Low graduate recruitment and growing age diversity among list of issues to be addressed in businesses’ recovery plans, according to global survey published by the Economist Intelligence Unit.
After two years of cut-backs, companies must now put their people first in the recovery or risk experiencing deep talent erosion and sustained underperformance, warns StepStone Solutions who co-authored the report: Companies at the Crossroads. The survey, undertaken in December 2009, covered over 400 senior managers primarily in major corporations in the US, Europe, and Asia-Pacific. Senior managers surveyed indicated cut-backs during the economic contraction had undermined workplace trust. This combined with increasing demand for executive talent and a sharp drop in graduate recruitment, has left ill prepared companies with major skills shortages just when they need employees’ energy and commitment the most.
Matthew Parker, Group Managing Director, StepStone Solutions said, “Right now, businesses are at a crossroads when it comes to their talent. They can either take steps to create, maintain and develop global talent pools, or ignore the warning signs from this survey and suffer a gradual talent erosion at all levels that will inevitably lead to underperformance.”
According to the report, nearly one third of the business executives surveyed said employee engagement is low and they expect to lose key people as talent demand grows. At the same time, graduate recruitment has also been dramatically affected, with just 6% of respondents saying graduate recruitment would be a focus for their organisation in 2010, compared with 50% of respondents in 2009. Talent has moved fast up the boardroom agenda, and according to almost half of respondents the availability of talent has risen to overall third as a driver of growth, sitting behind only economic recovery and credit availability.
Key statistics from the report include:
- 41% of respondents agreed they have a shortage of talent in their organisation
- 44% agreed they find it increasingly difficult to recruit talented employees
- 50% of respondents plan to ramp up recruitment over the coming year; only 18% still plan to reduce or freeze headcounts
- Only 16% of line managers said that staff were fully engaged with the business, yet this is not recognised in many boardrooms, with 38% of CEOs saying that trust is ‘high’.
- The top three priorities for talent investments for 2010 are:
- Performance management, 46%
- Leadership development, 41%
- Training and development, 36%
The survey found these issues are compounded by attitudes in an age-diverse workforce that is increasingly dominated by older staff, whose motivations for staying with an employer may be changing. This adds to the talent retention problems for managers, especially in companies that fail to recognise the different priorities of young and old workers. 50% of younger workers cited career development as their biggest priority, in comparison to just 1% for workers over 50 years old. Similarly, almost 40% of older workers cited non-salary benefits as important, while just 2% of 20-30 year-olds shared this view.
Parker added, “This research among global leaders shows that they understand the need to focus on their talent, but that greater action is needed today to create talent strategies for the future. It is particularly worrying to see low trust among middle-level employees going hand in hand with low graduate recruitment and an ongoing demand for senior executive talent. Left unaddressed these problems constitute a perfect storm for businesses, as the most capable employees head for the exit and fresh talent is not recruited. These trends have serious, long-term implications for any business in a recovering economy and they require urgent attention.”
The full report can be downloaded at: www.stepstonesolutions.com/eiu
Paul Arkwright
Publisher
