Zurich : Lunch & Learn

9 Mar 2011

Creating People Advantage 2010
How Companies Can Adapt Their HR Practices for Volatile Times

Dr. Rainer Strack
The Boston Consulting Group

Dr. Rainer Strack presented the findings from the second global survey conducted by The Boston Consulting Group (BCG) and the World Federation of People Management Associations (WFPMA) to some 40 participants from IHRC. The session was hosted at the offices of BCG in Zurich.
Download the report from BCG’s website.

Financial crisis and recession has added a new level of volatility on top of the challenges already faced by companies. To be competitive in an environment of accelerating change, companies will need to “reboot” their HR function. The online survey conducted in 2010, which generated over 5,500 responses from more than 100 companies covering five continents and numerous industries, details HR practices that give companies a competitive advantage. Of the 21 HR topics covered, four stand out as the most critical — managing talent; improving leadership development; employee engagement and strategic workforce planning. The survey shows that, of the five most frequent types of projects undertaken by companies, all of these four topics are poorly managed, that is, not effectively put into practice.

As the economically active population declines over the next few decades, most industries and countries will experience a widening talent gap, notably for highly skilled positions and for the next generation of middle and senior leaders. Strategic workforce planning, the cornerstone of fact-based HR management, is still in its infancy and a typical weakness in many companies. Dr. Strack suggests a systematic approach to estimating the future supply and demand for human capital should be embedded in the yearly planning process. By using models along with numbers, companies can run analyses that allow them to better plan today for tomorrow. Talent management and recruiting is the most critical topic for executives; however, this area has gained only slight improvement since the 2008 survey. Companies are now trying to improve employee engagement to restore a sense of pride and trust that suffered over the past two years by balancing cutbacks with flexibility measures. While improving leadership development has risen in importance over past 2 years, corporate capabilities have declined. Companies need a “new deal” with middle management to strengthen the role they play in restoring employee engagement

Of seven HR capabilities assessed by HR and non-HR executives, the greatest difference in perception is transforming HR into a strategic partner. To introduce or enhance the role of HR as a strategic business partner will require strong consulting skills, business acumen and people management expertise. Developmental initiatives and training are needed for both HR professionals and business managers to develop the skill sets and capabilities for a strategic partnership.

Photos by James Macsay/IHRC Support Team
Text by Mary Bronson/IHRC Support Team