Description

Unformatted Attachment Preview

1
Introduction
The report will address employee hiring as it is a basic requirement for the establishment and
growth of an organization. This comes with various issues and problems related to it. The various
reasons for employee turnover will also be addressed and how companies can cope with this
problem to retain their talent. The paper will also show the things that lead to the success of a
2
hiring process, the problems that come with hiring experienced talent and if hiring previous
employees is appropriate or not to a company. It will also evaluate the analyzed company’s culture,
its best aspects and recommend the things that can and should be changed about the culture.
Critical talent challenges
Increased employee turnover
Maersk relied on its original trainees who started with the group but later due to labor market
competition rising they quit their jobs to look for employment in other companies. The estimated
was 20% of the original trainees remained in the company. This was a huge problem as the Group
has to start increasing its efforts to hire more experienced employees.
The second problem was costly training and employee development programs which was
extensive and included formal and on-job training which Maersk considered to be a solid
investment but resulted in the competitors of the Group targeting Maersk employees due to their
strong training which was an advantage to their production and operations. In an attempt to rectify
this problem, Maersk Group had the need to hire more employees who further needed training to
be well equipped for the jobs in the group.
Hiring of experienced employees form outside the group increased from zero to 30% which results
in higher risk as it attracts candidates who may not be relevant and qualified for the positions. This
external hiring is also very expensive as it involves a lot of processes like advertisement of the
positions, communicating to candidates, conducting interviews and screening resumes. This is also
time-consuming as time is taken to fill the vacant positions. There is also possibilities of
maladjustments which results when new candidates are not able to meet the standards and the
recruiters are forced to hunt for new candidates for hire.
3
Growing up of all management executives in Maersk Group resulted in too similar beliefs which
was big problem to the group as they did not have the external focus which is very crucial in
globalization of the company. This made the employees to be operationally predisposed as they
knew how to get things done and were execution-focused rather than also being commercially
predisposed.
Rise in attrition because of the groups rapid growth that required sizable hiring needs which caused
the company to hire and become dependable on employees coming from other companies. This
struggle to meet the required number of employees has become a major problem to the Maersk
group as it results in lagging of its operations and productivity.
Long time taken for employees to move to executive positions in the group was also a major
problem of the talent challenges the group faced as the existing employees opted to move out of
the company to go and seek better employment in other companies. This was a huge lose to the
company as it had invested heavily on the training and employee development in the company.
The Group lost most of its promising employees to hiring by other competitor companies.
Poor leadership development in the company resulted in bad and uninspiring leaders who had poor
employee management skills.
Drivers to employee turnover
The lack of growth and progression for the employees in the Group made many employees to quit
heir jobs in Maersk Group to seek better employment in other companies. This was attributed to
the slow promotion of employees to executive positions in the Group.
When the company’s culture changed from family owned to global publicly-traded, it caused
changes of business culture to business-line rather than the original group functions which made
4
employees feel that they belonged more to a family. This changes to the company’s culture resulted
in many employees leaving their jobs In Maersk Group.
Previously, there was much flexibility in the company which allowed employees to move around
the company and do jobs which they liked to do and the company was focused more on employee
performance rather than their formal background. The change of flexibility to more of
professionalism and considerations of formal background for employee positioning resulted in
many employees dropping out of the company.
Employee hunting by other competitor companies led to many employees leaving their jobs to be
employed in other companies who offer better opportunities and leadership positions which is not
