HR leaders face challenges from the tough economic climate including cost pressures but remain focused on employees. Up-skilling employees and non-financial rewards are priorities despite cost reductions. Leadership development, engagement, and retention are top medium-term goals. HR is expected to develop new skills and influence business strategies more, but policy execution still lags expectations. HR leaders see a role in addressing youth unemployment.

1. 7th European HR Barometer
People First Despite Tough Economic Climate and Pressure on Cost Reduction
The impact of measures taken in 2011 to face the
Key results economic volatility has already been assessed by a
vast majority of respondents (88 percent) and, for two
▪ Deterioration of macro-economic climate reduces but
▪ third of respondents, results seem to largely match
doesn’t reverse corporate growth and new employment target objectives.
prospects.
▪ HR leaders ready to play an active role to tackle
▪ Most influential policy drivers for HR
unemployment of young people.
▪▪ Navigating through the crisis an opportunity for
raising HR profile, but too often communication with This year, “cost sensitivity” regains its place as the
employees is still poor. most influential factor when designing HR policies.
▪ Up skilling and (non-financial) employee reward are top
▪ The difficulty of having a suitably qualified labour
2012 actions despite pressure on cost reduction. force or in finding the right talent in the right
▪▪ Leadership development, employee engagement and place, followed by challenging productivity and
retention confirmed top HR medium-term priorities. profit targets make up the top tier of the list. More
▪▪ HR expected to develop new business competencies astonishing is the very limited consideration given to
and reshape its mission. emerging social and political factors such as:
▪▪ HR policy execution continues to lag beyond
▪▪ perceived inequalities,
expectations.
▪▪ HR capacity to anticipate needs and influence the ▪▪ increase of retirement age,
business agenda still limited. ▪▪ higher ethical standards or social networks.
▪▪ Steady level of cooperation with CEO but trust
shrinking. These factors are likely to have a much greater impact
▪▪ Perception of EU activities further declining while on management policies than indicated by HR leaders
negative sentiment increases. in the survey.
▪▪ Direct call to policy makers for:
- recasting and simplifying EU labour law,
- reinforcing financial support in favour of education,
Short and medium-term HR policy priorities
innovation and research,
- removing barriers to cross-border workforce mobility. In the short term, the greatest emphasis for new
measures planned in 2012 will be on learning and
development programmes (the priority for 69 percent
of respondents), followed by actions aiming to better
Growth prospects reward employee performance. Less frequent but
still indicated in the top twelve ranking are; actions
The majority of HR professionals across Europe expect in favour of the financial participation of employees
the impact of the downturn on business results to be to business results (21 percent), in favour of
significant, but only one third of respondents will see complementary health care (19 percent) and pension
HR programmes affected. Revenues and investment arrangements (13 percent).
are expected to grow more moderately than last year.
For the longer term (up to 2014) the range of
The proportion of companies with growth targets priorities on the HR agenda is much broader than was
above ten percent has shrunk compared to 2011 but the case in previous editions. Nevertheless, the ranking
still much higher than in 2010 and 2009.Meanwhile of the top three priorities is confirmed again this year,
67 percent of companies expect a shift in terms of pointing to:
origin of revenues from markets outside Europe. ▪▪ leadership development (mentioned by 46 percent),
▪▪ employee engagement (37 percent) and
Despite a gloomier macro-economic climate, the ▪▪ talent retention (37 percent).
proportion of companies that expect to add new jobs
in 2012 has increased to 47 percent and overtakes the The most notable variation compared to last year
number of companies foreseeing a reduction of their relates to the second tier of priorities, headed by
workforce (31 percent).

2. succession planning, measurement and rewarding of The top three measures indicated by at least half of
employee performance, and HR-IT system integration. respondents are related to:
▪▪ fostering partnership with education and training
HR performance institutions towards more relevant curricula;
▪▪new opportunities for training and corporate internship;
When judging its own performance against business ▪▪ making information on open positions more
expectations, HR delivery has matched corporate targets accessible and transparent.
in only 10 out of 25 employee-related activities, with 78 percent of HR leaders indicate also their openness
no material improvement compared to last year. In 15 to create additional traineeships opportunities within
HR-specific activities the majority of respondents admit the company, notably in case of public support that
to performing below expectations. The most frequently focus on wage subsidy for such trainees.
mentioned areas of excellence, where companies are
out-performing business expectations, include corporate HR satisfaction and engagement
governance, industrial relations, health and safety at work
and corporate social responsibility. At the opposite, the The level of satisfaction of HR leaders with their
weakest fields, where HR is looking for improvement, are role and employer remains high with eight out of
in relation to work-life balance programmes, mapping ten declaring that they like both and are not ready
and management of competencies and HR metric tools. to make a change. Meanwhile those that could be
In these areas none of the respondent organisations open to change job and move away from HR has
delivered beyond targets. The largest proportion of further increased to 23 percent this year and 19
companies indicating poor performance is in relation to percent could be interested to join a not-for-profit
the management of inter-generational diversity. organisation. Geographic mobility is also more
on demand with 41 percent wishing to change
HR-CEO co-operation their country of residence and make a professional
experience abroad.
The CEO maintains the top position for the highest
level of cooperation established by HR leaders. In terms HR and the European Union
of most trusted people the primacy goes to HR peers
within the organisation followed by the own employees, For the second consecutive year, HR executives who
while CEOs are ranked only in the third position, losing expressed a generally positive perception of the
20 percentage points compared to last year’s study. The impact of the EU are no longer the absolute majority,
weakest level (or total absence) of cooperation is with while the relative minority of those with a negative
NGOs and with the function responsible for investor opinion increases. The wish list of HR leaders for top
relations, with universities and business schools and with policy priorities include: the recasting of European
professional associations. The quality of the level of labour laws into a consolidated and simplified code,
cooperation with top business executives is reflected a grow plan fostering education, innovation and
in the high perception of HR activities by the CEO. 84 research; and action to improve cross-border work
percent of respondents think that their CEO has a high force mobility.
or very high perception of what HR does.
About the Research
This high level of appreciation is less widespread, and
further declining compared to previous years, when The 7th European HR Barometer survey was carried
reflecting about the perception that employees have out by Aon Hewitt in cooperation with the European
of HR (only 33 percent of respondents indicate a high Club for HR between December 2011 and January
or very high rate). 2012. In this edition, fifty-two organisations completed
the survey. They operate in a wide range of sectors,
generating together 517 billion euro of revenues
HR and youth unemployment and with a combined total of 2.4 million employees.
62 percent of participating organisations are listed
Almost all HR leaders surveyed - except a mere two companies. Survey respondents encompass 13 different
percent – consider that their company has a role nationalities. 71 percent are executives and directors
to play in tackling unemployment of young people with exclusive responsibility for HR at European or
and they recognise that this shouldn’t only be the global level.
responsibility of public authorities.
For more information, visit:
www.aonhewitt.com
www.europeanclub-hr.eu
© Aon Hewitt 2012.