HR Trends & Priorities for McLean & Company 1

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1 HR Trends & Priorities for 2012 McLean & Company 1

2 Executive Summary McLean & Company fielded its 2012 HR Priorities Survey with both HR and business respondents. Of the seven main areas in HR, Leadership & Management and Performance Management bear the highest rankings. HR Operations ranked the lowest. Within the Leadership & Management area, 60% of HR respondents say developing leaders within the organization is a top priority. Within the Performance Management area, 57% of HR respondents indicate that improving employee engagement is a top priority. HR from small organizations is focused on operational and process related activities, such as updating HR policies and improving performance appraisal systems. Large organizations put higher priority on strategic activities, such as implementing better software tools. Business managers and executives believe workforce planning, succession planning and employee development require the biggest increases in priority by HR. Managers and executives from the business differ in their opinions on career paths and work/life balance From the emerging trends surveyed, HR and business are most misaligned on high potential employee programs and social media for recruiting. In emerging trends, large organizations are ahead of small organizations in terms of how many are implementing, have deployed a partial solution or deployed a full solution in the following emerging trends: Globalization of HR Social media for recruiting Telework and telecommuting programs Business respondents from large organizations feel that telework and telecommuting programs are a significantly higher priority than business respondents from small organizations. McLean & Company 2

3 Survey Methodology McLean & Company fielded its 2012 HR Priorities Survey with both HR and Business Respondents Respondents were asked to rate the priority of various HR initiatives. The survey attracted almost 300 respondents across both categories. HR Respondents by Job Title C-Level with HR ownership 5% VP of HR 12% HR Director 31% HR Consultant 8% HR Generalist/ Specialist 19% HR Manager 25% Business Respondents by Industry Trans/Utilities/ Comms 10% Government 11% Wholesale/ Retail 6% Manufacturing 17% Primary Industries 2% Business Services 17% Financial Services 11% Education Healthcare 13% 13% N = 133 N = 148 McLean & Company 3

4 HR Trends Survey Objectives In December of 2011, McLean & Company surveyed HR and business respondents to answer the following questions: From the HR Responses: What are the top priorities of HR for 2012? Is there a difference between the priorities of HR from small and large organizations? From the Business Responses: What is the distribution of respondents that want to decrease/continue/increase priorities? Is there a difference between views on overall priorities for management and executives? Is there a difference between priorities placed on activities by management or executives? Is there a difference between priorities of business respondents from small and large organizations? From the Emerging Trends: What is the distribution of HR/business respondents in regards to emerging trends? Is there a difference between small and large organizations when it comes to emerging trends? Is there a difference between the emerging trends for business managers and executives? McLean & Company 4

5 Top HR Priorities for 2012 What s in this Section: Overall priorities for 2012 rated by HR Differences in priorities between small and large companies Where business respondents want HR to increase their effort in 2012 Sections: Top HR Priorities for 2012 Emerging Trends Appendix McLean & Company 5

6 Of the seven main areas in HR, Leadership & Management, and Performance Management bear the highest rankings HR leaders indicated which of the following areas is their top priority for The dashed line represents the baseline on average, any one of these is a top priority to 38% of respondents. Leadership & Management = 53% Performance Management = 46% Strategy = 44% Workforce Planning = 36% Recruiting = 35% Employee Development = 31% HR Operations = 28% % Top Priority 70% 60% 50% 40% 30% 60% 55% 44% 57% 47% 33% 49% 44% 39% 44% 27% 45% 36% 31% 30% 39% 32% 31% 23% 43% Average % top priority across all activities = 38% 33% 31% 28% 20% 10% 8% 0% Source: McLean & Company, N = 133 Activities The % Top Priority was determined by using the percentage of respondents who selected the option This is a top priority for each HR activity. McLean & Company 6

