Better get ready for all that “seat at the table” talk again.
Global enterprise software developer recently SAP partnered with Oxford Economics on a global study focused on the future of work, but it’s the six critical workforce issues facing HR professionals that they listed that got my attention — and should get yours.
Workforce 2020 is the result of a survey of more than 5,400 employees and executives interviewed by Oxford Economics in 27 countries, and overall, the key finding is that two-thirds of businesses have not made significant progress toward building a workforce that will meet their future business objectives.
Top 6 workforce issues facing companies
The study, conducted this summer, shows a big disconnect between executives and HR leaders regarding benefits, incentives, training and development strategies.
And, here’s the key to this research: The SAP analysis says that if HR was given a seat at the executive table, they could eliminate this disconnect and bring employee wants to the attention of the key executive leaders.
“To gain advantage in the future, businesses must understand the workforce of tomorrow and its importance to bottom-line success — today,” said Edward Cone, managing editor of Thought Leadership at Oxford Economics, in a press release about the survey. “Our research shows that the C-suite is out of touch with HR on business strategy and priorities, and workers are not getting what they want from their employers in terms of incentives, benefits and training.”
I know, I know; everyone is sick of the HR seat-at-the-table debate, but this seems to be a new wrinkle that we might want to pay a little closer attention to, especially since it calls for the C-suite leaning more on the one area of the company (HR) that has a better take on how to leverage and manage talent.
The study’s findings challenge the prevailing wisdom and highlight the most critical issues facing HR professionals. At the top of the list:
1. Compensation matters most
From the survey analysis: According to Workforce 2020, competitive compensation is the most important attribute of a job to two-thirds of respondents — 20 percent higher than the next highest benefit. Retirement plans, flexibility and time-off rank well ahead of amenities such as fitness centers, daycare and subsidized food.
If compensation is what motivates employees, what they are most afraid of is being left behind as a result of insufficient skills and inability to keep up with the latest technologies. “Becoming obsolete” is the biggest concern for today’s worker, twice as concerning as being laid off, the research finds.
2. Millennials are misunderstood
From the survey analysis: Although 51 percent of executives say that Millennials entering the workforce greatly impacts their workforce strategy, fewer than one-third say they are giving special attention to Millennials’ particular wants and needs — primarily because executives do not understand how Millennials think.
Much has been written about how Millennials are different in their use of technology and their attitudes toward work than past generations of workers; however, the Workforce 2020 study shows that they are surprisingly similar to their non-Millennial co-workers when it comes to workplace priorities:
- Millennials and non-Millennials alike cite compensation as the most important benefit. Additionally, 41 percent of Millennials and 38 percent of non-Millennials say higher compensation would increase their loyalty and engagement with the company.
- Contrary to popular thinking, Millennials are no more likely than non-Millennials to leave their jobs in the next six months.
- Millennials and non-Millennials have similar priorities in areas such as meeting career and income goals and meeting goals for advancement. The two groups have similar views on the importance of corporate values and achieving work-life balance.
“Millennials are a major challenge for companies. As the single largest and most tech-savvy workgroup, they also represent a significant opportunity,” said Mike Ettling, president of Cloud & On-Premise HR, SAP, in a press release. “Companies that can excite Millennials about work, train them to fill in gaps on experience and adapt to their style of working can build a workforce that can successfully execute on the objectives of today and adapt to drive advantage for the business of tomorrow.”
3. The Talent Gap is widening
From the survey analysis: Few companies are properly supporting their workers, including Millennials. Less than half of employees surveyed as part of Workforce 2020 say their company provides ample training on the technology they need, and less than one-third say their company makes the latest technology available to them.
The need for skills like analytics and programming/development will grow sizably over the next three years, but employees doubt the opportunity to gain proficiency in these areas. While executives cite a high level of education or institutional training as the most important employee attribute, only 23 percent say they offer development and training as a benefit. Incentives for pursuing educational opportunities are also uncommon.
