JEDDAH – Leadership, retention, HR skills, and talent acquisition are the top global trends in perceived urgency, a report by Deloitte Consulting LLP and Bersin by Deloitte titled “Global Human Capital Trends 2014 (Engaging the 21st-century workforce) said Saturday. Across all respondents to the global survey this year, companies cited four issues as the most urgent: leadership, retention and engagement, the reskilling of HR, and talent acquisition and access. Building global leadership is by far the most urgent: Fully 38 percent of all respondents rated it “urgent,” almost 50 percent more than the percentage rating the next issue “urgent.”
Companies see the need for leadership at all levels, in all geographies, and across all functional areas. This continuous need for new and better leaders has accelerated.
In a world where knowledge doubles every year and skills have a half-life of 2.5 to 5 years, leaders need constant development, the report said. This ongoing need to develop leaders is also driven by the changing expectations of the workforce and the evolving challenges businesses are facing, including two major themes underlying this year's trends: globalization and the speed and extent of technological change and innovation. The second most urgent issue today is retention and engagement—a topic that often has no clear owner within HR or the business.
The survey showed that “we all own this issue”: HR, top leadership, and all levels of management. It noted that companies should redefine their engagement strategy to move from keeping people to attracting them and creating a passionate and compassionate place to work. Further, companies will benefit from having a clear point of view on how business executives, line leaders, and HR can more effectively work together and address this challenge.
The third most urgent issue is the reskilling of HR. The finding suggests that the HR and talent functions are in the midst of a transformation. HR is not making the grade as companies move away from HR as people administration to a focus on people performance.
An essential part of this change is the upskilling, reorganization, and transformation of HR and its relationship with business leaders and issues. The fourth most urgent issue is talent acquisition and access. This continues to be one of the most important things companies do. In a skills-constrained environment, a company's ability to find, attract, and access highly skilled people is critical to success. This area is going through a significant disruption as a result of globalization, technology, social media, changing workforce expectations, and the shrinking half-life of skills and technical knowledge. Tools such as LinkedIn, Facebook, Twitter, and others are changing recruiting into a strategic function focused on marketing, branding, and new tools and technologies.
The findings further showed generally low levels of readiness to respond to the trends Overall, survey respondents reported generally low levels of readiness to respond to the 12 global trends in our survey. In fact, on average across all trends, 36 percent of respondents reported they were “not ready” as opposed to 16 percent reporting they were “ready”—meaning that they were more than twice as likely to say they were “not ready” versus “ready” for the trends they see coming.
Only in workforce capability did more than three-quarters of respondents feel either “somewhat ready” or “ready” to address the trend. These findings are sobering, given that each trend was rated “important” or “urgent” by at least 60 percent of respondents, while the top five trends were all rated “important” or “urgent” by at least 75 percent of respondents. More than 40 percent of respondents reported their companies were “not ready” to address talent and HR analytics, HR technology, the overwhelmed employee, and performance management—the lowest levels of readiness among all the trends. These low reported levels of readiness and preparedness are a warning signal, considering the high levels of urgency and importance attributed to the trends in the global survey.
Urgency is shown on the horizontal axis, with higher numbers indicating greater urgency; readiness is shown on the vertical axis, with higher numbers indicating greater readiness. The resulting grid shows a clustering of the trends in the lower right, underscoring one of the major findings in the survey: the gap between these trends' perceived importance and companies' readiness to address them.
The largest capability gaps are reported in leadership, analytics, reskilling HR, talent acquisition and access, and the overwhelmed employee To further highlight the near-pervasive gap between urgency and readiness, the survey calculated an index score for each trend that we call the Deloitte Human Capital Capability Gap Index, a figure that shows HR's relative capability gap in addressing a given talent or HR-related problem. It is calculated by taking an organization's self-rated readiness and subtracting its urgency, normalized to a 0–100 scale. For example, if an organization feels that an issue is 100 percent urgent and it also rates itself 100 percent capable and ready to address the issue, the capability gap would be zero. These index scores, which are almost always negative, provide a “weighting” of gaps to help identify the biggest areas of need. Leadership (gap of -34) and analytics (gap of -30) are the areas with the biggest gaps between urgency and readiness, and hence the most important areas on which to focus investment.
Reskilling HR, talent acquisition, dealing with the overwhelmed employee, and the need to replace HR technology are close behind, with gap scores of between -25 and -27, inclusive. These indicate areas where companies need to rethink their strategies and reengineer their current approaches. The challenges of revamping performance management, addressing retention and engagement, and improving HR globalization received gap scores of between -20 and -24. These areas reflect a need to rethink HR strategies to deal with the 21st-century workforce. The areas of workforce capability, diversity and inclusion, and learning and development also require attention. When weighted by importance, the gap between urgency and readiness is the smallest in our index, but these areas still represent potential opportunities for improvement.
Leadership is the top priority in developed and growing economies We asked our respondents to identify in which of seven global geographies their top five trends were most important. Leadership, the most important overall trend in our survey, was identified as highly important in five of seven global regions: Asia Pacific, Western Europe, Central and Eastern Europe, North America, and South America. Note also that, in these regions, retention and engagement is a high priority as well, with North America facing the most acute need in this area. – SG
