• Danella• GlaxoSmithKline• Honeywell• Hunt Brothers Pizza• Intel• Johnson & Johnson• Johnson Controls• Lancaster Foods• Pfizer• Quanta Services• Rockwell-Collins• Schindler Elevator
• US Army, Navy, Air Force, Marine Corps
• US Departments of Agriculture, Defense, Energy, Homeland Security, Interior, Labor, State, Veterans Affairs
• US Postal Service• Smithsonian Institution; NASA• Canada Post• LDS Church• RAND Corporation• Goodwill Industries• Transportation Research Board• 33 of 50 largest cities in the US,
including 10 largest;• 3 of 5 largest cities in Canada• 35+ state and provincial
governments• 40+ colleges and universities
Corporate Government/Other• Alyeska Pipeline Service Co.• BNSF Railway• Bonneville Power Authority• BP Alaska• British Columbia Hydro• Cudd Energy Services• EPCOR• Flint Hills Resources• Georgia Power Company• Gulf Stream Marine• Hoosier Energy• Horizon Utilities• Hovensa• Pacific Gas & Electric• Southern California Edison• Suncor• UGI Utilities• Whiting Oil & Gas
Utilities / Fuel / Rail
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Today’sDiscussionAs more and more baby-boomers retire and exit organizations,it’s becoming ever increasingly paramount for organizations tocapture institutional knowledge before they experience “Brain-Drain.” Failing to encapsulate knowledge will hamper employeereplacement transition, drive up costs, and impact customerservice delivery.
Learning Objectives:• Why is succession planning important and what is successionplanning?
• Why retaining institutional knowledge is important fororganizational success.
• Employee tasks and activities plan prior to an employee'stermination or retirement.
• Processes that can be used to prevent Brain-Drain” andimprove succession planning
• Case study: How successful fleet managers tackled thischallenge before exiting their organization.
Copyright©2017MercuryAssociates,Inc.Allrightsreserved.
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WhyDoOrganizationsNeedSuccessionPlanning?
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• Baby-boomersExitingWorkplaceDuetoRetirements
• Brain-drainAvoidance– LossofManyYearsofInstitutionalKnowledge
• AcceleratedComplexityofVehiclesRelatedtoTechnologyAdvances
• Shortage- QualifiedPoolofFleetTechnicianCandidatesandMillennialWorkExpectations
• LackofFormalizedMentoringandSuccessionPrograms
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WhyisSuccessionPlanningimportant?
Dependingonwhichstudyorsurveyyouacceptbelowareafewfactstoconsider:•33%ofbusinessownersplantoexitinthenext5-10years
•10%ofbusinesseshaveaformalsuccessionplan•38%haveanunwrittenorinformalsuccessionplan•52%havenosuccessionplanatall•Over$1.2Trillioninbusinessassetswillbetransferredtonewleadership
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WhyisSuccessionPlanningimportant?• BureauofLaborreportstechsupplygrowing2.6%anddemandgrowing0.7%annually– Qualityv.Quantity
• Turnover/rehireequals3Xemployee’ssalarytoreplace• 40-50%oftechnicianswillretireinthenext15years…• Over40%ofbusinessesstrugglingtofillvacancies.• Over1munemployedveteransw/perfectskillsforindustry• Averageageofvehiclesisrising(9.1years),requiring>Techs• Techsarepredominantlymaleworkforcebetweenages40and49• Estimated20-25%oftechniciansreceivenofringebenefitsandlessthan50%arecoveredbyamedicalplan
• Averagetechnicianworksabout44hoursaweek.• Averagesalaryforatechnicianis$43,000,butAdvancedTechnicianscanearnupto$57,000
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WhyDoOrganizationsNeedSuccessionPlanning?
Copyright©2017MercuryAssociates,Inc.Allrightsreserved. 10
9TrendsinPublicFleetManagementSeptember2016,GovernmentFleetMagazine
byThiDao
….“Vince Lorefice, director of Public Works for the Town of Wickenburg,Arizona agreed it has been hard to find talented fleet technicians,partially due to the fact that it’s not viewed as a prestigious job.”
…“Lorefice said the [FleetPros} is aware of this problem, and the grouphas been focusing on succession planning for the past few years in anattempt to train the next generation of fleet managers, providing classeson topics such as management skills and analyzing data through itsFuture Leaders program.”
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WhyDoOrganizationsNeedSuccessionPlanning?
Copyright©2017MercuryAssociates,Inc.Allrightsreserved. 11
WorkforceMagazine[Excerpt]*
… “Jim Skinner, former CEO of McDonald’s Corp., was known to tellmanagers: “Give me the names of two people who could succeedyou.” It was just one way the CEO continued the culture of successionplanning at McDonald’s.”
