Employee Development. Survey Report A Study by the Society for Human Resource Management and Catalyst

Transcription

1 Employee Development Survey Report A Study by the Society for Human Resource Management and Catalyst

2

3 Employee Development Survey Report Evren Esen SHRM Survey Analyst Jessica Collison SHRM Survey Program Manager April 2005

4 This report is published by the Society for Human Resource Management (SHRM) and Catalyst. The interpretations, conclusions and recommendations in this report are those of the authors and do not necessarily represent those of SHRM or Catalyst. All content is for informational purposes only and is not to be construed as a guaranteed outcome. The Society for Human Resource Management and Catalyst cannot accept responsibility for any errors or omissions or any liability resulting from the use or misuse of any such information Society for Human Resource Management. All rights reserved. Printed in the United States of America. This publication may not be reproduced, stored in a retrieval system or transmitted in whole or in part, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of the Society for Human Resource Management, 1800 Duke Street, Alexandria, VA 22314, USA. For more information, please contact: SHRM Research Department 1800 Duke Street, Alexandria, VA Phone: (703) Fax: (703) Web: Catalyst 120 Wall Street, 5th Floor, New York, NY Phone: (212) Fax: (212) Web:

5 Employee Development Survey Report Contents v v v v vi vii viii ix x About This Report About SHRM About Catalyst About the Authors Acknowledgments Introduction Methodology Key Findings Key Research Terms 1 Survey Results 1 Employee Development Methods Used by Organizations 3 Who Participates in Employee Development 5 HR Professionals Perceptions of Employee Development Issues at Their Organizations 9 Employee Development and Return on Investment 10 Diversity and Employee Development 18 Management Levels by Gender and Race 21 Conclusions 22 A Look Ahead: A Future View of Employee Development 24 Demographics 27 Survey Instrument 35 SHRM Survey Reports

6

7 About This Report In September 2004, the Society for Human Resource Management (SHRM) and Catalyst conducted the Employee Development Survey by asking HR professionals to identify the employee development methods being used by their organizations. HR professionals who completed the survey also gauged the effectiveness of those programs. For this survey, employee development was defined as improving employee competencies and skills over the long term through a variety of methods such as mentoring, coaching and succession planning. Findings are discussed in the survey results section. Interpretations about future trends in employee development practices are presented at the end of the report in the section titled A Look Ahead. Statistically significant findings by organization staff size, profit status and sector also are integrated in the survey report, where applicable. About SHRM The Society for Human Resource Management is the world s largest association devoted to human resource management. Representing more than 190,000 individual members, the Society s mission is to serve the needs of HR professionals by providing the most essential and comprehensive resources available. As an influential voice, the Society s mission is also to advance the human resource profession to ensure that HR is recognized as an essential partner in developing and executing organizational strategy. Founded in 1948, SHRM currently has more than 500 affiliated chapters and members in more than 100 countries. Visit SHRM Online at About Catalyst Catalyst is the leading research and advisory organization working with businesses and the professions to build inclusive environments and expand opportunities for women at work. As an independent, nonprofit membership organization, Catalyst uses a solutionsoriented approach that has earned the confidence of business leaders around the world. Catalyst conducts research on all aspects of women s career advancement and provides strategic and Web-based consulting services on a global basis to help companies and firms advance women and build inclusive work environments. In addition, Catalyst honors exemplary business initiatives that promote women s leadership with the annual Catalyst Award. With offices in New York, San Jose and Toronto, Catalyst is consistently ranked No. 1 among U.S. nonprofits focused on women s issues by The American Institute of Philanthropy. About the Authors Evren Esen is a survey analyst for SHRM. Her responsibilities include designing, conducting and analyzing surveys on HR-related topics and assisting in larger survey projects. She has a graduate certificate in survey design and data analysis from The George Washington University in Washington, D.C. v

8 Jessica Collison is manager of the SHRM Survey Program. Her responsibilities include managing the SHRM Survey Program and designing, conducting and analyzing surveys on HR-related topics. She has a graduate certificate in survey design and data analysis from The George Washington University in Washington, D.C. Acknowledgments This report is the culmination of a team effort between SHRM and Catalyst. Steve Williams, Director of Research, SHRM, provided valuable expertise adding to the content of the survey report. Paulette R. Gerkovich, Senior Director, Research, Catalyst, contributed to the overall content of the report and wrote the sections on Catalyst research. Brian Welle, Director of Research, Catalyst, gave his expertise to conceptualizing the project scope and content, as well as drafting the survey instrument. Emma Sabin, Director, Advisory Services, Catalyst, also contributed in developing the survey instrument. Jennifer Schramm, Manager, Workplace Trends and Forecasting, SHRM, provided insight on future trends in employee development. vi

