HR Priorities for 2009 and Beyond

December 29, 2008 What challenges face HR in 2009 and beyond? What about recent economic events are they impacting HR priorities? How are top-performing HR managers responding? What concrete steps can you take? The research is clear. This cutting-edge article aggregates factual data from the most current, prominent studies centralizing it into one powerful reservoir of knowledge. It gives you the information and tools to move forward during these uncertain times. Read on to ensure your success . . .

ECONOMIC TURMOIL A SNAPSHOT FOR HR

The global economic landscape is foreboding. Labor markets in every corner of the earth are undergoing change. Take a glimpse at the statistics below:

World economies face slower hiring through 2008 as reported by employers in 25 of 33

countries and territories

o o o

In Europe, the Middle East and Africa, outlooks declined in 12 of 17 countries

from just 3 months earlier (Global Manpower Employment Outlook Survey Q4/2008). In the U.S., employers reported the weakest outlook in 5 years (Global

Manpower Employment Outlook Survey Q4/2008). Another U.S. survey found hiring in October indicated the toughest U.S. labor

market in 4 years while exempt and non-exempt job vacancies were down significantly (Leading Indicators of National Employment Survey, Society of Human Resource Management, October 2008).

o o

In the U.K., employers reported the gloomiest outlook in 14 years (Global

Manpower Employment Outlook Survey Q4/2008). Another U.K. survey forecasts unemployment to double by the end of 2010

(Ernst and Young ITEM Club, October 2008). Its no wonder these independent research studies are reporting such doom and gloom. The U.S. Department of Labor itself reported that unemployment kept rising in its fastest pace in more than 5 years during September, and the U.K.s Office of National Statistics latest quarterly figures report the largest falls in employment since the early 1990s.

HR DEPARTMENTS BELT-TIGHTENING TREND

In light of these statistics, HR is feeling the pinch, and is undergoing its own trend that of moderation. A recent study by the Bureau of National Affairs reported the following belt-tightening measures, which are likely in response to uncertainty in the economy:

HR staffing ratios have been declining HR expenditures, including HR department staff salaries, stabilized in this last year following a

period of growth The proportion of HR departments taking on new responsibilities have declined

PRIORITES FOR HR 2009 AND BEYOND

As world economies face challenges during these difficult times, it is easy to see commonalities. The world continues to shrink as technology creates invisible bridges connecting people around the globe. In the center of the global melting pot is HR. What universal priorities are rising to the top CHALLENGE: Tackling Talent Shortages Even as companies shed employees due to unprecidented economic conditions (read Insalas article Outplacement Industry Forecast 2009) the top-ranked worry for employers is tackling talent shortages beating out the rising costs of total rewards (Top Five Total Rewards Priorities Survey, Deloitte 2008). And what jobs are most difficult to fill? According to Manpower Inc.s Annual 10 Hardest Jobs to Fill survey the biggest challenges are: 1. Engineers 2. Machinists/machine operators 3. Skilled trades 4. Technicians 5. Sales representatives 6. Accounting and finance staff 7. Mechanics 8. Laborers 9. IT staff 10. Production operators Which companies are most concerned about these talent challenges? According to a recent survey by Deloitte:

Smaller companies (under $100 million in revenue) are more concerned than medium/larger

companies Employers in technology and healthcare are more concerned than other industries On the brighter side, a recent survey by the Society of Human Resource Management actually reported that it is getting easier to find qualified candidates for most positions. Recruiting difficulty eased to 4 year lows as HR professionals reported having more success finding top talent. Likely this easement was in the easier-tofill positions. CHALLENGE: Managing Talent and Improving Leadership Development One of the most comprehensive surveys, Creating People Advantage--How to Address HR Challenges Worldwide Through 2015, reports data from 4,700 HR professionals in 83 countries. Their key universal finding was that managing talent and improving leadership development are critical to organizational success. Specifically the survey identified 8 critical challenges which fall into 3 strategic categories outlined below: Category 1: Developing and Retaining the Best Employees 1. 2. Managing Talent Improving Leadership Development

3.

Managing Work/Life Balance Category 2: Anticipating Change

4. 5.

6.

Managing Demographics, Especially an Aging Workforce Managing Change and Cultural Transformation Managing Globalization Category 3: Enabling the Organization

7. Becoming a Learning Organization 8. Transforming HR into a Strategic Partner Another prominent study of Business and Workforce Challenges by Towers Perrin supports Category 1 listed above. Even with economic downturns, the study reports the emphasis is on retention and staff development, not on large layoffs. Survey respondents have been anticipating layoffs, but earlier this year they were projecting more targeted and business-specific cuts vs. large-scale reductions. With recent fears of a global recession, the headlines are touting more large-scale reductions than HR previously reported this past spring. For the most current research on lay-offs read Insalas article Outplacement Industry Forecast 2009. A recent study by the Adecco Institute heavily supports Category 2 listed above. This study of over 5,000 HR professionals found the top 3 challenges facing corporations today are:

Globalization Demographic change Technical progress (skills shortages)

Globalization was cited by yet another study as one of the most critical challenges for HR. Mercer interviewed nearly 60 senior-level HR executives, 70% of whom hold global positions, and found the challenge to find a global service delivery model for the administration of their HR and benefits administrations programs is their most significant challenge. The study identified the key drivers of this globalization challenge as:

Rapid employee growth in emerging markets (many companies reported having more than

