Managing talent in a turbulent economy: Part5
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Where are you on the recovery curve? - janvier 2010.
Voir
Talent
Managing talentin a turbulent economy
Where are you on therecovery curve?
January 2010
CConotnetnetnsts
1 Key findings 2 Economic optimism advances… 3 But caution remains 4 Talent priorities adjusting to a reviving economy—but slowly 6 Are you accelerating into the recovery or stumbling out of the recession? 7 Companies that ignore retention may be skating on thin ice 8 Training and development efforts sharply focused on top talent 9 Spotlight on leadership15 Survey participants/demographics17 Contacts
You may be interested in our Managing Talent in a Turbulent Economy Survey Series This is a year-long longitudinal series conducted for Deloitte Consulting LLP by Forbes Insightssurveying global executives across all industries, at large businesses worldwide in the Americas,Asia Pacific, and Europe, the Middle East, and Africa. The talent pulse survey research, as wellas Deloitte’s position on the impending resume tsunami, has gained both U.S. and globalrecognition (e.g.,USA Today, The Wall Street Journal,and Management Issues).Playing Both Offense and DefensePart one in the series, conducted in January 2009, surveyed 326executives from businesses worldwide on how they are planningand managing their workforces in today’s challenging economicenvironment. The report was published in February 2009 andincludes a spotlight focus on workforce planning and analytics.ReadPlaying Both Offense and DefenseNavigating a Course Through Rough Waters Part two in the series, conducted in March 2009, examined how397 executives have changed strategic priorities and talent tacticssince the initial January survey. The report was published in April2009 and features a spotlight focus on talent and risk.ReadNavigating a Course Through Rough Waters
Ta el tn
Clearing the Hurdles to RecoveryPart three in the series, conducted in May 2009, focused onretention and continued to track and compare how 319 globalbusiness leaders have shifted their talent priorities and strategiessince the January and March surveys. This report was published inJuly 2009.ReadClearing the Hurdles to Recovery
Keeping Your Team IntactA special report in the series compared the results of an August2009 survey of 368 employees at large enterprises worldwide withthe May 2009 survey of executives. The study examines employees’perspectives on retention, their turnover intentions, and how theirresponses varied across the different workforce generations. Thisreport was published in September 2009.ReadKeeping Your Team IntactLeaning into the RecoveryPart four in the series, conducted in September 2009 and publishedin November 2009, reveals a clear divide between companies thatare positioning themselves effectively for the economic recoveryand those that are in danger of being left behind. Companies thatManaging talent in a turbulent economyremain in a defensive posture will risk losing the increasingly criticalLeaning into the recoveryNovember 2009fight for talent. Those that also embrace a talent strategy to driveinnovation will separate leaders from laggards.ReadLeaning into the Recovery
Key findings
Economic optimism reached its highest level in December• Nearly all executives surveyed “talk the talk” about theamong surveyed executives in Deloitte s year-long study importance of leadership development and believe their’of talent trends and strategies. More than one-third of companies have clear strategies in place to developsurveyed executives now believe the worst is behind us corporate leaders. Far fewer “walk the walk,” becauserather than in front of us—more than at any point since they lack the necessary tools to make their leadershipthe survey’s inception. Companies looking to move be- development programs more effective. As a result, manyyond the recession and forward on the recovery curve are admit their pipeline of emerging leaders is less thanstriving to find the right balance between offensive and robust.defensive talent strategies.• Companies heavily invested in leadership develop-Since January 2009, Deloitte has been conducting a ment—particularly those with “world-class” leader -longitudinal survey to gauge how senior executives and ship programs—act and operate differently than theirtalent managers are positioning their workforces, both in competitors. While many other companies are stilldeep recession and emerging recovery. The results of the focused on cutting headcount and managing costs,December survey—the final edition in Deloitte’s year-long, these organizations are effectively opening new careerlongitudinal survey of global talent trends and strategies— paths to their top performers and cherry-picking the bestrevealed the following key findings: talent available in the marketplace.• By a margin of more than 3:1, surveyed executives aremore inclined to believe the worst of the economic crisishas passed, rather than the worst lies ahead. Moreover,the percentage of executives who expect the difficultoperating environment will continue fell considerably inDecember to its lowest point since the study’s inception.• Companies that anticipate no layoffs over the nextquarter have a different view of the world—and theiremployees have a different view of them. Broadlyspeaking, these companies have a more optimistic viewof the future, are having an easier time holding on tohigh-potential employees, and are investing more heavilyin leadership development.
