Category Archives: Bersin

Longing for Leadership

Data Point Tuesday
Last week I discussed one of the trends (reskilling HR teams) called out in Deloitte’s annual Global Human Capital Trends Report for 2014. Recently released and influenced by the work of Bersin by Deloitte, the report examines 12 trends that represent the way employees today are driving their organizations to innovate and transform human capital practices. The report, as usual, is full of interesting data on human capital management trends and observations about the impact of those trends. It is definitely worth a read.

This week I’d like to look at another top talent issue facing organizations around the world as identified by Deloitte: leadership. Leadership is cited as the number one talent issue organizations today face, with 86% of respondents surveyed citing leadership as “urgent” or “important”. This is compared with a meager 13% of the same respondents that claim they are doing an excellent job developing leaders at all levels. So of all the trends discussed in Deloitte’s survey, this marks the largest “readiness gap”. Developing the next generation of leaders is urgent, yet very few report meeting the challenge.

When it comes to organizational strategies, most are requiring some significant tweaks due to the increasingly global, tech-savvy, interconnected, and diverse people that are the 21st century workforce, and leadership development is not exempt from this. Organizations are facing challenges such as developing multiple generations of leaders – not just Millennials, developing leaders with high flexibility and global fluency, and ensuring that leaders have the skills to understand and adapt to rapidly changing technologies. Essentially, leadership is taking on a much broader meaning than it did previously, where it may have described simply developing the next CEO or company C-Suite executive.

Looking at responses from executives who participated in Deloitte’s survey paints a clear picture of perceived leadership gaps. 66% reported believing that they are “weak” in their ability to develop Millennial leaders and just 5% rated themselves as “excellent”. Additionally, 51% of executives have little confidence in their ability to maintain clear, consistent, succession programs and just 8% feel they have “excellent” programs to build global skills.

Global Human Capital Trends Report for 2014It becomes clear then that as the global recovery continues to strengthen and organizations start to execute on growth strategies, that these gaps can only be filled by intentional focus and commitment to leadership development and training programs at all levels. Deloitte’s report suggests that companies should start by engaging their own top executives to develop leadership strategies and actively participate in them; refresh previous leadership strategies to link with evolving business goals; and implement a unique leadership program. They recommend that organizations focus on three aspects for developing leaders: developing at all levels, developing global leaders locally, and developing a succession mindset.

If companies want to grow in a global world, they need to grow global leaders. And Deloitte’s research shows clearly that this doesn’t happen accidentally.

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Business Leaders Don’t Think HR is Up to Snuff

Data Point Tuesday

Deloitte’s annual Global Human Capital Trends Report for 2014 is out. Influenced by the work of Bersin by Deloitte, it examines 12 trends that represent the way employees today are driving their organizations to innovate and transform human capital practices. The report, “Global Human Capital Trends 2014: Engaging the 21st Century Worker” surveyed 2,532 business and HR leaders in 94 countries around the world over several months, also drawing upon past research on global business challenges in HR, leadership, and talent management. The result of the report is a wealth of data on human capital strategies in the 21st century workplace that can be examined for perspective and insight into our own organizations and strategies. The year’s 12 critical human capital trends were categorized into three broad categories. “Transform and Reinvent” examines the need to reskill HR teams, capitalize on cloud based HR tech, implement HR analytics as a means to achieving business goals, and create a global HR platform that is robust and flexible enough to adapt to local needs.

So. Reskilling HR teams. Really? Why is this a critical trend? According to the report, less than 8% of HR leaders have confidence that their teams have the skills needed to meet the challenge of today’s global environment and consistently deliver innovative programs that drive business impact. Business leaders unfortunately corroborate this statistic, with 42% believing that their HR teams are “underperforming” or “just getting by”. This is compared to the 27% of business professionals who rate HR as excellent or good when assessing HR and talent programs. At a time when CEO’s are reporting human capital strategies as one of the top priorities for growth, it’s important that HR departments have the skills necessary to acquire, develop, and retain top talent as well as engage employees at all levels. And with a workforce that is increasingly global, tech-savvy, highly connected and demanding, HR departments face the challenge of doing all of this with increasingly creative strategies that meet the needs of this 21st century workforce. While such skills are highly necessary, the statistics indicate that HR departments are not as equipped with them as organizations would like.

