Challenges Facing HR Over the Next 10 Years November 1, 2012.

32
Challenges Facing HR Over the Next 10 Years November 1, 2012

Transcript of Challenges Facing HR Over the Next 10 Years November 1, 2012.

Page 1: Challenges Facing HR Over the Next 10 Years November 1, 2012.

Challenges Facing HR Over the Next 10 Years

November 1, 2012

Page 2: Challenges Facing HR Over the Next 10 Years November 1, 2012.

Challenges Facing HR Over the Next 10 Years ©SHRM 2012 2

• What will be the three biggest challenges facing HR executives over the next 10 years? Retaining and rewarding the best employees (59%), developing the next generation of corporate leaders (52%), and creating a corporate culture that attracts the best employees to organizations (36%).

• What will be the biggest investment challenge for organizations over the next 10 years? About two-fifths (43%) of HR professionals indicated that obtaining human capital and optimizing human capital investments will be the biggest investment challenge.

• Which tactics will be the most effective in attracting, retaining and rewarding the best employees over the next 10 years? The top four responses were providing flexible work arrangements (40%); creating an organizational culture where trust, open communication and fairness are emphasized and demonstrated by leaders (37%); providing employees with opportunities for career advancement (26%); and offering a higher total rewards package than organizations that compete for the same talent (26%).

• How do HR Professionals expect the future workforce to evolve over the next 10 years? In terms of workforce size, the majority (69%) of HR professionals expect their organization to have a larger workforce in 10 years. Just over one-half (54%) indicate that their use of contract/temporary employees will not change, and 29% expect a growing proportion of contract/temporary employees. Nearly one-half (47%) indicate that over the next 10 years there will be a greater proportion of full-time employees, whereas the other half believe the workforce will stay the same (27%) or have more part-time employees (26%).

Key Findings

Page 3: Challenges Facing HR Over the Next 10 Years November 1, 2012.

Challenges Facing HR Over the Next 10 Years ©SHRM 2012 3

• Which HR competencies will be most critical 10 years from now? Over one-third of HR professionals think that the four most critical competencies in 10 years will be business acumen (42%), organizational leadership and navigation (40%), relationship management (37%), and communication (35%).

• What components (subcompetencies) of business acumen will be most critical in 10 years? HR professionals expect the top three components to be HR and organizational metrics/analytics/business indicators (45%), knowledge of business operations and logistics (41%), and strategic agility (41%).

• What bodies of knowledge do HR professionals rate as being the most important in 10 years? The four bodies of knowledge that were rated as most important were strategic business management, talent management, change management, and workforce planning and employment.

Key Findings (continued)

Page 4: Challenges Facing HR Over the Next 10 Years November 1, 2012.

Challenges Facing HR Over the Next 10 Years ©SHRM 2012 4

Challenges in HR

Page 5: Challenges Facing HR Over the Next 10 Years November 1, 2012.

Challenges Facing HR Over the Next 10 Years ©SHRM 2012 5

Over the next 10 years, what do you think will be the three biggest challenges facing HR executives at your organization?

Retaining and rewarding the best employees

Developing the next generation of corporate leaders

Creating a corporate culture that attracts the best employees to our organization

Remaining competitive in the talent marketplace

Finding employees with the increasingly specialized skills we need

Creating smooth and efficient HR processes that ensure a good employee experience

Finding the right employees in the right markets where we do business around the world

Creating an employee-centric, service-oriented HR organization

Breaking down cultural barriers that make it difficult to create a truly global company

Other

59%

52%

36%

34%

33%

20%

15%

13%

11%

6%

51%

29%

44%

21%

41%

17%

33%

12%

24%

1%

2010 (n = 465)2012 (n = 483)

Note: Percentages do not total 100% due to multiple response options. Respondents who answered “don’t know” were excluded from this analysis.

Page 6: Challenges Facing HR Over the Next 10 Years November 1, 2012.

Challenges Facing HR Over the Next 10 Years ©SHRM 2012 6

Over the next 10 years, what do you think will be the three biggest challenges facing HR executives at your organization?

Note: Only statistically significant differences are shown.

