Pulse on Talent Management

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  • 1. A Pulse on Talent Management in the Year Ahead U.S. Companies Leverage Talent to Achieve Growth Under Pressure1818 Market Street, 33rd Floor, Philadelphia, PA 19103-3614www.right.com© Right Management 2012. All Rights Reserved.
  • 2. A WORD FROM THE HEAD OF TALENT MANAGEMENT As we enter the Human Age, the spotlight is on the Human Resources team. Why? Because these are the people now responsible for creating and sustaining their organization’s most important competitive asset – its talent! HR is in the driver’s seat for unleashing what is humanly possible. The changing world of work is forcing HR leaders to rethink work models, people practices and talent sources. Never before has there been such an important time to focus on talent. Our latest body of research unveils trends related to talent management practices anticipated in the year ahead. We trust these findings provide a barometer to compare recent trends to the dynamics within your organizations, and to better understand the implications and subsequent actions required to achieve growth in an increasingly pressurized business environment. New market complexities and client demands call for new solutions, grounded in solid research and backed by proven expertise. We at Right Management and ManpowerGroup are uniquely positioned to help you address these talent challenges. We encourage you to read on to learn more from our fresh and thought-provoking insights. Michael Haid Senior Vice President Talent Management Right Management© Right Management 2012. All Rights Reserved. 2
  • 3. TABLE OF CONTENTS Managing Talent in the Human Age 4 About this Study 5 Key Findings and Implications  Employers Worry About Scarcity of Talent and Leader Readiness 6  More Employers Find it Hard to Fill Key Jobs 9  Few Employers See Staff Cutbacks 11  Employers See Continued Slow Hiring 14 It Takes Talent to Win in 2012 16 About Right Management 17  Contact for More Information 17© Right Management 2012. All Rights Reserved. 3
  • 4. MANAGING TALENT IN THE HUMAN AGE The world is experiencing an era of great transformation. Organizations are racing to accelerate growth in the competitive and rapidly changing world of work. These organizations face new risks… dated business models, traditional organizational structures and uninspired people practices that are standing in the way of successfully executing business strategies. In this Human Age, talent is emerging as the key differentiator — the New It! To drive your business forward, you need to unleash the potential of your greatest asset — your people. Last decade’s rulebook, management practices and tools no longer lead to success in 2012. In the Human Age, the shift in strategic focus from capital to talent is putting business performance results at the door of HR leaders. Success will be measured by their ability to work with the business leadership to help unleash the human potential in their organizations and to leverage talent as a competitive advantage. Understanding individual motivations, the skill complexity required to keep pace with your customer demands, and the competitive forces fighting for the talent you need now and in the future, is only the beginning of the race. Today virtually every organization faces the same combination of business challenges…competing in the face of a slow economic recovery, the imperative for growth, and a workforce that is not as engaged as before. Our latest study of trends in talent management looks at how employers are focusing on their people and their skills and engagement. What we found is that employers will almost certainly cut fewer employees in the year ahead and may even boost hiring, at least to some degree. They will also be challenged to identify, retain and engage their much needed best performers to deliver on their organization’s growth targets. For most management this all comes down to an agenda of growth under pressure. Management by itself will not be able to generate the robust recovery that is needed. HR leaders can support the business strategy by focusing on the urgent talent management issues discussed in this paper. Translating these trends and forces into an actionable workforce strategy is what it will take to win. Right Management stands ready to help you.© Right Management 2012. All Rights Reserved. 4
  • 5. ABOUT THIS STUDY Right Management surveyed 631 senior managers and human resource professionals to learn more about the pressure points and issues they face related to talent management practices in the year ahead. The online survey was conducted between November and December 2011 throughout the United States. Responses by region:  27% North Central  26% East  14% Florida/Caribbean  11% Northeast  8% West  8% Great Lakes  5% Gulf© Right Management 2012. All Rights Reserved. 5