…”It was an understandable priority considering Skinner only landedin the role in 2005 after two other CEO’s died suddenly over thecourse of just two years. And when he retired in 2012, Skinner wasconfident that his successor, Chief Operating Officer Don Thompson,was ready to take over, because he spent much of his seven yearsmentoring him.”
*http://www.workforce.com/2013/03/11/succession-planning-roadmap/
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WhatisaSuccessionPlan?
•Successionplansareamethodologyforoldleaderstoidentifyanddevelopnewleaderswhentheyleave,retireorexittheworkplace
•Successionplanshavebeenusedforcenturiesbydictatorsandmonarchiestopreventpowerstruggles,coosandchaos
•Successionplanninghasbeenusedbylargecompanies(e.g.,GE,IBM,Coca-Cola,MS,Marriott,etc.)fordecadestomaintaincontinuity
•Successionplanning(i.e.,apprenticeshipprograms)wasusedbytradecraftsforyears
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WhataretheCriticalFactorsinaSuccessionPlan?
Clearobjectivesarecriticaltoestablishaneffectivesuccessionplanningprogram:• Identifythosepotentialemployeeswithtalentneeds• Providecriticaldevelopmentexperiencesforpotentials• Engageleadershipsupportintalentdevelopmentforkeyroles
• Buildatalentprogramtomakebetterstaffingdecisions• Initiateprogramsforemployeeengagementandmorale• Improveemployeecommitmentandretention• Implementcareerdevelopmentprogramsforemployees• Developinternalcandidatesandreduceexternalrecruitingneedsandcosts
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WhatElementsareRelatedtoSuccessionPlanning?
•AnnualCompany/EmployeeGoalSettingProcess• PersonalPerformanceObjectives(PPOs)
•EmployeePerformanceEvaluations• Annualevaluationprocess&ratings
•EmployeeEngagementMonitoringandMeasuring
• AnnualorBiennialEmployeeSurveys•TalentReviewandRatingProcess
• 9BoxAssessment&RatingProcess•CareerDevelopmentPlanningProcess
• IndividualDevelopmentPlans(IDPs)• PerformanceImprovementPlan(PIP)
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HowDoesanOrganizationDevelopmentaSuccession
Plan?
StepstoSuccessfulSuccessionPlanning
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Step1:IdentifyKeyAreasandPositions
Determinewhoisinterestedinandhasthepotentialtofillkeyareasandpositionsq Discusscareerplansandinterestswithemployeesq Identifythekeyareasandpositionsthatare
vulnerableandthecandidateswhoarereadytoadvanceorwhoseskillsandcompetenciescouldbedevelopedwithintherequiredtimeframe
q Ensurethatasufficientnumberofbilingualcandidatesandmembersofdesignatedgroupsareinthefeedergroupsforkeyareasandpositions
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Step2:IdentifyCapabilitiesforKeyAreasandPositions
Toestablishselectioncriteria,focusemployeedevelopmentefforts,andsetperformanceexpectations,youneedtodeterminethecapabilitiesrequiredforthekeyareasandpositionsidentifiedinStep1:q Identifytherelevantknowledge,skill(including
languageskills),abilities,andcompetenciesneededtoachieveorganizationalbusinessgoals
qUsekeyleadershipCompetenciesprofilingtoassessemployeeskills
q Informemployeesaboutkeyareasandpositionsandrequiredcapabilities
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Step3:IdentifyInterestedEmployeesandAssessThemAgainstCapabilities
Determinewhoisinterestedinandhasthepotentialtofillkeyareasandpositions:q Discusscareerplansandinterestswithemployeesq Identifythekeyareasandpositionsthatare
vulnerableandthecandidateswhoarereadytoadvanceorwhoseskillsandcompetenciescouldbedevelopedwithintherequiredtimeframe
q Ensurethatasufficientnumberofbilingualcandidatesandmembersofdesignatedgroupsareinthefeedergroupsforkeyareasandpositions
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Step4:DevelopandImplementSuccessionandKnowledgeTransferPlans
Incorporatestrategiesforlearning,training,development,andthetransferoforganizationalknowledgeintoyoursuccessionplanningandmanagementqDefinethelearning,training,anddevelopmentexperiencesthatyourorganizationrequiresforleadershippositionsandotherkeyareasandpositions
q Linkemployeelearningplanstotheknowledge,skills,andabilitiesrequiredforcurrentandfutureroles
qDiscusswithemployeeshowtheycanpassontheircorporateknowledge
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Step5:EvaluateEffectiveness
Evaluateandmonitorsuccessionplanningandmanagementeffortstoensurethefollowing:qSuccessionplansforallkeyareasandpositionsaredeveloped
qKeypositionsarefilledquicklyqNewemployeesinkeypositionsperformeffectivelyqMembersofdesignatedgroupsareadequately
representedinfeedergroupsforkeyareasandpositions
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HowtoAssessEmployeeTalentManagement?