Comparisons by organization sector

• Publicly owned for-profit and privately owned for-profit organizations are more likely than nonprofit organizations to indicate that finding the right employees in the right markets where we do business around the world is one of the biggest challenges facing HR executives.

Comparisons by organization sector

Publicly owned for-profit (24%)

Privately owned for-profit (19%)> Nonprofit (8%)

Page 7: Challenges Facing HR Over the Next 10 Years November 1, 2012.

Challenges Facing HR Over the Next 10 Years ©SHRM 2012 7

Over the next 10 years, what do you think will be the biggest investment challenge facing organizations?

Obtaining human capital and optimizing human capital investments

Obtaining financial capital and optimizing financial capital investments

Obtaining technology and optimizing technological capital investments

Obtaining intellectual capital and optimizing intellectual capital investments

Obtaining physical capital and optimizing physical capital investments

43%

22%

19%

14%

3%

47%

29%

11%

12%

2%

2010 (n = 449)

2012 (n = 484)

Note: Percentages do not total 100% due to rounding.

Page 8: Challenges Facing HR Over the Next 10 Years November 1, 2012.

Challenges Facing HR Over the Next 10 Years ©SHRM 2012 8

Talent Management Tactics

Page 9: Challenges Facing HR Over the Next 10 Years November 1, 2012.

Over the next 10 years, which of the following tactics do you believe will be most effective in attracting, retaining and rewarding the best employees in your organization?

Challenges Facing HR Over the Next 10 Years ©SHRM 2012 9

Providing flexible work arrangements

Promoting a culture of trust, open communication and fairness

Providing employees with opportunities for career advancement*

Offering a higher total rewards package than competitors

Demonstrating a commitment to employee development

Providing meaningful work with clear purpose in meeting organization's objectives

Creating a stimulating and attractive organizational culture

Having latest tools/technology to maximize work efficiency and effectiveness

Encouraging employees to make decisions and to take risks

Providing employees with recognition based on job performance*

Developing human capital managers at all levels of the organization

Providing employees with better opportunities to use skills and abilities

Creating a highly inclusive culture that uses diverse perspectives

Being committed to corporate social responsibility and sustainability

40%

37%

26%

26%

24%

24%

17%

17%

15%

14%

13%

11%

11%

7%

58%

47%

23%

29%

40%

21%

11%

15%

13%

14%

11%

4%

2010 (n = 449)2012 (n = 486)

Note: Percentages do not total 100% due to multiple response options. An asterisk (*) indicates option was not included on 2010 survey.

Page 10: Challenges Facing HR Over the Next 10 Years November 1, 2012.

Challenges Facing HR Over the Next 10 Years ©SHRM 2012 10

Over the next 10 years, which of the following tactics do you believe will be most effective in attracting, retaining and rewarding the best employees in your organization?

Note: Only statistically significant differences are shown.

Comparisons by organization sector

• Nonprofit organizations are more likely than privately owned for-profit organizations to indicate that creating an organizational culture where trust, open communication and fairness are emphasized and demonstrated by leaders is one of the most effective tactics in attracting, retaining and rewarding the best employees.

Comparisons by organization sector

Nonprofit (51%) > Privately owned for-profit (33%)

Page 11: Challenges Facing HR Over the Next 10 Years November 1, 2012.

Challenges Facing HR Over the Next 10 Years ©SHRM 2012 11

Future Workforce

Page 12: Challenges Facing HR Over the Next 10 Years November 1, 2012.

Challenges Facing HR Over the Next 10 Years ©SHRM 2012 12

Over the next 10 years, how do you expect the size of your organization’s workforce to evolve?

Larger workforce

Smaller workforce

No change

69%

16%

15%

48%

37%

15%

2010 (n = 470)

Note: Respondents who answered “don’t know” were excluded from this analysis.

Page 13: Challenges Facing HR Over the Next 10 Years November 1, 2012.

Challenges Facing HR Over the Next 10 Years ©SHRM 2012 13

Over the next 10 years, how do you expect the size of your organization’s workforce to evolve?

Note: Only statistically significant differences are shown.