9 Introduction The SHRM Workplace Forecast reports that among the top 10 trends HR professionals believe will have the greatest impact on the workplace is the labor shortage that will result when baby boomers begin to retire at the end of the decade. 1 Some organizations are projected to lose executives in record numbers over the next decade, and many organizations are unprepared. As a result, developing employees for future roles within the company is imperative for all organizations. However, this often is overlooked or put aside as other challenges of daily business operations take precedence. What do organizations do to prepare their existing workforce for future leadership roles? Are some employee development methods used more than others? Are organizations reaching out to and developing women, racial/ethnic minorities and other employee groups to fill executive positions? Do all employee groups receive the same opportunities to develop? Many organizations have incorporated succession planning, mentoring and identification of high-potential employees as part of their strategic plans. Are these programs providing a return on their investment? These are among some of the questions this research attempts to uncover. The results of this survey offer insight, from the perspectives of HR professionals, on the employee development methods implemented by most organizations and their effectiveness in grooming future leaders and strengthening workforce talent. Efforts made by organizations to diversify their leadership by preparing women and employees from racial/ethnic minority groups also are addressed in this report. 1 Schramm, J. (2004). SHRM workplace forecast: A strategic outlook. Alexandria, VA: Society for Human Resource Management. vii

10 Methodology The Employee Development Survey instrument was developed by the SHRM Survey Program and Catalyst. An internal committee of SHRM staff with HR expertise and members of SHRM s Organizational Development and Workplace Diversity Special Expertise Panels also provided valuable insight and recommendations for the instrument. A sample of HR professionals was randomly selected to participate in the survey from SHRM s membership database, which included approximately 190,000 individual members at the time the survey was conducted. Only members who had not participated in an SHRM survey or poll in the last six months were included in the sampling frame. Members who are students, consultants, academics, located internationally and who have no address on file were excluded from the sampling frame. In September 2004, an that included a link to the SHRM/Catalyst Employee Development Survey was sent to 2,500 randomly selected SHRM members. Of these, 2,011 s were successfully delivered to respondents, and 248 HR professionals responded, yielding a response rate of 12% (the number of respondents to each question is indicated by n in tables and figures throughout the report). The survey was accessible for a period of three weeks. Three e- mail reminders were sent to nonrespondents in an effort to increase response rates. The sample of 248 HR professionals was representative of the SHRM membership population, particularly with respect to industry. There were slight differences in organization staff size with more HR professionals from small- and medium-staff-sized organizations represented in the sample than the SHRM membership population. viii

11 Key Findings According to HR professionals, the top employee development methods used by organizations encompass some form of training: 1) training programs other than leadership training; 2) cross-functional training; 3) leadership training; and 4) developmental planning. Formal career mentoring programs, job sharing and job rotation were among the least used programs. About one-half of HR professionals believe that their organizations effectively identify which employees need to improve their competencies. About two-thirds of HR professionals, however, indicate that employee development is mostly an informal process in their organizations. About two-thirds of HR professionals report some types of diversity programs within their organizations. These programs include either a diversity or inclusion initiative supported by the organization or an individual whose function includes diversity and inclusion matters. These diversity programs are most commonly found in large-staff-sized organizations with 500 or more employees. In addition, organizations report using development planning, apprenticeships/ internships and leadership to specifically develop and/or prepare women and racial/ethnic minority employees for future roles in the organization. ix

12 Key Research Terms Correlation The degree of connectedness or association between two variables. Is there a relationship between x and y? Correlation does not necessarily indicate causality. Average The mathematical average of all of the data points or observations in a set, calculated by adding the data and dividing the resulting sum by the number of data points. A mean may be affected by extreme data values. Random sample A representative sample of a population where each member of the population has an equal chance to be chosen for the research. A random sample can be generated in a variety of ways. If the population is very small, names could be drawn from a hat. Typically, however, random samples are generated by statistical software. Sample (represented by n ) A subset of a population that represents the population to be studied. For example, consider that a researcher wants to study the U.S. population. It would be impractical to study every U.S. resident, so the researcher chooses a part of it (a sample) representing the entire population. The sample must have the same characteristics as the entire population. Similarly, it is not prudent to study all SHRM members in a single study; therefore, usually a smaller, representative sample is drawn. Standard deviation (SD) The dispersion of values around the mean. A small standard deviation indicates low variability and relatively high consensus among responses. A large standard deviation indicates high variability and a relative lack of consensus among responses. Statistical significance A condition occurring when the researcher can show (through specific tests for significance) that the likelihood is small that the results occurred by chance. For example, if a researcher claims that the results are statistically significant at p<.05, the likelihood (probability) of these results occurring by chance only is less than 5%. Adapted from Understanding Survey Research Concepts and Terms at x

