A look at current trends and data

Citation

Nolan, S. (2011), "A look at current trends and data", Strategic HR Review, Vol. 10 No. 4. https://doi.org/10.1108/shr.2011.37210daa.009

A look at current trends and data

Article Type: Research and results From: Strategic HR Review, Volume 10, Issue 4

Sara Nolan

Story 1

HR leaders’ confidence rising for 2011, yet people challenges remain

The sixth HR Barometer study has revealed a new air of optimism among HR leaders on key corporate trends and people issues. The study was designed and carried out for the European Club for human resources (EChr) by Aon Hewitt, the global HR consulting and outsourcing business of Aon Corporation. According to Leonardo Sforza, head of EU affairs and research at Aon Hewitt and author of the study, while HR leaders are increasing their focus on key human capital assets to help lead and develop the business, they continue to struggle to address emerging workforce issues and to anticipate business needs.

Growth and investment ahead

According to the study, HR professionals across Europe expect revenues and investment to grow at a much better pace in 2011 than in the last two years with only 2 percent of respondent organizations forecasting a decrease this year. Target increases for the majority of companies remain in the single digit range, but the proportion of those expecting revenue growth above 10 percent has jumped from 13 percent last year to 35 percent in 2011. Similarly, an increase in investment target above 10 percent is now planned by 25 percent of companies against 16 percent in 2010 and only 4 percent in 2009.

The more positive outlook for the year ahead is confirmed by the employment prospects. The proportion of companies foreseeing a reduction of their workforce is significantly smaller now at 26 percent compared to 44 percent last year and 71 percent in 2009. Meanwhile, the proportion of companies that expect to add new jobs has increased to 28 percent in 2011, up from 20 percent in 2010 and only 8 percent in 2009. Of companies 46 percent are expecting to maintain the same level of employment.

The impact of measures taken in 2010 to face the downturn and prepare for recovery has been assessed by almost all respondents and results seem to match target objectives. Only 4 percent of companies said that they missed their targets.

Key findings

Other key findings from the report include:

• •

  The difficulty of having a suitably qualified labor force, or in finding the right talent in the right place, emerges as this year’s most influential factor when designing HR policies.

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  The top three priorities on the HR agenda for the 2011-2013 period have remained stable over the last two years but with an even greater focus on core human capital assets, namely: leadership development (mentioned by 54 percent), employee engagement (50 percent) and talent retention (44 percent).

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  When judging its own performance against business expectations, HR delivery has matched corporate targets more frequently than in previous years. Nevertheless, in 15 HR-specific activities the majority of respondents admit to performing below expectations. The most frequently mentioned areas of excellence continue to be those related to statutory compliance issues, while the weakest fields are in relation to mapping and management of competencies, management of inter-generational diversity of the work force, and anticipation of employee expectations.

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  A majority of respondents expect significant changes in HR capabilities and competencies within the next three years particularly in relation to functional expertise on leadership and talent development (60 percent), change management (57 percent), and strategic advice to management (52 percent).

For more information

Visit: www.europeanclub-hr.eu

Story 2

Top executives fear being overwhelmed by change

More than two-thirds of corporate executives fear their leadership being overwhelmed by complex challenges as whole industries are transformed by the demands of the digital age in a trend towards “convergence.” The main drivers are changes in customer expectations and technological innovation, according to an international study by Egon Zehnder International, a privately-owned global search firm. The study included 515 top executives from multinational corporations, as well as small and medium-sized businesses, in a range of countries including Denmark, France, UK, Germany, India, Italy, The Netherlands, Sweden, Switzerland and the USA.

While three out of four top executives are witnessing convergence in their industry, nearly two-thirds believe their companies lack sufficient leadership skills to cope. The pressure on corporate executives has spiked substantially and leaders are required to possess skills and competencies that were once thought of as impossible to find in one individual. For example, leaders today are increasingly required to have a range of skills and competencies, from being vigorous and persistent to being culturally sensitive. As a result, an intensified war for talent is taking place across industry – and geographic – borders.

