HR Reaches Strategic Status
Benchmark your program against this year's HR Executive Outlook Survey results.
This year's Human Capital Executive Outlook Survey, co-sponsored by Kenexa, a provider of end-to-end recruitment and retention solutions, shows a few surprises, some assumptions validated and a few clear trends in the overall operations of HR departments and how they interact within an enterprise.
HR's Strategic Relevance
Almost two-thirds of respondents to the Executive Outlook Survey said that their company's top management team frequently or sometimes looks for solutions to business problems through human capital management. Another quarter said that senior management always comes to HR for solutions to business problems. All told, senior management's recognition of HR as a business problem solver is nearing 100 percent! (See Table 1.)
Strategic Status of HR
Does your top management team look for solutions to business problems through human capital management?-
Talent Management Named Answer to Labor Shortage
A majority, or 75 percent, of respondents believe a significant labor shortage is likely or very likely over the next five years. Anecdotally, many companies say shortages for certain talent are already upon us and will only get worse.
So how do executives plan to retain current talent and attract the best employees to their companies? Talent management was named as the primary technique by 55 percent of respondents, while recognition programs were a close second at 52.9 percent. Recruitment advertising would be used by 48 percent of respondents and company image campaigns are the solution for 29 percent. The number of companies relying on company image campaigns to improve recruitment and retention showed a 10 percent increase from the 2005 Executive Outlook survey. (See Table 2.) More organizations recognize the value of external and internal branding to current and prospective employees.
Labor Shortage Solutions
Benefit Offerings
Even with ever-rising healthcare costs, 54 percent of respondents said their current benefits offerings are the same as 2005. In fact comparing data from last year's survey, there is a slight shift toward more generous benefits offerings. In 2006, one-quarter of respondents increased benefits, while 18 percent planned to increase benefits in last year's survey.
About one-fifth reported that they increased employee contributions to premiums since last year and about 9 percent said that benefits had decreased since last year.
Almost half of respondents plan to offer long-term care insurance and/or supplemental insurance offerings. This is an increase of about 10 percent over last year's operations survey, showing a clear movement toward the value of these benefits to employees.
Consumer-driven healthcare (CDHC) still remains at low levels of usage, with only one-quarter of respondents offering this form of health insurance to their employees. In addition, only 15 percent plan to add it in 2006, a significant decrease from the 41 percent who planned to add this type of plan in 2005. A variety of reasons may be responsible for this shift, including market saturation, negative employee reactions to the plans, or lack of knowledge on the benefits of such plans.
Of those who do have CDHC plans in place, 30 percent noted reduced costs and more employee involvement as a result of the plans, while only 13 percent said they received negative employee reactions to the plans.
More Long-Term Care,
Supplemental Benefit Offerings
Companies that plan to add benefits
HR Management Systems
Not surprisingly, a majority of respondents currently use HR technology platforms to manage benefits, compensation, time and attendance. Approximately 45 percent of respondents have automated their recruitment and hiring function, while almost 30 percent have incorporated performance management into their HR information system.
Performance management is also the area in which the most respondents plan to automate as part of their technology platform in 2006. More than one-third plan to add performance management, while 22 percent plan to add talent management. Although time and attendance systems are already implemented by many companies, 22 percent plan to add this capability in 2006, bringing the number of respondents who currently have or are planning to implement time and attendance technology to about 85 percent.
Survey Demographics
Almost 50 percent of the respondents were directors of HR, and about 30 percent were either vice presidents of HR functions, CEOs, or presidents. Approximately 65 percent of respondents were from companies with 1,000 employees or less, while about 35 percent were from companies with 1,000 employees to 5,000 plus. About a quarter of those companies were in the manufacturing industry, while 20 percent were in services. The remainder of the respondents were spread out between healthcare, high tech, retail, construction, transportation, and financial institutions.
HC