A conversation about human capital and talent retention between the CFO and CEO could typically flow this way:
CFO: What if we invest in human capital and our employees leave?
CEO: What if we don’t invest in our employees and they stay?
Overwhelmed employees are typically millennials who hold vastly different ideals of job expectations and satisfaction versus their older counterparts
Such is the conundrum that finance often faces when deciding how much to invest in human capital. Where should the spending be directed, and, more importantly, how?
It is firstly imperative to understand the concept of the overwhelmed employee, a term born from a combination of information overload and myriad responsibilities faced by employees today.
Overwhelmed employees are typically millennials who hold vastly different ideals of job expectations and satisfaction versus their older counterparts. Keeping this group of workers happy is a challenge faced by many organizations.
The responsibility lies with employers to help staff deal with being overwhelmed in order for the business to stay competitive, says Nicky Wakefield, Leader, Southeast Asia Human Capital, at Big Four accounting firm Deloitte.
But assuaging the woes of the overwhelmed employee might be easier said than done. Some clever re-skilling of the HR function needs to be involved, and this could even entail throwing individuals with finance and marketing backgrounds into the mix, says Wakefield.
Global vs Local HR
Re-skilling the HR function appears to be a top priority among organizations today, particularly in Southeast Asia, according to a Deloitte study titled Engaging the 21st Century Workforce: Global Human Capital Trends 2014.
The study surveyed 2,500 business, finance and HR executives in 90 countries, and found this human talent issue to be a top priority both globally and in Southeast Asia.
Of the 54 Southeast Asia respondents, 75% cited re-skilling of the HR function as a critical human talent issue, compared with the global percentage score of 67%.
A large readiness gap also exists in this area, with just 30% of Southeast Asia respondents being of the opinion that their firms’ HR function is ready to meet the challenges of today’s business environment.
Moving away from HR’s traditionally tactical and operational role could be a key aspect of re-skilling the function.
“Today’s business environment requires HR strategies and operations to keep pace and align with business imperatives, and today’s HR professionals should understand new practices, technologies, workforce changes along with differences in culture, language and regulations in order to add value,” says Wakefield.
It is also imperative to strike a balance between global and local HR. “You need to be local about how you recruit staff and implement policies, and this differs between cultures and countries.”
Southeast Asia respondents are also concerned about the inability to build sustainable leadership practices within their organization.
Results of the study showed 73% of global respondents citing leadership as a major concern. Leadership was also found to be the area with the largest readiness gap – just 40% of respondents say their organization is ready to take on the leadership challenge.
Closer to home, the situation is fairly similar. The main gripe is with leadership, or rather, the lack thereof. Of the 54 respondents from Southeast Asia, 76% identified leadership as the No.1 talent issue. Less than half (38%) feel they scored highly in readiness to address leadership issues in their organizations.
The widening leadership readiness gap is due to in part to the added complexity organizations are facing today, caused among other things by massive volume of data and the exponential availability of data, globalization, social media technologies and the cloud, says Wakefield.
“In the past, leadership programs could remain relevant for a decade, but not anymore”
“21st century leadership is different,” says Wakefield. “It requires a move from being on the defense to the offense, compared to the situation during the 2008 global economic crisis.”
Revamp leadership programs constantly to ensure they do not remain generic, counsels Wakefield. “In the past, leadership programs could remain relevant for a decade, but not anymore.”
Talent retention and engagement is an issue for many organizations, with 65% of Southeast Asia respondents reported facing this challenge. But only 45% feel ready to address this issue adequately.
According to the report, the “always on” 24/7 work environment overwhelms employees, undermines productivity and contributes to low employee engagement.
But this negative state of affairs could be countered by building passion among employees, with the leadership playing in a key role toward achieving this goal.
The current problem lies with firms’ tendency to focus on retention alone at the expense of nurturing passion and purpose among employees, says Wakefield.
“Focusing on retention alone means companies just end up keeping people in the company who don’t want to be there,” Wakefield says. “Instead, companies should focus on letting employees see that the job they do is important.”
“To create talent, firms need to invest in developing people across the board.”
According to the report, Southeast Asia is characterized by prevalence of a younger workforce, whose expectations encompass a more diverse and holistic definition of “reward”.
“There is an increasing expectation of doing meaningful work, and more focus on the working environment, workforce flexibility and corporate culture. These non-monetary and intangible considerations will play an increasingly important role in employee engagement and retention,” says Wakefield.
HR programs should also be geared toward constantly asking staff in the organization about how engaged and connected they are, and what they feel about their leaders, says Wakefield.
Building Workforce Capability
Is building a capable workforce a pressing problem for organizations?
74% of respondents in Southeast Asia seem to think so, as they identified building workforce capability as a challenge in the coming 12 to 18 months. This result ranks far higher than the global figure of 57%.
“Industries in the region are undergoing rapid technological, demographic and regulatory chances, and organizations now have to change their game from one of simply finding and building skills to one of deep specialization,” says Wakefield.
When all is said and done, Wakefield’s final piece of advice deals with the need for the region’s HR professionals to rethink their talent management techniques.
“Talent management should be looked at in unique and innovative ways so that the employment brand is kept relevant, valued and authentic.”
About the Author
Melissa Chua is a Singapore-based Contributing Editor at CFO Innovation.
Photo credit: Shutterstock