A look at current trends and data

Citation

Nolan, S. (2011), "A look at current trends and data", Strategic HR Review, Vol. 10 No. 1. https://doi.org/10.1108/shr.2011.37210aae.003

A look at current trends and data

Article Type: Research and results From: Strategic HR Review, Volume 10, Issue 1

Story 1

UK lags behind USA on employee return on investment

US organizations have proved far more agile than those in the UK and the rest of Europe at maximising profit from their investment in people, according to PricewaterhouseCoopers (PwC) research. The Trends in Human Capital report includes data drawn from more than 10,000 companies in 40 countries to report the pre-tax profit produced for every pound, euro or dollar paid out in remuneration: the human capital return on investment (HC ROI). It shows that during the uninterrupted growth years of 2002 to 2006, HC ROI rose by a relatively modest 4.6 per cent in the UK and 8.3 per cent in Western Europe. Over the same period, HC ROI grew by 19.8 per cent in the USA.

In 2007, when the first signs of slowdown emerged in some economies and with markets suffering in 2008, the index fell in the UK by 2.8 per cent and 1.7 per cent for Western Europe, but held steady in the USA. Richard Phelps, human resource services partner at PwC, comments: “US firms have proved better at flexing employment costs to market conditions. Less prescriptive rules have allowed them to adjust staff numbers and salaries where necessary. The impressive return on investment level is starting to feed through to the dollar. In the UK and Western Europe the more regulated environment prevents such agility”.

Improving HC ROI

The report suggests numerous possible avenues for increasing HC ROI. These include investigating the utilisation of overtime, reviewing absenteeism, adjusting the balance of full-time, part-time staff and contract workers, assessing benefits structures and facilities, and overheads costs.

Keeping employees motivated and nurturing talent is an overriding theme of the report. It shows that organisations on average have at least one potential successor for each key position. However, when vacancies arise, only one in three are filled by the succession candidates. The report argues that companies need to strengthen talent management programs.

Retaining valued employees will become ever more challenging as emerging economies start to compete for talent. The report highlights that these economies are stepping up investment in R&D and often foster a more innovative culture.

For more information

Visit www.pwc.com/gx/en/hr-management-services/saratoga-global-human-capital-measurement-benchmarking-services.jhtml

Story 2

Employer brand management a key business tool

The Employer Brand Benchmark Survey shows that HR heads are increasing the number of specialist support managers leading employer brand projects within their departments as companies see employer brand management as a more critical business tool to stay ahead of the competition. The number of talent management and employer brand managers leading employer brand projects has increased nearly threefold from 10 per cent to 28 per cent in the last four years.

The survey, undertaken by employer brand consultancy People in Business, was conducted among 104 UK and international companies to evaluate current standards of employer brand practice. The survey results showed that the number of CEOs driving employer brand development has nearly tripled in the last four years, taking ownership away from corporate brand marketing and communications and resourcing teams. HR departments have maintained their leading role with the increasing support of specialists within their team, with 49 per cent of HR teams leading on employer brand projects.

The survey also highlighted the increasing trend to use employer brand thinking to shape overall HR strategy. Forty three per cent of the companies surveyed that had employer brand strategies said they had used them to shape their overall people management strategy. Of those who are currently developing their employer brand, 72 per cent said they will use it to review their people management processes and strategy, including performance management, learning and development and leadership and behaviours.

Continued investment

The importance of employer brand value to business is further supported by the fact that, despite the economic climate, organisations continue to make a significant investment in it. Survey respondents showed a spend of £5 to £6 per employee on research and development and first year creative development and communication.

When asked about benefits, respondents cited significant internal and external benefits of a successful employer brand strategy, including an improved ability to attract the right kind of talent (60 per cent), more consistent employee communication across the company (54 per cent), improved external employer brand reputation (54 per cent) and higher levels of employee engagement (43 per cent).

For more information

Visit www.pib.co.uk

Story 3

Critical decade ahead for companies with international workforces

A report from Brookfield Global Relocation Services concludes that the coming decade will be a critical one for companies with international workforces, as they grapple with several key issues, including the changing nature of temporary assignments, so-called “cross-border” commuters and emerging markets. Titled Employee Mobility in the New Decade, the research report is the result of a survey of senior mobility managers from multinational firms to determine their top concerns over the next five to ten years. The following top challenges were identified.

Linking talent management and employee mobility

Topping nearly every company’s list of challenges was linking talent management and employee mobility, in one form or another. The report points out that, as the nature of temporary assignments continues to evolve, it is causing companies and employees alike to take a measured look at the perceived benefits of the assignments. For their part, companies – faced with significant investments of money and time required for successful expatriate activities – are asking why, in fact, they are sending employees on international assignments and are increasingly attempting to quantify the returns on investment. Their employees, meanwhile, often find themselves questioning the personal and professional value of an overseas assignment after the fact, since it so often seems to have little or no bearing on their ability to advance within their organisation.

Cross-border commuters

North America, Europe and Asia have had so-called cross-border commuters for years – employees who regularly move back and forth between countries because it is geographically expedient to do so. In the last ten years or so, commuter assignments as an alternative to short-term (and even long-term) assignments have begun to take a larger role, primarily in Europe. In the next decade, the report concludes, more companies will see cross-border commuter assignments as a viable component of their mobility program. Companies interviewed acknowledge that there will be a significant focus on this assignment type over the next decade.

Emerging markets

Perhaps even more so than talent management and commuter assignments, the arena of emerging markets is set to expand significantly in the coming decade. The term “emerging market” has traditionally referred to the new destinations where companies are transferring their employees. Top destinations vary by industry, company business objectives and global reach. Brookfield GRS’s 2010 Global Relocation Trends survey notes that emerging locations run the spectrum of countries – from those that are long-time assignment destinations to those that are just this year appearing as locations for expatriate assignments. The latter category includes Saudi Arabia, Qatar, Hungary and Sweden, among others.

For more information

The report is a supplement to the 2010 Global Relocation Trends Survey report. To obtain a complimentary copy, go to www.brookfieldgrs.com/insights_ideas/trends.asp

Story 4

Talent management – the employee’s perspective

Research from the Chartered Institute of Personnel and Development (CIPD), The Talent Perspective: What Does It Feel Like To Be Talent Managed?, examines the issue of talent management from the employee perspective, helping organisations understand how to best focus talent investment and resources.

The study, undertaken by Capgemini Consulting, comprised a survey of 300 respondents and interviews with senior leaders in a talent program/pool within each organization, as well as those not selected to go on these programs. Top line findings include:

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  The vast majority (81 per cent) of respondents said talent management programs make them feel more engaged at work.

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  The top reason for wanting to be a participant in the programs is the belief that the development activities offered help people in the future (84 per cent). Fifty-two per cent also hoped the program would help them progress up the company at a faster pace.

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  Respondents were split 50:50 about the main objectives of programs: half believe it solely exists to help them perform better in their current job and the other half thought it was more about preparing them for a future role.

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  Most senior managers point to the benefits of the program in increasing their networks (78 per cent), developing new skills (72 per cent) and learning from a challenging experience (62 per cent).

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  There was very little difference between participants and non-participants regarding level of pride in their organisation and overall happiness with the organisation.

Sara Nolan

For more information

The report can be downloaded at www.cipd.co.uk/subjects/recruitmen/general/_talent_perspective