A new research report from Deloitte reveals, for the first time since initiating its longitudinal study of global talent trends and strategies in January, surveyed executives are more inclined to believe the worst of the economic crisis has passed. Moreover, while many of these leaders look to adopt talent strategies to prevent key employees from leaving for better opportunities, others may be at risk for not implementing talent or innovation strategies needed to seize the opportunities presented by a recovering economy.
In the fourth edition of Deloitte’s longitudinal study of talent trends and strategies, 325 international executives participated in the survey conducted by Forbes Insights on behalf of Deloitte. Survey participants were typically senior leaders within their organisations, with 42% occupying the CEO, CFO or other C-suite position. Geographically, the survey was well balanced between companies in three major economic regions: the Americas (37%); Europe, the Middle East, and Africa (31%); and Asia Pacific (32%).
“Companies may soon find themselves in a fight for talent as the recovery takes hold,” says Jeff Schwartz, principal, Human Capital, Deloitte Consulting LLP. “A defensive strategy of hunkering down with cost cutting and headcount reductions may very well prove to be a losing strategy for weathering the impending resume tsunami. To excel during changing times and the economic recovery, we believe organisations must take an ‘offensive’ approach, implementing talent strategies dedicated to driving innovation.”
Worst is Over
The survey of 325 executives reveals that, for the first time since the study was launched in January 2009, more surveyed executives now believe the worst of the economic downturn is over as opposed to impending by a decisive 31% to 7% margin.
Reducing headcount is secondary to training and retention as a top talent priority. Less than half (48%) of surveyed executives reported layoffs in the last quarter, down from 61% in May. When asked to rank top talent priorities three months from now, for the first time, survey participants pushed headcount reductions down to a clear third, with just 22% ranking it highest, behind both training and development (32%) and retention (30%).
To keep key leaders and high-potential employees on board, surveyed executives are ramping up retention initiatives. Nearly one-in-three executives surveyed (31%) reported they are increasing career path opportunities — a jump of 11% from January (20%). After nearly a year of austerity, even compensation is back on the table, with 28% reporting they plan to increase compensation levels over the next 12 months, up from 15% in January.
Talent managers also see flexible work arrangements as an effective retention tactic; 35% of those surveyed plan to increase their focus on this area.
As for the areas of increased focus on training and development over the next 12 months, the study reveals that high-potential employment development (49%) and leadership and management development (48%) are the top two priorities, followed by regulatory, security and risk training (34%).
As for job-specific areas, the priorities are sales and customer service (30%); operations (26%); and IT, finance, and HR (26%).
Meanwhile, surveyed executives clearly understand innovation will help navigate today’s difficult economy, but they are not prepared.
By overwhelming margins, executives surveyed responded that innovation is either very important or important to their company now (84%) and will continue to be important one year after the recession ends (82%) and three years in the future (85%).
However, more than six out of ten survey participants (61%) acknowledged they either had no talent strategy currently in place to drive innovation or did not know if they had one. An overwhelming majority of surveyed executives (88%) fear they will not have the necessary talent to lead their innovation programs after the recession ends.