Comparisons by organization sector

• Privately owned for-profit organizations are more likely than nonprofit and government organizations to expect the size of their organization’s workforce to grow larger over the next 10 years.

Comparisons by organization sector

Privately owned for-profit (80%) >Nonprofit (62%)

Government (36%)

• Government organizations are more likely than privately owned for-profit organizations to expect the size of their organization’s workforce to get smaller over the next 10 years.

Comparisons by organization sector

Government (39%) > Privately owned for-profit (11%)

• Nonprofit organizations are more likely than privately owned for-profit organizations to expect the size of their organization’s workforce to have no change over the next 10 years.

Comparisons by organization sector

Nonprofit (23%) > Privately owned for-profit (10%)

Page 14: Challenges Facing HR Over the Next 10 Years November 1, 2012.

Challenges Facing HR Over the Next 10 Years ©SHRM 2012 14

Over the next 10 years, how do you expect your organization’s use of contract or temporary employees to evolve?

No change

Growing proportion of contract/temporary employees

Growing proportion of full-time employees

54%

29%

17%

22%

65%

13%

2010 (n = 448)

2012 (n = 424)

Note: Respondents who answered “don’t know” were excluded from this analysis.

Page 15: Challenges Facing HR Over the Next 10 Years November 1, 2012.

Challenges Facing HR Over the Next 10 Years ©SHRM 2012 15

Over the next 10 years, how do you expect your organization’s use of contract or temporary employees to evolve?

Comparisons by organization staff size

25,000 or more employees (57%) >

1 to 99 employees (25%)

100 to 499 employees (21%)

500 to 2,499 employees (29%)

Note: Only statistically significant differences are shown.

Comparisons by organization staff size

• Organizations with 25,000 or more employees are more likely than organizations with 1 to 2,499 employees to expect a growing proportion of contract or temporary employees over the next 10 years.

Page 16: Challenges Facing HR Over the Next 10 Years November 1, 2012.

Challenges Facing HR Over the Next 10 Years ©SHRM 2012 16

Over the next 10 years, how do you expect your organization’s employment status to evolve?

Growing proportion of full-time employees

No change

Growing proportion of part-time employees

47%

27%

26%

19%

30%

50%

2010 (n = 447)

2012 (n = 434)

Note: Respondents who answered “don’t know” were excluded from this analysis. Percentages may not total 100% due to rounding.

Page 17: Challenges Facing HR Over the Next 10 Years November 1, 2012.

Challenges Facing HR Over the Next 10 Years ©SHRM 2012 17

Over the next 10 years, how do you expect your organization’s employment status to evolve?

Comparisons by organization staff size

25,000 or more employees (44%) > 1 to 99 employees (16%)

Note: Only statistically significant differences are shown.

Comparisons by organization staff size

• Organizations with 25,000 or more employees are more likely than organizations with 1 to 99 employees to expect a growing proportion of regular part-time employees over the next 10 years.

Comparisons by organization sector

• Privately owned for-profit organizations are more likely than nonprofit and government organizations to expect a growing proportion of regular full-time employees over the next 10 years.

Comparisons by organization sector

Privately owned for-profit (58%) >Nonprofit (38%)

Government(21%)

• Government organizations are more likely than privately owned for-profit organizations to expect a growing proportion of regular part-time employees over the next 10 years.

Comparisons by organization sector

Government (50%) > Privately owned for-profit (21%)

Page 18: Challenges Facing HR Over the Next 10 Years November 1, 2012.

Challenges Facing HR Over the Next 10 Years ©SHRM 2012 18

HR Competencies

Page 19: Challenges Facing HR Over the Next 10 Years November 1, 2012.

Challenges Facing HR Over the Next 10 Years ©SHRM 2012 19

Ten years from now, which of the following competencies do you see being most critical for the HR professional?

Business Acumen

Organizational Leadership and Navigation

Relationship Management

Communication

Critical Evaluation

HR Technical Expertise and Practice

Consultation

Ethical Practice

Global and Cultural Effectiveness

42%

40%

37%

35%

30%

26%

25%

21%

17%

Note: n = 472. Percentages do not total 100% due to multiple response options.

Page 20: Challenges Facing HR Over the Next 10 Years November 1, 2012.