Pre-Hire,Acquisition,Development,Performance,Promotionandthrough
Termination
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IndustryBestPractices– TalentManagementandReviewProcess
Copyright©2017MercuryAssociates,Inc.Allrightsreserved. 22
EffectiveEmployeeManagementProcessesKeyElements:• Policiesandprocedures• Standardoperatingprocedures• Structuredinterviewguides(SIG)• OnboardingPlan• IndividualPerformanceObjectives(IPO)alignedtocompanygoals
• IndividualDevelopmentPlans(IDP)
• Employeeevaluationandappraisalprocess
• Self-assessments• Mgr.assessments
• Talentratingcalibration• PerformanceImprovementPlan(PIP)
Example
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TalentAssessmentandRatingProcesses
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IndustryBestPractice– TalentReview
Copyright©2017MercuryAssociates,Inc.Allrightsreserved. 24
TalentRating/Ranking• Talentassessment* andrankingemployeesprovidesguidanceonorganizationalstatus
• Viewandfilltalentgapsproactively
• Determinetopandbottomperformers
• Managerscanfocusonemployeeperformancegoals
• IDPsforTopandPIPsforbottomperformers
*Sample“9-Box”rating/rankingprocess- SAPCareerFactors
9-BoxTalentAssessmentTool
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IndustryBestPractice– TalentReview
Copyright©2017MercuryAssociates,Inc.Allrightsreserved. 25
TalentRating/Ranking• Talentassessment* andrankingemployeesprovidesguidanceonorganizationalstatus
• Viewandfilltalentgapsproactively
• Determinetopandbottomperformers
• Managerscanfocusonemployeeperformancegoals
• IDPsforTopandPIPsforbottomperformers
*Sample“9-Box”rating/rankingprocess- SAPCareerFactors
9-BoxTalentAssessmentTool
1.StarPerformer
• Pastrecordofconsistentlyand/orexceedingperformanceexpectations
• Actsatalevelofcapabilityofatleastthenextlevelintheorganization
• Acknowledgedasaskilledsituationalleaderandrolemodel
• Haswidespreadinfluencebeyondcurrentrole
Readytoadvancetonextlevelin6to12months
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IndustryBestPractice– TalentReview
Copyright©2017MercuryAssociates,Inc.Allrightsreserved. 26
TalentRating/Ranking• Talentassessment* andrankingemployeesprovidesguidanceonorganizationalstatus
• Viewandfilltalentgapsproactively
• Determinetopandbottomperformers
• Managerscanfocusonemployeeperformancegoals
• IDPsforTopandPIPsforbottomperformers
*Sample“9-Box”rating/rankingprocess- SAPCareerFactors
9-BoxTalentAssessmentTool
9.LowPerformer
• Doesnotmeetperformanceexpectationsorhasinconsistentperformance
• Difficultyperformingsatisfactorilyinhis/hercurrentposition
• Maynotbeinterestedinadvancement
CandidateforDisciplinaryActionand/orPersonalImprovementPlan
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BuildingaFleetManagementPeopleCapabilityStrategy
NextSteps:UnderstandingtheRelationshipBetweenHumanResource
ManagementandDevelopmentofPeopleCapability(i.e.,Talent)
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PeopleCapability– GuidingPrinciples
•Talentisabusinessproblem,notanHRproblem– SuccessionPlanningiscritical
•PeopleReflect,ProtectandPreservetheOrganization’sBrand
•AssessingCapabilityisCross-functionalEffort
•IncreasedDiversityDrivesInnovationandCompetition
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UnderstandingtheLinkBetweenPeopleCapabilityandSuccessionPlanningCycle
ProcessRecruiting
Goal-Setting Performance
Evaluating
DesignIDPs&PIPs
AssessingTalent(9-Box)
EmployeeEngaging
Training&Developing
DesignIPOs
Succeeding
On-Boarding
SuccessionPlanningBeginswiththeEmployeeRecruitingandHiringProcess
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Challenges– SpecifictoFleet
IncreasinglydifficulttoattractadequateMaintenanceTalentandcapability• Unabletoattractandacquireenoughtalentedandqualifiedtechniciansandsupervision
• Fleetsuccess,executionanddurabilitydependonquantityandqualityfleetpersonnel
• UnabletocompetewithothercompaniesforqualityTechnicians• Impactinghigheroutsourcelaborcosts,increasedmistakes,overtime,etc.
