Almost overnight it seems, demographic shifts and technological advances are radically transforming how, where, and why we work.
Macroeconomic shifts in the global economy continue to drive the demand for qualified workers, especially in the knowledge sector. Meantime, social, mobile, analytics, and cloud technologies are forcing companies of all sizes, across all industries, and in all regions to leave behind traditional business models and reengineer new ones. And as new generations of professionals enter the global workforce they bring with them not only fresh ideas but new expectations
So are we really fully prepared for the workforce of the future?
At SAP, we face these new realities every day, in every area of the globe. And in talking to our hundreds of thousands of customers, we hear it from you as well. So we undertook a global survey, in collaboration with Oxford Economics, which confirms that the workforce strategy for 2020 is not being addressed with sufficient urgency. In fact, only one-third of the 2,700 surveyed executives believe that they’ve made significant progress toward meeting workforce goals – a number that’s predicted to only reach 48 percent in the next three years.
It’s time to rethink people strategies..
Here’s some insight from this study that can help you prepare for workforce 2020.
Progress Toward Achieving 2020 Workforce Objectives Is Slow
Nearly 53 percent of executives responded that workforce issues drive strategy at the board level, and still 25 percent, indicated workforce issues are often an afterthought in business planning. Our research suggests that an alarming number of companies don’t have the structure, strategy, culture, and resources needed to manage a diverse, contingent, and multigenerational workforce.
Here’s what we see. Revamping your talent strategy and addressing leadership gaps are required for success. At the same time, your leadership needs to engage the workforce and link what people do day-to-day to the outcomes the business desires. This is where we in HR play our most critical role – HR is uniquely qualified to ensure that its people strategies empower the chief executive agenda throughout the business – and nothing less.
Gaps in Leadership Capabilities Spell Trouble for Future Growth
Effectively guiding and engaging today’s increasingly diverse and globally dispersed workforce requires managers who can lead and who understand what their teams want. What we heard from far too many executives in our study is that they would list lack of capable leadership as one of the top factors impeding efforts in building the future workforce.
Here’s why: Most companies are not cultivating leadership within their organisations. Executives cited lack of employee loyalty and longevity as the biggest barrier to meeting strategic workforce goals. And it’s easy to see what’s fueling this trend – nearly two-thirds (64 percent) of employees acknowledged that they don’t believe succession plans and commitment to ensuring continuity in key roles is being addressed by leadership.
Leadership Doesn’t Understand What Employees Want
Our research shows employees’ priorities are shifting as economies rebound around the globe, yet companies either don’t understand, or are not addressing the changes. For example, when it comes to satisfied employees, compensation matters – a lot, again. Consistent with other recent findings, notably the Corporate Leadership Council, compensation is increasingly important to employees. Only 39% of executives say their company offers competitive compensation. But what matters most at work to employees is competitive compensation -when ranking the importance of benefits, competitive compensation and bonuses/merit-based rewards rank highest among employees—other benefits and workplace “perks” are far less important.
We Simply Don’t Have Enough People with the Right Skills Today
Globally, it’s increasingly difficult to find and develop skilled employees; yet, we’re also not investing enough time and money in developing the talent the people we already have. Ideally, when an employee resigns, someone from within will have been groomed and prepared to take over. But in reality, this is not happening – 69 percent of executives stated that vacated positions are filled by external hires. And at the same time, we’re seeing an increase in the number of nonpayroll positions for consultants, intermittent employees, and contingent workers.
To help employees build the skills needed, demands we establish and nurture a culture of learning. Only 41 percent of employees believe their company offers them opportunities to expand their skill sets. With roughly half the executives interviewed agreeing that their company is capable of retaining, updating, and sharing institutional knowledge, still only 40 percent responded that their companies offer formal programs, such as job rotation and shadowing.
In the next six years, every business will need to address new ways of working, communicating, collaborating, and innovating. And it’s not just millennials changing everything – it’s all of us. We see it in the technologies we use; how we communicate with each other; and what we expect as consumers, employees, and, most of all, human beings.
What is your business doing to be ready for the workforce of 2020? We hope this research will help you.
To learn more about how your company can better prepare for the workforce of 2020, download our research brief and stay tuned for the rollout of our full research results.