given a company. This is seen when employees in Maersk Group left their jobs to be employed by
rival companies which offered better positions.
Firing of underperforming employees in the company is a key factor that results to employee
turnover. The company lets go of the unskilled and inexperienced employees to hire new
employees who are qualified for the position. This causes leaving of employees in a wait for new
hires hence resulting in employee turnover.
What companies can do to retain their employees
Building of an inclusive culture by creating a more international trainee program. This is to teach
employee to use of one language which is voluntarily supported by employees of a company. This
will make employees from all over the company’s branches feel an inclusion by sharing of a
common language throughout the organization.
Rehiring of employees who have voluntarily left the company or acquitted due to downsizing in
the company also results to talent retention. This rehiring may be facilitated by keeping
5
communication with laid off employees and updating them on new changes and new opportunities
in the company. The company may also create an alumni network to facilitate this contact with old
employees.
Employee development by creating training initiatives for employee to grow their skill and
experience knowledge is a way to retain employee in a company. This is so because the company
does not need to fire employee to hire new employees who have the required skills and knowledge.
The existing employees are trained to assume the positions thus keeping them within the company.
Factors that make recruitment process successful
Attraction by bringing the right people into the group makes a recruitment process successful as
the people having the required skills are identified for the hire positions.
Identification of the company’s major needs to determine the required capabilities of the
company’s talent and to determine the impact of any changes to the company. This may be by
consideration of the required size of employee acquisition and how it affects the resources in the
company.
Development of the hires and employees by identification of the candidate’s qualifications and
also willingness to do the job in the company. This ensures that employees are satisfied and are
happy in their position of work. This also sees if the employee is willing to relocate and also the
family and personal commitments, they have that might prevent them from accepting the job
offered.
Scenario planning by looking at a certain period plan for each unit and assessing the unit’s major
employee need going forward, if it was growing, if there is need to make more hires. This is to
establish the performance of the new hire if it was productive or not.
6
Measuring performance of employees to see how underperforming employees influence career in
a company. This will help in setting short-term objectives for them to determine how they will
fulfill them and if they are to be relieved of their employment. This process is crucial for ensuring
a successful recruitment process.
Challenges facing hiring of experienced talent
Hiring of experienced talent is a difficult process as it is hard to identify quality candidates for the
job. This is because of the many applications by people and the company may miss on a potential
hire if it tries to narrow the hiring criteria.
It is time consuming to hire experienced talent as there are many processes involved which include
posting of vacancy, making interviews, shortlisting, and evaluation to finally making the hire.
There is also pressure to fill the vacant position which may lead to selection of a lesser qualified
and experienced candidate.
Managing the job posting is also very tedious and complicated as the recruiters have to post the
position vacancies on various platforms which some may not be easy.
There may also be resistance from existing employees who may be accustomed and used to their
fellow employees and may try to oppose hiring of a new employee into their workforce.
Maersk Group should hire its former employees as a strategy to increase employee retention and
promote unity among its employees. This is also a way to promoting loyalty to the company by its
former and active employees and also improving a public image of the company.
Company’s culture
7
Maersk’s culture of a performance-driven culture which changed from its former family-oriented
is beneficial to its employees and workforce as it makes it possible for experienced hires to succeed
as they will focus more on doing better in their positions. This culture will also motivate employees
to perform better in competition to their fellow employees. This results in more productivity and
success of the company.
References
A P Moller—Maersk Group: Evaluating Strategic Management Initiatives