  • 6. KEY FINDINGS AND IMPLICATIONS Employers Worry about Scarcity of Talent and Leader Readiness What do you expect to be the most pressing HR challenge faced by your organization? 35% 31% 30% Low engagement and 26% lagging productivity 25% 23% Shortage of talent at 20% 19% all levels Loss of top talent to 15% other organizations 10% Lack of high-potential leaders in the organization 5% 0% Lack of potential leaders is the most pressing human resource challenge organizations expect to face in 2012. Thirty-one percent of respondents cited their organization’s lack of high-potential leaders, while 23% indicated a shortage of talent at all levels. After three years of organizational contraction and less internal investment companies are taking a hard look at their onboard talent and are challenged with what they find.© Right Management 2012. All Rights Reserved. 6
  • 7. Lean times make it hard for organizations seeking to recruit, retain or develop future leaders. And they are keenly aware of the tough competitive environment they are in and the need to hold onto and build leadership bench strength. Employees are also feeling the pain. Recent Right Management research found nearly all employees are burdened with heavier workloads, disengaged from everyday responsibilities, anxious about job security and yet more open to prospective opportunities elsewhere. Retention of top talent is also a ranking concern of many employers. In fact, for nearly one-in-five of our respondents it is the main worry, losing strong performers to other companies which may be enticing to individuals who may feel stifled with their present employer. This is the kind of concern that HR leaders must bring to the forefront with senior leaders and create strategies to address individual motivators and career plans to foster engagement and retention. HR again has an opportunity to demonstrate how they can help their organizations to win in the war for talent. How are you able to fill critical roles in your organization? 90% 77% We have an ample 80% leadership pipeline that will cover most 70% of our needs. 60% We rely on a 50% combination of internal talent 40% development and external hiring. 30% We routinely look 19% externally before 20% filling critical roles in our organization 10% 4% 0% Employers tend to have doubts about their management succession pipeline, with as few as 4% able to confirm they have an ample leadership pipeline.© Right Management 2012. All Rights Reserved. 7
  • 8. They surely know their workforce is lean and internal development resources have generally been limited for some time. But now organizations must address how not to be caught short in terms of leadership and to minimize loss of top performers to other companies. It’s time to rethink outdated work models, people practices and talent sources to win in the changing world of work. Implications Organizations with scarce talent management resources need a different strategy to secure the right talent for key contributors and pivotal leadership positions within the firm. Doing so will help the organization to retain top performers who are often in pivotal roles which typically have greater scope and influence over other positions within the firm. With a well-constructed succession planning system in place for rapid replacement of key roles, and more broadly, a well-aligned succession management plan to ensure firm-wide talent progression, organizations will be well-positioned to avoid the exposure and risks of underperformance and further loss of talent. Those organizations that can evaluate what drives workforce engagement – and the lack of it – are in a much better position to mitigate the risks of top talent flight to competitors. Simply understanding what the current workforce engagement levels are is no longer a sufficient strategy to stem the tide of potential attrition. Organizations that can identify what drives engagement in actionable terms, so that those drivers can be leveraged in an overall retention strategy, will be the winners of the emerging talent migrations.© Right Management 2012. All Rights Reserved. 8
  • 9. More Employers Find It Hard to Fill Key Jobs With respect to the availability of top talent what has been the experience of your organization? 70% 61% 60% We often find it hard 50% to fill key positions. 40% We occasionally find it hard to fill key 30% 27% positions. We seldom if ever 20% find it hard to fill key 13% positions. 10% 0% Despite continued high unemployment nine out of 10 U.S. employers find it difficult to fill key positions. Twenty-seven percent of respondents reported difficulty filling certain jobs, and 61% indicated they have such difficulty on occasion. We found an uptick in employers who report difficulty filling key positions. This year it is 27%, up from 23% last year. And there is a corresponding drop among those who say they seldom face such a problem. Perhaps this is a sign of a strengthening job market. HR professionals know that it is usually a challenge to find and recruit people whether in a weak or strong job market. And it varies by level, industry, requisite skills and so on. Also, the findings suggest some shortfall among internal candidates who might be qualified.© Right Management 2012. All Rights Reserved. 9
