Strategic Sourcing at Lockheed Martin Corporation

1. Strategic Sourcing atLockheed Martin Corporation Prepared for:Corporate Sourcing Leadership ExchangeJune 2008 Meeting

2. Lockheed Martin Corporation • Contents • Lockheed Martin Overview • LM Recruiting Model • LM Strategic Sourcing Model • Evolution • Pipelines • What Works • What Needs Work • Metrics & Reporting • Related Best Practices Lockheed Martin Corporation - CSLE

3. 140,000 worldwide Employees Sales (2007) $41.9 billion Business Premier systems integrator, principally engaged in the research, design, development, manufacture and integration of advanced technology systems, products and services Customer Base • Primarily the U.S. Department of Defense and the U.S. federal government agencies • Lockheed Martin is largest provider of IT services, systems integration, and training to the U.S. Government • Other business comprised of international government and some commercial sales of our products, services and platforms Operations 1,000 facilities in 500 cities and 46 states in the U.S. Business locations in 75 nations and territories internationally Lockheed Martin Overview Lockheed Martin Corporation - CSLE

4. Lockheed Martin Overview Locations LM Locations with over 200 employees Lockheed Martin Corporation - CSLE

5. Phoenix Mars Lander Lockheed Martin Overview Market Focus - Programs Focus on profitability and growth in the following markets: Also working with NASA to support America’s reinvigorated commitment to space exploration • Over 3,000 programs in the U.S. and worldwide • about 19 percent of global defense exports, and • about 40 percent of all U.S. defense exports Lockheed Martin Corporation - CSLE

6. Lockheed Martin Overview Business Areas Aeronautics Tactical Aircraft, Airlift, and Aeronautical Research and Development lines of business Space Space Launch, Commercial Satellites, Government Satellites, Strategic Missiles lines of business Information Systems & Global Services Mission Solutions: R&D and Engineering for Intelligence, Defense and Civil Agencies Information Systems: IT Infra-structure, Process Outsourcing, COTS Integration, Level of Service Solutions Global Services: Support of Mission Services, Nation Building, Stability Operations, Facility Services Electronic Systems Missiles and Fire Control, Naval Systems, Platform Integration, Simulation and Training Systems Lockheed Martin Corporation - CSLE

7. LM Recruiting Model Background Mid-90s: Many legacy company units, each with own staffing Many empty seats - Slow time to fill 1997: HR VP opens Washington Post, sees 6 LM recruitment ads…. • “Has to be a better way!” 1998: LM Regional Recruiting Center (RRC) concept born Lockheed Martin Corporation - CSLE

8. 1. Improve recruitment service and hiring performance 2. Develop a system that introduces significant cost savings 3. Create a transferable concept LM Recruiting Model Regional Recruiting Centers (RRCs) Objectives: Cost per Hire Candidate Experience Cycle Time • Eliminate duplication:ads, job fairs, sourcing efforts • Interview once, but be seen by many BUs (one stop shopping) • 24-hour offers Lockheed Martin Corporation - CSLE

9. LM Recruiting Model RRC Process Process successful: • Washington Metro • Tyson’s corner satellite • Delaware Valley • Two centers: NJ and PA • Third satellite in Owego, NY • Orlando • Silicon Valley • Plus Rocky Mountain satellite near Denver • Aeronautics – Ft. Worth Today, LM hires10-12,000 people per year Over 80% hired through RRC process Lockheed Martin Corporation - CSLE

10. Corporate Staffing Director Regional Recruiting Centers University Relations Talent Sourcing Programs Delaware ValleyNJ-PA-NY OrlandoFL Silicon ValleyCA Strategic Sourcing & Military Relations Wash. MetroNo. VA Rocky MountainCO AeronauticsTX All Business Units LM Recruiting Model Structure Snapshot Customer Supported: Regional Recruiting Centers (RRCs) Business Units University Relations & Talent Sourcing RRCs Strategic Sourcing RRCs Each staffing entity has budget responsibility All costs consolidated and billed back to the Business Units Lockheed Martin Corporation - CSLE

11. LM Strategic Sourcing Model SSG – Evolution • Beginnings • In WMA RRC, initially identified need to proactively address increasing shortage of ‘cleared’ candidates (TS/SCI w/Polygraph) • Included study of state of clearances & potential candidate population • Small separate group formed within Staffing - Strategic Sourcing Group - to research, identify, ‘tag’ and source for these and other ‘critical skills’ • Critical skills defined as those skill sets that are: • Needed for maintaining & expanding LM’s core businesses • Needed in significant quantities across multiple LM Business Units • Always difficult to find and hire 2003 Lockheed Martin Corporation - CSLE