Challenges Facing HR Over the Next 10 Years ©SHRM 2012 20

Ten years from now, which of the following competencies do you see being most critical for the HR professional?

Comparisons by organization staff size

2,500 to 24,999 employees (56%)25,000 or more employees (59%) > 1 to 99 employees (24%)

Note: Only statistically significant differences are shown.

Comparisons by organization staff size

• Organizations with 2,500 or more employees are more likely than organizations with 1 to 99 employees to see business acumen as being most critical for the HR professional 10 years from now.

Comparisons by organization staff size

100 to 499 employees (35%) > 2,500 to 24,999 employees (14%)

• Organizations with 100 to 499 employees are more likely than organizations with 2,500 to 24,999 employees to see HR technical expertise and practice as being most critical for the HR professional 10 years from now.

Comparisons by organization staff size

2,500 to 24,999 employees (27%) > 100 to 499 employees (10%)

• Organizations with 2,500 to 24,999 employees are more likely than organizations with 100 to 499 employees to see global and cultural effectiveness as being most critical for the HR professional 10 years from now.

Page 21: Challenges Facing HR Over the Next 10 Years November 1, 2012.

Challenges Facing HR Over the Next 10 Years ©SHRM 2012 21

Ten years from now, which of the following competencies do you see being most critical for the HR professional?

Note: Only statistically significant differences are shown.

Comparisons by organization sector

• Publicly owned for-profit organizations are more likely than nonprofit organizations to see business acumen as being most critical for the HR professional 10 years from now.

Comparisons by organization sector

Publicly owned for-profit (57%) > Nonprofit (34%)

Page 22: Challenges Facing HR Over the Next 10 Years November 1, 2012.

Challenges Facing HR Over the Next 10 Years ©SHRM 2012 22

Ten years from now, when considering Business Acumen for HR professionals, which of the following components (i.e., subcompetencies) will be most critical?

HR and Organizational Metrics/Analytics/Business Indicators

Knowledge of Business Operations/Logistics

Strategic Agility

Business Knowledge

Knowledge of Government and Regulatory Guidelines

Knowledge of Finance and Accounting

Economic Awareness

Knowledge of Labor Markets

Knowledge of Technology

Systems Thinking

Effective Administration

Knowledge of Sales and Marketing

Other

45%

41%

41%

28%

25%

18%

17%

17%

16%

14%

11%

6%

1%

Note: n = 469. Percentages do not total 100% due to multiple response options.

Page 23: Challenges Facing HR Over the Next 10 Years November 1, 2012.

Challenges Facing HR Over the Next 10 Years ©SHRM 2012 23

Ten years from now, when considering Business Acumen for HR professionals, which of the following components (i.e., subcompetencies) will be most critical?

Comparisons by organization staff size

2,500 to 24,999 employees (57%) > 1 to 99 employees (34%)

Note: Only statistically significant differences are shown.

Comparisons by organization staff size

• Organizations with 2,500 to 24,999 employees are more likely than organizations with 1 to 99 employees to consider HR and organizational metrics/analytics/business indicators as being most critical for the HR professional 10 years from now.

Page 24: Challenges Facing HR Over the Next 10 Years November 1, 2012.

Challenges Facing HR Over the Next 10 Years ©SHRM 2012 24

Rate the importance of these bodies of knowledge for HR professionals 10 years from now.

Note: n = 446. Respondents rated each body of knowledge on a scale from 0 (not important) to 10 (very important).

Body of Knowledge Average Rating (0 to 10)

Strategic Business Management 8.8

Talent Management 8.6

Change Management 8.5

Workforce Planning and Employment 8.5

Compensation and Benefits 8.3

Human Resource Development 8.2

Employee and Labor Relations 8.1

HR Technology 8.0

Risk Management 7.7

Global and International Human Resources 6.9

Page 25: Challenges Facing HR Over the Next 10 Years November 1, 2012.

Challenges Facing HR Over the Next 10 Years ©SHRM 2012 25

Organization Demographics

Page 26: Challenges Facing HR Over the Next 10 Years November 1, 2012.

