HR Execs Fear Not Attracting 'A' Players
Vying for top talent and addressing benefit costs are the top-two challenges facing HR executives today, according to a new Aberdeen Group study. "The HR Executive's Agenda: The 2005 Benchmark Report," conducted with the Human Capital Institute (HCI) and sponsored by Lawson Software, Unicru, Peopleclick, and GoalCentrix, contends that 85 percent of HR executives site their ability to compete for top talent as their biggest concern, while 60 percent are concerned about addressing benefit costs, and 38 percent are concerned about balancing service levels and costs of benefits and services. Additional challenges include lowering the human capital operating budget (31 percent), predicting future workforce needs (30 percent), and maintaining the human capital management (HCM) operating budget (25 percent). Survey data is based on the responses of 98 HR executives who are members of HCI's online community, and interviews with HCM senior-level executives.
"Retention is a big issue--it's not that you can't get a person, it's that you can't get the talent you need to be competitive, and that's the fear," says Katherine Jones, Aberdeen HCM research director and the report's author. "Really look at the life cycle of this employee, and invest in the employee, so you have an employee in 2010 who's a happy, satisfied, highly productive, A player. That's the goal."
When segmented in best-in-class companies (BICCs) and aggregate organizations, however, the ability to hire and retain top talent remains the greatest challenge (85 percent of BICCs versus 62 percent of Aggregates), but BICCs are less worried about addressing benefit costs (54 percent of BICCs versus 60 percent of Aggregates), recruiting future talent (15 percent of BICCs versus 30 percent of Aggregates), and maintaining the HCM operating budget than their Aggregate cohorts (23 percent of BICCs versus 27 percent of Aggregates). "The best-in-class companies have already thought through the idea and the concept, and are implementing things that deal with the concept of real workforce planning," Jones says. "The others need to struggle with other things to get there."
The top-three strategies among HR executives for responding to these issues include emphasizing long-term workforce planning, improving the company's brand as a desirable place to work, and updating and integrating HCM technology, according to the report. Fifty-nine percent of respondents noted the improvement of such technology as a prime response to their business challenges. Specific HCM sects that are gaining traction include hiring management solutions, preemployment assessment, employee self-service, and performance management.
Pertaining to HR outsourcing, however, nearly all HR executives who responded, 96 percent, outsource some portion of their human capital activities, but 31 percent of BICCs and 37 percent of Industry Norms reported that nothing would lead them to consider outsourcing HR. Respondents also noted that they outsource business operations to companies that include Accenture, ADP, Aon, Ceridian, Fidelity, Genesys, Gervity, Hewitt, HR Xcel, IBM Global, Mellon, Mercer, Spherion, and Ultimate, report states.
Overall, one of the biggest takeaways of the report, according to Jones, is the use of HCM technology within the employee life cycle. Another is talent. "If you don't have a long-term strategy for your workforce--at least five years--you really need to sit down and think about at the end of the decade, how do I get the tasks of this company done?"
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