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Human Resources: The Big Issues

Human Resources: The Big Issues

The delicate balances between globalization and talent management are more important now than ever.

By Marshall Goldsmith | Business Week

June 19, 2009

Around the world, companies are struggling with the aging workforce and less-loyal employees. A new survey reveals executives’ worries.

Companies are facing daunting challenges in hiring, training, and retaining people. Globalization has increased the demand for talent everywhere, while the upcoming retirement of the Baby Boom generation is projected to shrink worker supply in the West. More than ever, employees are demanding a balance between their work and the rest of their lives—a trend long present in the West but now prevalent in Eastern Europe, South America, and India.

Companies have always struggled to measure and track their programs and activities aimed at improving people’s performance and level of engagement. To try to get a better handle on how companies manage their people, Boston Consulting Group (BCG) recently surveyed more than 4,700 executives in 83 countries and markets and published a report based on its findings, “Creating People Advantage: How to Address HR Challenges Worldwide Through 2015”. Executives told BCG they feel unprepared to face the massive challenges that confront them in managing talent.

The report is unique in its detailed and specific findings by country, region, and industry. I recently spoke with Anna Minto, a BCG partner and co-author of the report, and Chuck Scullion, also a BCG partner and leader of the firm’s organization practice in the Americas, about the study. Edited excerpts of our chat follow:

What are the key people issues that emerged in the U.S., and how should companies address them?

Of the 17 issues covered by the survey, the top three in the U.S. were managing talent, improving leadership development, and managing demographics. For each issue, we asked executives how important it was to their company’s future, and we asked them to assess their company’s capabilities in that area.

On managing talent, the key concerns center on sourcing talent globally and developing customized career tracks and compensation plans. Only 20% of respondents say their companies currently source talented people globally, yet nearly half said they would do so in the near future. If this does not sound startling, imagine a global search for half of the key positions at your company. While only 40% of respondents say their companies now have tailored career tracks and specific compensation schemes for talented people, roughly two-thirds of them believe they will in the near future.

To improve leadership development, U.S. executives expect their companies to start providing financial rewards for good leadership. Only one-quarter of executives said their companies provide financial rewards for leadership today, but 63% expect their companies to be doing so by 2015.

The third topic, managing demographics, is a double-whammy in the U.S. Executives need both to replace older employees and address the emerging needs of younger ones, commonly known as Generation Y or the Millennials. To fill the gap left by retirees, U.S. executives expect their companies will start offering employment options to attract or retain semi-retired or retired workers and look to train employees for new jobs. At the same time, companies are trying to keep younger employees, who have less loyalty to their company, engaged and committed.

How do these issues differ from the top issues in other countries and regions?

Managing talent and improving leadership development are universally important. Managing talent was one of the top three human resources issues in 14 of the 17 countries we analyzed in depth, while improving leadership development was a top-three concern in 10 of them.