It may sound counterintuitive in a so-called jobless recovery, but the latest research reveals employee recruitment is among the top five challenges facing companies in the United States today.
Findings from a just-released Oxford Economics report show that companies are not prepared to address what they’ve identified as the top labor market shifts affecting workforce strategy: difficulty recruiting employees with both base-level and specialized skills, changing work models such as telecommuting and flex time, shifting employee expectations, and an aging workforce.
The worldwide survey, sponsored by SAP and entitled, “Workforce 2020,” is based on feedback from a total of 5,400 executives and employees encompassing C-level, mid-level, and line-of-business managers, as well as front-line employees from a variety of industries. According to feedback from the U.S.-based respondents, businesses in this country may not be making human resources (HR) a priority as they struggle to manage talent, cultivate leadership, encourage learning and understand employees. Here is a summary of the results which should spark plenty of serious conversations and action plans across organizations.
Companies fall short when it comes to a workforce vision
Only 46 percent of executives say their company has a strong vision for the workforce it wants to build in three years. Worse, just 36 percent of executives say their company has an execution plan for achieving its vision of workforce management, and that workforce issues drive strategy at the board level. Maybe this short-sightedness reflects employee tenure patterns. According to Karie Wilyerd, Vice President of Learning and Social Adoption at SuccessFactors, the average tenure of employees at Fortune 500 companies is a little over five years. It may be easy to downsize but it’s also never been easier to network across departments, companies, and geographies for better opportunities.
New workforce demographics are driving policy changes
More optimistically, executives are rethinking compensation, training, and HR technology to meet the demands of the 2020 workforce that will be more diverse than ever. It will consist of multiple generations with different skills, experiences, habits, and motivations—and more of these workers will be freelancers and contractors. The report found that 83 percent of American companies say they are increasingly using contingent, intermittent, seasonal, or consultant employees, and 58 percent realize that this requires changing HR policy.
HR lacks training and insights to fully contribute
Even as they make some program changes, companies and workers in the United States appear unprepared for the growing need for technology. Although demand for more workers with an understanding of advanced technologies such as analytics and cloud-based computing is certain to grow, only 33 percent of employees expect to be proficient in cloud in three years, 43 percent expect proficiency in analytics, and about half expect proficiency in mobile, social media, and social collaboration.
Millennials are different but not in the way many think
While companies are hyper-focused on millennials—as workers and consumers—this study reveals what may be the biggest misunderstanding between age groups since the generation gap of the 1960s. For example, contrary to popular opinion, just about the same percentage (44 percent) of millennials and non-millennials are interested in quality of life over career. Ed Cone, Technology Practice Leader at Oxford Economics frames the findings like this, “People change when they grow up and go to work. Compensation matters to you as much as saving the world.”
The misunderstandings don’t end there. Sixty percent of executives in the United States think millennials are frustrated with manager quality, but only 18 percent of millennials say they are. Similarly, 62 percent of executives say millennials will consider leaving their jobs due to lack of learning and development, yet just 31percent of millennials say they have considered this. The major difference between millennials and non-millennials was around feedback from their managers. Twenty-nine percent of millennials expect to receive more feedback than they currently receive from their leaders, while 41 percent of non-millennials have the same expectations.
United States companies deliver benefits most valued by employees
According to this report, American companies are much more likely than worldwide respondents to offer competitive compensation (62 percent vs. 39 percent globally). That’s a good thing because 84 percent of employees say it’s the most important benefit and incentive, followed by retirement plans (75 percent) and vacation time (62 percent).
Executives and employees agree that leadership is lacking
In a rare moment of agreement, American executives (51 percent) and employees (49 percent) see company growth roadblocked by a lack of leadership. Only a little over half of both executives and employee also say their company has plans for succession and continuity in key roles. Top-performing organizations view human resources as an important change agent in steering clear of the leadership cliff.
This research may be eye-opening for many companies forcing some to question assumptions and retool policies to align with the realities of the 2020 workforce.
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