IBM Global Human Capital Study

KEY UK STATISTICS (from the report):
UK Skills Crisis: Half of UK HR executives (50%) say that their employee skills are not aligned with current organisational priorities ñ more than in all other developed economies (32% in USA and 22% in Japan) and almost as much as in China (60%).

Technological and Structural Barriers Deter Collaboration in UK Firms: Most UK HR executives (61%) cite technology as a deterrent to effective collaboration ñ more than in all other developed economies (41% in USA and 38% in Japan). In addition most UK HR executives (58%) also cite organisational silos as a leading barrier to collaboration ñ again more than in many other developed economies (35% in Italy and 22% in Japan) and only marginally less than in the USA (59%).

According to a major new IBM study of over 400 human resource executives from 40 countries released today, more than 75 percent of HR executives say that they are concerned with their ability to develop future leaders. Given the explosive growth in emerging markets, and the retirement of experienced personnel in more mature economies, the study suggests that companies are placing their growth strategies at risk if they cannot identify and develop the next generation of leaders.

The study shows that leadership issues are surfacing worldwide, with organisations in every corner of the globe being impacted. Companies in the Asia Pacific region are most concerned with their ability to develop future leaders (88 percent); followed by Latin America (74 percent); Europe, Middle East and Africa, (74 percent); Japan (73 percent) and North America (69 percent).

The Global Human Capital Study titled ìUnlocking the DNA of the Adaptable Workforce was developed by IBM Global Business Servicesí Human Capital Management practice and the IBM Institute for Business Value (IBV), with assistance from the Economist Intelligence Unit (EIU). Human Resources executives participated in a structured interview, with many of them face-to-face, designed to capture insights on the subject of workforce transformation.

According to Randy MacDonald, Senior Vice President of Human Resources for the IBM Corporation, ìthe ability of an organisation to look ahead and identify the skills it will need in the future, and then rapidly develop a critical mass of individuals with those skills in a cost-effective manner, will be a core competency for those companies looking to compete in the globally integrated world.î

Key Roadblocks
Rotating employees across divisions and geographies is also an important way to hone future leadership talent. Yet, according to the study, 36 percent of HR executives state rotating leadership talent is a significant challenge in developing future leaders. Another key challenge is the generation gap -- passing on knowledge from older to younger employees (28 percent).

Help Wanted: Skills
In addition to being unable to develop effective leaders, the study finds that 52 percent of HR executives say a significant workforce-related challenge facing their organisations is the inability to rapidly develop skills to address current and/or future business needs. Furthermore, the study shows that more than one-third of study participants state their employee skills are not aligned with current organisational priorities (36 percent).

In today's business environment, organisations worldwide need to have a pipeline of future leaders who can deliver on today's commitments, drive workforce and enterprise transformation, and lay the groundwork for future growth,î said Tim Ringo, Global Human Capital Management Leader, IBM Global Business Services. ìEffective leadership not only guides individuals through turbulent business conditions, but creates a climate that attracts and retains high performers, who will be in increasingly short supply in the future.

Talent Wars
For many companies participating in the study, turnover continues to increase. Forty-seven percent of the organisations surveyed said that employee turnover has increased over the past two years, while only 16 percent said it has decreased.

The study finds that HR executives and line of business executives appear to be more concerned about developing existing employee skills than attracting new talent. Many believe their corporate reputations will allow them to attract and retain the people they need. While 52 percent indicate an inability to rapidly develop skills is a primary workforce challenge, only 27 percent state the inability to attract qualified candidates is a problem.

Retention also seems to be less of a concern; only 18 percent state this is a high priority workforce issue. However, changing trends in workforce demographics and mobility patterns suggest they may need to invest more resources in recruiting, selection and retention.

An underlying cause according to the study is that HR executives believe that despite the ongoing war for talent, they are more capable of attracting and retaining talent than their competitors. Almost 60 percent of HR executives surveyed feel they attract and retain talent better than their peers, while only 10 percent state they are less effective.

Developing an Adaptive Workforce
Due to various internal and external pressures, companies today are forced to be more responsive to shifting market needs; more flexible in how they operate; more focused on their core competencies; and more resilient to external threats. Developing a workforce that is adaptable to change has become essential. According to the study, however, only 14 percent of HR executivesí state their workforce is very capable of adapting to change.

The Global Human Capital Study identifies three critical success factors to developing an adaptable workforce:

The ability to predict future skills: Successfully anticipating future business scenarios enables organisations to know what key competencies to target in advance of critical market shifts. Only 13 percent of organisations interviewed believe they have a very clear understanding of the skills they will require in the next three to five years.

The ability to locate experts: While predicting future skills is important, so is the ability to apply existing knowledge and skills to new challenges. Expertise location is cited by respondents as critical in identifying and allocating resources to address new opportunities and threats. Only 13 percent believe they are very capable of identifying individuals with specific expertise within the organisation. Companies are using a variety of techniques to improve their expertise location capability. More than 50 percent of companies that rate themselves as ìvery effectiveî in locating experts use some form of employee directory while only 39 percent of all respondents report using them.

The ability to foster collaboration: Once the experts are located and identified, collaboration is the next step to foster innovation and growth. According to the study, only 8 percent of companies believe they are very effective in fostering collaboration across the enterprise. Surprisingly, technology is not the deterrent to effective collaboration, with only 28 percent of companies indicating this is a significant factor. Instead, organisational silos (42 percent) are the leading barrier of collaboration in an organisation, followed by time pressures (40 percent) and misaligned performance measures (39 percent).