A vast majority of companies worldwide are having difficulty attracting the critical-skill and talented employees needed to help them rebound and prosper in the wake of the economic crisis. However, the severity of their difficulty in attracting these workers varies greatly from country to country as economic recovery is proving to be uneven in different regions, according to a survey conducted by Towers Watson and WorldatWork.
The Towers Watson Global Talent Management and Rewards Survey, a study of 1,176 companies globally, including 314 from the United States, also found that a majority of respondents said the cost-cutting measures that they took during the recession and financial crisis had an adverse impact on employees’ workloads, their ability to manage work-related stress and overall employee engagement. As a result, companies are beginning to reevaluate their reward and talent management programs, and how they attract, retain and motivate employees.
According to the survey, nearly two-thirds (65%) of companies globally and more than one-half (52%) of U.S. companies reported problems attracting critical-skill employees. Six in 10 (61%) companies globally, and 45% of U.S. companies, reported similar difficulty attracting top-performing, talented employees. Interestingly, companies in most regions reported having less difficulty retaining employees than they do attracting them. Globally, only 21% of companies are having difficulty keeping employees generally, while just 11% of U.S. firms reported problems holding onto employees.
“The business climate has clearly affected both the supply and demand of talent, and companies’ ability to attract and hire talented employees,” said Laura Sejen, global head of rewards consulting at Towers Watson. “Even in relatively soft economies, top employees are in short supply. Add to that, workers today simply are in no rush to seek employment elsewhere, given the uncertainty over economic recovery. As a result, many companies find themselves in a position of having to find new and innovative ways to entice and ultimately develop talent and leadership for the future.”
The economic crisis forced many companies globally to take cost management or cost-cutting activities, such as hiring and salary freezes, layoffs and bonus reductions, although there were significant regional differences in the nature and extent of those actions. The survey noted that U.S. companies took the most aggressive measures, with more than 60% implementing at least four cost-cutting actions. These cost-cutting steps took their toll on workers. Six in 10 (61%) believe their cost-cutting actions increased employees’ workloads, while 53% said they adversely impacted employees’ ability to manage their work-related stress. One-half (50%) also said these measures had a negative impact on employee engagement and workers’ ability to balance their work and personal lives.
“This study is a good reminder that employers need to reassess their employee value proposition to key in on those factors, both tangible and intangible, that would make them attractive to recruits,” said Ryan Johnson, CCP, Vice President of Publishing and Community for WorldatWork. “This is even more critical when luring top talent for leadership roles.”
The survey noted that organizations are likely to increase their talent management emphasis in leadership, succession planning and career pathing over the next three years. When asked what their top talent management priorities were, 62% of companies globally responded ensuring the readiness of talent in critical roles, followed by 60% who said increasing the investment in building an internal pipeline of talent was a top priority. Just over one-half (51%) ranked creating more movement, rotation and development opportunities for talent as a top priority.
“Leadership development is getting a lot of attention in the United States, and rightfully so,” said Laurie Bienstock, North America rewards practice leader at Towers Watson. “For companies that reduced the number of management layers, advancement opportunities have become fewer, and the gaps and complexity between levels have increased, making it significantly more difficult for companies to ensure leaders are prepared to effectively take on new and larger roles.”