Talent Management In Motion: Keeping Up with an Evolving Workforce

Transcription

1 Talent Management In Motion: Keeping Up with an Evolving Workforce A HUMAN CAPITAL INSTITUTE/DDI RESEARCH REPORT EXECUTIVE SUMMARY BY: RICHARD S. WELLINS, PH.D. ALLAN SCHWEYER Technology. Organizational restructuring. Changing workforce demographics. Globalization. The degree to which external forces such as these are reshaping the North American workplace is breathtaking. And HR leaders, who are particularly attuned to and entrusted with their organizations talent, are especially aware of the impact. To find out what HR leaders are seeing relative to these issues, DDI and HCI conducted a survey of 769 HR executives, directors, and managers in the U.S. and Canada representing a variety of organization types and industries. The survey, which comprised items on issues and trends related to the current and future state (three years out) of the North American workplace, specifically explored three broad areas: 1. The workforce of the future. 2. Globalization. 3. The leadership attributes required to be successful in organizations operating globally. The results of this survey were further examined through one-on-one interviews with a sample of survey respondents. FINDING: ORGANIZATIONAL RESTRUCTURING AND ITS ACCOMPANYING CHALLENGES WILL CONTINUE UNABATED. Survey respondents were presented with a list of 17 workplace trends and asked to indicate the degree to which each would increase, stay the same, or decrease over the next three years within their organizations. Table 1 lists the trends most widely predicted to either increase somewhat or increase significantly. TABLE 1: FACTORS EXPECTED TO INCREASE IN ORGANIZATIONS OVER THE NEXT THREE YEARS Increase Somewhat Factor or Significantly Organizational restructuring 74% Investment in employee training and development 72% The number of flexible work arrangements (such as job sharing, working remotely, etc.) 67% Employees line of sight from their contribution to strategic business goals 66% The number of women in executive positions 62% In the 1970s and 1980s, North American industries, faced with multiple challenges, undertook a wave of restructuring, which

2 often was accompanied by employee layoffs. (In the 1990s, the concept of re-engineering was briefly in vogue, though it lacked the same negative connotation as restructuring at least for a while.) Major organizational change is hardly a relic of the past, however. Merger and acquisition activity was at a record level in 2006 and is expected to continue at a strong pace. HR leaders, who listed organizational restructuring as the trend most likely to increase within their organizations, also predicted that investment in employee training and development would increase. Along with restructuring, organizations today are operating in an environment characterized by ever-changing technology, evolving business models, and the continual development of new products and solutions. To be successful in this environment, organizations must retool their workforces to adapt to changing jobs (thus the need for organizations to grow their investments in employee training and development) and also ensure that employees at all levels see the clear connection between their day-to-day activities and the success of the organization. These trends and needs point toward an ambitious agenda for HR as organizations must have a diverse, inclusive environment where employees feel involved, motivated, and engaged. They also need leaders who can drive their teams to perform at a high level (while keeping team members engaged). And to drive execution they must be able to effectively connect individual performance and contribution to strategic goals. FINDING: ANOTHER WAR FOR TALENT IS BEING FOUGHT INSIDE ORGANIZATIONS. There is a commonly held perception of a global war for talent, in which organizations must fiercely compete with other employers for a finite supply of desperately needed workers, especially those with hard-to-find or highly valued skills including leadership skills. Another war organizations find themselves fighting, however, is being waged on a different front within their own ranks. This war is about fighting for the hearts, minds, and commitment of employees at all levels. Employee retention and engagement are notoriously low in many industries and organizations. Studies by DDI and others have shown that only about 13% to 28% of employees (depending on the study) are highly passionate about their jobs and their organizations. We asked what HR leaders were seeing as the major drivers of employee engagement (Table 2). At the top of the list was the desire for challenging work (89%), opportunities for training and development (83%), constant learning opportunities (78%), and non-monetary recognition for accomplishments (77%). 2

3 TABLE 2: TOP FACTORS EXPECTED TO DRIVE WORKERS TO EXCEL AT THEIR JOBS FINDING: GLOBALIZATION WILL CONTINUE TO RESHAPE NORTH AMERICAN ORGANIZATIONS. HR leaders are seeing the effects of globalization at ground level as they grapple with various talent management issues, especially the scarcity of talent with the skills needed to help their organization be successful players in the global economy. Organizations no longer have the luxury of concentrating on finding, developing, and retaining talent for a single national economy. Instead, they must now look at talent globally, spanning multiple countries with different values, laws, and cultural norms. TABLE 3: TOP TALENT-RELATED TRENDS FOR THE NEXT THREE YEARS To win the war for talent by keeping the key employees they already have on board, organizations must provide workers with empowerment, opportunities for growth, and greater appreciation for what they accomplish. Those who are not engaged are the ones who will seek out opportunities elsewhere. Perhaps worse, they may remain in their jobs, contributing little and negatively impacting the performance of others. The key to engagement? Leaders. Organizations need to make sure their leaders have the right skills to build and maintain strong relationships with those who work for them capturing their hearts and minds. Notably, salary increases/raises (45%) were deemed less important than the factors identified in Table 2. We have heard this time and again. Fair salaries are an essential base ingredient in strong employee engagement, but compensation is far from the top of the list. Competition for talent with global skills will become more fierce 91% Trade of knowledge and intellectual capital across countries will increase 86% Trade of goods across countries will increase 85% Developing nations such as India and China will become dominant players in world markets 85% Companies will seek out more consistent HR processes and systems across the locations in which they have employees 82% Mentoring foreign nationals and expatriates will provide a strategic advantage 74% The U.S. will lose ground as a dominant player in world markets 65% Reflecting this concern (Table 3), a strong majority of HR leaders foresee, over the next three years, that trade of knowledge and intellectual capital (86%) and goods and services (85%) across countries will increase. They also see that competition for talent with the skills needed to work across borders will grow more fierce (91%). These response rates are consistent with findings disclosed in a 3

