A look at current trends and data

Article Type: Research and results From: Strategic HR Review, Volume 7, Issue 5

Story 1

Talent management the top people challenge worldwide

A global survey of 4,741 executives in 83 countries, carried out by The Boston Consulting Group (BCG) and World Federation of Personnel Management Associations, shows that executives worldwide rate talent management as the top people challenge. It is expected to remain at or near the top of executive agendas in every region and industry for the foreseeable future.

The study, the findings of which are published in a report, Creating People Advantage: How to Address HR Challenges Worldwide Through 2015,identifies the top eight future challenges in HR. On average only 40 percent of all executives who perceived at least one of the eight globally critical topics as important for the future said that their companies have begun tackling it today. The eight challenges fall into three strategic categories, as follows:

• 1.

  Developing and retaining the best employees. The first category consists of the challenges of managing talent, improving leadership development, and managing work-life balance.

• 2.

  Anticipating change. The second category encompasses managing demographics,managing change and cultural transformation, and managing globalization.

• 3.

  Enabling the organization. The third category consists of becoming a learning organization, and transforming HR into a strategic partner.

The quest for people advantage

The report provides an analysis of 17 HR challenges in seven major regions and suggests specific actions to address those issues. Managing talent is seen as the most important HR challenge in nine of the 17 countries analyzed in depth, including the United States, Australia, Singapore, Japan and the UK, and was at least in the top three in 14 of the 17 countries – a reflection of increasing globalization and competition. To help address this challenge,executives from all regions expect their companies to boost global sourcing of talented employees. While few companies today are moving businesses to new locations to access people, executives expect this to be the most rapidly growing HR trend from now until 2015.

Rainer Strack, a BCG partner and one of the report’s authors, comments:“It may become harder to recruit and retain talented employees than to raise money in an IPO. In the West, work forces are graying, while in developing markets, companies have an unquenchable thirst for skilled employees. Creating a‘people advantage’ will increasingly translate into competitive advantage.”

For more information

Visit the publications section of The Boston Consulting Group web site at www.bcg.com/publications,where an executive summary of the report can be downloaded and a full copy ordered.

Story 2

Economic slowdown to impact salaries

While the majority of companies have not fully felt the impact of current economic events, 16 percent expect business results to be significantly worse that budgeted levels. More than 30 percent of companies are freezing, or considering freezing, base salaries as a direct result of recent economic events, and globally 15 percent of organizations report that they are freezing salaries for all employees. This is according to a study of 1,003 companies in 80 countries conducted by global management consultancy Hay Group. Tom McMullen,vice president at Hay Group and one of the leaders of the study, says: “Short of layoffs or salary cuts, this is as serious as you can get in terms of sending out distress signals.”

In addition, the study found that 20 percent of organizations would be freezing or decreasing staffing levels in the near future. Yet when companies were asked about their primary concerns regarding engaging and retaining key employees during challenging economic periods, they identified retaining and motivating key contributors as their number one concern. Thirty-eight percent of companies indicated that they have either made changes or are making changes to their high performer retention programs.

Other report findings include:

• employer-provided benefits are being put under the microscope, especially healthcare – 27 percent report they have either made changes or are making changes to healthcare benefits;

• twenty-one percent of respondents indicated that they either have changes implemented or planned for retirement/pension benefits; and

• thirty-eight percent of respondents indicated that they have changes implemented or planned for training and development programs.

For more information

Visit www.haygroup.com

Story 3

Growth in western-style pay and benefits in Middle East

Western-style pay and benefit practices are on the increase in the Middle East, according to a regional survey of current practices and plans within multinational companies that was recently conducted by Mercer into the benefits and HR practices in seven countries in the Middle East. The survey shows the traditional focus on high basic salaries and cash allowances is shifting towards long-term incentives and “protection” benefits like pensions and medical, life and disability insurance. Additionally, lifestyle benefits such as company car allowances and leave entitlements are increasingly important, while allowances for housing, transport and education remain popular.

The changes in benefit practices are being driven by the continuing increase in multinational companies based in the region, an expansion of the expatriate workforce (some 85 percent of Dubai’s population is now expatriate), and greater mobility of expatriates between jobs. In the United Arab Emirates (UAE),changes in legislation have also strongly contributed to the trend.

Other report findings include:

• Retirement benefits. The change in pension practices, in particular, is driven by workforce mobility as many expatriates are now choosing to stay long-term or to permanently relocate. Expatriates in most of the Gulf States have no statutory entitlement to local state pensions, and local job moves generally result in the loss of membership of their home country pension plan. This has prompted an increase in employer-provided supplementary benefits. The provision of supplementary pension plans across the Middle East varies by country, but the majority of multinationals in these countries confirmed they are planning changes in benefit provision.

• Medical benefits. The UAE’s national health service used to be free to all UAE nationals but this is no longer the case. In addition, private sector companies in certain locations such as Abu Dhabi and the free trade zones must provide all their employees and families with a private medical plan. Consequently, the majority of multinationals in the UAE (85 percent) provide a supplementary medical insurance policy, usually through an insured arrangement. There are also mandatory requirements for private healthcare in Saudi Arabia and Egypt but the majority of multinational companies in the Middle East (80 percent) provides private medical benefits irrespective of these requirements.

• Other benefits. Almost all companies in the Middle East provide additional perks and allowances to their expatriates. These vary between countries and employers, but the majority provides allowances for housing,schooling and flights home. All participants provide allowances for return flights to expatriates’ home country. A company car benefit is also commonly provided, while there has been an increase in demand for protection benefits such as death and disability. Throughout the region, the most popular fringe benefits are long-service awards, mobile phones, social allowances and subsidized health club memberships.

For more information

Visit www.mercer.com/middleeastbenefitsto view a summary survey report.

Story 4

Advance of e-learning overstated

Over half of learning and development managers (57 percent) now offer e-learning as part of their training provision. However, there remain continuing doubts about its effectiveness. This is according to the Chartered Institute of Personnel and Development’s annual learning and development survey of the UK market, which covered e-learning as one of its study topics. When asked to list the top three most effective training practices, only 7 percent of respondents mentioned e-learning.

For respondent organizations using e-learning, it is on average available to 60 percent of employees, but taken up by only half of them, while only 30 percent are reported as completing courses. The issues of e-learning are clearly defined: almost all organizations agree e-learning is more effective when combined with other forms of learning (95 percent) and that it demands a new attitude on the part of the learner (92 percent).

Martyn Sloman, learning and development adviser, CIPD, comments: “E-leaning is here to stay: over the last decade it has become a permanent feature of the training and learning landscape. However, we still have a long way to go to embed it effectively in the organization. It is clear from our survey that it is still not fully appreciated by learners or by training managers.”

“Simply saying we support blended learning solutions is not enough. We must work much harder to integrate e-learning into broader learning and performance support activities. The best organizations are doing this, but the worst are simply making e-learning available to the individual on their PC and hoping that something will happen as a result. E-learning is about learning not technology.”

For more information

Visit www.cipd.co.uk/surveysto download the report.

Sara Nolan