50% of their workforce located outside of their corporate home country or region) An increase in global workforce mobility More stringent governance and compliance requirements that vary dramatically by region Pressure for overall cost savings through process and policy standardization

The study also reported that increasingly HR executives are being promoted to carry out global responsibilities. Of the survey respondents:

45% have taken on global roles within the last two to three years 40% have assumed such responsibilities within the last 12 months alone

CHALLENGE: Mastering the Fundamentals of HR The study, Creating People Advantage--How to Address HR Challenges Worldwide Through 2015, reported that during these difficult times HR must focus on excelling at the fundamentals of the HR function:

Restructuring the organization Delivering on recruiting and staffing Mastering HR processes

Clearly mastering these fundamentals is critical to successfully meeting the talent management priorities previously listed. CHALLENGE: Sustainability and Corporate Social Responsibility In addition to the HR basics, building a sustainable business in a socially responsible way, has crept onto the HR agenda. Key themes from a recent Executive Roundtable Symposium held by the Society for Human Resource Management are summarized below:

Sustainability is not getting the leadership it needs in many organizations Many HR professionals are not yet ready to lead on sustainability SHRM has a key role equipping HR professionals to lead in sustainability

Current research reviews of sustainability and corporate social responsibility in the U.S.and the U.K. show significant evidence of these sweeping HR trends.

WHAT IS DETERMINING THESE HR PRIORITIES?

A number of underlying influences are fueling HRs focus on these specific challenges. The study Creating People Advantage--How to Address HR Challenges Worldwide Through 2015, credits the following major influencers:

Talent and leadership is scarcer than ever before workforce is growing older and people are having fewer children Globalization - companies are becoming global organizations Emotional well-being of employees is more important than ever before

HOW CAN HR TACKLE THESE CHALLENGES?

Focus on Managing Talent

HR practitioners need to focus on their biggest priority managing talent. Research from the Adecco Institute reports that forward-thinking HR professionals should:

1. Analyze the age of their workforce down to the job-function level 2. Develop plans for individual career management 3. Develop plans for knowledge management for the firm 4. Encourage lifelong learning to renew skills and keep them up-to-date 5. Develop a better understanding of staffing needs and trends, and develop tools to acquire, develop, retain and reward talent based on workforce demands 6. Grow comfortable in a global world with geographically dispersed workforce

Additionally, the study Creating People Advantage--How to Address HR Challenges Worldwide Through 2015, suggests HR take the following 5 key steps to manage talent and leadership development:

7. Understand the external environment 8. Understand the internal environment 9. Select the most critical HR topics and set priorities 10. Initiate projects with dedicated teams 11. Secure support from top management

Specifically the study suggests organizations:

Make sure that HR and people strategy is the cornerstone of corporate strategy; an effective

way to do so is by creating a strategic workforce plan systematically analyze the future supply of and demand for employees under different growth scenarios and on a job-by-job basis

Make sure links, along with measurements, exist connecting corporate strategy and HR in the

following key areas:

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Sourcing strategy recruiting, hiring, HR marketing/branding, diversity should

target workforce needs Performance strategy individual performance, human capital metrics,

incentive systems should support corporate goals Development strategy development of employees and leaders should

reinforce corporate strategy Affiliation Strategy - establishment of systems to track compensation and

retention, work-life balance, engagement, motivation, and corporate social responsibility should build relationships with employees o Make sure executives not only have financial dashboards on their desktops

giving a quick picture of business and financial performance metrics, but dashboards should include qualitative and quantitative HR metrics o Make sure that HR is recognized as central to ensuring competitive advantage

through people (only 40% of HR executives reported that they receive sufficient support from top managers)

Invest in Technology
Research from the Gantry Group shows that U.S. companies plan to allocate 46% of their HR IT budgets for 2008-2009 to strategic functions such as:

Talent Management

Performance Management Leadership/Development Recruitment

Research from Mercer suggests that with the help of specific strategic outsourcing product solutions, including global data aggregation and an integrated employee online experience, HR can successfully overcome many of these challenges, deliver a higher level of employee service, and fulfill the new global role that is expected of them. Research from the Adecco Institute reports:

Technology will infiltrate the HR function automating transactional services HR practitioners will increasingly rely on knowledge management tools to track the skills,

experience, background, interests and formal/informal feedback on employee performance; currently 55% of companies maintain standardized records of business critical knowledge, and only 30% publish information about knowledge holder in an internal directory

Traditional administrative tasks will be handled by outsourcing, automation and self-service.

POWERFUL SOLUTIONS TO INCREASE YOUR BUSINESS

The research is clear. Even with the uncertain economy and burgeoning layoffs, HR priorities for 2009 and beyond revolve around attracting, developing and retaining talented employees. Those organizations who focus on managing talent will employ flexible and affordable technology solutions enabling them to:

Link corporate strategy to metrics for recruiting, performance, development, compensation,

retention, work-life balance, engagement and corporate social responsibility Analyze their workforce and prepare a strategic workforce plan Provide individualized career planning Offer skills development and life-long learning Capture knowledge management for the organization Perform global data aggregation

Do you currently have technology in place to support these initiatives for HR in 2009 and beyond? Is it easily accessible and affordable? If not, consider Insala. Insala is a leading global provider of web based talent management software for organizations implementing talent management and career development initiatives. Insalas products can be used individually or as a Solution for integrated, in-depth, and broad approach to talent identification, growth and development. Insalas consultants can help you decide and assemble your unique integrated Solution. Request a live demo to learn more.

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