For the exclusive use of K. Duan, 2022.
9 -4 2 0 -1 0 6
FEBRUARY 27, 2020
LAKSHMI RAMARAJAN
VINCENT DESSAIN
EMER MOLONEY
Leading Change in Talent at L‘Oréal
On a sunny morning in March 2018, Jean-Claude Le Grand, Senior Vice President (SVP) Talent
Development and Chief Diversity Officer at French cosmetics company L’Oréal paced his Paris office
as he clarified his thoughts for a meeting with L’Oréal CEO and Chairman Jean-Paul Agon. Le Grand
had recently been appointed to the company’s Executive Committee (ExCom)—a 15-member group of
the company’s top executives. As the new Executive VP HR—as of July 2018—he would be responsible
for the hiring, development, promotion, and retention of approximately 83,000 employees worldwide.
Le Grand’s great passion was nurturing people. He strongly believed that for the company to live
up to its mission of “Beauty for All,” it needed to be as diverse and inclusive as the world itself.
Moreover, influencers, beauty bloggers and a diverse consumer base were all challenging the company
to create brands and products that were more inclusive and met the needs of every form of beauty in
every culture (See Exhibit 1 for selection of headlines). However, the top layers of the firm were still
largely composed of people like himself—male, French, elite-educated and Bébé L’Oréal (a term used
by employees to describe those who had spent their entire career within the company). (See Exhibit 2
for ExCom.)
The company had made not just public commitments, but also visible progress on diversity. In 2017,
women held about half of the top 1,000 positions (up from nearly one quarter a decade ago). Likewise,
over half of the top 1,000 were non-French, from 64 different nationalities. Moreover, the company had
also moved away from its model of largely French, male executives serving as expatriates. Rather, an
increasing number of emerging market leaders were from their home region (for instance, 89% of
leaders in the Asia Pacific region were from the region). Yet, Le Grand was also keenly aware that
important disparities persisted at the top of the firm. About one third of the top 250 strategic positions
were held by women. (See Exhibit 3.) And while 40% of revenue came from emerging markets, only
7% of the top 250 managers came from those markets.
Furthermore, observers noted that the L’Oréal culture was notoriously strong and not easy for
outsiders to penetrate. Le Grand viewed the company’s tight-knit culture as both a blessing and a curse.
The company was amazingly successful; L’Oréal was the market leader in its industry with €26 billion
of revenue in 2017, an increase of 5% over 2016. However, it was also hard to change. Le Grand literally
couldn’t and didn’t want to throw the Bébés out with the bathwater; he firmly believed that a core part
Professor Lakshmi Ramarajan, Executive Director Vincent Dessain and Senior Researcher Emer Moloney (Europe Research Center) prepared this
case with the assistance of Research Associate Tonia Labruyère. It was reviewed and approved before publication by a company designate. Funding
for the development of this case was provided by Harvard Business School and not by the company. HBS cases are developed solely as the basis
for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective
management.
Copyright © 2020 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685,
write Harvard Business School Publishing, Boston, MA 02163, or go to www.hbsp.harvard.edu. This publication may not be digitized, photocopied,
or otherwise reproduced, posted, or transmitted, without the permission of Harvard Business School.
This document is authorized for use only by Kerui Duan in MGT 691-37-FALL 2022 taught by JOSEPH GANITSKY, University of Miami from Sep 2022 to Mar 2023.
For the exclusive use of K. Duan, 2022.
420-106
Leading Change in Talent at L‘Oréal
of the company’s strength was its people. However, living up to the company’s global mission was a
challenge that depended on continuously nurturing diverse talent and creating an inclusive culture.
Le Grand was preoccupied with three main concerns regarding talent throughout the company for
his meeting with Agon. First, the gender gap at the top seemed to be a tough problem to crack. Second,
was the gap in emerging market leaders. Third, was the Bébé L’Oréal culture. How could he attract and
support talented, entrepreneurially-minded leaders from inside and outside the company and
empower them to act as change agents? How could he get those like himself to change? How could he
preserve the best aspects of its distinctive, tight-knit culture and ensure it was open and inclusive to
the changing composition of its workforce?
L’Oréal
Mission, Strategy and Performance L’Oréal’s mission, “Beauty for All”, envisioned offering
