RPO & StaffingTalent Acquisition

The Post-Recession Leader Gap

A new poll by Aon Hewitt reveals significant disconnects in the workplace.
 

By The Editors
 
 
The 2011 Talent Survey released in May by Aon Hewitt, the global human resource consulting and outsourcing solutions business of Aon Corporation, finds a significant capability gap in leaders, as most organizations focus on growth in today’s post-recession environment.
 
 
The firm polled 1,328 employers nationwide and found that leaders should play a vital role in meeting business goals (56 percent), meeting profitability targets (56 percent), delivering service (56 percent) and retaining talent (44 percent). However, only 12 percent of respondents say their leaders are extremely effective at meeting business goals. What’s more, just 14 percent believe their leaders are extremely effective at meeting profitability targets, 17 percent say the same holds true for delivering service, and 7 percent believe their leaders are extremely effective at retaining talent.
 
 
According to Aon Hewitt, leaders must be more creative in the post-recession environment. Other key capabilities include:
• Focus on the most valuable talent and pay for performance;
• Demonstrate speed and agility;
• Develop middle management;
• Increase employee engagement; and
• Develop leadership resiliency.
 
 
The survey also revealed that 45 percent of respondents are planning to hire more employees in 2011 than they did in 2010, and only 16 percent expect to hire fewer employees this year than they did last year. However, just 28 percent of organizations believe they are very or extremely effective at hiring high-quality employees. Approximately half of these employers (51 percent) say they are effective at securing quality hires and 21 percent think they are only somewhat effective or not at all effective at hiring quality workers. Part of the problem, according to Aon Hewitt, is that many HR departments lack recruiting resources to process and screen the large number of candidates applying for positions.
 
 
Retention and talent development were among the other areas with key findings:
• Employers’ top three concerns are talent retention (31 percent),
business strategy execution (18 percent) and employee engagement (16 percent).
• Sixty-one percent of employers will increase their focus on talent
development, 40 percent anticipate a greater focus on hiring, and nearly one-third anticipate increased turnover in 2011.
• Seventy-eight percent of employers agree that total rewards statements, which provide an overall look at compensation and benefits in a user-friendly manner, are effective at demonstrating value to employees. In addition, total rewards statements are reported to improve retention (69 percent) and improve employee engagement (63 percent).
 

The following pages include more highlights from the survey. To see the entire report, go to http://www.aon.com/talentsurvey.
 
 
Summary of Findings
As leaders transition toward growth, there is an increased focus on human capital: identifying and actively engaging the most critical employees, rapidly aligning the workforce around change, and thinking creatively about how to ensure that cost is managed to get the most out of every HR dollar spent.
 
 
In this report, Aon Hewitt’s 2011 Talent Survey, we examine survey responses in four areas: leadership, engagement, talent acquisition, and “next-generation” communication.
 
 
We report on:
• Key Findings—as identified by our respondents
• Commentary and Calls to Action—steps to position your
organization for success
• Survey Data—the complete findings for your reference
 
 

Engagement Drives Passion and Productivity
The economic challenges of the past three years have significantly impacted organizations’ ability to deliver on their employer-employee contract. Employee engagement is at an all-time low. And yet, for the past two years, retention levels have been at an all-time high, driven in large part by a close to 10% U.S. unemployment rate. With fewer companies hiring, consolidation of businesses and processes, off-shoring, outsourcing, and fewer mature employees leaving the workforce, many employees have become reluctant to stray from their current employer.
 
 
As the economy shows signs of recovery, employees will begin to consider greener pastures.” What happens if there’s a mass exodus of key talent just as an organization is moving toward recovery? Organizational leaders are concerned and engagement strategies are a reported priority.
 
 
Key Findings:
• Engagement of critical talent is a top concern.
• Engagement levels are low and there is a lack of confidence
that leaders can retain their critical talent.
• Total rewards plays a significant role in engaging a workforce.
• Middle management will be critical to business strategy
execution and engaging the workforce.
 
 

The New Normal Demands New Leadership

Talented, effective, creative, and respected leaders have a dramatic impact on employee engagement, innovation, and profitability. In an economic environment where change is the norm, leaders are finding themselves ill-equipped to adapt and become a catalyst for change. In this year’s survey, one striking finding is the perceived lack of leaders’ effectiveness in delivering on the success factors that are critically important.
 
 
Key Findings:
• There is a perceived gap in leadership effectiveness.
• There is a general lack of confidence in leaders’ ability to drive change.
 