13 Survey Results Throughout this report, conventional statistical methods were used to determine whether observed differences are statistically significant. Overall survey findings are discussed first and then, when applicable, results by organization staff size, 2 profit status and sector are included for comparison. employ such methods: one-quarter (25%) of HR professionals report using formal career mentoring (internal program) and even fewer have an external program (10%). More organizations (35%) have succession planning programs in place. A glossary of Key Research Terms on the previous page is provided for readers to reference. Table 1 Employee Development Methods Employee Development Methods Used by Organizations HR professionals were asked which employee development methods were used in their organizations. Each of the top three methods cited pertained to training. The most frequently used employee development method is generic training (not including leadership training), which was cited by 84% of HR professionals. Cross-functional training (80%) followed closely, while 71% of organizations used leadership training and 70% used development planning. These data are depicted in Table 1. While training is certainly an important component in furthering employee competencies, formal learning opportunities that provide experiential practice are also thought to be effective since such programs are directly focused on the individual. The findings suggest, however, that organizations are less likely to (n = 248) Use Method Training other than leadership training 84% Cross-functional training 80% Leadership training 71% Development planning 70% Apprenticeships/internships (to assess potential future hires) 57% Formal coaching 55% Matching employees with stretch assignments/opportunities 47% High-visibility assignments/opportunities to work with executives (e.g., executive task forces) 47% Leadership forums (i.e., opportunities for individuals to meet with senior executives in organized events or semiformal settings) 44% Formal identification of high-potential employees 40% Formal succession planning processes 35% Job rotation 30% Formal career mentoring (internal program) 25% Job sharing 25% Formal career mentoring (external program) 10% Source: SHRM/Catalyst 2 The organization staff size categories are as follows: small organizations (1-99 employees), medium organizations ( employees) and large organizations (500 or more employees). 1

14 Programs that groom employees to become future leaders, such as formal succession planning, take solid investment and focus. Succession planning programs that allow high-potential employees in the organization the opportunity to be coached and mentored demonstrate such an investment. They also secure strong candidates with requisite skills to immediately fill vacant senior management positions. Yet, very few organizations have succession plans in place for executive-level positions. In fact, an SHRM Weekly Survey revealed that fewer than two out of 10 HR professionals indicated that their organizations had succession plans in place for job titles ranging from vice president to CEO. 3 Employee development methods were analyzed by organization staff size. Table 2 compares the methods used by large, medium and small organizations. The order of priority in which organizations utilize employee development methods is almost identical. There are differences, however, in the percentage of organizations using particular methods. Larger organizations use leadership training and development planning more frequently than smaller organizations. Larger organizations also are more likely to utilize succession planning and identification of high-potential employees. It is not surprising that these organizations employ more structured methods for employee development. Larger organizations invest more in succession planning and are more likely to have the resources necessary to devote to these programs. While developing human capital is crucial for all organizations, it is even more crucial for larger organizations, which tend to have specialized and highly integrated job functions necessitating high-potential employees to be targeted early on to increase their understanding of the organizational structure. 3 Society for Human Resource Management. (2004, December 16). SHRM weekly online poll: Succession planning levels. Retrieved from Table 2 Employee Development Methods (By Organization Staff Size) Small Medium Large (1-99 Employees) ( Employees) (500 or More Employees) Differences by (n = 95) (n = 77) (n = 56) Staff Size Large > small Leadership training 50% 81% 88% Medium > small Large > small Development planning 57% 76% 79% Medium > small Leadership forums (i.e., opportunities for individuals to meet with senior executives in organized events or semiformal settings) 32% 42% 59% Large > small Large > small Formal succession planning processes 18% 41% 55% Medium > small Large > small Formal identification of high-potential employees 23% 46% 54% Medium > small Large > small Job rotation 15% 38% 44% Medium > small Formal career mentoring (internal program) 15% 26% 38% Large > small Formal career mentoring (external program) 9% 1% 16% Large > medium Note: Percentages are column percentages. Data are sorted by the large organization column. Multiple methods were selected, and each method was treated as a separate question, therefore percentages will not total 100%. Sample sizes of the organization size categories are based on the actual number of respondents answering the organization size question; however, the percentages shown are based on the actual number of respondents by organization size who answered this question using the provided response options. Source: SHRM/Catalyst 2

