If it’s critical that you stay up to date with talent mobility processes and policies, you can find strategies to address today’s extraordinary challenges at the Worldwide ERC Symposium in Denver, Colorado, from 12–14 October.

Worldwide ERC is using this opportunity to bring together HR professionals from across the globe to examine changing business paradigms, increasing government regulation, and cost pressures affecting talent mobility. Registration is free.

Managing human capital is considered the most important factor in improving productivity, according to a survey just released by the Economist Intelligence Unit. Some 85% of the 350 companies surveyed believe it to be either ‘crucial’ or ‘important’ to their business effectiveness.

However, the challenges in getting more from employees differ by region, reflecting the experience of companies during the recent financial crisis. Respondents in Europe cite a lack of engagement and motivation as the biggest obstacle to human-capital productivity, followed by poor performance management. This probably reflects the fact that European companies were encouraged to retain staff during the downturn, even though they sat idle for lack of business. North American companies feel more overstretched and lacking in investment in staffing, no doubt reflecting the fact that they were quick to make deep cuts to staffing levels during the recent recession.

The survey was conducted for a new Economist Intelligence Unit report, Gearing for growth: Future drivers of corporate productivity.

Other key findings of the research are as follows:

• Companies are optimistic that they can increase productivity further. Two thirds (67%) of companies polled for this report expect to see productivity increases in the next 12 months, either in terms of greater output or more or improved products and services. Executives see two functional areas — operations (58%) and sales (33%) — as likely to see the greatest productivity increases in the next year. North American companies are less optimistic about productivity gains in terms of improved products or services in the coming year: 59% cite this as likely, compared with 72% in both Asia-Pacific and Europe
• Functional training is seen as a key tool for improving productivity. Training ranks highly as an efficient tool for improving productivity, particularly training for specific functions. While 67% of those that have introduced management training programmes see these as effective tools, the number rises to 79% when respondents are asked about functional training. The latter also tops the list of human-capital initiatives that executives will introduce in the next 12 months that are expected to have the biggest impact on productivity
• Companies have yet to fully capitalise on the productivity potential of technology. Using the best available technology is only the third-most-important factor in raising productivity, after human capital and good strategic decisions, with 69% ranking this as either crucial or important. Meanwhile, nearly half (49%) of respondents believe they are not getting the most out of technology. This is especially so for European firms (58%, as opposed to 41% in North America). Lack of investment in new technology also emerges as a concern, with 36% overall believing this is hampering productivity
• There is scepticism about the productivity impact of green practices. While leading companies say they find that engaging employees on sustainability initiatives is a powerful motivating tool, the survey respondents appear less certain. Only 32% of those that have introduced green practices say they have had a positive effect on productivity, while half say these practices have no effect on productivity and 17% say they have a negative effect
• Corporate strategy is seen as key to productivity gains, but companies worry about making the best decisions. Making the right strategic choices ranked second (77%) behind managing human capital more effectively in terms of the primary levers for productivity improvements. However, there is concern that common strategies are not always beneficial to productivity. For instance, 76% of respondents have engaged in cost cutting and labour-force reduction in the past 12 months. Yet focusing too closely on cost cutting and not making the most of existing resources is also cited most commonly among the top three strategic problems negatively affecting productivity (by 36% of respondents). Respondents’ second most commonly cited strategic problem is an over-emphasis on top-line growth, cited by 30% (rising to 43% among Asian companies)

Gearing for growth: Future drivers of corporate productivity is available free of charge from www.businessresearch.eiu.com/gearing-growth.html

At yesterday’s 2011 Corporate Relocation Conference and Exhibition, held in London, Catherine Gervais, of global consulting firm Mercer, reviewed the latest demographics from her company’s Worldwide Policies and Practices Survey and made some predictions for the future of global mobility.

The survey showed that, in 2010, the cost-of-living allowance fell in many regions and across many industry sectors. In terms of housing, host allowances also declined. So, too, did schooling provision; local schools were preferred to international schools, and further education and pre-kindergarten allowances were cut.

43% of companies are now implementing, or considering, less-costly housing policies, and ‘peer’ housing – whereby workers are offered accommodation in local communities rather than in an ‘artificial’ expatriate community – is becoming more and more popular. In general, it appears that companies are spending more time face to face with expatriates before they relocate, in order to talk through the company’s expectations and housing decisions and make sure the employee is comfortable with the relocation package and process.

Companies are also making cutbacks in education allowances. 42% pay for basic tuition fees only, 40% are not prepared to pay for boarding, and there is a steady decline in those that are willing to pay for textbooks and school transport, as they look to save on peripheral costs.

Organisations that offer business-class travel within Europe are few and far between, as many now consider this unnecessary. Fewer companies are willing to provide a car in the host country.