4 recent study by the Economist Intelligence Unit that found that addressing the issue of a lack of local talent in emerging and developing markets represented one of the greatest corporate priorities for 2007 and beyond. FINDING: LEADERS MUST ADAPT TO CHANGING WORKFORCE DEMANDS AND DYNAMICS. Leaders continually need to grow and adapt as their organizations priorities reorder. This is especially true as the changes afoot in the North American workplace are redefining the roles and responsibilities of leaders. Accordingly, HR leaders identified specific areas on which leaders will need to focus within the next three years (Table 4). TABLE 4: WHAT WILL BE EXPECTED OF LEADERS OVER THE NEXT THREE YEARS As these findings show, leaders will need to operate effectively within an environment rife with new talent challenges greater diversity, employees who may be less engaged in their jobs, the need to lead workers they may rarely see face-to-face, etc. Leaders will also need to build and maintain a climate that fosters creativity and innovation. A growing chorus of business experts expects innovation to be critical for continued economic growth and competitive differentiation. North American organizations also are faced with making sure they have the right quality and quantity of global leadership talent. Leaders who are effective when working within the confines of their home country will not necessarily be effective when they have to lead across borders. Underscoring this point is a 2005 DDI study in which 97% of respondents indicated that general leadership skills are transferable into a global context, but only 50% were confident that leaders successful in one setting or region would be equally successful in another. Taking stock of the changing leadership environment and the rising importance of global leaders, DDI conducted an extensive literature review and interviewed leaders from around the world to develop a set of current and future competencies that characterize effective global leaders: People Black Belt A leader who brings out the best in people, exhibits authenticity, builds trust, and builds strategic working relationships. Master Mobilizer A leader who displays propensity to lead, drives execution, exhibits leadership influence, and mobilizes resources. Visionary A leader who is a conceptual thinker and effectively navigates ambiguity. Contextual Chameleon A leader who is adaptable and who exhibits cultural interpersonal effectiveness. Intellectual Grunt A leader who thinks conceptually and makes strategic decisions. Humility A leader who is receptive to feedback, possesses a learning orientation, and has the ability to have accurate self-insight. 4

5 Global Explorer A leader who exhibits learning agility. Solid as a Rock A leader who is authentic, resilient, and who displays operational decision making/judgment. Company Poster Child A leader who can balance the demands of culture with results. A leader who possesses this competency also can lead through vision and values, and display executive disposition. Unbridled Energy A leader who possesses extraordinary capacity for focus and productivity. HR leaders responding to the HCI/DDI survey were asked to rate the importance of each of these competencies (from not at all important to extremely important ). While all of the competencies were deemed important by HR leaders, the degree to which they saw them as very to extremely important varied significantly (Table 5). TABLE 5: MOST IMPORTANT GLOBAL LEADER COMPETENCIES FOR THE FUTURE Very or Global Leader Competencies Extremely Important 1 People Black Belt 93% 2 Master Mobilizer 84% 3 Visionary 81% 4 Contextual Chameleon 78% 5 Intellectual Grunt 76% 6 Humility 70% 7 Global Explorer 69% 8 Solid as a Rock 69% 9 Company Poster Child 66% 10 Unbridled Energy 60% FINDING: IF TALENT MAKES THE DIFFERENCE, ORGANIZATIONS NEED TO ADAPT THEIR TALENT PRACTICES. Nearly 90% of HR leaders either agreed (46%) or strongly agreed (43%) with the statement, Companies talent will be a primary differentiator of business success. TABLE 6: TOP TALENT PREDICTIONS FOR THE NEXT THREE YEARS STATEMENT Companies talent will be a primary differentiator of business success Organizations will find it more difficult to retain leaders Ethical issues in business will continue to increase Workplace stress and pressure will increase Workers will change organizations more often AGREE OR STRONGLY AGREE But with dependence on talent comes implications. One of the greatest is the difficulty in finding and retaining top leadership talent. HR leaders are generally pessimistic about the ability of organizations to retain the leaders they have (84% agree or strongly agree with the statement, Organizations will find it more difficult to retain leaders ). Good leaders are in greater demand and are more likely to bail out if their expectations aren t met. What s more, the demographics of the North American workplace are changing with younger, less-experienced individuals moving into leadership roles at the same time that the baby boomer generation begins reaching 5