Challenges Facing HR Over the Next 10 Years ©SHRM 2012 26

Demographics: Organization Industry

Note: n = 461. Percentages do not total 100% due to multiple response options.

Percentage

Professional, scientific and technical Services 20%

Health care and social assistance 17%

Manufacturing 16%

Educational services 13%

Finance and insurance 12%

Accommodation and food services 7%

Transportation and warehousing 6%

Arts, entertainment and recreation 5%

Government agencies 5%

Administrative and support and waste management and remediation services

4%

Religious, grant-making, civic, professional and similar organizations 4%

Page 27: Challenges Facing HR Over the Next 10 Years November 1, 2012.

Challenges Facing HR Over the Next 10 Years ©SHRM 2012 27

Demographics: Organization Industry(continued)

Note: n = 461. Percentages do not total 100% due to multiple response options.

Percentage

Retail trade 4%

Construction 3%

Information 3%

Real estate and rental and leasing 3%

Repair and maintenance 3%

Wholesale trade 3%

Agriculture, forestry, fishing and hunting 2%

Mining 1%

Personal and laundry services 1%

Utilities 1%

Other 9%

Page 28: Challenges Facing HR Over the Next 10 Years November 1, 2012.

Challenges Facing HR Over the Next 10 Years ©SHRM 2012 28

Demographics: Organization Sector

Privately owned for-profit

Nonprofit

Publicly owned for-profit

Government

Other

47%

25%

18%

7%

3%

n = 462

Page 29: Challenges Facing HR Over the Next 10 Years November 1, 2012.

Challenges Facing HR Over the Next 10 Years ©SHRM 2012 29

Demographics: Organization Staff Size

1 to 99 employees

100 to 499 employees

500 to 2,499 employees

2,500 to 24,999 employees

25,000 or more employees

21%

30%

19%

20%

10%

n = 454

Page 30: Challenges Facing HR Over the Next 10 Years November 1, 2012.

Challenges Facing HR Over the Next 10 Years ©SHRM 2012 30

Other Demographics

U.S.-based operations only 71%

Multinational operations 29%

Single-unit organization: An organization in which the location and the organization are one and the same.

28%

Multi-unit organization: An organization that has more than one location.

72%

Multi-unit headquarters determines HR policies and practices

51%

Each work location determines HR policies and practices

3%

A combination of both the work location and the multi-unit headquarters determines HR policies and practices

46%

Is your organization a single-unit organization or a multi-unit organization?

For multi-unit organizations, are HR policies and practices determined by the multi-unit headquarters, by each work location or by both?

Does your organization have U.S.-based operations (business units) only, or does it operate multinationally?

n = 470 n = 473

n = 347

Corporate (companywide) 71%

Business unit/division 17%

Facility/location 12%

n = 348

What is the HR department/function for which you responded for throughout this survey?

Page 31: Challenges Facing HR Over the Next 10 Years November 1, 2012.

Challenges Facing HR Over the Next 10 Years ©SHRM 2012 31

• 2012 response rate = 17%

• 2010 response rate = 17%

• Sample composed of 487 (2012) and 449 (2010) randomly selected HR professionals from SHRM’s membership

• Margin of error +/-5%

• 2012 survey fielded September 14 to September 28, 2012

• 2010 survey fielded August 10 to August 23, 2010

Challenges Facing HR Over the Next 10 Years

Survey Methodology

Page 32: Challenges Facing HR Over the Next 10 Years November 1, 2012.

Challenges Facing HR Over the Next 10 Years ©SHRM 2012 32

• For more survey/poll findings, visit www.shrm.org/surveys

• For more information about SHRM’s Customized Research Services, visit www.shrm.org/customizedresearch

• Follow us on Twitter @SHRM_Research

Challenges Facing HR Over the Next 10 Years

About SHRM Research

Project leader:Tanya Mulvey, survey research analyst, SHRM Research

Project contributors:Mark Schmit, Ph.D., SPHR, vice president, SHRM ResearchEvren Esen, manager, Survey Research Center, SHRM ResearchAlexander Alonso, Ph.D., SPHR, director, HR Thought Leadership

Copy editor:Katya Scanlan, SHRM Knowledge Center