The conference concluded with predictions for the future of international assignments. Mercer foresees more: 

• Effective use of expatriates
• Efficient cost management
• Streamlined administration
• Use of talent and performance management
• Focus on return on investment
• Focus on the expatriate’s work-life balance. With cost cutting in areas such as family support, expatriates need to be assured that they, and their families, will receive sufficient backup to feel secure in their new location

Although companies remain cost conscious, they are putting much more emphasis than in recent years on increasing market share and preparing for the future, and their change management efforts reflect this. According to an Economist Intelligence Unit survey, the three main goals of corporate change initiatives over the next year are increasing revenue (cited by 55% of respondents), preparing the organisation for the future (52%) and cost reduction (50%).

The research is summarised in Leaders of change: Companies prepare for a stronger future, the third in a series of change management studies published since 2008 by the Economist Intelligence Unit.

These priorities differ from those voiced by corporate executives in the two previous surveys on change management, where cost considerations dominated. In the 2009 survey, for example, 66% of respondents cited cost reduction as the primary goal of change initiatives, while preparing for the future (46%) and increasing revenue (37%) lagged behind.

“Executives have moved beyond strategies for surviving the economic downturn and are increasingly focusing on expanding market share,” says Gilda Stahl, editor of the report. “They see the economy improving and want to capitalise on it. The sort of changes needed to do this will require different leadership skills and approaches than in the recent past."

Other findings of the survey include:

• Sales and marketing functions are in the front line of change. According to 41% of survey respondents, sales and marketing were the most common areas to experience change in the last year. Since these functions are first to detect upturns in demand, this finding can be attributed to the shift towards a more optimistic view of growth prospects – and the need to prepare the organisation to take advantage of it

• Most companies are still remarkably unsuccessful at change management. Respondents say that, on average, only 56% of change initiatives are successful, even though more senior executive time (cited by 63% of respondents) and spending (47%) than previously are being devoted to these efforts

• Lack of senior management commitment is a major obstacle to change. Respondents at companies with the fewest successful change initiatives complain that senior management are the source of the biggest bottlenecks. They also cite lack of senior management commitment as the largest barrier to change (40%).

The report is available free of charge at www.businessresearch.eiu.com/leaders-change.html

By highlighting good practice from 16 public-, private- and voluntary-sector organisations, the guide aims to help reward and HR professionals review their existing pay processes, or establish new schemes. It explains how to align pay awards closely with the needs of the business, and identifies ten central messages for organisations to adhere to, including the importance of effective planning and the gathering and interpreting of relevant data. It encourages practitioners to keep processes as simple as possible, to use management tools to support decision making, and to use previous reviews as a basis for improving current practice.

Commenting on the research, Charles Cotton, CIPD adviser for Performance and Reward, said, "Too often, the annual pay review is seen as a tick-box HR process, rather than a vital business process impacting on organisational strategy, despite the huge sums of money usually involved.

"Get it wrong and it may send out mixed messages on what your organisation values in terms of employee behaviours, skills, attitudes and performances. On the upside, the employers we have spoken to have emphasised that getting it right can create value for the organisation by supporting the employer brand."

The 16 employers interviewed for this research are: Boehringer Ingelheim; Citizens' Advice Bureau; FirstGroup; Kent County Council; John Lewis Partnership; McDonalds; Moog; National Bank of Abu Dhabi; Oxfam; Royal Bank of Scotland; Sainsbury's; Shell; Specsavers; Transport for London; TUI Travel; and Welsh Assembly Government.

CIPD members can download The Pay Review Process from www.cipd.co.uk/subjects/pay/general/_pay-review-process

Blueprint for Growth calls on policy makers to encourage more investment in the leadership and management skills that will underpin economic success in the coming decades, while also highlighting the need for the government to adopt a flexible approach to fiscal policy if the pace of economic recovery slows markedly in the coming months.

Launching the programme, Dr John Philpott, chief economic adviser to the CIPD, said, "The government wants to foster a strong private-sector-led economic recovery, but we have yet to see a coherent strategy for economic growth to sit alongside the Chancellor's very clear-cut approach to reducing the fiscal deficit. The coalition needs to show greater urgency in implementing measures to help boost the long-run supply-side capacity of the UK economy, which must include efforts to boost productivity by improving the way in which businesses manage the people they employ.

“But the Chancellor should also demonstrate a willingness to ensure there is sufficient demand in the economy to reduce the considerable unused capacity available at present, and, if necessary, revise the speed and scale of the planned fiscal squeeze. A fiscal 'Plan B' could take many forms and need not require major adjustment to the coalition's long-term fiscal policy objectives; it would also be far better than sticking with 'Plan A' if unemployment rises sharply in the coming months.

"There needs to be a step-change in the UK's leadership and people-management skills if we are to close productivity gaps with our international competitors. The government recognised this in its skills strategy last year and committed to establishing a new framework to support better management and leadership. We now need action to turn the ambition into reality."

