A vast majority of companies worldwide, including a growing number of U.S. companies, continues to struggle with attracting and retaining the high-potential and critical-skill employees necessary to increase their global competitiveness, according to a new survey conducted by global professional services company Towers Watson and WorldatWork, an international association of human resource professionals. The survey also found that employees are experiencing high levels of stress, a trend that many employers and employees expect to continue for the next three years.
The Towers Watson Global Talent Management and Rewards Survey, a study of 1,605 companies globally, including 278 from the United States, found that nearly three-fourths of respondents (72%) cite problems attracting critical-skill employees, while roughly six in 10 employers are having difficulty attracting high-potential and top-performing workers (60% and 59%, respectively). In the United States, the number of employers having difficulty attracting employees with critical skills increased for the third consecutive year, to 61%, nearly the same percentage as in 2005 and 2006, when economic growth was stronger and unemployment rates were significantly lower. More than half of all respondents also reported difficulty retaining critical-skill, high-potential and top-performing employees.
“The demand for the best talent is as strong as ever, especially given a challenging economy and heightened global competition. But many employers are not taking advantage of opportunities to attract, retain and engage high-value employees by offering a work environment and the total rewards programs that are most important to them,” said Laura Sejen, global leader of Rewards at Towers Watson. “In fact, there appears to be a mismatch between what employers are offering and what employees are looking for. Employees, including top talent, are more focused on competitive base pay and job security. Employers, on the other hand, are emphasizing other items, such as challenging work, and their mission, vision and values.”
The study also found that employees continue to experience high levels of stress at work. Close to half (48%) of respondents indicate that employees often experience excessive pressure in their job, and more than half (53%) report their employees worked more hours than normal during the past three years. Nearly as many (43%) expect to maintain that pace for the next three years. In the United States, stress levels are even higher, with 61% saying that employees at their organization often experience excessive pressure on the job. Nearly three in four (71%) U. S. participants say employees are working more hours, while almost two-thirds (63%) expect that trend to continue over the next three years.
U.S. Employers Rate Performance Management Programs Lower, Leadership Programs Higher
U.S. companies see themselves as less effective overall than their global counterparts in their assessment of their performance management process in several areas. In a frank acknowledgement of the challenges in getting performance management right, only half (51%) of U.S. respondents believe their performance management process effectively links salary increases to individual performance results, compared to 62% of global companies. Even fewer — 44% of U.S. employers — believe they effectively link bonus payouts to individual performance, versus 65% of companies globally. When asked to rate the effectiveness of managers in the performance management process, U.S. employers were even more negative. U.S. companies saw their managers as significantly less effective at setting individual performance goals (37% vs. 52%), giving employees regular coaching and feedback (24% vs. 39%) and conducting career development discussions (19% vs. 33%).
However, leadership management programs at U.S. employers received high marks compared with the global results. Virtually all U.S. respondents (95%) believe their leadership development programs support their organization’s culture, compared to 84% globally. Two-thirds of U.S. respondents said they have formal leadership development programs.
“As U.S. employers seek to grow profitably during a period of economic volatility, their focus needs to be on crafting an employee value proposition that helps to attract and retain talented and critical-skill employees while also engaging the broader workforce,” said Laurie Bienstock, North America Rewards leader at Towers Watson. “Plus, organizations need to position themselves for future success over the next five to 10 years. Effective leadership development, performance management and succession-planning programs will be keys to getting it right. U.S. employers give themselves lower marks compared to the global norms and need to take action to strengthen the process and outcomes.”
“There are many smart companies competing and winning in the talent market right now,” said Ryan Johnson, CCP, vice president of Research and Publishing for WorldatWork. “They realize that engagement is a two-way street — they actively listen to employees and then tailor total rewards packages that ensure the work is invigorating, satisfying and truly rewarding in more ways than just pay.”
About the Survey
The Towers Watson Global Talent Management and Rewards Survey was conducted in late April through early June of 2012, and includes responses from 1,605 companies worldwide, including 278 companies from the United States. The participants represent a wide range of industries and come from a broad cross section geographically.
About Towers Watson
Towers Watson (NYSE, NASDAQ: TW) is a leading global professional services company that helps organizations improve performance through effective people, risk and financial management. The company offers solutions in the areas of benefits, talent management, rewards, and risk and capital management. Towers Watson has 14,000 associates around the world and is located on the web at towerswatson.com.
WorldatWork is a global human resource association focused on compensation, benefits, work/life and integrated total rewards to attract, motivate and retain a talented workforce. Founded in 1955, WorldatWork provides a network of more than 30,000 members in 100 countries with training, certification, research, conferences and community. It has offices in Scottsdale, Arizona, and Washington, D.C.