12. LM Strategic Sourcing Model SSG – Evolution • Beginnings (cont.) • Developed critical skill list – hard work! • Set up initial ‘central repository’ of sourcing knowledge (Strategic Sourcing SharePoint) • Developed specialized research on critical skills • Began development of critical skill pipelines, with limited staff 2004-2006 Lockheed Martin Corporation - CSLE

13. LM Strategic Sourcing Model SSG – Evolution • Business case to expand team to accommodate more pipelines • Based on existing research, focused LM’s need to tap into broader labor market (‘passive’ candidates) • Highlighted other companies’ best practices re: passive candidates • Gap analysis: present state vs. desired state • Showed considerable groundwork already established ! • Role of RRCs vs. SSG re: pipelining candidates – tactical vs. strategic: different approach, different tools • Benefits of dedicated work on pipelines • Resources needed to close the gaps • Gained buy-in from RRC stakeholders Early 2007 Lockheed Martin Corporation - CSLE

14. LM Strategic Sourcing Model SSG – Evolution • Current State • 5 strategic sourcers • 9 major skill pipelines in progress (since 3Q07) and producing viable, critical skill candidates • Established Service Level Agreement, early 2008 • Contributing on hard-to-find sourcing assignments • Completing research requests • Establishing credibility as we go Lockheed Martin Corporation - CSLE

15. LM Strategic Sourcing Model Why ‘Expro’ Pipelines? • Industry research: > 50% of Labor Market is ‘passive’ • For LM critical skills, considerably higher • Build predictable talent pipelines in advance of need, given tightening market of critical talent • Enhance positioning relative to our competitors; attract more than our share of critical skill talent • Gain talent advantage by maintaining relationships with top talent over time, to convert the best candidates quickly • Break ahead of ‘business as usual’ to improve key recruiting outcomes A focus purely on active candidates ignores over half the talent market Lockheed Martin Corporation - CSLE

16. Internal External Pipeline LM Strategic Sourcing Model Filling the Pipelines Mine/Research LM Candidate Database ‘Soft-Sell’ Advertising/Outreach Mine Web: Any/Every Way Strategic Sourcer Engage ‘Silver Medalists’ Employ Social Networking Tools Contacts the Prospect(email or phone) Begins the dialogue Obtains basic profileor resume Sets framework for follow-up w/prospect Completes CRM form Enters info/resume as Pipeline prospect/candidate Continues to update prospect record over time Research, Research, Research… LM Proprietary Web Tools Lockheed Martin Corporation - CSLE

17. Strategic Sourcing Leads Contacts RRCs Candidates Hires LM Strategic Sourcing Model From Pipelines to Applicants • Passives to Actives • When the prospect’s timing is right • When we have a particular opportunity that we market to them and they’re interested • Strategic Sourcer refers the candidate • To the appropriate recruiter (if actual requisition is known) • To RRC manager if just area of fit is known • Candidate type changed: ‘passive’ to ‘external’ • Smooth transition is important! • Candidate shouldn’t feel like they’re starting over • Still working this process Lockheed Martin Corporation - CSLE

18. LM Strategic Sourcing Model SSG – Services Provided • Primary Services • Critical skill pipeline development, sourcing support • Special Research Requests • New Market Research, Acquisition Support, other research • Additional Activity/Output • Update/maintenance of critical skill list, sharepoint, industry conferences, etc. All services defined inService Level Agreement Lockheed Martin Corporation - CSLE

19. LM Strategic Sourcing Model What Works • All-Sourcers List • Soft-sell advertising • Focused use of specialized tools • Elevator Pitches – for campaigns • Varied backgrounds of sourcers • Building relationships over time Lockheed Martin Corporation - CSLE

20. LM Strategic Sourcing Model What Needs Work • Transitioning passives to RRC recruiters • Soft-sell advertising • More automated data capture • Identifying skill pools in the corporation • Integrating understanding of SSG into dynamic staff changes at RRCs • Verifying ‘real’ needs Lockheed Martin Corporation - CSLE

21. LM Strategic Sourcing Model Metrics & Reporting • Monthly Pipeline Reports– internal to team • Monthly Reports – highlights to staffing/staffing management • Quarterly Reports– staffing/staffing management Pipeline stats, sourcing projects for RRCs, specific sourcing assistance, special activities to build pipelines, resulting hires, etc., Lockheed Martin Corporation - CSLE

22. Related Best Practices • Partnership with Talent Sourcing Team • Alumni network • Strategic Focus on Transitioning Military • Chat sessions by skill focus • Consistent LM recruitment branding • Close partnering with LMCareers team(applicant/hiring database) Lockheed Martin Corporation - CSLE

23. Questions/Discussion Lockheed Martin Corporation - CSLE