The statements in this report reflect our analysis of survey respondents and are not intended to reflect facts or opinions of any other entities. All survey data and statisticsreferenced and presented, as well as the representations made and opinions expressed, unless specifically described otherwise, pertain only to the participating organizationsand their responses to the Deloitte surveys conducted from January 2009 through December 2009.As used in this document, “Deloitte” means Deloitte Consulting LLP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure ofDeloitte LLP and its subsidiaries.Managing talent in a turbulent economy – January 2010 1
Economic optimismadvances…
In December, more than one-third of the executivessurveyed (35%) believe the worst of the economic crisisis behind us—the highest level of economic confidencesince the survey began in January 2009 (Figure 1). TheDecember data comes from a survey of 335 seniorexecutives and talent managers from large companies(annual sales $500+ million), across a range of manyindustries and the three major economic regions, theAmericas, Asia Pacific (APAC), and Europe, the MiddleEast, and Africa (EMEA). The survey was conducted forDeloitte by Forbes Insights.Economic optimism reac hi estlevell among escuervmebyeerd 2e0x0ec9h uestdui vrietss in g hDe oitte’s D vey.
Figure 1. Executive outlook on the economy*40%
30%
20%
10%
0%January March May September December2009*The remaining surveyed executives believe conditions are tough and will be for a while.
The worst is still ahead The worst is behind us
In another signal that the economic recovery is underway,the number of surveyed executives who believe toughoperating conditions will continue fell by 10 points—from62% in September to 52% in December. This continues asteady decline from a peak of 66% in July.Digging Deeper:Participating Consumer/IndustrialProduct executives report that their industry isfacing an uphill climb. Nearly two-thirds (64%) ofConsumer/Industrial Products executives surveyedbelieve economic conditions will continue to bedifficult and only 27% believe the worst of theeconomic crisis has passed. Surveyed executives inTechnology/Media/Telecommunications, on the otherhand, are feeling more upbeat. Less than half, 44%,believe tough conditions will persist, and the samenumber (44%) believe the worst is behind us.
Managing talent in a turbulent economy – January 2010 2
But caution remains
Greater economic optimism has been somewhat slow to The results were very similar across industries, except formanifest itself on the corporate strategic agenda. Cutting Energy/Utilities where executives’ attention was closelyand managing costs remains the top strategic issue for the divided across three issues, with “managing human capi-executives surveyed in December, just as it has in every tal” edging out “developing new products and services”previous survey. by four points (37% vs. 33%) and “cutting and managingcosts” by seven points (37% vs. 30%) (Figure 3).Figure 2. Current strategic issues: December vs. SeptemberhtCutting and managing costs5578%%hTuhrmeae no tchaepri tiasls rueesm raeinms aiinn ati gstatliys tcilcuasl tteiree dw.i thM iamnapgrionvign g nd develo in wAcquiring/serving/top and bottom line performance a p g neretaining customers46%50%products and services. These three issues have remainedImproving top and bottom line29%remarkably consistent throughout the entire courseperformance27%of our longitudinal study.Developing new products 28%and services24%Managing human capital273%1%aDrieg gmionrge pDreeeopcceur:p iEexde cwuittihv easd idnr tehssei nAg mriesrki caans d Addressing risk and regulation17%regulatory challenges, according to the surveychallenges20%results. More than one in five Americas respondentsCapitalizing on M&A/divestiture/Decemberulator arestructuring121%6%t(o22p %st)r arteepgoirct itshsuate .r eEgxecutivye sc ihna ltlheen gEeMs EaAre and SeptemberExpanding into global and new markets1143%%AbuPrAdCe rnesg—ioonnsl ya r1e 2le%s sa cnod n1c6er%n erde swpietcht irveeglyu.latory Investing in innovation/research 11%& development15%Leveraging technology1101%%
Figure 3. Current strategic issues by industryConsumer/ Life Sciences/ Technology/Media/Ranking Health Care Telecommunications Energy/Utilities Financial ServicesIndustrial Products1 Cutting and managing Cutting and managing Cutting and managing Managing human Cutting and managing costs (64%) costs (58%) costs (59%) capital (37%) costs (49%) 2 Acquiring/serving/ Acquiring/serving/ Acquiring/serving/ Developing new Acquiring/serving/ retaining customers retaining customers retaining customers products and services retaining customers(62%) (45%) (49%) (33%) (49%)3 Developing new Developing new Developing new Cutting and managing Addressing risk andproducts and services products and services products and services costs (30%) regulation challenges(35%) (45%) (30%) (32%)
Managing talent in a turbulent economy – January 2010 3
Talent priorities adjustingto a revivi conomy—but slowlyng e
Figure 4. Current highest talent priority50%40%30%20%10%0%January March May September December2009Figure 5. Highest talent priority three months from now40%30%20%10%
0%January March May September December2009
Clearly 2009 has been a tumultuous year for managingtalent. Defensive actions, such as layoffs and cutbacks,dominated the agenda for many companies throughoutthe year and remain an action item for many executives.In December, reducing employee headcount remained theleading current talent priority, ranked number one by 35%of the executives and talent managers who participated inthis survey, followed by retention (28%) and training anddevelopment (25%) (Figure 4).Reducing employeeheadcountOver the course of the entire 2009 survey, participatingRetentionexecutives have eased off of defensive strategies andTraining andramped up offensive retention and developmentdevelopmentmeasures. Leaving 2009 behind and looking ahead to thenext quarter, surveyed executives appear to be adjustingtheir mix of offensive and defensive talent strategies tomatch where they are on the recovery curve. A rankingof talent priorities over the next three months produced avirtual dead heat, with reducing employee headcount at31%, training and development at 29%, and retention at27% (Figure 5).Digging Deeper:Among industries, executivessurveyed in Life Sciences/Health Care plan to rampup recruiting of critical leaders in the year ahead,with 65% reporting an increase. A majority ofEnergy/Utilities respondents will do the same—53%intend to boost critical leader recruitment in 2010.
