Business confidence is improving, and many organizations are moving from a cost-control focus to a growth standpoint, according to Accenture’s annual High Performance Work Force study. Some 42 percent of respondents, made up of nearly 250 senior executives from companies across the United States, Europe and Australia, feel that their companies’ focus is shifting from cost control to growth in the next year. Unfortunately, this shifting focus is going to bring about new challenges for learning and HR executives, as organizations increasingly compete for skilled talent and get their workforces up to speed.
More than 40 percent of respondents expect the war for talent to have an impact on their companies in the next 12 months, and nearly one-quarter said the war for talent is already affecting their organizations. The combined pressures of a new focus on growth and increasing competition for skilled workers means organizations need the skills and capabilities needed to excel and compete in their markets, yet most respondents indicate that they do not have these necessary skills and abilities.
“We don’t think many organizations are well positioned to compete as the economy begins to improve,” said Jeanne C. Meister, vice president of market development for Accenture Learning and monthly contributor to CLO Magazine. “So many of these organizations have been focused on cost control, and now as the economy picks up, their focus is on growth and the war for talent is going to escalate. That has implications for HR and training.”
The study was intended to identify the trends and other factors that are now affecting business and workforce performance. NOP World, on behalf of Accenture, conducted e-mail and telephone interviews with 244 business executives from 17 industry segments, including financial services, manufacturing and government. “It’s not just chief learning officers,” Meister said. “We had a sizable number of chief operating officers. To underscore the demographics, 40 percent were C-level executives, a combination of COOs and CxOs (including CIOs and CFOs), and 40 percent were the EVPs of HR. The remainder was heads of corporate training or learning.”
The study revealed distressing trends in respondents’ workforces. For example, only 20 percent of the respondents said that three-quarters or more of their employees understand the company’s strategic goals, and only 22 percent said at least three-quarters of their employees understand how their jobs contribute to the company’s ability to achieve its strategic goals.
However, Meister noted that there was some improvement over last year. “We asked this group how they felt their employees understood that their jobs contribute to the bigger picture, and there was a slight improvement there,” she explained. In 2003, only 17 percent of respondents said their employees knew or understood the strategic objectives of the company. That figure rose to 22 percent in 2004. Meister added, “My feeling is that over the year, companies have put much greater emphasis on employee orientation as a strategic process, rather than an HR paper-shuffling program. Many of these newer programs are delivered through e-learning or online. As many of these CLOs have made new-hire orientation part of their formal training objectives, I think we’re seeing a slight increase in the number of C-level executives who believe that their workforces understand the bigger picture.”
Still, only 17 percent of respondents said the overall skill level of their workforce as a whole could be described as “industry leading.” Nearly two-thirds said that developing effective leadership as a very important organizational capability, and nearly half said creating a culture that adapts effectively to change was an important organizational capability. In both areas, only 8 percent said their organizations are performing well.
This feeds into other challenges to the HR and training functions revealed by the study. Respondents identified the three most important HR initiatives in their organizations as improving worker productivity, improving the adaptability of the business to new opportunities and facilitating organizational change. Yet, no more than 12 percent were satisfied with their progress on these three mission-critical initiatives. The most important training initiatives for respondents included aligning learning strategy to business goals, ensuring learning meets workforce needs and boosting productivity and agility. But only 11 percent, 16 percent and 9 percent, respectively, said they were satisfied with progress in these areas. Even more disturbing, just 16 percent of respondents said they were very satisfied with the overall performance of the training function.
Meister said that aligning learning with strategic goals is a continuing challenge for the CLO community. While many organizations have governing bodies to help link learning to strategic business goals, learning executives can do more to ensure it’s done successfully. “Linkage is more than having an advisory board,” Meister said. “It’s really about having a whole process to make sure that there’s a budgeting process lined up and an audit of learning programs to make sure they’re on target and refreshed.”
She added, “In 2004, only 17 percent of respondents described the overall skill of their workforce as industry-leading. I think that’s a real wake-up call for this community. We have to focus on hard skills as well as leadership development and increasing the bench strength of high-performance managers.”
There is a disconnect, Meister explained, between the way C-level executives view the world and the HR and CLO point of view. A very small percentage of C-level executives said they were very satisfied that their training organizations provide timely, relevant and cost-effective services. “And 18 percent said they receive any type of weekly or monthly evaluation on the effectiveness of learning programs,” Meister said. “The CLOs and HR folks don’t see the world through that lens. The HR department believes they’re doing a better job than the C-level executives think they are.”
A communications strategy is the best solution for bringing these disconnected world views into harmony, Meister said. “The learning professionals have to do a much better job communicating their value back to the C-level executives,” she explained. “They don’t feel some of these programs are timely, or cost-effective, or relevant. They want to get updates from HR just like they get from their other business-unit heads. The call to action is really to have a communications plan as part of your overall strategy. You may in fact be providing timely, cost-effective and relevant programs, but it’s not being communicated to your C-level audience. How many CLOs have a communication plan? How many have linkage into the chief marketing officer or the public relations department to showcase what they’re doing and how it’s relevant to the business?”
To learn more about Accenture’s 2004 High Performance Workforce Study, visit http://www.accenture.com.