Emerald Group Publishing Limited
Article Type: Literature review From: Human Resource Management International Digest, Volume 22, Issue 7
Skill gap highest for seven years
Some 36 per cent of employers globally report difficulty in filling jobs because of the lack of skills available – the highest level for seven years.
ManpowerGroup spoke to more than 37,000 employers in 42 countries and territories to assess the level of talent shortage and which jobs are proving most challenging to fill. While globally more than one in three employers report difficulty in filling jobs, in the UK, the percentage of employers reporting a skill shortage has fallen to 12 per cent.
ManpowerGroup has identified three roles that HR departments must play to help organizations to succeed. First, they must understand how demand for their companies’ products and services requires the right balance of skilled talent to meet changing needs and achieve business goals.
HR leaders need to provide market intelligence supported by relevant data and understand how their internal and external talent supply is reshaping the availability of required skills. They must be able to spot any misalignment between business objectives and workforce capabilities and have a plan to bridge any gaps, more quickly than in the past.
Second, HR specialists must be able to attract and retain talent in the same way that the marketing department segments and targets consumers of the company’s products and services. HR needs to consider how branding, messaging and image can help to pinpoint and market strengths to win in-demand skills and help the business to succeed.
However, the process of thinking as marketers cannot stop after a company successfully has talent through the door. Organizations must ensure that they offer career paths that allow employees to advance business goals, develop their skills and grow. This includes empowering leaders throughout the organization to focus on, and be held accountable for, employee development, so that top talent stays motivated and engaged.
HR departments must regularly seek out quantitative and actionable employee feedback to ensure that improvement is an ongoing process and act quickly to address any misalignment.
Finally, HR specialists must take on the role of designer, structuring work models to gain access to, mobilize and unleash the potential of current and prospective employees in a diverse, and often virtual, workplace. This expanded role includes structuring work innovatively and building systems to put an appropriate model in place to drive desired outcomes and develop the right balance of talent.
Work will be divided into smaller tasks distributed to more people as increasing segmentation is demanded. Work will also be performed more frequently by freelancers and consultants willing to work on an outcome basis, so that they can choose the work they want to do.
A different way of thinking is needed to cultivate communities of work and balance the employment mix to include contingent, fully outsourced, partially retired and other workers – as permanent, full-time employment is no longer by default the best fit for employers or individuals.
Mark Cahill, managing director, ManpowerGroup, UK, commented: “The HR departments that are really getting it right understand that they must develop expertise in new areas. Successful HR leaders are increasingly efficient in recruiting talent exactly where it is needed, marketing their organization’s strengths to attract the best candidates and shaping the work model to suit their goals and employees.”
Only a quarter of employees are committed to their jobs
Only 24 per cent of UK employees are committed to their jobs, compared with as many as 45 per cent in Denmark, 42 per cent in Norway and 37 per cent in Russia.
Only a third of employees feel valued by their employers, with a third feeling less loyal to their employers compared with last year. As a result, 67 per cent plan to look for a job in the year ahead, with 44 per cent frequently thinking about quitting. Nearly half are looking for new opportunities, even when they are happy in their jobs. Of these, as many as 72 per cent actively look for a job at least once a week.
In terms of what they look for in a new employer, 81 per cent are motivated by salary and benefits. However many do have strong ambitions for career progression, with training and development being important for 65 per cent and opportunities for advancement the key for 59 per cent.
Half of those polled mentioned that the opportunity to work with colleagues from whom they could learn would help to influence their employment decision.
Katie Ivie, HR director at Kelly Services UK and Ireland, which carried out the research, said: “Engagement levels are comparatively low in the UK compared with other European markets. More needs to be done by employers to provide an environment that will help to retain staff in the long term. This will become even more important as the war for talent intensifies.”
When searching and applying for jobs, 85 per cent of employees use digital applications. Despite the increase in online applications, only a third use social media in their job search. Only 15 per cent of candidates have taken part in an employer’s online talent community, yet 33 per cent would be interested in doing so if the opportunity arose.
Trust and confidence in senior leaders drop
Trust and confidence in senior leaders have fallen to a two-year low, with almost one-third of employees believing that performance-management systems are unfair, according to a survey of more than 2,500 employees by the CIPD, the professional body for HR and people development, in partnership with Halogen Software.
As well as feeling that performance-management systems are unfair, almost a third of employees believe that progression in their organization is unachievable. One in five state that their managers do not effectively communicate objectives and expectations.
The CIPD calls on managers to talk to their employees about development or risk losing valuable talent. This is particularly the case in the voluntary sector, which has seen a rise in employees looking for a new job (27 per cent up from 24 per cent), compared with a slight drop in job-seeking in the public sector (20 per cent from 23 per cent) and private sector (22 per cent from 24 per cent).
Claire McCartney, research adviser at the CIPD, commented: “It is not surprising that job-seeking intentions are still high, as employees lack faith in their leaders and managers. This survey shows a marked increase in negative perceptions of senior managers. Trust and confidence are particularly low in the public sector.”
