Strategies for growth
Towers Watson (2010). Strategy for growth. October 2010, 11p.
In a just-completed survey of more than 700 companies in all regions of the world, finding and keeping talent was the biggest potential obstacle to achieving growth across virtually the entire survey sample.
- Very few respondents believe their company has a “lock” on the talent issue, perhaps because people remain the least controllable (if often the most critical) element of competitive advantage.
- The least prepared organizations will not only find themselves at a significant disadvantage over time, but may lose critical momentum in trying to catch up to more advanced peers once recovery is in full swing.
Performance management — especially in terms of differentiation — was the number one area for greater focus this year across all regions.
Only a third or slightly more indicated their company had sufficient capability in various areas to support this goal.
Workforce Challenges Could Hinder Hoped-For Growth
The top three workforce challenges:
- loss of key talent
- lack of succession planning
- an inability to attract necessary talent
While the focus here was on pay, the broader issue of performance differentiation and performance management came through in other survey findings as a key theme and challenge.
Performance management remains a thorny issue:
- companies’ difficulty in truly aligning pay with performance
- in terms of measuring performance
- holding people accountable for key actions and behaviors
- recognizing performance in multiple ways, pay being but one
Workforce Cost Management: Here to Stay
Redesigning career ladders also supports two needs— tactical and strategic:
- clearly a way to flatten hierarchies, eliminate under-functioning layers of management and show employees there are several paths to progress through the organization.
- a strategic tool increating a high-performance culture that aligns career progression with pivotal roles, critical skills, and current and emerging workforce planning needs.
A Changing Emphasis on Workplace Programs: Performance and Governance Take Precedence
- Improving performance management and incentive systems (stronger performance distinctions) +76
- Improving governance/managing risk in HR operations +66
- Helping employees manage their health and well-being (e.g., smoking cessation) +47
- Encouraging employees to manage their own benefits and work/life programs(more self-service tools) +34
- Expanding the use of social media (for example, Twitter, Facebook) in the workplace for employee communications +6
- Providing financial education to employees to help them plan for/manage their retirement income needs +4
- Enabling automatic enrollment in organization-sponsored savings/investment plan +0
- Expanding investment options in organization-sponsored savings/investment plan -4
Far fewer companies put a priority on helping employees manage their finances to prepare for retirement. As data from our 2010 Global Workforce Study suggest, however, providing decision support for employees in this area is an unmet need in many cases and could yield benefits for both companies and individuals in various ways, from improved engagement to greater employee self-reliance.
Strength of HR governance policies/processes
(Reasonable to appropriate; appropriate ranging from 25% to 54% of respondent)
- Occupational safety 84
- Executive incentive compensation 84
- Defined benefit retirement plan 71
- Employee relations/compliance 86
- Sales force incentive compensation 79
- Broad-based employee incentive compensation 80
- Training 82
- Leadership recruiting 79
- Leadership development 71
- Talent acquisition 75
- Talent retention 69
- Succession planning 62
It calls for a deeper understanding of the different needs and expectations of the talent pools pivotal to the strategy, wherever those individuals reside.
- segmentation — look specifically at the employee groups most critical to your success to understand and define the rewards that matter most to them.
- a significant emphasis on career development, especially in terms of establishing and sustaining a transparent and well-defined career advancement program.
- focus on performance — defining it, measuring it, managing it and rewarding it appropriately.