7 Developing leaders is the top activity for HR, followed by increasing employee engagement 60% of HR respondents say developing leaders within the organization is a top priority. 57% of HR respondents indicate that improving employee engagement is a top priority. Our priority is an overarching talent program that will look at formalizing succession planning, developing and retaining leaders and top high-potential employees, and employee engagement through development and recognition. - HR Manager, Healthcare For more information on developing leaders in your organization, please see these McLean & Company solution sets: Assess Leadership Capabilities Leverage the First 100 Days as a New Leader Lead Staff through Change Design a Management Development Program [It s important to] create more employee involvement and to create different ways in which this can happen for example, service councils where participants get involved in the community. - HR Manager, Trans/Utilities/Comms For more information on improving employee engagement, please see these McLean & Company solution sets: Optimize Employee Engagement Surveys Identify & Select Employee Engagement Initiatives Identify & Reengage the Disengaged Empower to Engage McLean & Company 7

8 HR leaders weigh in on which initiatives they believe will have the biggest impact on employee engagement in 2012 New Performance Management system, including new appraisal reward based on performance and coaching, and feedback during the process. - HR Director, Trans/Utilities/Comms Enhancing leadership capabilities. - VP of HR, Manufacturing Communication. - HR Manager, Manufacturing Improving our assessment procedures and increasing feedback to staff. - HR Manager, Financial Services Work on high-level management leadership and employee recognition. - HR Manager, Health Care Identify opportunities for your organization to improve engagement through an Engagement Survey. McLean & Company 8

9 Top priorities differ between HR in small and large organizations across the seven main HR areas HR from small organizations put significantly higher priority on performance management than any other area when compared to HR from large organizations. Performance Management Employee Development Strategy HR Operations Workforce Planning Recruiting Leadership and Management 19% 13% Small Orgs Greater Priority 6% Large Orgs Greater Priority 2% 1% 4% 9% Difference between Priorities for Small and Large Organizations Statistically Significant Difference Source: McLean & Company, N = 117 The difference in priorities was calculated by subtracting the average priorities for small organizations from the average priorities for large organizations (large organization priority minus small organization priority). Small organizations were defined as organizations with 500 or fewer full-time employees. Large organizations were defined as organizations with greater than 500 full-time employees. McLean & Company 9

10 Drilling down into the activities: improving performance appraisals is significantly more important for small companies HR from small organizations is focused on operational and process related activities, such as updating HR policies and improving performance appraisal systems. Large organizations put higher priority on strategic activities, such as implementing better software tools. Small Orgs Greater Priority Large Orgs Greater Priority Improve our performance appraisal system Improve rewards and recognition program 28% 22% Performance Management Improve employee development programs Implement better HR software tools Update HR policies 26% 21% 19% Employee Development Strategy HR Operations Difference between Activity Priorities for Small and Large Organizations Source: McLean & Company, N = 117 Only activities with priorities that were statistically different between small and large organizations are shown in the above graph. The priorities for the remaining 19 activities were not significantly different from one another. The difference in priorities were calculated by subtracting the average priorities for small organizations from the average priorities for large organizations (large organization priority minus small organization priority). Small organizations were defined as organizations with 500 or fewer full-time employees. Large organizations were defined as organizations with greater than 500 full-time employees. McLean & Company 10

11 Business managers and executives weigh in: workforce planning, succession planning, and employee development require the biggest increases in priority Average % increase in priority across all activities = 67% % Respondents that wanted Increase/ Decrease in Priority Average % decrease in priority across all activities = 6% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Workforce Planning* = 84% Leadership & Mgmt* = 82% Strategy* = 75% Performance Mgmt* = 74% Employee Development* = 73% Recruiting* = 71% Managers and execs feel that the priority of outsourcing HR functions should be decreased HR Operations* = 62% 82% 80% 77% 78% 78% 68% 65% 60% 72% 71% 71% 80% 72% 64% 65% 70% 71% 66% 64% 69% 62% 55% 30% 3% 2% 6% 5% 2% 9% 9% 12% 3% 3% 3% 1% 3% 4% 2% 5% 4% 3% 2% 7% 9% 8% 27% 36% 7% Increase in Priority Decrease in Priority Source: McLean & Company, N = 148 *Note: The percentages that are shown are the average percentage of respondents who did not select Continue with similar effort for management and executives. Small organizations = 500 or fewer full-time employees. Large organizations = greater than 500 full-time employees. Data Insight When comparing small and large organizations, the only activity that resulted in a significant difference was increasing employee engagement. Small organizations wanted to increase the priority of this more than large organizations. McLean & Company 11

