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November 2010 Newsletter

5 Formidable Threats Facing Staff Development in 2011 – Special issue Newsletter

For many the working landscape has changed drastically in the last few years, and with more than 33%[1] of executives expecting a European double-dip recession it seems likely that the challenges many have been facing are not abating just yet.

We recently commissioned an extensive study in order to determine how the issues that have arisen over the last couple of years translate into specific threats and challenges for organisations operating in the UK. Our study, undertaken with our specialist sister company Versado, uncovered five formidable threats facing businesses in 2011 to which organisations must be cognizant if they are to survive and grow.

 

A Lack of Engagement Pandemic

One of several consistent findings in our research concerned the level of staff satisfaction in the U.K. Unfortunately the current statistics from a number of consultancies and independent bodies paint a worrying picture. One key survey found that 71% of employees surveyed are not fully engaged with their jobs.[2]

Disengaged staff can impact on an organisation’s success considerably and coupled with certain dynamics created by the recession, which we will explore shortly, present distinct challenges to organisations.

What follows are five formidable threats which form a picture of the potential challenges in 2011 for organisations in the U.K.  

 

Threat 1 - Employee Retention – a ticking time bomb?

Employee retention may well be a ticking time bomb. The recession stunted opportunities for healthy churn of staff, as well as led to higher levels of disengagement among staff as many employees were forced to do more with less prospect for promotion and reward.

Couple this with the fact that many organisations still do not fully understand what motivates their employees and you potentially have a climate which could see large scale movement of talent as opportunities arise, leaving a significant recruitment gap.

A leading global workforce survey by Towers Watson found that it is crucial for employers to realise that money is no longer the main motivator for securing engagement and staff retention.[3]

A survey in by Linkage indicates that 40% of respondents would consider leaving their job for the same financial benefits at another company if that company offered heightened personal and career development.[4]

 

Threat 2 - Talent Management – a losing battle?

Thousands of organisations run the risk of not having the talent they need to remain competitive. The consulting firm McKinsey’s year long survey, The War on Talent, found that only 3% of all respondents felt that their organisation developed talent quickly and effectively.

The case for talent management becomes clear when you consider that across all sectors, companies that are proactively managing their employee talent do on average 22% better on shareholder return, than those organisations that do not.[5]

Talent management is just as much about identifying and rewarding strong performers as it is about not tolerating under performers. Underperforming bosses and mangers could potentially do the most damage as their ethos and habits often filter down to their reports.

 

Threat 3 - Tick-box Performance Management

Only 20% of the respondents in the CIPD’s national survey felt that performance management had any bearing on individual performance. It was generally seen as a bureaucratic exercise with little, or no personal relevance.

Feedback is also an essential element of performance management - 73% of managers view informal quality feedback as indispensable. Yet 30% of those surveyed said they did not receive sufficient feedback.[6]

Effective delivery of feedback by managers and leaders should be directly linked to their own performance assessment and compensation/reward schemes. There are two key capability points in giving effective performance feedback: entry and delivery. All managers must know the difference and be fully competent in both.

 

Threat 4 - Escalating Conflict and Grievance

Increased awareness of employment rights as well as easier access to litigation in the form of ‘no win, no fee’ legal services, means that between 2006-2009 individual employment tribunal cases increased by 32%.[7]

Internal conflict hampers performance and impairs teams, costing UK organisations billions every year. It is estimated that more than 65% of performance problems result from strained relationships between employees and line managers.[8]

It is essential that line mangers have the skills, training and confidence to deal with conflict and grievances at an early stage. Yet 27% of managers receive no guidelines or training on how to deal with conflict.[9]

 

Threat 5 – Engagement

The most important consideration of all threats to the future of your organisation’s success is disengaged employees. Engagement is one of the biggest HR challenges in the next year.

Organisations need to devote serious time and thought to this issue as it intersects with all of the aforementioned threats. Engagement is the holy grail of workplace relations. It is a virtuous circle: engaged employees = better results = deeper engagement.

In order to tackle this managers need to take an active role in identifying disengagement and sustaining engagement. If an employees' relationship with their manager is fractured, then no amount of perks will persuade the employees to perform at top levels.

The CIPD’s extensive engagement survey found that poor management is the second greatest contributor to disengagement. This means it is critical that managers need the skills of:

  • Enablement
  • Removing obstacles
  • Creating opportunities
  • Translation of  the greater goals of the organisation to local objectives

In order to achieve this training and coaching have consistently been found to be very beneficial. The RSA Group did this in the midst of the recession and as a result they were one of a handful of European companies to counter-intuitively improve their employee engagement whilst making redundancies. 

Investing in management is vital in order to increase engagement. A 10% increase in discretionary effort among your staff would be the equivalent to increasing your workforce by 10%. If you calculate the costs associated with employing 200 new staff in a company of 2,000 the case for investing in engagement becomes unequivocal. 

 

Conclusion

When markets are shrinking and contracts are falling, it is your employees and their commitment, productivity and ability to add value that will keep your organisation robust and provide opportunities for growth. 

you:unlimited uses a cyclical approach to combat the five threats facing organisations. This approach focuses on how actions, results, beliefs and potential are all interlinked. The basis of this approach is that your beliefs and potential are representative of your internal thoughts and processes and so they directly affect your mindset.

Behavioural aspects, however, manifest themselves in external actions. We believe the way people think directly affects the way they behave. So if you believe that your next meeting will go well it will directly affect the way you act during the meeting. This in turn affects your potential, which in turn affects the results you are likely to get.

Our approach to training is to focus on how all four elements connect to each other, and how by starting with any one of the four elements the whole picture can be improved. This is an effective way to approach the five threats, and leads to long lasting success.

If you want to help your business manage and excel through the obstacles that lie ahead then speak to one of our specialist consultants on 020 7407 0044 or mail edward@you-unltd.co.uk.


[1] Versado survey 2010

[2] BlessingWhite (April 2008). 2008 Employee Engagement Report

 

[3] Towers Watson 2010 – Global Survey / Linkage Incorporated, June 2010 

[4] Linkage Incorporated http://www.linkageinc.com/thinking/linkageleader/Pages/Linkage%20eNewsletter.aspx

[5] Guthridge, McPherson, Wolf “McKinsey Quarterly: Upgrading Talent”

 

[6] The CIPD, “Performance Management in Action: Current Trends and Practice, 2009

[7] United Kingdom  Tribunals Services Statistics 2008-2009

[8] Working Dynamics http://www.workdyn.com/tools-ConflictStats.html January 2006

[9] The CIPD “Managing Conflict at Work”

 

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