  • 10. Implications HR leaders need to adapt and embrace what ManpowerGroup calls the human dynamics at play that are resulting in a scarcity and abundance inversion. In the Human Age, resources that were once plentiful are now limited, while others that were limited are no longer so. Chastened by declining revenues, companies have had to adjust their philosophies about the use of resources – natural, financial and human. They’ve switched to smaller staffs and have been exceedingly cautious about adding employees at greater expense or without proof that additional talent would add benefits. HR leaders can address the challenges associated with today’s talent shortages by increasing supply – finding new sources of talent and reinventing existing workers. This will enable a greater range of workers, often marginalized from opportunities (such as young people, women, older workers and people with disabilities) to join the workforce. Demand for training, that will enable workers to develop broad and specialized skills is growing exponentially due to demand. Comprehensive solutions providers such as Right Management and ManpowerGroup are best positioned to meet this surging demand. Yet, balancing the push and pull management approach to employee development is a challenge, as employees expect greater autonomy and employers struggle to forecast in- demand skills needed in the future.© Right Management 2012. All Rights Reserved. 10
  • 11. Few Employers See Staff Cutbacks With respect to restructurings and cutbacks what do you anticipate for your organization in 2012? 70% 65% 60% 50% Significant staff cutbacks 40% 32% Modest number of staff cutbacks 30% Practically no staff cutbacks 20% 10% 3% 0% Few U.S. employers predict significant staff cutbacks in the year ahead. Just three percent of respondents anticipate significant cutbacks or restructurings, and two- thirds expect almost none. Layoffs had already begun to decline during 2011, a development most employers saw coming a year ago and which was reflected in Right Management’s 2010 trends survey. A year ago 52% of employers predicted virtually no restructurings in 2011. Nevertheless, lean staffing is now the norm at most organizations. Asked about expected hiring in 2012, respondents were slightly optimistic. In the latest findings one-in-five employers predict stepped-up hiring in order to drive strategic growth. The majority, 58%, predicts just nominal hiring on an as needed basis and 21% predict more hiring in order to fill existing gaps in the organization.© Right Management 2012. All Rights Reserved. 11
  • 12. How would you describe the kind of hiring your organization is likely to do in 2012? 70% 60% 58% Just nominal hiring on an as needed basis 50% 40% More hiring than in 2011 in order to fill existing gaps in the 30% organization 21% 21% 20% Stepped-up hiring to drive strategic growth 10% 0% Organizational staffing trends will mirror overall U.S. economic trends. We will see employers push for growth, but with fewer resources, trying to make do with what they have. This will continue to be a pressurized workplace, and management has to take into account the stress all this creates. Organizations will need to be effective with their talent strategies to nurture employee engagement, productivity and performance with their streamlined workforces. Implications Businesses across the board have successfully taken costs out of their structure through a variety of methods. The opportunity now is to rebuild and grow the business with the talent left after the wake of cost cutting efforts. Engagement and motivation levels are not the only challenges firms face when re-focusing the business on the future. The skill sets and abilities of the remaining workforce may or may not be what is needed to take the business forward. Organizations that evaluate what they need to achieve growth in 2012 – and how the mindsets, skills sets, motivations and abilities of the workforce need to be developed, adapted and changed to meet the future – dramatically increase their chances of winning in the changing world of work.© Right Management 2012. All Rights Reserved. 12
  • 13. Management in the Human Age will set the tone for organization’s to embrace fresh thinking on recruiting, skills and career development, work environments and the balance of full-, part-time employees, as well as outside contributors connected by virtual networks. Human Age leaders will understand the business’s obligation to nurture workers, leading more on the pull side of push-pull management, asking more questions to understand what their people need, instead of ruling by decree. This requires organizations to engage people more personally to understand their needs. Such an environment is what ManpowerGroup calls the recommendations for a changed ecosystem – founded on an era that requires new ways of doing business and creating fresh strategies, processes and approaches to leadership.© Right Management 2012. All Rights Reserved. 13
