Talent shortage tops HR's list of worries

Mar 27 2008 by Nic Paton Print This Article

Skilled workers are in such short supply in America that finding talent is now a greater headache for HR managers than even the spiralling cost of funding healthcare.

A poll of 413 HR professionals by consultancy Deloitte and the International Society of Certified Employee Benefit Specialists identified finding, hiring and keeping talent as their top concern.

While containing the cost of health care was still a top five concern for more than seven out of 10, this was down on the eight out of 10 reported in a similar survey last year.

More than half identified the willingness, or lack of it, of employees to pay for an increasing portion of their benefit plan coverage or to manage their own reward budget as a growing headache.

Similar numbers said they were wrestling with the need to create a clear alignment of their rewards with their business strategy and brand.

And four out of 10 identified demonstrating return-on-investment for what they spent on reward as their key challenge.

The need to feel economically secure in retirement was another key worry.

More than four out of 10 cited the "ability to afford retirement, including post-retirement health care" as their most important area of concern, while the "ability to earn additional rewards that allow oneself to stay on top of inflation and advance in real economic terms" was cited by more than a quarter.

There was also a drive towards increased customisation of rewards strategies and handing over increased control of them to employees.

More than eight out of 10 of the HR professionals polled, compared with seven out of 10 a year ago, expected to make changes in specific elements of their rewards programme or strategy, said Deloitte.

These were likely to include increased differentiation of rewards by business unit or workforce segment or a closer (or just different) alignment with their brand.

Nearly three-fourths planned to "increase employee communication and education" around their reward programmes and more than half planned to "redesign some of our reward programs to better align the interest of employees and the organisation and promote employee engagement".

And when asked whether they either already had or were planning to make changes to their programmes based on generational differences, nearly a third said yes.

"Clearly, talent management is the top organisational challenge, higher than managing the cost of total rewards, especially health care," said Tim Phoenix, a principal in Deloitte's human capital service area and co-director of the survey.

"We find that HR organisations around the world are becoming increasingly business-driven and strategic, shifting their focus from HR administration and cost reduction to long-term ROI and growth in a way that directly impacts the bottom line," he added.