Study Reveals Talent Squeeze is Globalizing; Shortage, Motivation and Retention of Talent Emerge as Top Challenges
Despite stubbornly high unemployment, with recent reports of job gains showing a modest decline in the U.S. unemployment rate, human resource (HR) professionals around the globe have continued concerns about attracting and retaining top talent. This talent paradox, combined with dynamics of four distinct generations in the global workforce, points to the need for more effective and adaptable talent strategies and rewards programs.
The 2013 "Top Five Global Employer Rewards Priorities Survey" from Deloitte, the International Society of Certified Employee Benefit Specialists (ISCEBS) and the International Foundation of Employee Benefit Plans reveals that HR leaders across the globe are acutely focused on talent as the top challenge and priority over the next three years. Approximately one in four respondents from all geographies surveyed, including the Americas (24 percent), EMEA (28 percent) and Asia-Pacific (24 percent) cited finding, motivating and keeping talent as their top priority.
Top Five Priorities
"The Top Five Global Employer Rewards Priorities Survey" series is an annual barometer of talent and rewards management challenges. Conducted globally for the first time this year, 27 different countries ranked the top five priorities for 2013:
1. The ability of reward programs to attract, motivate and retain employees
2. Clear alignment of Total Rewards strategy with business strategy and brand
3. Motivating staff when pay increases are flat or non-existent
4. The cost of providing benefits to employees
5. Demonstrating appropriate return on investment for reward expenditures
6. The ability of reward programs to attract, motivate and retain employees
Retirement Security: A 21st Century Retention Strategy?
From a personal employee perspective, retirement continues to be top of mind. Two-thirds (66 percent) of U.S. respondents ranked their ability to afford retirement as their top concern. This issue is so deeply felt that more than one in three U.S. employees (34 percent) plan on delaying their retirement age. This is in contrast to other regions, including EMEA where a triple dip recession looms. There, 16 percent of employees say they plan on delaying retirement and similarly in Asia, 17 percent indicate plans to delay retirement as well.
Generational Considerations: Rewards Tailored to Career Stages
The report highlights the challenges of addressing the needs of a diverse range of generations. Workforces in China, the U.S. and most of Europe are aging, while others, such as those in India and Brazil, are seeing a high influx of young employees. These changes are putting a strain on companies and their leadership to identify and implement effective rewards programs as each generation is marked with distinct values and expectations. This is reinforced by the finding that only 61 percent of global respondents either somewhat agree or strongly agree that their organization’s leadership team understands the differing generational values in the workforce; more than one in four respondents (28 percent) indicate their organization does not have the correct Total Rewards strategy in place to recruit and retain the talent needed in their workforce.
IT employment set another all-time high in February with an increase of 16,500 jobs.
The number of IT jobs grew 0.38 percent sequentially last month to 4,371,200, according to TechServe Alliance, a collaboration of IT & Engineering Staffing and Solutions firms, clients, consultants and suppliers. With the upward revision in January’s numbers from 0.37 to 0.78 percent, IT employment has grown by over 4.57% since February 2012.
57% of Finance Executives say their Companies are ‘Fair’ or ‘Poor’ at Ensuring Big Data and Similar IT Projects Yield Expected Returns
At a time when Big Data and other cutting-edge information technology (IT) is being actively evaluated in boardrooms everywhere, 57% of senior finance executives at large and midsized North American companies say their companies are either “fair” or “poor” at ensuring that such “improve-the-business” IT projects are actually yielding expected financial returns. And almost none (3%) rate their companies as “excellent.” That’s according to a new survey of more than 150 senior finance executives by CFO Research in collaboration with AlixPartners, the global business-advisory firm.
The survey also finds that more than two-thirds of financial executives (66%) give their companies a “C” or “D” when it comes to measuring financial returns from discretionary IT projects, such as Big Data ones, designed to improve or add to a company’s business and profits. (Only 5% gave their companies an “A.”)
Meanwhile, at the other end of the IT spectrum, the survey reveals that “keep-it-running” IT costs – non-discretionary support and maintenance systems – are cannibalizing funds available for business-improving IT. A plurality of respondents (49%) estimates that, over the past two years, their company has maintained approximately a 70-30 ratio of keep-it-running to improve-the-business IT spending, and of that amount, a solid majority – 63% – believes that their company’s spending is weighted too heavily toward keep-it-running IT services, and that a greater share should be directed to improve-the-business IT projects.
