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Which Talent Management Issues Are Shaping the North American Workplace?
A new study by DDI and the Human Capital Institute reveals HR leaders' take.
(Part 1 of 2)
by Richard S. Wellins, Ph.D., Senior Vice President
Technology. Organizational restructuring. Changing workforce demographics. Globalization. The degree to which external forces such as these are reshaping the North American workplace is breathtaking. And HR leaders, who are particularly attuned to, and entrusted with, their organizations’ talent, are especially aware of the impact.
To find out how HR leaders see the North American workplace evolving, DDI recently partnered with the Human Capital Institute (HCI) to survey 769 HR executives, directors, and managers in the U.S. and Canada from a variety of organization types and industries. (We also conducted one-on-one interviews with a sample of survey respondents.)
The survey, comprising items on issues and trends related to the current and future state (three years out) of the North American workplace, specifically explored three broad areas: 1) the workforce of the future, 2) globalization, and 3) the leadership attributes required to be successful in organizations operating globally.
The end result is a new study, Talent Management in Motion: Keeping Up with an Evolving Workforce, which depicts a North American workplace in transition. Here are some of the study findings:
Organizational restructuring––and its accompanying challenges––will continue unabated. Survey respondents were presented with a list of 17 workplace trends and asked to indicate the degree to which each would increase, stay the same, or decrease over the next three years within their organizations. Table 1 lists the trends most widely predicted to either increase somewhat or increase significantly.
In the 1970s and 1980s, North American industries, faced with multiple challenges, undertook a wave of restructuring, which often was accompanied by employee layoffs. (In the 1990s, the concept of “re-engineering” was briefly in vogue, though it lacked the same negative connotation as “restructuring”—at least for a while.)
Major organizational change is hardly a relic of the past, however. Merger and acquisition activity was at a record level in 2006 and is expected to continue at a strong pace.
HR leaders, who listed “organizational restructuring” as the trend most likely to increase within their organizations, also predicted that investment in employee training and development would increase. Along with restructuring, organizations today are operating in an environment characterized by ever-changing technology, evolving business models, and the continual development of new products and solutions.
To be successful in this environment, organizations must “retool” their workforces to adapt to changing jobs (thus the need for organizations to grow their investments in employee training and development) and also ensure that employees—at all levels—see the clear connection between their day-to-day activities and the success of the organization.
These trends and needs point toward an ambitious agenda for HR as organizations must have a diverse, inclusive environment where employees feel involved, motivated, and engaged. They also need leaders who can drive their teams to perform at a high level (while keeping team members engaged). And to drive execution they must be able to effectively connect individual performance and contribution to strategic goals.
Another war for talent is being fought inside organizations. There is a commonly held perception of a global war for talent, in which organizations must fiercely compete with other employers for a finite supply of desperately needed workers, especially those with hard-to-find or highly valued skills—including leadership skills.
Another war organizations find themselves fighting, however, is being waged on a different front—within their own ranks. This war is about fighting for the hearts, minds, and commitment of employees at all levels.
Employee retention and engagement are notoriously low in many industries and organizations. Studies by DDI and others have shown that only about 13 to 28 percent of employees (depending on the study) are highly passionate about their jobs and their organizations.
We asked what HR leaders were seeing as the major drivers of employee engagement (Table 2). At the top of the list was the desire for challenging work (89 percent), opportunities for training and development (83 percent), constant learning opportunities (78 percent), and non-monetary recognition for accomplishments (77 percent).
To win the war for talent by keeping the key employees they already have on board, organizations must provide workers with empowerment, opportunities for growth, and greater appreciation for what they accomplish. Those who are not engaged are the ones who will seek out opportunities elsewhere. Perhaps worse, they may remain in their jobs, contributing little and negatively impacting the performance of others.
The key to engagement? Leaders. Organizations need to make sure their leaders have the right skills to build and maintain strong relationships with those who work for them—capturing their “hearts and minds.”
Notably, salary increases/raises (45 percent) were deemed less important than the factors identified in Table 2. We have heard this time and again. Fair salaries are an essential base ingredient in strong employee engagement, but compensation is far from the top of the list.
Globalization will continue to reshape North American organizations. HR leaders are seeing the effects of globalization at ground level as they grapple with various talent management issues, especially the scarcity of talent with the skills needed to help their organization be successful players in the global economy. Organizations no longer have the luxury of concentrating on finding, developing, and retaining talent for a single national economy. Instead, they must now look at talent globally, spanning multiple countries with different values, laws, and cultural norms.
Reflecting this concern (Table 3), a strong majority of HR leaders foresee, over the next three years, that trade of knowledge and intellectual capital (86 percent) and goods and services (85 percent) across countries will increase. They also see that competition for talent with the skills needed to work across borders will grow more fierce (91 percent). These response rates are consistent with findings disclosed in a recent study by the Economist Intelligence Unit that found that addressing the issue of a lack of local talent in emerging and developing markets represented one the greatest corporate priorities for 2007 and beyond.
The Meaning for Leaders
The trends identified in the study point toward a changing workplace for leaders, too. Next month we will examine findings from the study related to expectations for leaders and competencies that leaders will need to be effective in the future.
Click here to download a copy of the full Talent Management in Motion study.
About the Author
Rich Wellins, Ph.D., is a senior vice president at DDI. He has authored six books on team and leadership effectiveness and has worked with dozens of organizations around the world to impact their business results through improved workforce performance. Contact him at rich.wellins@ddiworld.com.
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