Companies Worldwide View Talent as Biggest Obstacle to Future Growth

Companies Worldwide View Talent as Biggest Obstacle to Future Growth
Monday December 20, 2010



New York — Dec. 20

As companies worldwide begin to position themselves for future growth in the face of an uncertain economic recovery, a new survey by global professional services company Towers Watson finds that concerns over their ability to attract and retain key talent, or to plan for an orderly replacement of talent, could thwart those efforts. The survey also found gaps in employers’ capabilities to address talent management and succession planning issues.

The Towers Watson Strategies for Growth study, a survey of more than 700 companies globally, revealed that talent — finding it and keeping it — is the biggest potential workforce obstacle to achieving growth. Specifically, more than half of the respondents worldwide (51 percent) cited the loss of talent in key skill areas as a workforce challenge that could hinder growth. Slightly fewer (49 percent) cited the lack of succession planning as a top challenge, while 38 percent noted concerns about attracting necessary talent.

Regionally, the survey revealed some divergence, which tended to track with the differing economic climate in various parts of the world. North American companies are less concerned about loss of key talent than their counterparts in other regions, but are more concerned about levels of disengagement among employees. In Asia Pacific, disengagement is not a major issue, but the inability to pay workers competitively is, reflecting the region’s fairly young and mobile workers, who are willing to change jobs frequently to advance their careers and raise their paychecks. Respondents in Europe are more concerned about the talent drain’s impact on management succession planning.

“Companies clearly see talent as an integral part of growing their businesses when the economic recovery firmly takes hold,” said Ravin Jesuthasan, global head of talent management consulting at Towers Watson. “And despite respondents’ cautious optimism about growth in the coming year, they recognize that an inability to attract new talent or hold on to key individuals could prove to be the difference between growing and remaining stagnant.”

Only a quarter or slightly more of the respondents indicated they have an appropriate capability in place for acquiring talent (29 percent) or retaining talent (25 percent). Even fewer (21 percent) have a sufficient capability for succession planning. These gaps appeared in all the regions, but were significant in Asia Pacific, where formal and structured HR processes are generally somewhat newer.

“The global lack of a sufficient governance capability in talent management and succession planning is a real concern, particularly since the least prepared organizations will not only find themselves at a significant disadvantage over time, but may lose critical momentum in trying to catch up to more advanced peers once recovery is in full swing,” said Nigel Bateman, a director of international consulting at Towers Watson. “One positive finding that may help offset this risk is respondents’ focus on improving performance management, which was cited as the No. 1 area for greater emphasis this year across all regions.”

“This tells us that respondents recognize the relationship between a high-performance culture and growth, and the role that effective performance management plays in helping shape such a culture,” Jesuthasan said.

For more info: http://www.towerswatson.com


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