While business leaders remain preoccupied with economic uncertainty, their employees are getting restless.
A recent study by Kelly Services shows that less than half (44%) of theglobal workforce feels valued by their employers and that two-thirds (66%) intend to look for a new job with another organisation next year.
Another study, by Heidrick & Struggles, indicates that companies looking to retain their valued talent or lure desired candidates away from competitors will need a compelling relocation package to make it happen. According to one of the study’s architects, “You can’t run a successful long term business without the right talent in place, regardless of what city you are based in.”
The pace of corporate relocations is expected to pick up in 2012, spurred by a gradually improving economy, more favorable real estate trends and faster evolving business priorities.
According to the results of Weichert Relocation
Resources Inc.’s (WRRI) 2012 Employee Mobility Survey
, an overwhelming majority of companies expect their relocation activity to increase (40%) or remain at the same level (54%) over the next twelve months—a stark contrast to the post-recession landscape of just a few years ago.
Entitled Coaching Climate, the report, by the Chartered Institute of Personnel and Development (CIPD), found that 77% of companies that responded were carrying out coaching activity, compared with 90% in 2009.
However, the coaching landscape is far from bleak, with more than four-fifths of those using coaching reporting that they were doing more of it than two years ago.
A new report investigates how coaching and mentoring are developing in organisations and helps HR professionals and coaches to deliver the best possible value from their initiatives.
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
Entitled The Pay Review Process
, the latest guide from the Chartered Institute of Personnel and Development (CIPD) raises awareness of the need to establish the pay review as a business process, and offers insight on how to achieve this.
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.
The Pay Review Process
also recommends that roles and responsibilities be clearly defined early on, and gives tips on using the pay process as a positive vehicle for change, to help foster business success.
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
Launched today, the Chartered Institute of Personnel and Development’s (CIPD) 2011 public policy platform is described as ‘an agenda designed to secure the economic recovery, improve job prospects for all and boost UK productivity'.
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 the latest Work Audit of official labour market statistics – The 2010 Jobs Recovery
– from the Chartered Institute of Personnel and Development (CIPD), two-thirds of the 350,000 additional jobs created in the UK in 2010 have gone to workers aged under 35, the remainder being filled by people aged over 50.