“There are also real concerns regarding progression across sectors but particularly in the voluntary sector, with more employees currently feeling that career progression is unachievable.”
Donna Ronayne, vice-president of marketing and business development at Halogen Software, said: “With employee perceptions of the job market improving organizations need to prevent their best talent from jumping ship. This means ensuring that performance-management processes are clear and consistent and used to align employees to the vision of the organization.”
“It is also important that processes be used to strengthen the manager-employee relationship where regular coaching and feedback are the norm. Firms should use these processes to identify the learning and development needs of employees so that they grow with the organization and see that career progression is a possibility. And managers need to be given the tools and training to identify and highlight employees who add the most value to the business for differential reward, and progression.”
Employees link pay to happiness at work
After enduring years of frozen wages or small pay increases, US employees are now tying compensation to how happy they are at work, according to research by the Society for Human Resource Management (SHRM).
When asked what was very important to them, 60 per cent of employees said pay, making it the biggest contributor to job satisfaction. The last time compensation was the top contributor to overall job satisfaction was in 2007.
“Incomes have grown slowly since the recession. That undoubtedly is having an impact on workers’ priorities and is one explanation for the leap to the forefront by compensation,” said Evren Esen, director of SHRM’s survey research center.
He noted that four generations of employees ranked compensation as either the top or second-ranked aspect of job satisfaction. Employees at all job levels – with the exception of executives – ranked it as one of the top three contributors to overall job satisfaction.
Some 56 per cent of employees reported receiving a pay rise in the last year, a 6 per cent point increase from 2012. But a much smaller portion (36 per cent) of employees received a bonus in the last 12 months, a 3 per cent point decrease from the previous year.
“Often, the manager-employee conversation is only about pay,” said Alex Alonso, SHRM’s vice-president of research. “At a time when salary budgets are not increasing significantly, employers might want to emphasize overall benefits packages – including health care, retirement savings and paid time off – as a way to help them to retain skilled workers.”
Opportunities to use skills and abilities, the top factor cited by employees in the previous year, tied with job security (59 per cent each) as the second-biggest factor influencing job satisfaction.
The survey showed that:
A total of 81 per cent of US employees were satisfied overall with their current job.
A total of 73 per cent of employees were satisfied with their relationships with colleagues and 70 per cent with their relationship with their immediate supervisor.
A total of 68 per cent of employees thought their work was interesting, challenging and exciting and were satisfied with it.
A total of 79 per cent of employees said they were determined to accomplish their work goals and confident that they could meet them, making it the top factor measuring employee engagement.
A total of 62 per cent of employees said they had passion and excitement about their work.
“While many employees emphasize pay when considering how happy they are in their jobs, a significant proportion also place importance on relationships with colleagues and supervisors,” Alex Alonso said. “Fostering an environment that treats all employees equally and encourages communication among all levels of workers can be an effective way for employers to earn trust from employees and increase their satisfaction with their jobs.”
Long-hours culture prevails among professionals
Almost three-quarters of UK professionals are working longer than the hours stipulated in their contracts and believe that these excessive working hours are affecting their work-life balance.
The overwhelming majority are unaware of any plans to change working practices in their organization. Two-thirds feel obliged to work in excess of their contracted hours.
The survey, carried out by global recruiter Morgan McKinley, also shows that more than half of organizations offer opportunities to work from home or to work flexible hours.
Those in more senior positions and those aged 41-60 years work the longest hours. On average, men work slightly longer hours than women. Among men, the percentage working more than their contracted hours is 76.1 per cent, compared to 67 per cent of women.“This may, however, simply reflect the fact that there is a rather higher proportion of men in more senior roles,” said Hakan Enver, operations director, Morgan McKinley, UK.
“More than half of respondents say that they are more productive outside of their contracted hours. This is to be expected. Meetings tend to be organized during normal office hours and we all know that we can get more done when we can shut out any distractions in order to focus on important challenges and priorities.”
Older workers to benefit from more flexible benefit packages
Nearly two out of five companies are planning to review their employee-benefit packages to ensure they are suitable for older workers.
Research for employee-benefits specialist MetLife shows that 37 per cent of employers plan to review their employee-benefits package to meet the needs of older workers, while 17 per cent have already done so. More than half of employers questioned are anticipating a rise in older staff as a proportion of their workforce.
Tom Gaynor, employee-benefits director, MetLife UK, said: “Traditional retirement ages have become increasingly meaningless as we see three major factors at play:
the increase in the number of older workers comprising the workforce;
longer life expectancies and better health care; and
continued downward pressure on interest rates meaning lower returns on investments and relatively smaller retirement funds.”
“Even without the demographic and financial challenges, our research indicates that many people want to work in later life. The social benefits and the sense of purpose work brings are significant factors and employers need to step up and respond.”
“The changes in pension rules being introduced in the UK are significant and finally recognize that the old days of a ten-year retirement are no longer the norm.”
“It is encouraging that a good proportion of employers plan to review their employee-benefit offerings to ensure they are suitable for older workers but the majority of employers still need to create a plan of action. Providers also need to innovate to ensure that products are suitable for the changes and the challenges ahead.”