• Needtostrengthenitsfleetmanagementskillsusingtraditionaleducation,internaltrainingtoolsandindustryrecognizedcertificationprogramstobettercompeteinthemarket.(e.g.,University/College,Trade/VocSchools,IntranetLearningPortalandCAFM)
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RecruitingandRetainingQualifiedTechniciansisChallenging
Whatyouneedtounderstand?1. Societyhasnegativeviewoftheprofessionaltechniciancareer
path.2. Guidancecounselorsandparentsdiscourageyouthtoconsidera
careerinvehiclemaintenance.3. Feweropportunitiesforyouthtoobtainexperienceworkingin
automotivemaintenance.4. Vehiclesmorecomplexandyouthunableorill-equippedtowork
onownvehiclesandcultivateinterestinautomotivetechnology.5. Internalprocessesmayneedstreamlining(or>training)
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Sample:Strategies– OpportunitiesDevelopa“Positive”TechnicianMarketingProgram• Accentuatethepositivesofjoiningthefleetindustryasastableandgrowingworkforce
• Developaprogramtopromoteandexpandtheorganizationbrandtoattractlargercandidatepools
• Designandimplement“careerfair”programtoproactivelymarkettheorganization’stechnicianopportunitiesüWorkcloselywithgovernmentagencies(i.e.,Military)totargetpotentialcandidatesüWorkwithvocationalschoolstoattractcandidates
• Expandorganizationtrainingopportunitiesandcompensatetechnicians(one-timebonus)foreachclasscompletedwithclaw-backclause
• Expandengagementtoincrease“non-monetary”incentiveprogramstorewardtechniciansforincreasedproductivityandqualityüToolpurchasingprogramsüEducationreimbursementprograms
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Sample:Strategies- OpportunitiesDevelopa“Positive”TechnicianMarketingProgram• PartnerwithCommunicationsDepartmentonsolutions• IdentifyfutureneedandpeoplenumbersforFleetstaff• ExpanduseofSocialMediawebsitestoattractcandidates• Definedjobsandleveloftechnicalskillsneededtomaintainequipment.
• Effectivematerialsnecessarytopersuadepotentialemployeesandthosewhoareinfluentialintheirdecision-makingprocess.
• Designateregionalemployeestoserveinanadvisorycapacityinvocationalschools.
• Leverageindustrytoolsandvenuestobroadenoutreach(e.g.,LinkedIn,CareerBuilder,Indeed,Monster,TMC,NAFA,etc.
• PrepareadvanceCommunicationpacketandtalkingpointsforLeaders
• EstablishFleet“PeopleCommittee”anddesignatespecificmanagerstobeinvolvedwithprogramsthatpromotetechnicianimageandCompanyprograms.
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Sample:Strategies- OpportunitiesExpandandstrengthenIncentivesandCompensationprograms• Offer“Sign-OnBonus”toincentcandidatestojoinorganization• Develop“Apprenticeship”programtoexpandTechniciancareerpathtowardjourneyistTechnician(e.g.,CtoATechnicianin4years)
• DesigncareerpathtoserveinSupervisordevelopmentprogram• Modify“ToolAllowance”programstobettercompensateTechniciansforcontinuedinvestment
• Strengthenthe“shiftpay”programdifferentialstomitigatethreatofTechnicians’leaving(ornotjoining)toworkdesireddayshiftsathigherpayingcompanies(e.g.,GovernmentandDealers)
• Developanannualincentive(bonus)programtocompensateTechnicianswitha“Claw-back”forgreaterretentionfocus
• ImplementcompensationprogramtopayforASE(AutomotiveServiceExcellence)continuoustraining(i.e.,Testingand%salarybumpforpassingtests)
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Sample:Strategies- Opportunities
ExpandyourOutreach:• WorkcloserwithVocational&TechCollegestoproactivelyattractcandidatespriortograduation(Part-Timeworkforce)
• Increasefocusonstrengtheningcandidatepoolworkingwithdiversityoutreachprograms
• NetworkearlytoidentifyHighSchoolseniorsaspotentialcandidatesanddevelopapart-timeworkerprogramtohirestudentsaslaborers.
• WorkwithGovernmentandNon-GovernmentOrganizations(i.e.,church,seculargroups,etc.)