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4. Leadership is lacking
From the survey analysis: Unfortunately, supporting growth among employees is creating a leadership void. Lack of adequate leadership is cited by executives as the number two impediment to achieving their goals of building a workforce to meet future business objectives. Almost half of those surveyed say their plans for growth are being hampered by lack of access to the right leaders within their organizations.
Only 31 percent of executives interviewed say that when a person with key skills leaves they fill the role from within the organization. Surprisingly, less than half indicate that their leadership team has the skills to effectively manage talent or inspire and empower employees.
5. The workforce is changing
From the survey analysis: As the economy evolves to a state where nearly everything can be delivered as a service, companies are increasingly tapping external expertise and resources they need — and on an as-needed basis — to fill skills and resource gaps and to accommodate rapidly changing business and customer demands.
That means more temporary staff, more consultants and contract workers, and even “crowd-sourced” projects. In fact, of those companies surveyed as part of Workforce 2020, 83 percent of executives say they will be increasing the use of contingent, intermittent or consultant employees.
6. Comp models, development, technology must change
From the survey analysis: This changing nature of employment is affecting workforce strategies. Of the companies surveyed:
- 46 percent say they will require changes in compensation plans.
- 45 percent say they will require increased investment in training.
- 39 percent say they will result in changes to technology policies to support mobility, bring your own device, etc.
- Just 38 percent say they have ample data about their workforce to understand their strengths and potential vulnerabilities from a skills perspective, and 39 percent say they use quantifiable metrics and benchmarking as part of their workforce development strategy.
- Only 42 percent say they know how to extract meaningful insights from the data available to them.
“The C-suite is out of touch”
“To gain advantage in the future, businesses must understand the workforce of tomorrow and its importance to bottom-line success — today,” said Cone of Oxford Economics. “Our research shows that the C-suite is out of touch with HR on business strategy and priorities, and workers are not getting what they want from their employers in terms of incentives, benefits and training.”
Here’s my 2 cents: I haven’t dug through this survey yet, but the highlights of the Workforce 2020 research is a damning indictment of executive management and their lack of focus on talent and what they should be doing to nurture and grow it for the good of the organization.
I’ll remember this the next time I hear some executive or company’s PR flack spew the nonsense that “our people are our greatest asset.” As this research shows, that is clearly not the case in far too many organizations.
Of course, there’s a lot more going on this week than the latest workplace survey. Here are some HR and workplace-related items you may have missed. This is TLNT’s weekly round-up of news, trends, and insights from the world of talent management. I do it so you don’t have to.
- HRCI continues to press ahead. Despite the split between the HR Certification Institute and SHRM over SHRM’s decision to launch their own, competing certifications, HRCI continues to press ahead. They recently announced a partnership with La Asociación Mexicana en Dirección de Recursos Humanos (AMEDIHR), which represents HR professionals throughout Mexico, and also, a grant of $750,000, plus an additional $250,000 matching contribution up to $1,000,000, to the SHRM Foundation. “Our investment in the SHRM Foundation has always been an investment in the future of our profession,” Clarissa Peterson, SPHR, GPHR, chair of HRCI’s board of directors, said about the announcement.
- Why wellness programs usually don’t work. The New York Times did a deep dive into this week’s Kaiser Family Foundation annual survey on employer-sponsored health plans and came up with this wrinkle: “Despite the fact that employers are “very fond of workplace wellness programs .. while such programs sound great, research shows they rarely work as advertised.”
- Unpredictable hours stress workers out. The HBR blog recently touched on something we probably all know to be true — “as jobs become ever more dependent on online connectivity and technology, more of us are losing control over our time.” The result? “Workers at the top and bottom of the economic spectrum feel the loss of control dearly, and technology is often the culprit. Whether it’s a buzzing smartphone or software that tracks our whereabouts, the more hard to predict our schedules become, the less real flexibility many of us have.”