Thursday 14 February 2013

Career Planning & Development: Facts, Figures & Findings

Part 2 of 11 of the CompetencyCoreTM Guide to Career Planning & Development 

This is the second in an eleven part series that looks at:
  1. Making the Case for Competency-based Career Planning & Development
  2. Facts, Figures & Findings
  3. Career Planning & Development Defined
  4. Key Definitions of Career Planning & Development
  5. Framework for Competency-based Career Planning & Development
  6. Best Practice Tools & Processes
  7. Implementing Career Planning & Development – Part 1
  8. Implementing Career Planning & Development – Part 2
  9. Implementing Career Planning & Development – Part 3
  10. Key Considerations for Software, Part 1
  11. Key Considerations for Software, Part 2
Scarcity of Talent – A Key and Consistent Concern
There is resounding world-wide concern being expressed by CEOs, CFOs and HR leaders about the scarcity of qualified talent to fill vital roles to position their organizations to achieve their strategic goals.  In a 2012 survey of global leaders (Lloyd’s Risk Index) conducted by The Economist and Lloyd’s  of London, “talent and skills shortages” ranked as the second most pressing concern for companies, trailing “loss of customers” by a small margin.  In a survey of 1,605 HR Professionals around the world, Towers Watson found that 72 percent of the respondents reported difficulty in attracting and retaining the high-potential and critical-skill employees necessary to increase their global competitiveness.  In the same study, 61 percent of the US based HR Professionals reported that they were having difficulty attracting employees with the critical skills needed, increasing for the third consecutive year.  Similarly, a shortage of key skills in the external market was the number one pressure identified in Aberdeen’s September 2012, Talent Acquisition study (cited by 55% of respondents).

This begs the question as to why companies are so worried about the scarcity of talent when the talent pool in the market is large.  The answer is that while the overall unemployment rate may be high in many parts of the world, the people with the vital skills and capabilities needed are already employed.

competency-based career planning and development
Challenges to be addressed
In a 2012 study of 410 readers responding to an online survey conducted by the Human Resource Executive magazine (September 2012), HR leaders reported that their biggest challenges were:
  • Ensuring employees remain engaged and productive (34%)
  • Retaining key talent as the economy recovers (33%), with 91% reporting that they are moderately to extremely worried about losing their top talent when the recovery takes hold
  • Developing leaders (32%, up from 28% in the previous year)
  • Aligning people strategies with business strategies (30%)
Commentary on the results noted that in order to remain competitive in a changing market, HR leaders understand that they need to protect their knowledge base – in other words, the valuable talent that resides within the organization.  Strategies organizations are using to boost employee retention include:
  • Increasing employee communication (60%)
  • Providing employees with additional training and development (57%), and
  • Assisting employees in their career development (46%)

The same study notes that these challenges will be compounded in the near future, with more respondents reporting that they foresee baby boomers retiring in greater numbers (43% versus 36% last year).  Thus, preparing for the brain drain by developing Gen X and millennial workers should be forefront in HR leaders’ minds, at least in the Western and European parts of the world where there is a much older age demographic in the workforce.

The results are similar in a recent survey conducted by Ernst & Young in which just 20% of the 810 executives polled believe their company manages talent effectively across all markets, with just 18% indicating that they achieve the right balance of local talent and expatriate managers in international markets.   Korn/Ferry (2012) found that three-quarters of more than 400 executives at various levels pointed to budget, staff and skills shortages as hindrances to effectively developing the talent they do have, with only 29% reporting that they have technology needed to integrate their talent data.

Measuring & Managing the Impact
The impact on the bottom-line of not having good talent management strategies in place is underscored in a recent study conducted by the American Institute of CPAs (AICPA) and Charted Institute of Management Accountants entitled Talent Pipeline Draining Growth: Connecting Human Capital to the Growth Agenda.  A noteworthy 43% of the CEOs, CFOs and HR directors surveyed said their companies have missed financial goals in the past 18 months because of inadequacies in human capital management.  Almost the same number (40%) indicated that shortcomings such as insufficient systems, processes or management information have hindered their ability to innovate.  In a commentary on the study (See Human Resource Executive, November 2012), Arleen Thomas, AICPA senior vice-president for management accounting, noted that, “Ideas are the currency of the knowledge economy, so human capital must be managed as rigorously as financial capital.”  “It is clear from our research that many companies are falling short of their potential because they lack thorough, relevant information about their people to support effective strategy, hiring and training decisions.”

HR leaders, therefore, must understand what is important in their business and translate this into talent metrics that are aligned with the business requirements, including such things as ability to fill key positions, ability for the organization to resource growth initiatives, ability to address critical skills gaps and the strength of succession management within the organization.  While historical data are helpful, to be of true value the analytics gathered should be anticipatory and predictive nature, so that key decisions can be made to address talent requirements before they become a problem.  Beyond this, HR Analytics should demonstrate the return on investment for the talent management programs, processes, systems and tools that have been, or will be implemented.

Need for Competency-based Career Planning & Development
All of this underscores the need for competency-based career planning and development programs supported by technology and tools that enable organizations to more effectively manage their human capital, as well as make evidence-based decisions that enhance and protect the organization’s most important asset – their valued talent.

The rest of this blog series focuses on how having a good Competency Framework supported by enabling software and predictive tools form the foundational building blocks for high impact Career Development.

The next blog in this series reviews the basics of Competency-based Career Planning & Development and some of the key foundational pieces needed for successful implementation. Sign up to our blog’s mailing list through the form on the right-hand side to receive the rest of the series in your inbox.

HRSG is a leader in Competency-based Career Planning and Development solutions. Contact us today to find out how we can help you.

Want to learn more? Competency-based Talent Management, or CbTM, is the best practice for defining job requirements and building effective HR programs to develop skilled, engaged and productive workforces. Download this Best Practice Guide to learn how competencies can increase workforce effectiveness and improve business practices.


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