Reducing employeeheadcountRetentionTraining anddevelopment
Managing talent in a turbulent economy – January 2010 4
In another sign that some companies are shifting fromrveyededxeefceuntsiev etso roefpfoernts teh oatn ltahyeo ftfasl eanret fdreocnlti,n imnga nayn sdu expect that Surveyed executives aretrend to continue over the coming quarter.aodffjeunsting athnedi rd emfiexn soifv e The number of survey participants whose companiessiveat 61% in May and declined dramatically to 48% inta enexperienced layoffs over the last three months peakedwlht sthreaty eagriee so tno thmea tch September and December (Figure 6). Heading into thefirst quarter of 2010, only 39% of talent managers andere texecutives who participated in this survey anticipatereco curadditional layoffs, compared to 51% who see no layoffsvery ve.on the horizon.Figure 6. Organizations conducting/anticipating layoffs70%60%50%40%30%20%10%0%
January March2009
May September December
Past three monthsNext three months
Managing talent in a turbulent economy – January 2010 5
intotAhree ryeocu accelerating nout of tohvee rrey coers ssitounm?blig
The layoff question in the December survey revealed aninteresting dividing line that may have implications abouthow companies are positioned from a talent standpoint asthe economy improves.Overall, companies that reported no layoffs over thelast three months appear more confident that theirworkforces have been right-sized for the new economy.By a 60-point margin (76% to 16%), the executives fromthese companies foresee no need for layoffs over the nextquarter. Of those companies that did experience layoffs,however, 65% expect more layoffs to come.Companies still in layoff mode are less active on theretention front, leaving them exposed to a potential“resume tsunami” where workers seeking to test the jobmarket take increased confidence from an improvingeconomy. Specifically, companies that have laid offemployees over the last three months are more likely tobe cutting back on new talent programs by nearly 3:1(36% to 13%).
Companies that plan no layoffs nextquarter are more optimistic about theasier time holdi ntfou thuirge,h -hpaovtee annti ael employees, andn ga roe investing more heavily in leadershipdevelopment.
One clear, compelling difference between companies stillfacing layoffs and those that are not is in their ability todevelop top talent. Fully 60% of surveyed executives thatforesee no additional layoffs plan to increase programs fordeveloping high-potential employees, compared to just34% of companies that plan more cutbacks in the comingquarter.Looking beyond talent priorities, it becomes obvious thatcompanies which do not expect further layoffs have adifferent view of the world—and their employees havea different view of them. Overall, companies that do notanticipate making additional layoffs in the next threemonths:•Are more optimistic about the future.By a 22-point margin (46% to 24%), surveyed executives whoanticipate no additional layoffs in the next quarter aremore likely to believe the worst is behind them and lesslikely (44% to 58%) to believe tough times will continue.•Have higher employee morale.Surveyed executivesat companies that are not facing additional layoffs areless likely to report employee morale has suffered (26%to 40%).• Enjoy greater trust in leadership. Just 17% of surveyparticipants at companies not expecting layoffs in thenext quarter say trust in leadership has declined—compared to 32% who report trust has eroded atcompanies planning more layoffs.•Are better able to keep top talent.Just 18%of executives at surveyed companies expecting noadditional layoffs have seen increases in voluntaryturnover among high-potential employees comparedto 31% of executives at companies predicting futurelayoffs. •Are developing future corporate leaders. One thirdof surveyed executives (33%) at companies that do notplan additional layoffs next quarter are scaling backleadership programs. More than two thirds (68%) ofcompanies expecting additional layoffs in the next threemonths report cutbacks in these programs.