“all women and men worldwide the best of cosmetics innovation in terms of quality, efficacy and safety
to satisfy all their desires and all their beauty needs in their infinite diversity.” In order to achieve this
mission, L’Oréal adopted a strategy of “universalization”, which it described as, “globalization that
captures, understands and respects differences. Differences in desires, needs and traditions.” 1 In 2017,
L’Oréal reported €4.68 billion in operating profit and a record operating margin of 18%. (See Exhibit 4
for financial performance and Exhibit 5 for breakdown of sales.)
History and Growth In 1907, Eugène Schueller, a graduate of École Nationale Supérieure de
Chimie de Paris, created his first hair dye formula using a blend of harmless chemical compounds under
the name Oréal. At the time, dyes on the market used henna or mineral salts, which produced a bright
and artificial look. Schueller’s dyes, however, provided a subtle range of colors. In 1909, Schueller
founded Société Française des Teintures Inoffensives pour Cheveux. His hair dye soon became popular
among Parisians and, after the First World War, caught on internationally. Italy, Austria and the
Netherlands were among the first international markets, but the hair dye also reached the U.S., Canada,
the U.K. and Brazil. In 1939, the company officially changed its name to L’Oréal, with premises at 14,
rue Royale in Paris, still the company’s head office today. 2
The company’s growth came through both acquisitions and entering new geographic markets. In
the 1960s, L’Oréal acquired Lancôme to move into the upmarket cosmetics sector and Garnier to
expand its selection of haircare products. In the 2000s, it acquired companies such as the U.S. brand
Carson and the Japanese brand Shu Uemura to expand the racial and ethnic diversity of its consumer
base. 3 (See Exhibit 6 for an overview of L’Oréal’s brands.) Geographic expansion began in the 1970s,
with the creation of a multi-divisional organization in Latin America; by the 1990s new subsidiaries
had also opened in Asia. 4
Organizational Structure L’Oréal was a complex matrix organization, with divisions and
regions. The company had four operational divisions: Consumer Products (CPD), L’Oréal Luxe,
Professional Products (PPD) and Active Cosmetics. CPD sold products via mass-market retail channels,
Luxe products were only available in selective retail outlets and PPD products were sold in hair salons
and beauty institutes. The Active Cosmetics Division comprised dermocosmetics products, which were
sold through health channels, such as pharmacies, parapharmacies, and drugstores. 5 The company was
also organized by four major geographic zones: Western Europe; Eastern Europe, Africa and the
Middle East; Asia Pacific; and Americas. L’Oréal operated in 150 countries, which maintained full P&L
responsibility within the regional zone structure. Every L’Oréal employee reported to a divisional
manager in the country and a country manager from the corporate function. Four division chiefs and
four zone managers, reported directly to the CEO. The division chiefs were responsible for guiding
2
This document is authorized for use only by Kerui Duan in MGT 691-37-FALL 2022 taught by JOSEPH GANITSKY, University of Miami from Sep 2022 to Mar 2023.
For the exclusive use of K. Duan, 2022.
Leading Change in Talent at L‘Oréal
420-106
overall brand strategy, global brand sales and profitability, and marketing. The zone managers were
responsible for sales in their respective regions, and, more broadly, for executing sales strategies.
In addition to the multi-divisional and regional structure, there were several important corporate
functions: (1) Direction Marketing International (DMI) was responsible for product development
(working closely with research and innovation) and global marketing for each brand. Based in the
country or region of origin of their respective brands, the DMI teams devised global strategies, finetuned development processes for new products and coordinated the deployment of their brand
strategy worldwide. 6 (2) Research and Innovation (R&I), which comprised 20 research centers—
including 3 global centers in France and 6 regional hubs (United States, Japan, China, Brazil, India and
South Africa), 7 employing 3,870 people. R&I filed over 498 patents in 2017. 8 L’Oréal invested €877
million in R&I in 2017. (3) Operations, which developed, manufactured and supplied consumers with
L’Oréal branded beauty products. The Operations department employed approximately 19,000 people
in head offices, factories and distribution centers. The Operations teams were present in 41 plants and
155 logistics sites worldwide. (4) Human Resources (HR), which consisted of 1,600 people around the
globe, was responsible for the entire range of talent management activities. The company had a strong
