We’ve been hearing a lot about the skill shortage among workers, but just in case you don’t really believe it, here’s more research that shows how big a problem this really is.
According to the Towers Watson Global Talent Management and Rewards Survey of 1,605 companies globally, including 278 from the United States, nearly three-fourths of respondents (72 percent) say they have problems attracting critical-skill employees, with six in 10 employers indicating they have difficulty attracting high-potential and top-performing workers (60 percent and 59 percent, respectively).
In the U.S. specifically, the number of employers having difficulty attracting employees with critical skills increased again for the third consecutive year, to 61 percent, nearly the same percentage as in 2005 and 2006 (back when economic growth was stronger and unemployment rates were significantly lower).
The bottom line for U.S. companies? More than half of all respondents reported difficulty retaining critical-skill, high-potential and top-performing employees — probably because they are in high demand and easier to lure away.
“The demand for the best talent is as strong as ever, especially given a challenging economy and heightened global competition,” said Laura Sejen, global leader of rewards at Towers Watson, in a press release about the latest Global Talent Management and Rewards Survey. “But many employers are not taking advantage of opportunities to attract, retain and engage high-value employees by offering a work environment and the total rewards programs that are most important to them.”
If that wasn’t damning enough, she added this: “In fact, there appears to be a mismatch between what employers are offering and what employees are looking for. Employees, including top talent, are more focused on competitive base pay and job security. Employers, on the other hand, are emphasizing other items, such as challenging work, and their mission, vision and values.”
Yes, top-flight and highly skilled workers want to be challenged in their job, and they probably are willing to connect with an organization’s missions and values, too, but why aren’t companies more willing to do what it takes to keep these workers in the fold — namely, focus on job security and ultra-competitive salaries and compensation?
Good question, and my view — and it’s just an educated guess — is that far too many organizations still are under the mistaken impression that because unemployment continues to be high (8 percent plus in the United States) that they don’t need to focus on better compensation that would help them hang on to critical employees.
Some other highlights from the Global Talent Management and Rewards Survey:
Performance management — a controversial and never-ending topic, it seems — also came under scrutiny in the Towers Watson survey, and the results weren’t very pretty.
“In a frank acknowledgement of the challenges in getting performance management right,” as the Towers Watson analysis put it, only half (51 percent) of U.S. respondents believe their performance management process effectively links salary increases to individual performance results, compared to 62 percent of global companies. That’s a terrible indictment of the performance management process, particularly in American companies.
But, it’s also clear that American employers know all too well how bad it is.
When asked by Towers Watson to rate the effectiveness of managers in the performance management process, U.S. companies saw their managers as significantly less effective at setting individual performance goals (37 percent vs. 52 percent globally), giving employees regular coaching and feedback (24 percent vs. 39 percent) and conducting career development discussions (19 percent vs. 33 percent).
One bright spot in this survey (although it’s probably not if you are just an average worker), is that leadership management programs at U.S. employers received high marks compared with the global results. Virtually all U.S. respondents (95 percent) believe their leadership development programs support their organization’s culture, compared to 84 percent globally, and two-thirds of U.S. respondents said they have formal leadership development programs.
“As U.S. employers seek to grow profitably during a period of economic volatility, their focus needs to be on crafting an employee value proposition that helps to attract and retain talented and critical-skill employees while also engaging the broader workforce,” said Laurie Bienstock, North America Rewards leader at Towers Watson.
She added: “Organizations need to position themselves for future success over the next five to 10 years. Effective leadership development, performance management and succession-planning programs will be keys to getting it right. U.S. employers give themselves lower marks compared to the global norms and need to take action to strengthen the process and outcomes.”
The Towers Watson Global Talent Management and Rewards Survey was conducted in late April through early June of 2012, and includes responses from 1,605 companies worldwide, including 278 companies from the U.S.. The participants represent a wide range of industries and come from a broad cross section geographically.
A survey like this should set off a lot of alarms, but will it? At it’s core, it says that businesses everywhere — but particularly in the U.S. — are losing critical talent because they are completely out of synch with what their best employees are looking for in their jobs. And, it also shows just how badly the performance management process is being handled at American companies.
That should be a wake-up call for organizations everywhere, but why am I not convinced that the companies who need to be looking at this the closest — particularly herein the U.S. — are probably not even paying much attention to it at all?
