As companies in the UK and across Europe begin to position themselves for future growth in the face of an uncertain economic recovery, a new survey by global professional services company Towers Watson finds that concerns over their ability to attract and retain key talent, or to plan for an orderly replacement of talent, could thwart those efforts. The survey also found significant gaps in employers’ capabilities to address talent management and succession planning issues.
The Towers Watson Strategies for Growth study, a survey of more than 700 companies globally, revealed that finding talent and keeping hold of it was one of the biggest potential workforce obstacle to achieving growth.
Respondents in Europe are particularly worried about the talent drain’s impact on management succession planning with nearly half (48%) citing this in the ‘top three’ most important challenges to growth, on a par with concern about the loss of talent in key skill areas, also cited in the ‘top three’ by 48% of companies. The other most concerning challenge cited in the ‘top three’ was the level of disengagement amongst workers (stated by 39%).
Joris Wonders, Senior Consultant, Talent and Rewards for Towers Watson said: “Companies clearly see talent as an integral part of growing their businesses when the economic recovery firmly takes hold. And despite respondents’ cautious optimism about growth in the coming year, they recognise that an inability to attract new talent or hold on to key individuals could prove to be the difference between growing and remaining stagnant. In light of this concern it is striking that the research found that many respondents aren’t truly prepared to address talent issues.”
Of those companies surveyed only a quarter (26%) indicated they have an appropriate capability in place for acquiring talent and fewer (23%) for succession planning (23%). Only 22% have a sufficient capability for retaining talent.
Joris Wonders continues: “The lack of a sufficient governance capability in talent management and succession planning is a real concern, particularly since the least prepared organisations will not only find themselves at a significant disadvantage over time, but may lose critical momentum in trying to catch up to more advanced peers once recovery is in full swing. One positive finding that may help offset this risk is respondents’ focus on improving performance management, which was cited as the number one area for greater emphasis this year globally.”
The relationship between a high-performance culture and growth, and the role that effective performance management plays in helping shape such a culture was recognised by respondents to the survey. With talent worries looming large, there’s little doubt that getting the pay/performance equation right can deliver benefits across the board, giving companies the ability to keep top talent, have a sufficient pool to draw on for succession planning and have an easier time attracting the necessary talent.