Dom Loehnis, a consultant specializing in convergence at Egon Zehnder International in London, comments: “Convergence is taking all sorts of businesses into areas where they’re interacting directly with consumers – often for the first time – and you can measure everything. This raises real challenges as organizations have to build new capabilities and often new structures.” He continues: “The biggest challenges we see are for the leaders of established businesses making a transition from the old to a new business model. Every legacy business finds it hard to cope with convergence because of cannibalization issues and the challenge of developing new skills and mindsets.”

Key findings

Other key findings from the report include the following:

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  Business models across industrial sectors are opening up. For more than half of all respondents, better informed and more autonomous customers combined with leaps in innovation, are driving the trend to convergence.

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  Old barriers are breaking down, with closer collaboration and new alliances forming.

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  There are organizational consequences of convergence, with 39 percent of executives saying their companies either had or plan to develop a new business model in response to convergence.

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  Leadership issues are emerging from convergence, with 78 percent saying teamwork at management level has become significantly more important.

For more information

Visit: www.egonzehnder.com/iep-convergence

Story 3

HR capability less of a priority, yet overall people development more important than ever

The importance of developing HR teams has fallen as a priority in 2011, although people development as a whole is more important than ever. This finding is reported in the Corporate Learning Priorities Survey 2011 carried out by Henley Business School’s Corporate Development team and based on feedback from 225 HR and non-HR senior managers based around the world.

Seventy-four percent of respondents said that developing people to achieve growth and competitive advantage is paramount (up from 69 percent in 2010). Retention of talent is the second highest priority for development activity with 73 percent identifying it as crucial, a rise from 63 percent last year. Concern about managing change, reflecting a continuing volatile economy, came third with 64 percent naming it as a learning objective, compared with 60 percent in 2010.

Despite the apparently positive attitude towards development as a whole for next year, there seems little appetite to focus on HR capability with the development of HR teams dropping in the priority list from 34 percent in 2010 to just 3 percent in this year’s survey. HR and non-HR respondents also have a different view on learning and development spending this year with 24 percent of respondents in HR roles saying they will spend more in 2011 versus 32 percent of those in non-HR roles.

Other key findings of the research include:

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  Attracting new talent is a priority – 64 percent said this was important, compared to 52 percent in 2010.

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  The development of middle managers remains significant with 43 percent naming this as a first or second priority.

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  Of respondents 35 percent place developing senior managers in first or second place, while 31 percent identify developing the management skills of new leaders.

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  The overwhelming majority of respondents will be doing more, rather than less, learning and development activity in 2011 – specifically many will be “doing it for themselves” with 62 percent of respondents saying they would be doing more informal knowledge sharing between peers and 59 percent more mentoring between peers in 2011 than in 2010.

For more information

The report can be downloaded at: www.henley.reading.ac.uk/web/FILES/corporate/cl-Henley_Corporate_Learning_Priorities_Survey_2010.pdf

Story 4

Talent top of the CEO agenda

Managing talent has overtaken risk as top of the CEO agenda, according to a survey of 1,200 CEOs globally by PwC. Some 83 percent of the 1,200 CEOs surveyed globally plan to change their firm’s talent management strategy over the next 12 months and for 31 percent these changes will be major. The next priorities are risk management and investment, with 77 percent and 76 percent of CEOs, respectively, anticipating changes in these areas. Last year risk management was the number one priority for 85 percent of CEOs, followed by investment (81 percent), and talent third (78 percent).

Michael Rendell, head of HR consulting at PwC, says: “As we move out of the downturn, CEOs are putting the focus firmly on their people. Competition for talent is intensifying as recruitment activity picks up in some sectors and there are increasing difficulties finding staff with the right skills. CEOs often speak of the importance of talent, but there’s not enough evidence of action being taken. The survey findings are encouraging, suggesting talent will be reflected more in company strategy. HR professionals need to help CEOs see what can and should be done.”

CEOs globally anticipate greater use of non-financial rewards to motivate staff and increased work with government and education systems to improve skills. CEOs believe the main challenges to talent over the next few years include a limited supply of candidates with the right skills, and those individuals with the right skills lacking flexibility and creativity. Another major challenge according to the survey will be recruiting and integrating younger employees.

For more information

These findings come from PwC’s 14th PwC Global CEO survey. For more information visit: www.pwc.com/gx/en/ceo-survey