A vast majority of companies worldwide continue to struggle with attracting and retaining the high-potential and critically-skilled employees necessary to increase their global competitiveness, according to a new survey conducted by global professional services company Towers Watson and WorldatWork, an international association of human resource professionals. The survey also found that employees are experiencing high levels of stress, a trend that many employers and employees expect to continue for the next three years.
Towers Watson’s Global Talent Management and Rewards Study, a survey of 1,605 companies globally, found that employees continue to experience high levels of stress at work. A third (32%) of UK companies indicated that employees often experience excessive pressure in their job and well over half of UK organisations (57%) report their employees have been working more hours than normal during the past three years. Nearly as many (46%) expect to maintain that pace for the next three years. In Europe, Middle East and Africa (EMEA) as a whole, as well as the US, companies reported even higher stress levels with nearly half (47%) the workforce in EMEA and six out of 10 (61%) in the US often experiencing excessive pressure on the job.
“At a time when organisations are under pressure to increase performance in difficult market conditions, inevitably additional pressure can fall on the workforce to up their game.” said Carole Hathaway, EMEA rewards leader at Towers Watson. “But it’s important for companies to bear in mind the impact this can have on retention and engagement. Cracking the whip will only get an organisation so far, it’s even more important to work on employee engagement strategies that encourage discretionary effort and maintain motivation levels during periods of high pressure.”
The study found that UK employers have fewer problems when it comes to attracting critical-skill employees than elsewhere in the world, with only two-fifths of UK respondents (39%) reporting such problems while comparable figures in the US and EMEA were more than double this (72% and 68% respectively). A similar global pattern is shown for employee retention with 37% of UK employers experiencing problems keeping hold of critical skill employees, compared to more than half (56%) of employers globally.
“The UK looks to be suffering from fewer problems in the attraction and retention of highly-skilled employees and this may be because there is less recruitment activity as employees are more likely to stay as they value the security they feel with their current employer, rather than taking the risk of moving organisations,” said Hathaway. “However, for those employers struggling to attract, retain and engage high-value employees it is likely that they are not offering the work environments and total rewards programmes that are most valued by employees. Our research shows that there appears to be a mismatch between what employers are offering and what employees are demanding. Employees, including top talent, are focused on competitive base pay and job security. Employers, on the other hand, are emphasising other items such as challenging work and their mission, vision and values.”
Performance Management and Leadership
UK employers were broadly optimistic about the effectiveness of their performance management processes. Six out of 10 (60%) suggest the company successfully links salary to individual performance results and nearly three-quarters (73%) claimed bonus pay-outs were also linked to performance. However, communicating these links has proven less successful as only half (53%) the UK organisations surveyed report that employees understand how their base pay is determined. Employees are even more negative, with a only a third (34%) of UK workers feeling their pay was linked to performance. These findings were taken from Towers Watson’s Global Worforce Study, a survey of 32,000 employees.
Confidence in managers is lower in the UK than the rest of the region with only 45% of organisations claiming their managers were effective at setting individual performance goals, compared to 52% in EMEA. In addition, only 41% believe the company’s managers executed its base pay programme well.
UK organisations had lower confidence in their managers across a wide range of management criteria, compared to their European counterparts. Other low scoring skill areas included providing regular coaching and feedback, conducting career development discussions, explaining career opportunities, developing performance plans and building trust with employees.
“As UK companies seek to grow profitably during a period of economic volatility, their focus needs to be on crafting an employee value proposition that helps to attract and retain talented and critical skill employees and also engages the entire workforce,” said Hathaway. “Additionally, organisations need to position themselves for future success over the next 5 to 10 years. Effective leadership development, performance management and succession planning programs will be key to getting it right.”