reputation in the labor market; in 2018, the company ranked eighth in Universum’s ranking of the
World’s Most Attractive Employers, which polled 294,000 students and business school graduates. 9
Culture The company was known for its marketing-driven culture. One country director, who
had spent much of his career at another firm before joining the company, said, “L’Oréal is not a
company of theoretical strategies but of executions. If you look at it carefully, they are very rigorous
on strategy long term, but they do not think it’s important to formalize it. When I see the yearly
international brand presentations in Paris with all the marketing executions I am blown away, I call
my wife to tell her I have seen the most incredible presentations of my life. It is astonishing. Then you
understand what L’Oréal is and why L’Oréal is successful: it’s because of an incredible passion for
excellent execution.”
The culture was also competitive. The same country director continued, “The culture of L’Oréal is
seen as very tough. There is a famous story of a meeting room in Clichy that was called the
confrontation room; in normal companies meeting rooms are called with the names of flowers, birds.”
Another non-Bébé L’Oréal leader said, “It’s a company where you have to fight because this is their
culture, they are fighters. They want to win against competitors. Internally it’s the same—you must be
ready to fight.” In 2017, the company started a change initiative called Simplicity to shift the culture to
be more innovative and collaborative. (See Exhibit 7 for example of Simplicity posters.)
Trends “Digitalization” was transforming the company. In 2014, L’Oréal appointed a Chief
Digital Officer to the ExCom to lead and support the company’s numerous initiatives in e-commerce
and digital marketing. Key activities included developing ‘beauty companions’, digital services to
guide consumers and help them to choose the right products. 10 L’Oréal was also adapting to the ever
more dynamic world of digital marketing, investing 38% of its media budget in digital platforms. 11 In
2017, e-commerce sales grew by 33.6%, with the largest growth coming from China, where it
represented almost 25% of sales. 12 The strongest segment was the luxury segment. 13
Le Grand—Change Agent at L’Oréal
Early life Born in Paris in 1965, Le Grand grew up in a family of entrepreneurial women—his
mother, grandmother and great-grandmother all led their own businesses in the fashion industry. He
began his schooling in the wealthy Parisian suburb Neuilly-sur-Seine. He commented, “I was with the
3
This document is authorized for use only by Kerui Duan in MGT 691-37-FALL 2022 taught by JOSEPH GANITSKY, University of Miami from Sep 2022 to Mar 2023.
For the exclusive use of K. Duan, 2022.
420-106
Leading Change in Talent at L‘Oréal
children of bankers who were brought to school by drivers. It was a protected world. I was with super
educated white people; they were all the same.”
Le Grand’s family later left its privileged Parisian lifestyle for Marseille, from where his mother’s
family originated. He continued his education in a high school in a disadvantaged area of the city. He
recalled, “40 years ago, it was very eye-opening. There was a huge level of immigration; there were
people from many different cultural origins. I remember being in the Marseille football team’s stadium,
which is in the center of the city, and it was a shock, it was a huge melting pot.”
Soon after completing his studies—an undergraduate degree at the Institut d’Etudes Politiques in
Aix-en-Provence and a post-graduate Master’s Diploma in Human Resources Management from
Dauphine University in Paris —and a short stint in HR at another company, Le Grand joined L’Oréal.
Le Grand was strongly aligned with L’Oréal’s values and its long-held dedication to “the importance
of people, people, people.” Rising through the ranks of the HR organization, he sought to build on the
work already done in the HR organization for several decades. (See Exhibit 8 for Le Grand’s bio.)
HR organization At L’Oréal, the HR organization worked closely with the business. In an
annual review process, business and HR leaders worked together to match “talents” to key positions
within the organization. a For the top 250 strategic positions, Le Grand worked with the top-most
business leaders; for the top 1,000 key group positions, divisional and zone HR executives worked with
the division and zone managers; and for the key local positions, country HRDs played a vital role. Le
Grand stressed the centrality of HR to the business, noting, “The reality is that among our greatest
talents, the turnover is 50% of executives. It’s not just the costs, it also means that you are building on