  • 14. Employers See Continued Slow Hiring A majority of U.S. employers expect corporate hiring to remain sluggish in the year ahead. Fifty-five percent of respondents said the year ahead would be similar to 2011 with both slow hiring and postponed HR initiatives. But one- third predicts 2012 will be a year of growth and recovery. From your perspective as an HR executive what do you expect for 2012? 60% It will be a year of 53% growth and recovery 50% marked by increased hiring and new talent development 40% initiatives. 36% It will be similar to 2011 with sluggish 30% hiring and postponed HR initiatives. 20% It will be a year of 11% stagnation with more 10% cutbacks and restructurings. 0% Implications The talent pool is flooded with people looking for work, making external hiring a process of finding precise skills they need a much more complex and challenging task. Organizations that have a clear set of selection criteria and a highly efficient selection process will reduce the risk that so many face in spending too much time and resources on finding the wrong person. An accurate high-speed talent identification process can take the best talent off the market before other firms even see them. Development dollars will be more wisely spent if time and resources are put against people who have the ability, drive and mindset to be developed. HR can help by implementing a© Right Management 2012. All Rights Reserved. 14
  • 15. proper and efficient way of identifying who, internally, is worth development investment is necessary if talent resource allocation is to be optimized. Employers must minimize their reliance on in-demand workers and shift their focus to transferring their knowledge and skills to others – preserving and advancing precious skill sets, and utilizing virtual work models such as swarm work and hyerspecialization.© Right Management 2012. All Rights Reserved. 15
  • 16. IT TAKES TALENT TO WIN IN 2012 Growth and competitiveness are now so closely dependent on the strength and commitment of an organization’s talent that our findings have bearing well beyond the HR and talent management sectors. In the Human Age, talent is the New It – the best source of competitive advantage. The main findings of the study have noted a keen concern over the availability of leadership talent, growing difficulty filling key positions, fewer staff cutbacks and an uptick in hiring. Furthermore, the implications of the findings are numerous, among them… talent will look elsewhere for new opportunities as the job market improves, loss of key talent will become increasingly common, and organizations will lack the very top performers and leaders who are essential to achieve growth under pressure. It’s time to think differently about your workforce. These challenges call for the attention of senior management and HR leaders. Leaders need to embrace diversity of workforces and create talent strategies that account for diversities, varying expectations, motivations, training and development, and cultural norms. Only in this way will organizations be able to have the right talent in the right place at the right time and doing the right things to insure the growth and competitiveness so crucial today. With a human approach and with a solid understanding of the changing world of work, leaders must quickly curate information, understand implications, and adapt and share insight accordingly in order to empower and unleash human potential. Right Management has applied our knowledge and experience to be uniquely positioned to help you to create strategies and solutions to deal with succession planning, leadership development, identification of high potential employees, specific and targeted recruitment and hiring processes and selective retention efforts. This is how you can win in today’s complex work ecosystem and succeed in the new era of the Human Age.© Right Management 2012. All Rights Reserved. 16
  • 17. ABOUT RIGHT MANAGEMENT Right Management is a global leader in talent and career management workforce solutions within ManpowerGroup. The company designs and delivers solutions to align talent strategy with business strategy. Expertise spans Talent Assessment, Leader Development, Organizational Effectiveness, Employee Engagement, and Workforce Transition and Outplacement. With offices in over 50 countries, Right Management partners with companies of all sizes – including more than 80% of the Fortune 500 – to help grow and engage their talent, increase productivity and optimize business performance. ©2012 Right Management. All Rights Reserved. Contact for more information: Jennifer L. Jones, Director of Marketing, Americas Right Management, jennifer.jones@right.com You can also find us online: www.right.com www.facebook.com/rightmanagement www.linkedin.com/company/right-management www.twitter.com/RightUpdates www.right.com/rss© Right Management 2012. All Rights Reserved. 17