The survey also shows that, despite massive IT investments in recent years, companies aren’t getting enough of the kind of information they need to successfully run and grow their businesses. In fact, no less than 71% of the executives polled say their companies should have access to more robust business information for the money spent on IT. In addition to desiring more robust information on product profitability (cited by 42%) and customer profitability (41%), there was also strong interest in having better access to information about customer acquisition (33%), revenue (32%), price elasticity (31%), customer attrition (29%) and promotions effectiveness (25%).
One big reason companies are over-spending on IT or spending on it in the wrong places, reports the survey, has to do with governance and discipline around IT programs. For example, 72% of respondents said that factors other than a carefully considered business case (e.g., internal politics, personal persistence/willingness to be a “squeaky wheel”) influence the priority and funding of “improve-the-business” IT projects much more often than they should. Meanwhile, when asked who in their company should have a greater voice in whether to fund such projects, 45% said sponsors from business or functional units and 28% said the finance function. By contrast, when asked who today is primarily responsible for deciding funding, just 14% said business sponsors and only 7% said the finance function.
By the same token, when it comes to “keep-it-running” IT spending, 62% of finance executives say that kind of spending is currently either kept at the corporate level (within the IT department) or only partially charged to business units, neither of which is necessarily optimal for controlling such costs. Moreover, more than two-thirds of those surveyed (66%) say that keep-it-running and improve-the-business IT spending is budgeted together at their companies.
Fourteen percent of U.S. chief information officers (CIOs) surveyed recently plan to expand their IT teams in the second quarter of 2013, according to the just-released Robert Half Technology IT Hiring Forecast and Local Trend Report . In addition, 61 percent of CIOs said they will not be adding positions but will fill IT positions that open in the next three months. Twenty-two percent will not be hiring, even to fill an open position, and 2 percent expect to reduce their IT staffing levels.
Q2 IT Hiring Forecast
CIOs adding more staff to IT departments - 14%
CIOs planning to hire only for open IT roles - 61%
CIOs planning to put IT hiring plans on hold - 22%
CIOs planning to reduce their IT staff - 2%
The IT Hiring Forecast and Local Trend Report survey was developed by Robert Half Technology, a provider of information technology professionals on a project and full-time basis, and conducted by an independent research firm. The survey is based on more than 2,300 telephone interviews with CIOs from a random sample of U.S. companies in 23 major metro areas with 100 or more employees. Robert Half Technology is a leading provider of IT professionals on a project and full-time basis and has been tracking IT hiring activity in the United States since 1995.
Seventy percent of CIOs surveyed said it's somewhat or very challenging to find skilled IT professionals today. Respondents cited networking (16 percent), data/database management (13 percent) and applications development (12 percent) as the most challenging functional areas in which to recruit.
Confidence in Business Growth and IT Investments
The survey results suggest that CIOs are optimistic about their companies' growth and IT investments. Eighty-nine percent of CIOs reported being somewhat or very confident in their companies' prospects for growth in the second quarter of 2013.
Seventy-two percent of CIOs also said they were somewhat or very confident that their firms would invest in IT projects in the second quarter of 2013.
Skills in Demand
Among the technology executives surveyed, 51 percent said both network administration and database management are the skill sets in greatest demand within their IT department. Desktop support followed, with 48 percent of the response.
According to the new International Data Corporation (IDC) United States Black Book 4Q12, total IT spending on hardware, software, and IT services across all 15 enterprise industries is forecasted to grow by 6% in 2013, to approximately $474 Billion. Over the last quarter, the U.S economic outlook has been clouded with uncertainties surrounding the fiscal cliff, contracting G.D.P growth, and declining international trade owing to reduced economic activity in the Euro zone. IDC expects the U.S. economy to stabilize in the second half of 2013, leading to moderately strong IT spending growth.
Specific industries expected to grow at above-average rates for the coming year include healthcare, which is forecast to grow by more than 8% in 2013, due in part to the need to process and analyze increasing volumes of data from new clinical systems such as EHR. The professional services industry is also expected to grow more than 8%; a high correlation between overall corporate profitability and IT spending by professional services firms suggests robust spending within this industry as corporate profits are forecasted to improve.
IDC's United States Black Book: State IT Spending by Vertical Market is a quarterly analysis of the status and projected growth of the IT industry in 50 states, segmented by 15 vertical markets as well as 15 technologies across hardware, software, and services. The quarterly releases are provided as Microsoft Excel pivot tables that allow for customized views of the data. The current release offers IT spending forecasts for the 2011-2016 period.