Glencore: the Private to Public Transition Highlights

Glencore: The Private to Public Transition Highlights

Lack of Employee Development Processes

Team 12

Organizational Behavior

9/28/2011

“On our honor we neither gave nor received unauthorized help on this assignment”

Executive Summary

Glencore International plc. was founded in 1974 as Marc Rich & Co AG. Since then, it has grown to be the world’s largest and most profitable marketer of physical commodities. Glencore’s success is attributable to its “shrewd traders, [who] are arguably the most valuable asset at the secretive Swiss company.” As a private company, Glencore was able to recruit top traders by offering equity positions and the draw of a much more focused, nimble environment than larger public organizations.

Unfortunately, with its 2011 initial public offering, Glencore’s edge in the recruitment game was lost, and it is now facing the prospect of paying large cash signing bonuses ($5+ million) and promising high yearly payouts even if trader profits are not impressive. In order to avoid ballooning recruitment costs, Glencore needs to implement an internal talent development process. The successfully implemented strategy will increase the engagement and enthusiasm of lower-level employees, save Glencore substantial money in talent acquisition, and create a more loyal workforce.

At the core of the talent development process will be a strategy for teaching high-potential employees the procedural knowledge necessary to be successful in the markets. First, management will choose successful traders to be mentors. Second, traders and management will work together to identify employees ready to move into trading roles. Third, the chosen traders will act as mentors and coaches to the employees. Lastly, the process will be monitored based on mentee success in trading simulations.

It is important that the trading experts train the potential traders. Procedural knowledge cannot be learned from a book; experts must act as coaches, and...