Human Capital Trends 2015 Ireland
Culture and engagement critical talent challenge for 90% of Irish organisations. Irish leaders give their HR and talent programmes a C for overall performance
Culture and engagement is at the forefront of talent issues for the majority of Irish companies, according to Deloitte’s Human Capital Trends 2015 survey, which reveals the top trends shaping the human capital agenda.
Nine in ten Irish organisations cite culture and engagement as one of their biggest challenges. However, of the respondents, only 28% feel ready, and 8% very ready, to tackle this challenge. This represents a considerable widening of the “capability gap” – the difference between the survey’s importance index and readiness index – with regards to this issue, which now stands at 30 on the index.
Commenting on the findings, Cormac Hughes, Partner, Human Capital Consulting, Deloitte, commented: “An organisation’s culture can be hard to define, and senior leadership continue to grapple with making this concept tangible. We define culture as the systems of behaviours, values and beliefs that influences how work gets done in the organisation. It is an enabler of strategy and while it is driven by leaders, it is enacted by all employees, and forms the basis for increasing engagement among an increasingly mobile, diverse and demanding workforce. Fundamentally, culture needs to align with and support the business strategy. It is no longer seen as a ‘soft concept’ or a ‘nice to have’.”
In order to address the challenge of culture and engagement, HR practitioners can take a number of steps. Putting in place real time programmes to evaluate an organisations culture using diagnostic models and easily accessible mobile tools, can help understanding and measurement. Reinforcing to leadership that a clear understanding of culture is a top priority ensures that efforts to address this challenge start at the top.
Engaging with employees to assess what is meaningful to them, and taking steps to reduce the burden of an increasingly 24/7 work environment by evaluating business processes, for example, are also important steps. Last year’s survey showed that the overwhelmed employee was the top issue in Irish organisations, and should still be front of mind for HR practitioners. In particular, engaging with millennials (people born after 1982) will be critical.
Hughes commented: “The needs and values of millennials will shape the organisation’s culture over the next 10 years. Deloitte research shows that millennials most value the leadership skills of strategic thinking, being inspirational, strong interpersonal skills, and vision.”
Leadership – a perennial challenge
In addition, this year’s reports indicate a continuing lack of progress in what has become a perennial organisational challenge – leadership. 90% of respondents in Ireland also view this as a top talent priority, yet only 26% feel ready to address it. New approaches to leadership development involving better assessment of necessary leadership qualities, and a focus on understanding the career pattern of outstanding leaders, can help HR and talent leaders build development programmes tailored to the unique complexities faced by their leaders.
Learning and development (up from sixth position in 2014), performance management, and building an ‘on demand workforce’ complete the top five critical talent challenges for Irish organisations. The challenges identified by Irish organisations are broadly in line with their global counterparts.
Learning and development – into the spotlight
In 2014, learning and development did not feature as a top five challenge in Ireland or globally. In 2015, the need to transform and accelerate corporate learning moved from sixth place in 2014, to the third highest priority in Ireland. There are signs of progress in addressing this challenge, with 45% of Irish business and HR leaders rating themselves ‘somewhat ready’ to respond, but there is large variation in how ready companies are to address this talent challenge, with only 7% responding that they are ‘very ready’ to redesign their approach to learning.
Performance management – the secret ingredient
This trend is the fourth most pressing talent challenge in Ireland, and comes in at fifth place globally. As business needs for leadership, stronger engagement, and critical skills continue to grow, business and HR leaders look to performance management as the ‘secret ingredient’ that affects all of these challenges. 82% of business and HR leaders in Ireland rate it as important, but only 22% are ready to deal with new challenges in this area. However, findings suggest that efforts in Ireland to address this challenge are well underway, with 50% either planning to review or currently evaluating their performance management system. Encouragingly, 45% have reviewed and updated their performance management process in the last 18 months.
Workforce on demand – are you ready?
Almost 8 out of 10 Irish business and HR leaders rated building an ‘on demand workforce’ as an important talent challenge, making this the fifth most important trend. To combat talent shortages organisations must engage with the ‘open talent economy’ to tap into a broader range of external talent through non-traditional employment methods such as joint ventures and partnerships, contracted, outsourced and freelance workers. Deloitte data suggests that 41% of companies in Ireland plan to increase the use of contingent, outsourced, contracted and part time employees over the next 12-18 months, rising to 56% over the longer term horizon of 3-5 years. Managing this complex workforce effectively will require new, integrated relationships across HR and procurement, as well as with business leaders.
In line with last year’s findings, Irish business leaders give their HR and talent programmes a C grade for overall performance, slightly above their global peers, but still indicating room for improvement. 39% of respondents believed that their programmes were good, while 32% only rate them as adequate.
Valerie Daunt, Director, Human Capital Consulting, Deloitte, commented: “HR faces continuing challenges in generating the investment to begin to close the gap between current practice and desired outcomes. Encouragingly our data shows that 68% of Irish business leaders have plans to increase or significantly increase investment in HR. Key to continued investment will be focused investments which deliver the business strategy including investment in technology, talent management, building of HR capabilities, and supporting business decisions through data and analytics. With targeted investment to address capabilities across our top trends, HR leaders can begin to really engage with solutions to the people challenges facing their organisations. Investment in HR technology is crucial to begin this process, however, this investment must be accompanied by efforts to redesign processes, talent management programmes and retraining of HR professionals to see the maximum return.”
Survey findings also show that Irish organisations are taking a more optimistic view of the outlook for business growth than in recent years. 21% of respondents anticipate stronger growth than 2014, and 40% expect moderate growth. In comparison with global counterparts, Irish organisations are slightly more positive - just 16% of global respondents expect strong growth compared to last year.
About the survey
More than 3,300 business and HR leaders participated in the Global Human Capital survey. They represent businesses of varying sizes across a range of industries in over 100 countries. This special excerpt, the Ireland Human Capital Trends report, is based on results from over 60 Irish respondents, and summarises the trends and priorities of HR and business leaders across the country. This report is designed to complement the Deloitte 2015 Global Human Capital Trends report, available at www2.deloitte.com/ie/humancapitaltrends2015.
*The Human Capital Capability Gap Index
The Deloitte Human Capital Capability Gap Index is a research-based index that shows HR’s relative capability gap in addressing a given talent or HR-related problem. It is computed by taking an organisation’s self-rated readiness and subtracting its urgency, normalised to a 0–100 scale. For example, if an organisation feels that an issue is 100 percent urgent and it also rates itself 100 percent capable and ready to address the issue, the capability gap would be zero. These gaps, which are almost always negative, can be compared against each other.
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The information contained in this press release is correct at the time of going to press.
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