15 A few differences were found between private and public sector organizations with respect to employee development methods used. Public sector organizations use formal career mentoring (external program) more frequently than private sector organizations. The private sector, however, is more likely to match employees with stretch opportunities that provide them with a chance to hone their skills while directly working on a challenging project. Although each method has its advantages, mentoring is formal, ongoing and tailored to the individual, providing the employee with guidance from a seasoned professional. The formal career mentoring approach is especially salient for women employees and employees from racial/ethnic minorities who may find it more challenging to find high-level executives within their organizations with whom they can identify and from whom they can informally seek advice. Who Participates in Employee Development The employee s supervisor has the primary responsibility for employee development, as indicated by 64% of HR professionals. According to about one-half (49%) of HR professionals, secondary responsibility is held by HR staff who work with supervisors and sometimes oversee the organization s employee development process. These data are depicted in Figure 1. Figure 1 Primary and Secondary Responsibility for Employee Development 64% 49% 24% 5% 9% 13% 17% 10% 2% 2% 1% 2% 2% 0% 0% 1% No one Employee s supervisor Department head (excludes employee s supervisor) HR staff Internal coach (excludes employee s supervisor) Mentor (excludes employee s supervisor) Outside consultant Other Primarily Responsible (n = 246) Secondarily Responsible (n = 243) Note: Percentages may not total 100% due to rounding Source: SHRM/Catalyst 3

16 The majority of HR professionals (85%) state that the employee s supervisor also takes a leading role in formally measuring the outcomes of employee development. This is not surprising, given that supervisors are uniquely positioned to understand employee potential and identify burgeoning leaders. According to 43% of HR professionals, employees themselves are responsible for the measurement of their own career development. The most likely scenario is that employees and supervisors work together in measuring employee development as part of employee performance reviews. These data are depicted in Figure 2. Employee performance reviews provide an opportunity for employees and supervisors to work together on devising a plan for the employee s continuing development. Research indicates that employees are more motivated when they are highly involved in the performance review process and in setting their individual goals. Ideally, employees should be encouraged through informal or formal mentoring and coaching from their supervisors to gain additional expertise as they prepare for leadership positions. The employee-supervisor relationship is necessary not only to encourage employees to improve their abilities, but also because it serves as the organization s direct link to each of its employees. About one-half (52%) of HR professionals report that employees are encouraged to set their own development goals. Although department heads play a smaller role than supervisors with respect to their responsibility and measurement of employee development, they were reported by 47% of HR professionals to have a prominent role in setting employee development goals. It is probable that department heads work in conjunction with supervisors to set goals and that a large part of their role includes providing the final approval for employee participation in employee development programs. These data are shown in Table 3. Figure 2 Responsibility for Formal Measurement of Employee Development (n = 222) Employee s supervisor 85% Employee (i.e., self-assessment) 43% Department head (excludes employee s supervisor) 37% HR staff 27% No one 10% Mentor (excludes employee s supervisor or HR staff) Outside consultant Internal coach (excludes employee s supervisor or HR staff) Other 4% 2% 2% 4% Note: Percentages do not total 100% due to multiple response options. Source: SHRM/Catalyst 4

17 HR Professionals Perceptions of Employee Development Issues at Their Organizations This section examines the effectiveness of organizations in identifying the specific development needs of employees and helping employees develop. Results are expressed in terms of whether HR professionals agreed with statements about their organizations. 4 4 Both the agree and strongly agree categories are combined to form the agreed response and disagree and strongly disagree form the disagreed response in this section. Table 3 Encouragement or Requirement in Setting Employee Development Goals n Encourages Requires Neither Encourages nor Requires Does your organization encourage or require employees to set development goals for themselves? % 32% 16% Does your organization encourage or require department heads (excludes employee s supervisor) to set development goals for employees? % 22% 31% Does your organization encourage or require supervisors to set development goals for their employees? % 49% 12% Does your organization encourage or require HR staff to set development goals for employees? % 6% 68% Does your organization encourage or require internal coaches (excludes employee s supervisor or HR staff) to set development goals for employees? % 4% 73% Does your organization encourage or require mentors (excludes employee s supervisor or HR staff) to set development goals for employees? % 4% 73% Does your organization encourage or require outside consultants to set development goals for employees? % 2% 86% Note: Percentages are row percentages and may not total 100% due to rounding. Results were calculated by removing respondents who indicated Not Applicable for each option. Source: SHRM/Catalyst Figure 3 Organization Effectively Identifies Employees Development Needs (n = 245) 44% 27% 18% 7% 4% disagree Disagree Neither agree nor disagree Agree agree Note: Percentages may not total 100% due to rounding. Source: SHRM/Catalyst 5

18 Figure 3 depicts HR professionals perceptions about the effective identification of employee development needs in their organizations. While about one-half (48%) of respondents respond agree or strongly agree that their organizations successfully identify the needs of employees, only 4% indicate strong agreement. About one-third (34%) disagree. Fifty-two percent of HR professionals agree that their organizations are effective in helping employees Figure 4 Organization Is Effective in Helping Employees Develop (n = 245) 49% 22% 20% 6% 3% disagree Disagree Neither agree nor disagree Agree agree Note: Percentages may not total 100% due to rounding. Source: SHRM/Catalyst Figure 5 Organization Effectively Identifies High-Potential Employees (n = 244) 42% 25% 18% 7% 7% disagree Disagree Neither agree nor disagree Agree agree Note: Percentages may not total 100% due to rounding. Source: SHRM/Catalyst 6