12 Managers and executives from the business differ in their opinions on career paths and work/life balance McLean & Company tested to see if there was a significant difference in the perceptions of management and executives when it came to the priorities of their HR department, and as it turns out there were no statistically significant differences between the positions. 80% 70% 78% 70% Both management and executives tend to be aligned in what areas they believe their HR department should increase priority. Looking at the activity level, however, there were two significant differences in the amount managers wanted to increase priorities compared to executives: Clarify employee career paths Enhance work/life balance options Managers care about their employees and would like to see an even greater increase in priority for employee development and working conditions. % Respondents who said to increase in priority 60% 50% 63% Clarify employee career paths 54% Enhance work/life balance options (e.g. telework) Activities Source: McLean & Company, N = 148 Managers Executives McLean & Company 12

13 Emerging Trends Comparison of HR against business responses for key emerging trends to determine where misalignment exists Comparison of emerging trends by small and large organizations by HR respondents Comparison of emerging trends by small and large organizations by business respondents Top HR Priorities for 2012 Emerging Trends Appendix McLean & Company 13

14 Emerging trends: HR and business are most misaligned on high potential employee programs and social media for recruiting To become more aligned with what the business indicates is a top priority, HR should consider implementation of high potential employee programs in High Misalignment % Business Respondents that said this was a Top Priority for 2012 Alignment Globalization of HR High potential employee programs Telework and telecommuting programs Diversity programs Mentoring programs Social media for recruiting Employeesenior management relations Alignment Misalignment Low % HR Respondents Implementing, Partially Deployed, or Fully Deployed High McLean & Company 14

15 HR respondents from small and large organizations differ in several emerging trend areas In every emerging trend, large organizations are ahead of small organizations in terms of how many are implementing, have deployed a partial solution, or deployed a full solution. However, they are significantly ahead in three areas, including: Globalization of HR Social media for recruiting Telework & telecommuting programs % HR Respondents Implementing, Partially Deployed, or Fully Deployed 60% 50% 40% 30% 20% 14% 39% 55% 50% 32% 30% 30% 47% 47% 33% 33% 39% 44% 45% 10% 0% Globalization of HR Social media for recruiting Telework and telecommuting programs Diversity programs Mentoring programs High potential employee programs Employee-senior management relations Statistically Significant Difference Small Organization Large Organization Source: McLean & Company, N = 117 Small organizations were defined as organizations with 500 or fewer full-time employees. Large organizations were defined as organizations with greater than 500 full-time employees. A significantly higher percent of HR departments from large organizations are implementing, or have deployed a partial or full solution, in these areas than HR departments from small organizations. McLean & Company 15

16 Business respondents from small and large organizations generally agree on which emerging trends are top priorities, except when it comes to telework and telecommuting Business respondents from large organizations feel that telework and telecommuting programs are a significantly higher priority than business respondents from small organizations Small and large organizations agree that high potential employee programs and mentoring programs are the emerging trends that top their priority list for % 56% 53% % Business Respondents that said this was a Top Priority for % 40% 30% 20% 10% 31% 14% 16% 27% 42% 40% 7% 10% 36% 39% 22% 20% 0% Telework and telecommuting programs Diversity programs High potential employee programs Mentoring programs Globalization of HR Employee-senior management relations Social media for recruiting Statistically Significant Difference Small Organization Large Organization Source: McLean & Company, N = 142 Small organizations were defined as organizations with 500 or fewer full-time employees. Large organizations were defined as organizations with greater than 500 full-time employees. Globalization of HR is the lowest priority for small and large organizations McLean & Company 16

17 Summary Compare your HR priorities against your peers. Benchmarking against your peers gives you an opportunity to make sure you re up to speed with the market and current trends; when benchmarking, ensure you re comparing yourself to other organizations your size. The top priorities in 2012 for large companies (>500 FTE) includes implementing better software tools, whereas the top priorities for small companies (<500 FTE) includes improving the performance appraisal system and updating HR policies. Gain input from the business to determine if your priorities are aligned. The projects you put your efforts into in 2012 will be much more successful if the business is backing them as a full partner. If they are not aligned, strike a deal work on their top priorities if they help you with yours. Make sure you make the case for why yours are important to the bottom line. According to our survey, the business listed improving workforce planning, succession planning, and employee development as a top priority. Evaluate emerging trends. Keeping on top of emerging trends ensures your organization is never left behind or put at a disadvantage. The top two trends for 2012 that HR and the business agree on are improving employee-senior management relationships and introducing/improving a mentorship program. McLean & Company 17

