Research shows where HR should focus to make improvements
Lack of strategy, cultural awareness and solutions to manage an increasingly diverse, mobile employee population are keeping many companies from building a workforce that will meet their future business objectives, according to research released Sept. 10, 2014.
More than 5,400 employees and executives from 27 countries were surveyed for global advisory firm Oxford Economics’ Workforce 2020, an independent study that revealed two-thirds of surveyed businesses are failing to seize opportunities to increase productivity, talent development and employee engagement. The survey was conducted during the second quarter of this year with enterprise application software firm SAP.
“Our research shows that the C-suite is out of touch with HR on business strategy and priorities, and workers are not getting what they want from their employers in terms of incentives, benefits and training,” said Edward Cone, managing editor of Thought Leadership at Oxford Economics, in a statement about the findings.
Part of the problem is a lack of metrics and tools, which keeps HR from developing strategies for building the future workforce, according to the survey findings. Most respondents said they lack sufficient data on their strengths and vulnerabilities and that they do not use quantifiable metrics and benchmarking in workforce development. Only 42 percent said they know how to extract meaningful insights from the data available to them. Consequently, HR often works with the C-suite but does not drive board-level strategy.
Resulting Workforce Challenges
The impact of this disconnect affects nearly every aspect of workforce management, from compensation strategy to employee development.
Case in point: Although 51 percent of surveyed executives said that Millennials’ entry into the workforce greatly impacts their workforce strategy, less than one-third said they are giving special attention to the particular wants and needs of this generation. The reason? Executives don’t understand how they think.
Much has been written about how Millennials are different in their use of technology and their attitudes toward work compared with other generations; however, the study shows that Millennials are surprisingly similar to their older co-workers when it comes to workplace priorities, such as compensation and career advancement goals. Both groups reported that compensation is their most important benefit. In fact, 41 percent of Millennials and 38 percent of all other employees said that higher compensation would increase their loyalty and engagement with the company.
Both groups also have similar priorities and views on the importance of corporate values and achieving work/life balance. Contrary to popular thinking, Millennials are no more likely than other employees to leave their jobs in the next six months.
“Companies that can excite Millennials about work, train them to fill in gaps on experience, and adapt to their style of working can build a workforce that can successfully execute on the objectives of today and adapt to drive advantage for the business of tomorrow,” said Mike Ettling, SAP’s president of cloud and on-premise HR, in a statement about the study results.
But the study shows few companies are properly supporting their workers, including Millennials. While executives polled by Oxford cited a high level of education or institutional training as the most important employee attribute, only 23 percent said they offer development and training as a benefit. Incentives for pursuing educational opportunities are also uncommon. Roughly half of executives said their company is capable of retaining, updating and sharing institutional knowledge, while 47 percent said they have a culture of continuous learning.
Becoming obsolete is the biggest concern for today’s workers, twice as concerning as being laid off. Less than half of employees surveyed said their company provides ample training on the technology they need, and less than one-third said their company makes the latest technology available to them.
For example, the need for skills like analytics and programming/development will grow over the next three years, but employees doubt they will have the opportunity to gain proficiency in these areas. Only 41 percent of employees said their company offers them opportunities to expand their skill sets.
An article published on the Fast Company website reports a similar dearth in social media skills. The article cites research by Capgemini, an IT services provider and consultancy, that reveals that 90 percent of all jobs in the next year will require information and communication technology skills, but more than half of companies polled for that research said their employees lacked social media skills.
“Millennials need help because they don’t have the professional skill set, but older people don’t have the social skills to apply business knowledge,” said William Ward, social media professor at Syracuse University, in the article.
Strong Leadership Key to Progress
Executives and employees polled by Oxford did agree on one thing: Leadership and leadership development is lacking in their organizations.
Executives cited a lack of adequate leadership as a major impediment to achieving workforce goals, with only 35 percent saying that their current talent in leadership positions is sufficient to drive global growth. Only half said their team has the skills to manage talent or to inspire and empower employees.
Just 44 percent of surveyed employees said that leadership at their company can lead the organization to success.
“When it comes to preparing for the future of work, knowledge is power,” Ettling said. “Tomorrow’s workforce will be more diverse and work differently. Companies must understand this and develop new strategies that support diversity and foster a new level of employee engagement and collaboration—or they will ultimately remain stuck in the past.”
Poorly executed succession planning appears to be part of the problem. Only 31 percent of executives interviewed said that they hire from within the organization when a person with key skills leaves the company. Few employees or executives said management values leadership ability in employees.
And companies are increasingly tapping external expertise and resources on an as-needed basis to fill skills and resource gaps and to accommodate rapidly changing business and customer demands. That means more temporary staff, more consultants and contract workers, and even “crowd-sourced” projects. In fact, 83 percent of executives said they will be increasing the use of contingent, intermittent or consultant employees.
An increase in the number of nonpayroll positions may force new thinking on development, the report concludes.
Theresa Minton-Eversole is an online editor/content manager for SHRM.
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