No matter where in the world you operate, chances are good that your organization has weaknesses in three key areas of people management: managing talent, improving leadership development and strategic workforce planning. That is the key finding of "Creating People Advantage 2012: Mastering HR Challenges in a Two-Speed World," released last week by Boston Consulting Group and the World Federation of People Management Associations (WFPMA).
The "two-speed world" refers to the weak growth among developed economies and the much stronger growth among developing economies. This disparity has forced more than half of the larger companies with more than 2,000 employees surveyed into a dichotomy where they struggle to build up their workforce in certain regions, business units and job groups, while they are laying off employees in others. For example, companies with operations in emerging markets face a dearth of management talent, while they have an overabundance of managerial candidates in developed markets.
The shortages of management and technical skills are most acute in the so-called BRICS countries (Brazil, Russia, India, China and South Africa). "In the BRICS countries, companies can't rely on their country's education system or the general workforce to produce the talent they need," says Pieter Haen, president of the WFPMA. "But they won't continue to grow and compete successfully if they can't acquire or develop the talent."
The study is based on research in 22 key HR topics and their component activities, a survey of 4,300 HR and non-HR executives from more than 100 countries and in-depth interviews with 63 executives. We covered another portion of this research in a previous post.
What makes addressing these weaknesses so imperative is that they are in areas that increasingly are considered critical to global business success. Companies that have higher capabilities when it comes to managing human capital achieve 3.5 times more revenue growth and 2.1 times higher average profit margins than companies that are less capable in these areas.
The researchers isolated six capabilities that are particularly important to a company's economic performance:
- 1. strategic workforce planning
- 2. employer branding
- 3. recruiting strategy
- 4. recruiting process
- 5. on-boarding
- 6. retaining employees.
The study notes that integrating all of these elements into the "employee lifecycle" is a characteristic of the best-performing companies. For example, these companies have strong strategic workforce planning, tailor their value proposition to different targeted groups, have a structured approach to on-boarding new employees, and begin managing employees' careers almost immediately once those employees join the company.
By contrast, companies that do not perform well in these areas tend to demonstrate a disconnect between people planning and recruiting; more than half of the companies surveyed do not align their recruiting targets with people planning.