18 Appendix What s in this Section: Small vs. Large company comparison on all HR priorities Business executive and manager comparison on HR Leveraging McLean & Company to kick-start your 2012 employee engagement initiative Sections: Top HR Priorities for 2012 Emerging Trends Appendix McLean & Company 18

19 Small versus Large company comparison on all HR priorities Refine compensation structure Enhance work/life balance options (e.g. telework) Clarify employee career paths Improve employee development programs Improve compliance with labor laws and regulations Refine role definitions Create a more rigorous HR metrics and reporting program Outsource some HR functions Update HR policies Improve formal coaching and mentoring program Improve core management skills in the organization Develop leaders in the organization Increase employee engagement Improve rewards and recognition program Improve our performance appraisal system Refine on-boarding program Improve our selection criteria Upgrade manager interviewing skills Strengthen supply of recruitment candidates Improve our employer brand Implement better HR software tools Develop a more robust HR strategy Increase accuracy of workforce forecasting Improve succession plans for key roles 14% 10% 13% 14% 8% 21% 31% 21% 21% 21% 33% 24% 40% 31% 29% 39% 34% 28% 62% 31% 45% 50% 54% 41% 46% 51% 37% 19% 51% 39% 29% 25% 21% 24% 24% 55% 38% 34% 40% 59% 41% 50% 59% 24% 22% 52% 32% 76% Employee Development HR Operations Leadership and Management Performance Management Recruiting Strategy Workforce Planning 0% 10% 20% 30% 40% 50% 60% 70% 80% % of HR Respondents who said this was a Top Priority Large Organizations Small Organizations Source: McLean & Company, N = 117 McLean & Company 19

20 Business executive and manager comparison on HR priorities Refine compensation structure Enhance work/life balance options (e.g. telework) Clarify employee career paths Improve employee development programs Improve compliance with labor laws and regulations Refine role definitions Create a more rigorous HR metrics and reporting program Outsource some HR functions Update HR policies Improve formal coaching and mentoring program Improve core management skills in the organization Develop leaders in the organization Increase employee engagement Improve rewards and recognition program Improve our performance appraisal system Refine on-boarding program Improve our selection process Upgrade manager interviewing skills Strengthen supply of recruitment candidates Improve our employer brand Implement better HR software tools Develop a more robust HR strategy Improve workforce planning Improve succession plans for key roles 63% 66% 54% 70% 63% 78% 75% 83% 35% 36% 66% 73% 59% 66% 27% 33% 57% 53% 75% 78% 76% 79% 79% 77% 69% 77% 72% 70% 74% 69% 59% 70% 62% 69% 74% 69% 66% 73% 66% 65% 56% 63% Source: McLean & Company, n = % 67% 83% 80% 72% 85% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% % of Business Respondents who said to Increase in Priority Employee Development HR Operations Leadership and Management Performance Management Recruiting Strategy Workforce Planning Executives Managers McLean & Company 20

21 Get to action: leverage McLean & Company to kick-start your 2012 employee engagement initiative Identify opportunities for your organization to improve engagement through our Engagement Survey. Mini case study on the benefits of our engagement program: Once you have obtained the results, access our employee engagement solution roadmap to help you act on the feedback. Industry: Financial Services Size: Large Overview: This organization operates full service Banking Centers in the United States. Key findings: Managers are not succeeding at dealing with performance related questions from employees. Managers are providing their employees with no coaching or career/skill development. Day to day recognition from management is non-existent. Objective: This financial services organization had recently slipped from the best employers list. Senior Management wanted to determine the underlying causes of the decrease in satisfaction levels. Impact and Result Of the many actions taken by the organization, here are a few related to the key findings highlighted: HR begun one-on-one coaching sessions with managers who had low engagement scores. The organization is using McLean & Company s Optimize Rewards and Recognition manager training deck to develop a manager training session. The employee engagement program really proved to me that employees do leave managers, not companies. Director of HR McLean & Company 21

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