sand.” Other HR leaders shared this view. A global VP of HR said, “To ensure that the HR function is
at the core of the business strategy, you need proximity and to know your employees. In some
companies you have one HR person for 1,000 employees. For us, the average ratio is 1:200 or 1:300 max.
Then you can see the best way to develop people and truly work on their career progression.” 14
HR philosophy Le Grand was passionate about the role of HR professionals in employees’ lives,
“It’s a noble profession that only very few people are qualified to do; I would forbid 99% of people to
work in HR.” He took a hands-on people-centric approach to his HR responsibilities. Marcelo Zimet,
Country Managing Director at L’Oréal Argentina, recalled, “I was working with a person for six
months and Jean-Claude had a half hour conversation with him and later told me, ‘You know, that
person was in the war when he was very young and he was responsible for calling the families when
young soldiers died.’ I said that I didn’t know that and I was surprised, since I thought I knew this
person well. Le Grand has a special skill to connect with people quickly and to really understand
them.” Le Grand explained, “I try to encourage HR managers to spend time with people to find out
what is unique about them; it is something that can only come out of a conversation. It is different from
looking at a CV line by line; I don’t care about that.” He continued, “We can have a huge impact,
because we take care of a part of people’s lives where they spend a lot of time, their professional life. I
often say: I don’t do HR, I take care of people—I know a lot of people that do HR, but few who take
care of people. That is what has animated me throughout my career; having an impact on people’s
professional development and seeing them grow is the real success for me.” 15
A key pillar of Le Grand’s HR philosophy was that change needed to be forcibly imposed in order
to make progress: “Like everyone else, I would prefer to believe that forcing things isn’t the solution,
but you have to admit that it does help a little. It allows you to take the first step.” However, he also
a L’Oréal used five criteria to identify “talents” in the company: vision, leadership, ambition, judgement and co-operation.
4
This document is authorized for use only by Kerui Duan in MGT 691-37-FALL 2022 taught by JOSEPH GANITSKY, University of Miami from Sep 2022 to Mar 2023.
For the exclusive use of K. Duan, 2022.
Leading Change in Talent at L‘Oréal
420-106
believed that, “The future of HR is to empower people more. The future will center on self-learning,
self- management of careers. The future is not to control everything, but to delegate and to share.”
Diversity perspective
L’Oréal had long stated that diversity in human resources was a strategic
lever for performance and growth. 16 Le Grand said, “The best competitive advantage of L’Oréal is our
capacity to innovate; it’s our creativity! It’s in our roots to challenge and rethink our brands, products
and ideas. Of course, this implies being consistently open to different viewpoints. People with different
ages, gender, backgrounds, religions, experiences or origins enhance creativity and innovation.” 17
Moreover, Le Grand was driven by a personal desire to be an agent of change on the issue of
diversity. He said, “Why do I care so much about the topic of diversity? I’m white, I’m a man, I’m fifty
… I have no reason to do anything. I’m the pure representative of the vast majority of people doing
nothing. My purpose is that we, as the majority in companies, we have to change.”
To create change in the composition and culture of the company, Le Grand had led a range of formal
a

Don't use plagiarized sources. Get Your Custom Essay on
MGT691 International Management
Just from $10/Page
Order Essay

“Place your order now for a similar assignment and have exceptional work written by our team of experts, guaranteeing you A results.”

SUPPORT

support@classmatetutor.com

About us

Contact us

User reviews

Become a freelance writer

FAQ’s

OUR SERVICES

 

Persuasive essays

Expository essays

Compare and contrast Essays

Persuasive essays

Argumentative essays

Narrative essays

Definition essays

Informative essays

MAIN

Place order

Our Affiliate program

Privacy Policy

 

LEGAL

Our privacy policy

Terms and conditions

Our Cookie Policy

Confidentiality policy

 

 

Disclaimer: Writemasters is a professional essay writing service, providing custom assistance for research and reference purposes only. The use of our work must comply with all academic guidelines and integrity standards. Copyright © 2009 - 2024
7904 Dorothy St, Rosemead, CA 91770
Open chat
1
Need help? Chat Now
Scan the code
Hello, welcome to our instant WhatsApp chat. We are online and ready to assist.
How can we help you today?