 
Focus on Quality New Employees over Quantity
With job cuts and unemployment stabilizing, and business recovery on the horizon, HR executives can look toward strategically growing their workforces. Forty-five percent of respondents anticipate slightly to significantly greater hiring volumes than in the past year. Only 16% of the responding organizations anticipate slightly or significantly less hiring this year compared to last. Respondents also report an increased focus on the quality of candidates, citing a priority for more productive employees. With those directives, the shrunken talent acquisition function must be bolstered with the required employees to match business demand.
 
 
Key Findings:
• Top hiring priority is quality, not quantity.
• The talent acquisition function is a strong candidate for
process improvement.
• Social media is an emerging, but not yet prevalent,
sourcing channel.
 
 
Communication in the New Age of Employee Engagement, Recruitment, Productivity
Most respondents agree that their organizations value the role that communication plays in engagement and retention; they also agree that they are not very good at it. Most acknowledge that their communications could be more effective at impacting employee behavior. They also report a wait-and-see approach to social media tools, with only 16% of organizations investing in this area.
 
 
Key Findings:
• Traditional employee communication tools are still prevalent.
• Change communication is “easier said than done.”
• Social media networks are not prevalent in HR (yet).
 
 
Engagement Findings:
Engagement Drives Passion and Productivity

The economic challenges of the past three years have significantly impacted organizations’ ability to deliver on their employer-employee contract. Employee engagement is at an all-time low. And yet, retention levels have been at an all-time high for the past two years, driven in large part by a close to 10% U.S. unemployment rate. With fewer companies hiring, consolidation, off-shoring, outsourcing, and fewer employees retiring, many have become reluctant to stray from their current employer.
 
 

Key Findings:
As the economy shows signs of recovery, employees may begin to consider greener pastures.” What happens if there’s a mass exodus of key talent just as an organization is moving toward recovery?
 
 
The Aon Hewitt 2011 Talent Survey shows that:
• Engagement of critical talent is a top concern.
• Engagement levels are low and there is a lack of confidence
that leaders can retain their critical talent.
• Total rewards plays a significant role in engaging a workforce.
• Middle management will be critical to business strategy
execution and engaging the workforce.
 
 
Engagement of critical talent is a top concern
Retaining and engaging the workforce is a business-critical focus coming out of the global recession, with more than half of the leaders rating them as two of their top three concerns:

• Talent retention (31%)
• Business strategy execution (18%)
• Engagement of employees (16%)
 
 
When asked to anticipate the HR actions mostly likely to occur in 2011, we again see a concern about acquiring, keeping, and developing talent:

• 61% anticipate an increased focus on talent development
• Nearly 40% anticipate an increased focus on hiring
• Nearly one-third anticipate increased turnover
 
 
The respondents of Aon Hewitt’s 2010 Engagement 2.0 Study echo this concern and provide clear evidence that the actions taken during the global recession have impacted employee engagement. There’s a chink in the foundation of the employer-employee relationship:

• Over 50% are passive or actively disengaged
• 42% are not energized by their work
• Only 43% trust in senior leadership
• 40% are generally stressed to the point of feeling
burned out
• 64% are physically exhausted when they get home
from work
 
 
Respondents generally think that leaders play a significant role in the attraction and retention of key talent, but many agree that they may not be able to follow through:

• 73% agree that senior leaders play a very or extremely
important role in attracting talent
• 83% agree that senior leaders play a very or extremely
important role in retaining talent
• Only 33% rate their leadership as very or extremely
effective in retaining the talent they need for the future
• Less than one-third feel that leaders are very effective in
hiring more productive employees
 
 
Leadership Findings:
The New Normal Demands New Leadership

Talented, effective, and respected leaders have a dramatic impact on employee engagement, innovation, and profitability. They also drive organizational change from the top, working through middle management to translate strategy into tactical plans.
 
 
Key Findings:
• There is a perceived gap in leadership effectiveness.
• There is a general lack of confidence in leaders’ ability to drive change.
 
 
There is a perceived gap in leadership effectiveness
When asked about the importance of leadership credibility, almost unanimously (97%) respondents agree that leadership credibility is important, very important or extremely important to the business strategy.
 
 
Respondents agree that leadership is extremely important for:

• Meeting business goals (56%)
• Meeting profitability targets (56%)
• Delivering service (56%)
• Retaining talent (44%)
 
 
Yet, less than 20% of respondents rank leadership as extremely effective in the same categories:

• Meeting business goals (12%)
• Meeting profitability targets (14%)
• Delivering service (17%)
• Retaining talent (7%)
 

Tags: RPO & Staffing, Talent Acquisition

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