19 develop, although very few strongly agree. These data are shown in Figure 4. Forty-nine percent of HR professionals agree that their organizations effectively identify high-potential employees, while 25% disagree. These data are depicted in Figure 5. Identifying high-potential employees is an important step to grooming targeted employees for roles with greater responsibility in the organization. While 44% of HR professionals agree that their organizations are effective in helping high-potential employees develop, 29% disagree. Data are depicted in Figure 6. Figure 6 Organization Is Effective in Helping High-Potential Employees Develop (n = 245) 38% 22% 27% 7% 6% disagree Disagree Neither agree nor disagree Agree agree Note: Percentages may not total 100% due to rounding. Source: SHRM/Catalyst Figure 7 Organization Is Effective in Aligning Employee Development With the Organization s Business Goals (n = 245) 41% 20% 25% 7% 7% disagree Disagree Neither agree nor disagree Agree agree Note: Percentages may not total 100% due to rounding. Source: SHRM/Catalyst 7

20 Effectively developing employees as human capital in alignment with business goals provides a critical strategic advantage to organizations. Forty-eight percent of HR professionals agree that their organizations are effective in accomplishing this objective. Data are shown in Figure 7. According to HR professionals, 65% of organizations often assign employee development opportunities informally (see Figure 8). This finding suggests that flexibility in determining appropriate employee development opportunities is the norm in organizations. Although having designated employee development goals is beneficial, much of an employee s development is probably determined in an ad-hoc fashion at the discretion of an employee s supervisor or at the employee s request to work on specific projects. Table 4 compares the average levels of agreement for the employee development issues depicted in Figures Figure 8 Organization Often Assigns Employee Development Opportunities Informally (n = 245) 59% 18% 12% 6% 6% disagree Disagree Neither agree nor disagree Agree agree Note: Percentages may not total 100% due to rounding. Source: SHRM/Catalyst Table 4 Levels of Agreement on Organizations Handling of Employee Development Issues Issue Average Standard Deviation Organization often assigns employee development opportunities informally Organization effectively identifies high-potential employees Organization is effective in helping employees develop Organization is effective in aligning employee development with the organization s business goals Organization is effective in helping high-potential employees develop Organization effectively identifies employees development needs Note: Averages are based on a scale where 1 = Disagree and 5 = Agree. Source: SHRM/Catalyst 8

21 3 through 8. Overall, more HR professionals agree that organizations often informally assign employee development opportunities and that organizations are effective in identifying high-potential employees. They are least likely to agree that organizations are effective in identifying employee development needs. Employee Development and Return on Investment Table 5 illustrates the percentage of organizations that conduct analyses to determine the return on investment (ROI) of employee development methods. The results indicate that most organizations do not collect ROI data. For those organizations that do collect ROI, the outcomes result in positive gains for the organization, regardless of the employee development method utilized. The employee development practices that produce the highest ROI are: 1) apprenticeships/internships (20%); 2) formal coaching (18%); and 3) leadership training (18%). These methods are also among the employee development methods that a greater percentage of organizations collect ROI data for to begin with. These particular methods may be more amenable for collection of ROI because the costs are measurable and the outcomes tangible. Apprenticeships/internships tend to have high rates of return for organizations because they serve as cost-effective and low-risk methods of identifying high-potential upcoming graduates or recent graduates for positions within the organization. Given the positive ROI, it is surprising that only 57% of organizations use this employee development method. Formal coaching, which also has a positive ROI, is utilized by only about one-half (55%) of organizations. Leadership training s positive ROI is probably attributed to the selection process. Employees who participate in leadership training have been slated for leadership roles or may already be in leadership positions. Table 5 ROI and Employee Development Methods n Positive ROI Negative ROI No Analysis of ROI Apprenticeships/internships (to assess potential future hires) % 2% 78% Formal coaching % 1% 81% Leadership training % 3% 78% Leadership forums (i.e., opportunities for individuals to meet with senior executives in organized events or semiformal settings) % 2% 82% Training other than leadership training % 3% 81% Cross-functional training % 1% 83% Development planning % 1% 84% Job rotation % 3% 82% Formal identification of high-potential employees % 3% 83% High-visibility assignments/opportunities to work with executives (e.g., executive task forces) % 3% 83% Formal succession planning processes % 5% 82% Formal career mentoring (internal program) 95 11% 5% 84% Formal career mentoring (external program) 74 10% 1% 89% Matching employees with stretch opportunities 113 9% 2% 89% Job sharing 86 8% 7% 85% Note: Percentages are row percentages and may not total 100% due to rounding. Source: SHRM/Catalyst 9