Of further interest, Deloitte’s report discusses how many organizations are reporting seeing a “disruption” of the CHRO role in their organizations. This disruption consists of a refocusing HR as a “business contribution” function with deeper skills in data/analytics as well as MBA-level business capabilities. When it comes to organizations’ readiness to respond to the 12 global human capital trends there is a discrepancy between business professionals’ and HR professionals’ perceptions. For the five most urgent trends identified (leadership, reskilling HR, global HR and talent management, retention and engagement, and talent and HR analytics) business executives report that their companies are less ready to address these issues than HR leaders report. For the issue of reskilling HR, 48% of business respondents reported that HR is “not ready,” compared to 36% of HR respondents.

Deloitte’s report links this perceived lack of HR skills to some basic attributes such as the fact that many organizations do not invest in developing the business skills of their HR teams and to the fact that more than 70 percent of all HR professionals enter the field without a specific degree or certification in business or human resources. Of respondents surveyed from Deloitte’s report, 43% stated that their companies are “weak” when it comes to providing HR with appropriate training and experiences.

While disappointing, data like this are great because they clearly identify perceived areas of weakness and allow organizations to challenge their own programs and strategies for HR, as well as draw conclusions more specific to their organization and strategies for transforming, reinventing, and reskilling the HR team.

The bad news? Business leaders think HR isn’t up to the people challenges of the 21st century. The good news? Now we know and can get to work!

Deloitte Human Capital Trends 2014

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Good News From Your L&D Department!

Data Point Tuesday

A 2014 report from Bersin by Deloitte, “The Corporate Learning Factbook 2014: Benchmarks, Trends, and Analysis of the U.S. Training Market” relays some positive information regarding investment in employee development. Businesses increased training budgets by an average of 15% last year, reflecting the highest growth rate in this area in the last seven years, and also likely that as the economy continues to mend, organizations are able to reinvest in areas that experienced significant cost cutting during the downturn. At a time when there is discussion of a lack of specified skills in the talent pool, this would appear to be welcome news, particularly because this investment applies not only to short term training. For mature organizations this training budget involves identifying capability gaps now and into the future and combats them by developing a “supply chain” of skills to fill gaps in the long term.Bersin by Deloitte

How much are organizations spending on these increased L&D budgets? On average in 2013, businesses across the United States spent $1,169 per learner. This amount varies by company size and industry, with tech firms leading the pack in terms of amount invested per learner (spending an average of $1,847). As far as which areas of training and development organizations are focusing their increased budgets on, leadership development takes the largest share, with 35 cents on average of each training dollar going to leadership development at all levels. This certainly suggests this is an important strategic investment for companies in the coming year. As the study reports, “more than 60% of all companies cite leadership gaps as their top business challenge”.

Spending on L&D initiatives is likely to be higher for organizations with a more “mature” L&D function. Those ranked at either 3 or 4 on Bersin by Deloitte’s maturity model spent an average of 37% more on training and development than the least mature organizations. Here at Great Place to Work, we can certainly attest to the fact that organizations on the FORTUNE 100 Best Companies to Work For list invest significantly in training and development programs. In 2013, companies on the list offered 66.5 hours of training annually for salaried employees and 53 hours of training for hourly employees, with close to 70% of those hours devoted to employees’ current roles and nearly 40% focused on growth and development. Though they display impressive training and development programs, many of these Best Companies cited employee development as remaining an area of focus, with 3 key areas highlighted: Leadership Development (reflecting the data from Bersin by Deloitte), Career Road-mapping, and Diversity Development.

This investment trend is good news for employers and employees alike. Employers will have greater inventories of skills in-house and may not have to turn to the marketplace as often – or expensively – in coming years to support basic business operations. Additionally, by providing skills development to younger workers who are arriving with significant skills deficits, employers may be staunching the early talent drain from their organizations. And employees of all ages continue to need growing support to expand their knowledge and skill bases as the world of work continues to evolve and certain skills het harder and harder to find.

But the opportunity to develop management and leadership skills may be the most valuable investment for both sides of the employee-management relationship. It prepares the next generation of organizational leaders, it communicates a commitment to employees’ futures and it strengthens the ties between these two sides of the employment equation. That high performing employers are spending 40% of corporate learning dollars on their future leadership talent would be a compelling component of any employer’s employee value proposition.

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