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Emerald Group Publishing Limited
Copyright © 2008, Emerald Group Publishing Limited
A look at current trends and data
Article Type: Research and results From: Strategic HR Review, Volume 7, Issue 4
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1.1 Attracting and retaining talent a top concern
A new survey from Accenture shows that attracting and retaining the best talent is identified by senior executives as a top concern relating to their companies’ success, alongside competition and the global economy. The survey encompassed more than 850 senior executives in the US, UK, Italy, France, Germany, Spain, Japan and China.
According to the findings, executives perceive the top five threats to business success as competition (cited by 73 percent of executives), the health of the global economy and the inability to attract and retain the best talent (67 percent each), company reputation (62 percent) and the inability to develop new products and services (51 percent). These same issues topped the list of threats cited in a similar survey that Accenture conducted in 2005. The one issue that has increased in importance, however, is that of talent, which was cited by 60 percent of executives in 2005 and rose to 67 percent in the new survey.
1.2 Globalization raises issues
Mark Foster, Accenture’s group chief executive, Management Consulting and Integrated Markets, comments: “In today’s multi-polar world – where economic power is distributed among multiple centers of economic and business activity – the war for talent has gone global. Additionally, new technologies are transforming the nature of work, the skills demanded, the manner in which work is sourced globally and the ways in which people collaborate. Leading organizations must build capabilities to understand and source talent more strategically, based on clear definitions of skills gaps and needs for the future.”
Globalization is raising a number of concerns among the executives surveyed. More than half (56 percent) said they are concerned or very concerned about the impact of the global economy on business. Respondents also expressed concerns about their ability to maintain a common corporate culture (cited by 54 percent), as well as service remote customers effectively and understand local ways of doing business (52 percent each). One in five said their organizations are not adequately equipped to succeed as global enterprises.
1.3 More information
As part of an annual study to identify senior executives’ top concerns, Accenture conducted a telephone survey of 867 senior executives at many of the world’s largest organizations. Respondents represented all major industries and the public sector and included executives at the highest levels of senior management, as well as heads of key functional areas, such as human resources. For this year’s study, fieldwork was conducted between September and December 2007. For more information on the survey, visit www.accenture.com
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2.1 Shared services approach to HR growing in popularity
HR departments are increasingly favoring a shared services approach to the transactional elements of HR, a survey of multinational organizations has shown. Research from Hewitt Associates, a global human resources services company, indicates that the majority of HR shared service centers are in a growth phase, with 84 percent of organizations that use them having plans to extend their scope in the near future.
Shared services are now widely recognized as a cost effective way to manage transactional and administrative tasks. The findings show that the success of HR shared services is lowering the administrative burden for HR professionals; an important step in freeing them to start adding more value and enabling them to plan for the future.
Hewitt’s research also found the following key trends:
Shared service centers are here to stay. Three-quarters of organizations surveyed, confirmed that they have increased the scope of their shared service centers since they were established – both in terms of activities performed and internal clients served. Eighty-four percent have plans to further increase the scope.
There is a new emphasis on customer satisfaction. HR shared services are now much more focused on effectiveness, not just efficiency. The top priority of those polled was to improve end-user satisfaction, with cost reduction as a secondary priority.
An “us-versus-them” culture prevails. There is often a problem with integration of shared service centers into the overall HR function. The research showed that HR professionals in the business often views administrative tasks as “no longer their business” when a shared service center is in place. This hinders the realization of efficient processes and related cost savings.
There is a struggle for effective performance management. Shared service centers have yet to find a reliable set of practices that can improve planning and provide better management insight. Forty percent of respondents confirmed that they do not currently use customer satisfaction indicators to measure performance. Just under a third of the respondents were dissatisfied with the management information available to measure performance.
2.2 More information
The Next Generation Shared Services research was conducted by Hewitt Associates and SharedXpertise among 97 multinational organizations. For more information, visit www.hewitt.com
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3.1 Effective people management pays
An independent report, People and the Bottom Line, produced by the Work Foundation and the Institute for Employment Studies (IES), delivers evidence of a link between effective people management and business success. The two-year study suggests that organizations with a comprehensive approach to people management perform better than those without, indicated by higher profits per employee, higher profit margins and higher productivity. The results suggest that if a business increases its investment across a number of people management practices by around ten percent, it could secure an increase in gross profits per employee of over £1,500 per annum.
The report also identifies 12 core measures that are most effective in helping employers track the impact of their people management practices on business performance, including areas as diverse as recruitment, development plans and employee appraisals. Other key findings from the report include:
Younger firms tend to score better against the key indicators than longer established organizations.
There is no “leveling off” in terms of the business benefits that good people management can deliver – even where companies are investing in their workforce, there is evidence of the benefits of doing more.
Companies that score highly tend to be strongly geared towards creating a good working environment for their employees and being innovation led.
3.2 More information
This research involved developing and testing a framework of people management practices with 2,905 employers to assess their impact on organizational performance. For more information visit www.employment-studies.co.uk
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4.1 Global compensation programs focus on executive-level employees
Although multinational organizations are striving to globalize their compensation practices, less than half have predominantly global programs, according to Mercer’s Global Compensation Strategy and Administration survey. A total of 45 percent of participating organizations take an almost exclusively global approach to compensation design, while the majority continues to take a local approach (39 percent) or regional approach (16 percent).
According to Mercer, the development of global compensation programs starts with an overall global compensation strategy. While the vast majority of responding organizations (84 percent) have established a global compensation strategy for their executive-level employees, much fewer have done the same for other employer groups, continuing to define their compensation strategies at the local or regional level. Slightly more than half of the organizations (53 percent) have specific global compensation strategies in place for their managers while just less than a third (30 percent) have global strategies for professionals and slightly more than a quarter (26 percent) for sales employees.
4.2 More information
Mercer’s Global Compensation Strategy and Administration survey includes responses from 168 multinational companies based primarily in the United States and Europe. Spanning a variety of industries, these companies have an average of 20,000 employees and revenues between $1 billion and $5 billion. For more information visit www.mercer.com