22 Diversity and Employee Development Leading U.S. corporations understand that internal diversity creates competitive business advantages. Among other things, they report increases in creativity, innovation and morale as a result of diverse teamwork. A recent Catalyst study, The Bottom Line: Connecting Corporate Performance and Gender Diversity, 5 confirms the competitive advantage that diverse leadership teams produce. By examining financial and diversity data amongst Fortune 500 companies over a five-year period, the study found a very strong connection between gender diversity and organizational performance. Specifically, those organizations with a higher than average representation of women in top management significantly financially outperformed those companies with a lower than average representation of women in terms of both return on equity and total return to shareholders. However, it is not enough to just have diversity at the top or throughout an organization. Diversity needs to be managed well: individuals need to have access to a range of development and advancement opportunities to truly flourish. Despite the increasing importance of diversity to business success, only 38% of HR professionals report that their organizations have formal diversity and inclusion initiatives, as shown in Figure 9. Additional analysis by organization staff size reveals that about twice as many large organizations (62%) have these initiatives in place as small (23%) and medium (35%) organizations, suggesting that larger organizations have more resources to devote to diversity. 5 Catalyst. (2004). The bottom line: Connecting corporate performance and gender diversity. New York: Catalyst. Figure 9 Existence of Formal Diversity and Inclusion Initiative and Manager in Organization Figure 10 Organization s Diversity Component and Employee Development 62% 69% 61% 68% 38% 39% 32% 32% Yes No Yes No Diversity and Inclusion Initiative (n = 245) Diversity and Inclusion Manager (n = 235) Note: Percentages may not total 100% due to rounding. Source: SHRM/Catalyst Diversity and Inclusion Initiative Includes Employee Development (n = 188) Diversity and Inclusion Manager Involved in Employee Development (n = 170) Note: Percentages may not total 100% due to rounding. Source: SHRM/Catalyst 10

23 Thirty-two percent of organizations have a diversity officer or diversity manager. Large organizations (55%) have diversity officers or managers at more than double the rate of small (16%) and medium (27%) organizations. Of those HR professionals who report that their organizations have formal diversity and inclusion initiatives in place, 39% report that employee development is part of the program. About one-half (53%) of large organizations report that employee development is part of their formal diversity program, compared with 26% of small organizations. HR professionals in organizations that have diversity managers indicate that managers are involved in employee development practices (32%). These data are illustrated in Figure 10. Table 6 demonstrates the proportion of organizations that offer development programs targeted to specific employee groups. In general, it appears that organizations attempt to involve both women and racial/ ethnic minority groups in the same types of employee development programs. The top three programs that organizations use to particularly reach out to women and racial/ethnic minority groups are: 1) development planning (29% each); 2) apprenticeships/internships (26% each); and 3) leadership training (25% each). These results are different from the employee development methods used by organizations overall (see Table 1). Formal career mentoring for women (14%) and for racial/ethnic minorities (13%) appear to be underutilized, suggesting an area for improvement. Mentoring often is regarded as a crucial component of organizational diversity initiatives. Opportunities for women and racial/ethnic minorities to gain access to informal networks and tiers within an organization can be gained through mentors who can introduce them to key players. Mentors can also work in conjunction with an employee s supervisor to determine appropriate development opportunities. Table 6 Employee Development Methods That Organizations Use When Reaching Out to Specific Employee Groups Racial/Ethnic Employees From Outside (n = 248) Women Minorities the United States Development planning 29% 29% 7% Apprenticeships/internships (to assess potential future hires) 26% 26% 7% Leadership training 25% 25% 6% Training other than leadership training 25% 25% 8% Cross-functional training 25% 25% 8% Formal identification of high-potential employees 20% 21% 6% Formal coaching 17% 18% 4% Formal succession planning processes 17% 17% 5% High-visibility assignments/opportunities to work with executives (e.g., executive task forces) 17% 15% 4% Matching employees with stretch opportunities 17% 16% 5% Leadership forums (i.e., opportunities for individuals to meet with senior executives in organized events or semiformal settings) 16% 15% 5% Formal career mentoring (internal program) 14% 13% 4% Job rotation 13% 12% 3% Job sharing 9% 8% 3% Formal career mentoring (external program) 3% 2% 1% Note: Data are sorted by the women column. Percentages will not total 100% due to multiple response options. Percentages are column percentages. Source: SHRM/Catalyst 11