Blueprint for Growth also calls on the government to:

• Maintain the number of Tier 2 work-related visas at or near 20,000 and retain the intra-company transfer exemption for those earning over £40,000 from the migrant cap
• Introduce a £2.50 an hour Training Wage into National Minimum Wage legislation for internships lasting three months or longer
• Extend the right to request flexible working to all employees
• Establish mediation as a routine part of the employment tribunal claims process
• Raise awareness among employees of 2012 pension reforms

According to a new research report from the Economist Intelligence Unit, 84% of top executives in companies across Europe and the Middle East believe “disengaged employees” are one of the three biggest threats facing their business.

However, almost half (43%) of board directors admit that engagement issues, such as staff motivation, identification with the company goals or willingness to ‘go the extra mile’ for the firm, are “occasionally”, “rarely” or “never” discussed at board level, and only 12% report that their companies “regularly and often” tackle staff with “continually low engagement”.

Entitled Re-engaging with engagement, the research report reveals that nearly half (47%) of C-suite executives (i.e. chief officers) believe that they themselves have generated levels of employee engagement in their firm, a view shared by only 16% of senior directors outside the C suite. The low proportion (13%) of C-suite executives who believe that line managers and middle managers are “chiefly responsible” for staff engagement also contrasts starkly with the views expressed by those outside the C-suite, who believe that it is the “motivational ability of one’s line manager” that determines engagement.

"This research strongly suggests that many, though certainly not all, CEOs retain an unrealistic and over-optimistic view about their own impact when it comes to staff engagement," says Paul Lewis, managing editor of Executive Briefing at the Economist Intelligence Unit and editor of the report.

Other key findings of the study include:

• Overall engagement levels are believed to have increased, with 42% believing that workers are more engaged than they were two years ago, and only 23% believing that they are less engaged. This improvement comes in the face of widespread reported salary freezes and lay-offs, and despite levels of stress and pressure greatly increasing

• The research shows overwhelmingly that it is hardest to raise the engagement levels of “experienced and long-serving staff”. However, only 27% of CEOs believe that this group presents the greatest challenge, believing that the under-25s are the most problematic group, in line with the current management orthodoxy surrounding Generation Y

Re-engaging with engagement, is available free of charge at www.businessresearch.eiu.com

The findings of new research from the Chartered Institute of Personnel and Development (CIPD) suggest that the practice of collecting, evaluating and reporting on human capital management (HCM) enables better business decision-making and deepens understanding of the link between human resources, business strategy and performance.

Entitled Human capital reporting: What information counts in the City?, the research report consists of interviews with two sets of interviewees, one representing the views of investors and the other providing insights into companies’ perceptions of what information from human capital measurement investors are most interested in.

The report examines the appetite of the investment community for HCM reporting and investigates whether, following the financial crisis, levels of interest have changed since the completion of a similar piece of CIPD research published in 2007. It highlights a continued gap between the data currently available and the actual demand for specific types of data which investors and other stakeholders require when making business decisions. It also asks questions about the importance of HCM to overall business performance from both investors and organisations.

Angela Baron, CIPD adviser for Organisational Development and Engagement, says, “Our research has shown that investors want comparable data related to organisational key performance indicators, and HR is perfectly placed to provide this type of tailor-made, high-quality data. However, there are issues around the capability of current HR data to provide the type of information stakeholders require, and practitioners need to develop appropriate measurement frameworks, a point highlighted in the views from investors.

“We are in a unique position at the CIPD to help employers to improve how they use and report on people management and human capital information. Our research has shown that it is important for organisations and investors to understand the people drivers of sustainable success. This focus on sustainable performance is also the main focus of our major CIPD research programme, Shaping the Future.”

The findings of the research were discussed in a recent roundtable of senior HR practitioners and investors, and have been summarised in a research insight, View from the City: How can human capital reporting inform investment decisions?.

The Human capital reporting: What information counts in the City? report and View from the City: How can human capital reporting inform investment decisions? research insight are available to download from the CIPD website from 7 December. Go to:

www.cipd.co.uk/subjects/corpstrtgy/hmncapital/_human-capital-stakeholders

www.cipd.co.uk/subjects/corpstrtgy/hmncapital/_human-capital-management-view

The Shaping the Future report can be downloaded from www.cipd.co.uk/shapingthefuture

Fiona Murchie reports on some of the key themes that emerged from ERC’s recent Global Workforce Symposium, which will be explored further in future issues of Re:locate and on our website.

AT ERC’s Global Workforce Symposium on the theme of The Game is Changing ... are you?, which took place in Seattle in October, the emphasis was on shifting global mobility from a transactional process to a strategic position as partners in talent management.

The future was seen as a more consultative approach, with the opportunity for those in global mobility to take up a dynamic new leadership role. This also fits with the CIPD’s agenda for HR as a strategic business partner.