• TargetVeteranoutreachprogramstoattractqualitycandidatesfromthosereturningfromMilitarydeployment
• DevelopinternaloutreachprogramtoincentemployeestoconsideracareerinFleetManagement
• Utilizeretired(orsoontoretire)employeesasa“SuccessionPlanning”resourcetomentornewlyhiredassociates
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Sample:FleetPeopleCapabilityInitiativesBuildandExpandCapabilities:• LinkagetoOrganizationalgoals• SkillsAssessments• Mgr.BootCamps• AssistantMaintenanceManager
(AMM)Program• IndividualDevelopmentPlans
IndividualPerformanceObjectives• BuildInternalTrainingPrograms
q Fleet101,201• LeverageExternalPartnerTraining
Venuesq ASE/NAFA/OEMq VocationalSchools/Colleges(Tuition
Reimburse)• OnlineLearningPortalImplementation• Certificationprograms• TargetedDiversity&Militaryrecruiting
focus• OperationalExcellence
q Lean,6Sigma,FMEA,DMAIC,etc.
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2018 2019 2020 2021 2022
1.PeopleCommittee2.Recruiting&onboardprocesses3.EngagementPlan4.Assessskills9-Box&IDPsandIPOs5.LeverageOEMtrainingvenues6.CreateOEMTrainingTracker7.DesignLeaderBootCamps8.MarketingPlan9.SocialMediaadoption
1.Designtrainingrequirementsforallfleetjobdescriptiontitles(e.g.,ASE)2.Buildleadertraining(e.g.,CAFS,CAFM)3.EdReimburseprograms4.Award&recognitionprograms(MIP)5.Partnerw/3PLschools/military6.Diversityprogram
1.DesignemployeeOneFleetcertificationprogramcapability2.CreateShopOneFleetCertificationPrograms3.Reviewandstandardizetoolallowances4.IntegrateOperationalExcellencecapabilityinfleet5.DevelopAMMProgram
Sample:5YearPeopleCapabilityPlanStrategies
Organize StandardizeStabilize Optimize Realize
1.Strengthentraining/certificationprogramstoaddressTechshopautomation2.Integrateadvancedfleettrainingcurriculumandtestingprograms3.Revampjobdescriptionsw/advancedrequirements4.DesignApprenticeshipprogram(Talentpipeline)
1.ReducedTurnover2.Qualified&Certifiedemployees3.Engaged&CommittedEmployees4.ImprovedEmployeeMorale5.IncreasedEmployeeProductivity6.ReducedfleetOpscosts
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Transit:ExampleofanIndustryThat’sWinningtheSuccessionPlanningGame!
• 15yearsinTransitandparticipateda4yearApprenticeshipProgramtobecomeaJourneymechanic.ManyTransitorgsstillhavetheseinplace.
• Apprenticeshipprogramsworkassuccessfulsuccessionplans
TransitClientsinCalifornia:• Ourmechanicturnoverraterangesbetween2-3%annually.Wehiremechanicsthroughourapprenticeshipprogramgraduatesandwehireoursupportstafffromourapprenticeshipprogramwashouts.
• Ourmechanicturnoverratioisverylowbut40%ofoureligibletoretireinthenext5years.Thisproblemthatwillneedtobeaddressed,however,weuseourServiceemployeesasafeederprogramtothemechanicstaff.Serviceemployeeareadmittedtotheapprenticeshipprogrambyatest.
• Thentheymustcomplete1950classroomhoursplusOn-The-JobTraining.Wehaveanin-houseteamof10instructorsteachingourMasterMechanicmandatorytrainingwhichrequirespassing22modules.
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Questions
Copyright©2017MercuryAssociates,Inc.Allrightsreserved.
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ForFurtherInformation
SteveSaltzgiverMercuryAssociates,Inc.
Presentationavailablefordownloadatwww.mercury-assoc.com(clickonResourcestab)
Copyright©2017MercuryAssociates,Inc.Allrightsreserved.40
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Resources&References
• Wikipedia:SuccessionPlanning• WorkforceMagazine-http://www.workforce.com/2013/03/11/succession-planning-roadmap/
• GovernmentFleetMagazine:9TrendsinPublicFleetManagement-byThiDao,September2016
• WhatManagersNeedtoKnowAboutSuccessionPlanning?– SusanM.Heathfield,2017
• SuccessFactors (SAPCompany)– TalentManagementProgram– 9Box• SuccessionPlanning:Howtodoitright?– StephenA.Miles,2009• SuccessionPlanningandManagementFive-StepProcess:TreasuryBoardofCanada,2009
Copyright©2017MercuryAssociates,Inc.Allrightsreserved. 41