A Roadmap for HR Executives: Which Way Do I Turn?
(And it’s okay to ask for directions)

by Rich Wellins, Ph.D., Senior Vice President, DDI

There’s no doubt about it. Today’s economy has most of us sailing in uncharted waters. In our field of talent management, we’re faced with many questions, from how much should we be investing in—or cutting back on—leadership development programs to what role will we play in meeting new business priorities. What better place to begin our search for answers than to survey what our peers are planning.

Recently, DDI sponsored an Aberdeen Group study that did just that. The 2009 HR Executive’s Agenda: Driving Business Execution and Employee Engagement study was conducted in November and December 2008 and the research provides current benchmarking data for HR executives looking to understand other HR executives’ strategies for 2009. Specifically, the study covers top business priorities for the year ahead, top HR priorities for the year ahead, how the economy is affecting budgets, and what best-in-class companies are doing that others aren’t.

Here’s how Aberdeen puts it: “Human resources (HR) executives are under more pressure than ever to ensure that their activities are aligned with business priorities, and to deliver consistently higher performance without increasing their budget. Everyone is looking to get more from less . . . This report, a compilation of surveys of and interviews with more than 400 HR executives and business line managers . . . provides a roadmap for any HR (or HCM) executive looking to execute on immediate business priorities without shortchanging long-term strategic objectives, while preserving key talent in tough times.”

What’s compelling about this study is that Aberdeen looks at three key performance metrics—employee performance, employee engagement, and employee retention—to classify companies as best-in-class, average or laggard. Then Aberdeen determines what strategies, capabilities and enabling technologies and services separate these groups.

So what road will HR executives be traveling this year? Here are four highlights from the report:

  • While uncertainty is the key word for 2009, leading organizations still view talent management as a core business strategy. “No matter what the future brings to the global business climate, a talent pool that is ready to adapt, has the knowledge to execute, and is engaged with the vision and mission of the business is critical,” according to the Aberdeen study.
  • The top business priorities in 2009 are: 
    • Executing business strategy (51%)
    • Reducing operational costs (42%)
    • Recruiting, retaining and developing a great workforce (29%)
    • Adapting to change quickly and competently (28%).

This makes sense. Many of our clients are in the midst of shifting their business models in order to survive and thrive in today’s tough economic times. Yet they know they will not be successful unless they have a strong execution plan in place to shift the behaviors and mindset of the entire organization.

  • The top HR priorities among best-in-class companies for 2009 are:
    • Increase employee engagement throughout the organization (42%)
    • Focus resources to develop talent that already exists in the organization (23%)
    • Implement programs that align the workforce with organizational objectives (23%).

“In an environment where organizations must do more with less, people are one of the areas to look to for discretionary effort that can produce big results—and engagement is a key strategy to ensure those performance gains. In fact, best-in-class organizations are 40% more likely than all other organizations to make this a key strategic action in 2009,” according to the Aberdeen report.

  • What’s the impact of economy on human capital management? Among all respondents, 60% foresee the importance of human capital management will increase in 2009, but only 27% expect budget (non-personnel) to increase in the next fiscal year. However, among best-in-class companies, 42% expect a budgetary increase for human capital management processes, programs and technology in 2009, and best-in-class companies are 55% more likely than all other organizations to anticipate a budgetary increase in 2009. According to Aberdeen, “HCM budgets and investments will be heavily scrutinized in 2009. Therefore, it will be imperative that HR executives document and validate HCM performance as well as be proactive with recommendations to meet the organization’s changing needs.”

As this study shows, best-in-class organizations are making talent management a core business strategy. They view talent as the critical success factor in executing their business strategies and are making an investment in human capital to ensure they emerge from the recession stronger than ever. At the same time, these organizations are working harder than ever to justify HR investments by improving their measurement efforts.

About the Author

Read the complete Aberdeen study.

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