24 HR professionals also were asked if their organizations featured targeted development programs for employees who had immigrated to the United States. The results suggest that very few organizations reach out to this group of employees with tailored development programs. Such efforts may intensify as demographic changes lead to a greater need for highly qualified and educated employees, necessitating an influx of foreign workers to the United States. Analysis by profit status suggests that more for-profit than nonprofit organizations are attempting to groom women and racial/ethnic minorities for leadership roles through formal identification of high-potential employees and formal succession planning processes. This suggests that corporate initiatives promoting diversity may already be impacting and will have future impact on women and racial/ethnic minorities and their ability to move up the corporate ladder. As will be demonstrated later in this report, women and racial/ethnic minorities in leadership positions are largely underrepresented in for-profit, compared with nonprofit, organizations. Initiatives in for-profit organizations that focus on these demographic groups are likely to increase the proportion of women and racial/ethnic minority groups at the managerial level and above. Large organizations are attempting to involve women in employee development programs at much higher Table 7 Employee Development Methods That Organizations Use When Reaching Out to Women (By Organization Staff Size) Small Medium Large (1-99 Employees) ( Employees) (500 or More Employees) Differences by (n = 95) (n = 77) (n = 56) Staff Size Large > small Development planning 18% 25% 50% Large > medium Large > small Leadership training 13% 22% 46% Large > medium Large > small Large > medium Formal identification of high-potential employees 5% 18% 45% Medium > small Large > small Cross-functional training 15% 21% 43% Large > medium Training other than leadership training 16% 22% 41% Large > small Apprenticeships/internships (to assess potential future hires) 16% 22% 39% Large > small Large > small Formal succession planning processes 6% 14% 38% Large > medium Large > small Formal coaching 6% 14% 34% Large > medium High-visibility assignments/opportunities to work with executives Large > small (e.g., executive task forces) 12% 12% 29% Large > medium Leadership forums (i.e., opportunities for individuals to meet with senior executives in organized events or semiformal settings) 11% 13% 29% Large > small Large > small Match employees with stretch opportunities 12% 10% 29% Large > medium Formal career mentoring (internal program) 8% 9% 23% Large > small Note: Percentages will not total 100% due to multiple response options. Percentages are column percentages. Data are sorted by the large organization column. Sample sizes of the organization size categories are based on the actual number of respondents answering the organization size question; however, the percentages shown are based on the actual number of respondents by organization size who answered this question using the provided response options. Source: SHRM/Catalyst 12

25 rates than small and medium organizations. This is especially evident through examination of the top methods used by large organizations: development planning efforts, leadership training and the formal identification of high-potential employees. Large organizations, which have more diversity initiatives and/or staff devoted to diversity issues, are more than twice as likely to use formal succession planning, formal coaching and high-visibility assignments, compared with small and medium organizations. These data are shown in Table 7. Table 8 illustrates how organization staff size relates to the methods used to target specific employee development programs for racial/ethnic minorities. The efforts made by large organizations for racial/ethnic minority groups closely correspond with their efforts for women in terms of development planning and formal identification of high-potential employees. Organizations appear to use apprenticeships/internships more frequently for racial/ethnic minority groups than for women. Table 8 Employee Development Methods That Organizations Use When Reaching Out to Racial/Ethnic Minorities (By Organization Staff Size) Small Medium Large (1-99 Employees) ( Employees) (500 or More Employees) Differences by (n = 95) (n = 77) (n = 56) Staff Size Large > small Development planning 15% 26% 52% Large > medium Large > small Large > medium Formal identification of high-potential employees 5% 20% 50% Medium > small Large > small Apprenticeships/internships (to assess potential future hires) 15% 21% 45% Large > medium Large > small Cross-functional training 15% 22% 45% Large > medium Leadership training 13% 25% 43% Large > small Training other than leadership training 16% 22% 41% Large > small Large > small Large > medium Formal coaching 4% 18% 38% Medium > small Large > small Large > medium Formal succession planning processes 5% 17% 38% Medium> small High-visibility assignments/opportunities to work with executives Large > small (e.g., executive task forces) 10% 12% 29% Large > medium Leadership forums (i.e., opportunities for individuals to meet with senior executives in organized events or semiformal settings) 10% 13% 29% Large > small Large > small Match employees with stretch opportunities 12% 10% 29% Large > medium Formal career mentoring (internal program) 7% 10% 23% Large > small Note: Percentages will not total 100% due to multiple response options. Percentages are column percentages. Data are sorted by the large organization column. Sample sizes of the organization size categories are based on the actual number of respondents answering the organization size question; however, the percentages shown are based on the actual number of respondents by organization size who answered this question using the provided response options. Source: SHRM/Catalyst 13