Managing talent in a turbulent economy – January 2010 6
Companies that ignore may be skatinroent etnhtiino inceg
Companies that are using the recession as a retentionDigging Deeper: Half of Energy/Utilities executivesstrategy need to adopt a new approach in 2010. surveyed (50%) report that they plan to increase payWhile some talent managers may be tempted to neglect over the next 12 months. Only 18% of Consumer/retention efforts in a period of high unemployment, Industrial Products participants say they will boostcompanies that follow this course risk losing critical talent compensation in the year ahead.and being left behind by competitors as organizationsmove up the recovery curve.Nearly one-third of executives surveyed (32%), forDeloitte’s December survey suggests many companies example, report that their companies plan to increaseare getting the message: More than half (54%) of the career path opportunities over the coming year—anexecutives surveyed express a high (41%) or very high increase of nearly 100% from the March survey low(13%) concern about competitors poaching high- of 17%. Even compensation is showing some upwardpotential employees. This may explain the revival of movement; 26% of surveyed executives expectseveral key retention initiatives that remained dormant compensation levels to rise over the next 12 months. Aduring the recession. significant number of survey participants (32%) also planto redirect employees to higher demand jobs as part ofFigure 7. Areas of increased focus on retention over the next 12 monthstheir retention strategy (Figure 7).Redeployment of workers to 32%divisions and jobs in higher demandCareer path opportunities32%Companies using theFlexibl k ( lecommuting,30%recession as a retentione.e worregd.,u tceed work week)strategy will need toCompensation levelsrethink their approachRedirection of outsourced work toin 2010.in-house employeesBenefit levels and packagesDiscretionary perks (e.g., subsidizedfood/beverage, subsidized parking)Paid holidays and vacationTuition reimbursement
12%12%11%
20%
26%25%
Managing talent in a turbulent economy – January 2010 7
Training and developmentefforts sharply focused ontop talent
Figure 8. Areas of increased focus on training and development overthe next 12 monthsHigh-potential employee developmentLeadership/management developmentOnboarding, orientationRegulatory, security and risk trainingJob-specific – sales, customer serviceJob-specific – operationsJob-specific – IT, finance, HR
30%29%28%23%23%
When it comes to training and development, companiespositioning themselves to accelerate into the recovery47%intend to stay tightly focused on specific areas over thecoming year. More than four in ten executives surveyedexpect their companies to increase programs aimed at43%developing high potential employees (47%) and cultivatingcorporate leaders (43%) (Figure 8).Nearly half (47%) ofsurveyed executives planto increase high-potentialemployee development inthe next 12 months.An examination of training and development prioritiesover the entire course of the longitudinal study reveals ineven sharper detail the renewed emphasis on developingtop talent.Nearly every other segment of corporate training anddevelopment efforts—such as onboarding/orientationinitiatives, regulatory/risk training, and job-specific skillHigh-potential employeetraining—have remained locked in a relatively narrowdevelopmentband in each survey. However, we have seen a fairlyLeadership/managementsteady march upward in the survey results for both high-developmentpotential employee and leadership development as theeconomy bottomed out and began advancing (Figure 9).
Figure 9. Top areas of increased focus on training and developmentover the next 12 months: January through December60%50%40%30%20%10%0%
January March2009
May September December
Managing talent in a turbulent economy – January 2010 8
Spotlight onleadership
In each edition of this longitudinal study, Deloitte shinesFigure 11. Level of agreement that company has aclear strategy and operating model for leadershipa spotlight on a specific talent management issue in orderto probe corporate workforce strategies along the curvedevelopmentfrom recession to recovery. In December, the focus was onDon’t knowleadership—how companies value, plan for, and promoteStrongly disagree 1%4%leaders.Disagree Strongly agreeEveryone “talks the talk” when it comes to15% 25%leadership…Most corporate executives and talent managers surveyedtalk a good game when it comes to leadership. Nearlythree-quarters of surveyed executives believe thatleadership development is either critically important (27%)or very important (45%) at their companies (Figure 10).And an overwhelming eight out of ten either agreed(55%) or strongly agreed (25%) that their companies havea clear leadership development strategy (Figure 11).Agree55%Figure 10. Improvement of leadership developmentNot important Don’t know… But few “walk the walk”—only 10% believe theirSomewhat import1a%nt1%leasdpietres hniepa rp uronigvrearsmals aagrree e“mweonrtl do-nc ltahses ”importance of7%Critically Deimportantleadership programs, surveyed executives do not have a27%high sense of confidence about their efforts in this area.Important sur ants describe their leadership19%iOnintilya ti1v0es% aos f“wovrledy-cplaarstsi caipcross the board” (Figure 12). Figure 12. Overall quality of leadership initiativesDon’t knowRequire a 1%significant overhaul World-class8% across the boardNeed some 10%improvement7%Adequate/acceptable22%
Very important45%
Strong insome areas53%
Managing talent in a turbulent economy – January 2010 9
