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Deutschland Digest Market Commentary Q2 2021

Deutschland Digest Market Commentary Q2 2021

At long last, it is starting to feel like the world is returning to some semblance of normality. With vaccination rates now rising at a fantastic pace, it can well be hoped that the worst is behind us and we can finally begin to not just to think about future plans, but put them in to action.

It is safe to say that one of the biggest, most pressing topics on the minds of business and HR leaders is how to structure the return to an office-based environment, particularly what balance the firm aims to achieve in providing more flexibility to those who have become accustomed to working differently these past 18 months.

So far, based on our discussions with senior HR professionals, there have been a wide array of posited approaches either in planning stages or already put in place. There are numerous discussions to be had surrounding the ‘new normal’ but, with everything subject to change 6-12 months down the line, we’ll be focussing on one more immediate aspect: the increased utilisation of OKRs (Objectives and Key Results).

That’s because this is becoming more widely adopted, not only in response to the challenges of the past few years, but also as a natural consequence of the evolving landscape of HR.

Market Overview

Frankfurt (and, of course, the rest of Germany) seemingly remains the option of choice as post-Brexit reorganisation within the continent continues. A number of the large Tier One banks have transferred senior regional leadership roles to the Germany, both from a business leadership perspective as well as for HR strategy.

Among these are Morgan Stanley, who recently hired Guido Fuhrmann to lead their Continental European and MENA HR function, and Deutsche Bank, who recently brought in Virginia Bastian to lead their Global Talent & Development function. Many others, including Citigroup and Goldman Sachs are also looking to bolster their in country/regional HR teams. (LinkedIn.com & Stepstone.de)

The world of professional services is equally busy, with many high profile moves having taken place already. Watson Farley & Williams brought in Svenja Spranger as HR Director to lead the growth of their new German practice, similarly so did Allen and Overy, with Felix Theurer recently joining as their German HRD. Sabine Spindler transitioned across from the world of legal to consulting, taking on the Head of HR Europe role with Finsbury, Glover and Herring, whilst Yalda Shojai made a move in the opposite direction, joining White and Case to lead their Talent Acquisition function.

In general, professional services has certainly been our busiest sector to hire for within the past three months. With so many fantastic firms hiring in earnest, the competition is fierce and some firms are innovating their approach in new ways, to help them stand out from the crowd.

Hiring has certainly been important within the Insurance sector too, for example ARAG Insurance have just appointed their first ever female Executive Director, Dr. Shiva Meyer, who will take on the responsibility for leading HR and audit.

Irrespective of the industry, there is an additional focus for many firms: a concerted push towards digitalisation and the adoption of more modern practices. For many long-established insurance companies, the pandemic and with it the necessity to have as many people as possible working from home was a real catalyst for change. Throughout the industry we now see firms making significant efforts towards modernising their work culture in order to meet employees future needs. While some companies like AXA had already started flexible working schemes quite some while prior to the pandemic, others are making up ground at pace. Most insurers are currently taking great strides to ensure their entire workforce is fully vaccinated as quickly as is possible, with their efforts currently being considered the most vested across the various industries. (versicherungsjournal.de, June 2021)

One force propelling such modernisation of the industry is the slowly-increasing market share of InsurTechs. One great example of this is wefox, which has just been revalued at $3 billion and is looking for a quick expansion across Europe, with a more long term expansion goal  to make across to the US and Asia.

Likely the most pressing topic for all, irrespective of industry, is that of returning to work. As mentioned above, too much remains uncertain to give any clear picture of various practices within this digest. We recently hosted a small scale virtual networking event with some leaders from the industry, where we had some great discussions and will follow up on this with a second iteration sometime in September/October to see what has changed. 

 

How they can Objectives & Key Results support flexible/hybrid working?

OKRs are an agile leadership and goal management framework and have become a valued tool in the workplace. They are a strategy execution tool to guide result-focused work, creating alignment and engagement around measurable goals. OKRs consist of one Objective and several Key Results. (Workpath.com) The most distinct difference between a KPI and an OKR is that OKRs are a measure of outcome, rather than output. It measures the end product, not the way of getting there. Additionally, OKRs are most commonly personally derived so once someone is given a task, they are also given full control of exactly how to achieve said goal and create their own path.

Going into great detail on all aspects of OKRs would make a bit of a laborious a read. So, should you have any interest in more detailed material on this subject, I would be more than happy to share some further data with you. For now, let’s look at one granular aspect of exactly how the use of OKRs as both a project management tool and a performance analytics one can be a great benefit to firms who are aiming to provide flexible or hybrid working environments.

One fantastic impact of implementing such a measure is that of creating a more trustful relationship between employee and employer. Moving away from a granular, micro-managed form of oversight (such as heavily KPI driven performance tracking) and instead adopting a hands-off, trustful approach to the completion of any given task (or tasks), provides the employee with the confidence to structure their work in a way that is suitable for them, as well as the feeling that they are trusted and valued by their employer. This could not only mean that turnover could be significantly lowered, but also that data metrics taken from these new methodologies can be utilised in future on a wider scale to the benefit of the whole firm.

This is not to say that KPIs do not have their place. Many firms adopt a blended strategy, utilising both OKRs for more holistic, long term measures whilst implementing some complementary KPIs within that to act as road markers. This is one of the highly reported positives of those utilising OKRs; it provides a high degree of flexibility to fit whichever unique needs your firm may require. The visible and open nature of how they are most commonly utilised also serves to stimulate greater conversation and collaboration between peers, when compared to more traditional techniques (FlockBlog Survey, 2020). Particularly during the review phase, which some firms do almost every week in so-called ‘Sprints’, it can provide a great centre piece to the conversation of how some objectives can be supported by other colleagues, thereby creating a more efficient channel for workstreams.

In Germany, OKRs (for the most part) remain a seldom-used tool. This is not to say that some firms have not adopted these; many have with great success. However, it is still reportedly not as commonly used here as in other geographies. Furthermore, within the Financial & Professional Services sectors, many of the conversations I have had point towards an appreciation of the potential benefits of utilising OKRs, but an equal lack of certainty on the appetite of the business to utilise such a methodology. 

To end as I began, the above is only a very small snippet of the benefit that adopting OKRs could bring and is by no means exhaustive. If anyone would be interested to discuss this in more detail, I would very much enjoy the opportunity to do so.

If you are currently looking for a new role, or are interested in partnering with us to help deliver on an open search, please get in touch with James Casey or one of our team or specialist consultants