6 the traditional retirement age within the next three years. The resulting brain and talent drain promises to hit organizations where they can least afford to take a hit in their leadership ranks. Finally, there is likely to be a continued focus on ethical issues and compliance, which, while a positive development for the credibility of most organizations and their leaders, amounts to leaders operating in an environment of greater transparency and accountability. Little wonder that HR leaders also see workplace stress increasing (80% agree or strongly agree), potentially driving many talented workers to reconsider their leadership aspirations. ARE WE READY FOR THE BRAVE NEW WORLD? As the findings of this study make clear, HR leaders are acutely aware of the many seismic changes reshaping North America s workforces. They understand the power of talent and the necessity of their organizations having the best talent if they are to be global players. But is HR ready for the brave new world of the evolving North American workplace? The Talent Management in Motion study identifies several necessary actions HR can proactively take to help set their organizations on the right path to winning the war for talent. Among these actions: Get as close to the business as possible. To be relevant, talent strategies must be connected to business strategies. This requires that HR leaders get as close to the business as possible. This might mean decentralizing HR and dispersing some HR activities and departments geographically, in order to better align organizational structure and areas of emphasis with talent-related initiatives. Show impact. HR people are often criticized for wanting a seat at the table when it comes to organizational influence, while failing to speak the language of the business. HR has to do better, continuing to develop the skills, knowledge, or broad access to financial tools and data required to accurately reflect their contribution. That requires that HR leaders more proactively partner and seek counsel from experts from other functional areas, such as finance, sales, or production, to determine the true value of HR s contribution to the organizational bottom line. Adopt a big picture view of talent management. Just as organizations have silos, HR has its silos, too. For example, within many HR functions staffing and development are separate areas or departments. As organizations increasingly realize the need to retain top talent, they need to integrate their various talent management efforts. A competency framework provides an unmatched foundation for integrating hiring, development, performance management, or succession management. Redesign HR first. When asking whether or not your organization has the talent it needs with the skills it needs, HR also needs to hold a mirror up to itself. As the challenges defining talent management for the present and future have changed, the skills required of HR professionals have evolved, as well. HR professionals need to develop a better understanding of their organizations business. They must view themselves as internal business performance consultants and focus on those tasks that are most likely to transform their organizations. 6

7 ABOUT THE AUTHORS Richard S. Wellins, Ph.D., is a senior vice president at DDI. Rich is responsible for leading DDI s research programs, launching new solutions, building strategic alliances, and executing marketing strategies. During his tenure at DDI, Rich has authored five books on leadership and teams. He served as DDI s overall project leader in the development of a new competency model for workplace learning professionals, sponsored by the American Society for Training and Development. Allan Schweyer is executive director of the Human Capital Institute (HCI), editor of Leadership Excellence: The Journal of Human Capital Management, and author of the book Talent Management Systems (Wiley & Sons, 2004). He is an internationally renowned analyst and speaker on the topic of transformational human capital management for individuals, organizations, regions, and nations. Allan s articles and white papers appear in dozens of popular media and industry-specific publications worldwide. 7

8 THE AMERICAS WORLD HEADQUARTERS PITTSBURGH MEXICO CITY TORONTO Other offices include Atlanta, Calgary, Chicago, Dallas, Detroit, Monterrey, Montreal, New York, St. Louis, San Francisco, Santiago, and São Paulo EUROPE/AFRICA DÜSSELDORF LONDON PARIS Other offices include Johannesburg, St. Petersburg, and Warsaw ASIA-PACIFIC SHANGHAI SINGAPORE SYDNEY Other offices include Auckland, Bangkok, Beijing, Brisbane, Dubai, Hong Kong, Jakarta, Kuala Lumpur, Manila, Melbourne, Mumbai, Perth, Seoul, Taipei, and Tokyo ABOUT DDI. Since 1970 Development Dimensions International has worked with some of the world s most successful organizations to achieve superior business results by building engaged, high-performing workforces. We excel in two major areas: Designing and implementing selection systems that enable you to hire better people faster, and identifying and developing exceptional leadership talent crucial to creating a workforce that drives sustained success. What sets DDI apart is realization. We focus on the needs of our clients and have a passion for their success. The outcome? You bring the best people on board, who get up to speed faster, contribute more, and stay longer giving you the ultimate competitive advantage. For more information, visit: ABOUT THE HUMAN CAPITAL INSTITUTE The Human Capital Institute is a global think tank, educator, and professional association defining the agenda and setting the pace for the new business science of human capital management. With over 52,000 members in over 40 countries, HCI offers a new association framework that cuts across the silos of recruitment, HR/OD, finance, sales and marketing, operations, manufacturing and IT. We provide key executives, line managers and human capital professionals with the newest education, most effective tools and best practices in talent strategy, acquisition, alignment, engagement, deployment, measurement, and retention. Through research and collaboration, HCI programs collect original, creative ideas from a field of the brightest thought leaders in talent management. Those ideas are then transformed into measurable, real-world strategies that help its members attract and retain high-performing people, build a diverse, inclusive workplace, and leverage individual and team performance throughout the enterprise. For more information, please visit: TO LEARN MORE, CONTACT: INFO@DDIWORLD.COM MKTCPES MA