26 A large percentage of organizations do not compare the effectiveness of employee development programs for specific employee groups. Nearly nine out of 10 (88%) HR professionals indicate that their organizations do not examine program effectiveness by either gender or racial/ethnic minority groups. These results are shown in Table 9. HR professionals were asked whether they agreed that specific groups of employees in their organizations received the same development opportunities. 6 Table 9 (n = 240) Employee Development Program Effectiveness and Diversity We compare employee development effectiveness based on gender ONLY 0% We compare employee development effectiveness based on racial/ethnic minority groups ONLY 2% We compare employee development effectiveness based on BOTH gender and racial/ethnic minority groups 10% We DO NOT compare employee development effectiveness for either gender or racial/ethnic minority groups. 88% Note: Percentages may not total 100% due to rounding. Source: SHRM/Catalyst Seventy-eight percent of HR professionals agree that women employees in their organizations receive the same development opportunities as men employees; 15% disagree. These data are shown in Figure 11. As mentioned earlier in this report, mentors provide employees with access to key players in the organization. In organizations that have fewer women in managerial and executive-level positions, it may be harder for women to find mentors of the same gender. Fifty-seven percent of HR professionals, however, indicate that it is no more difficult for women employees, compared with men employees, to find mentors in their organizations; 17% disagree. Figure 12 shows these data. Figure 13 shows that 83% of HR professionals agree that racial/ethnic minorities in their organizations receive the same development opportunities as white employees; only 8% disagree. Almost twice as many HR professionals disagree (15%) that women employees have the same opportunities as men employees (see Figure 11), compared with racial/ 6 Both the agree and strongly agree categories are combined to form the agreed response and disagree and strongly disagree form the disagreed response in this section. Figure 11 Women Receive the Same Development Opportunities as Men Employees in Organization (n = 235) 39% 39% 5% 10% 8% disagree Disagree Neither agree nor disagree Agree agree Note: Percentages may not total 100% due to rounding. Source: SHRM/Catalyst 14

27 ethnic minority employees and white employees (8%). This suggests that HR professionals perceive women as being slightly disadvantaged, compared with racial/ethnic minorities, in terms of opportunities for employee development. Figure 14 shows that 48% of HR professionals agree that it is no more difficult for employees from racial/ethnic minority groups, compared with white employees, to find a mentor in their organizations; 20% disagree. These data suggest that it may be more difficult for racial/ethnic minority employees to find mentors, compared with women employees. Gay and lesbian employees receive the same development opportunities as heterosexual employees, according to 75% of HR professionals; only 3% disagree with this statement. These data are shown in Figure 12 It Is No More Difficult for Women Employees to Find a Mentor in the Organization Than It Is for Men Employees (n = 231) 27% 29% 28% 7% 10% disagree Disagree Neither agree nor disagree Agree agree Note: Percentages may not total 100% due to rounding. Source: SHRM/Catalyst Figure 13 (n = 236) Racial/Ethnic Minorities Receive the Same Development Opportunities as Caucasian/White Employees in Organization 45% 38% 5% 3% 9% disagree Disagree Neither agree nor disagree Agree agree Note: Percentages may not total 100% due to rounding. Source: SHRM/Catalyst 15

28 Figure 15. Forty-six percent of HR professionals agree that it is no more difficult for gay and lesbian employees to find a mentor in their organizations than it is for heterosexual employees; 14% disagree with this statement. Data are shown in Figure 16. Table 10 compares the average levels of agreement for the data depicted in Figures 11 through 16. The averages suggest that HR professionals believe that racial/ethnic minority employees have an advantage over gay and lesbian and women employees in terms of having equal opportunities for employee development. This may indicate that organizations are placing greater emphasis on ensuring that racial/ethnic minority employees receive the development opportunities they need. This group, however, is disadvantaged in finding mentors within the organization, compared with women and gay and lesbian employees. Figure 14 (n = 232) It Is No More Difficult for Racial/Ethnic Minority Employees to Find a Mentor in the Organization Than It Is for Caucasian/White Employees 33% 23% 25% 9% 11% disagree Disagree Neither agree nor disagree Agree agree Note: Percentages may not total 100% due to rounding. Source: SHRM/Catalyst Figure 15 (n = 235) Employees Known to Be Gay or Lesbian Receive the Same Development Opportunities as Heterosexual Employees in Organization 35% 40% 22% 3% 0% disagree Disagree Neither agree nor disagree Agree agree Note: Percentages may not total 100% due to rounding. Source: SHRM/Catalyst 16

29 Figure 16 (n = 231) It Is No More Difficult for Gay or Lesbian Employees to Find a Mentor in the Organization Than It Is for Heterosexual Employees 41% 22% 24% 7% 7% disagree Disagree Neither agree nor disagree Agree agree Note: Percentages may not total 100% due to rounding. Source: SHRM/Catalyst Table 10 Levels of Agreement on Organizations Employee Development Opportunities for Specific Employee Groups Average Standard Deviation In my organization racial/ethnic minority employees receive the same development opportunities as white employees In my organization employees known to be gay or lesbian receive the same development opportunities as heterosexual employees In my organization female employees receive the same development opportunities as male employees In my organization it is no more difficult for female employees to find a mentor than it is for male employees to find one In my organization it is no more difficult for employees known to be gay or lesbian to find a mentor than it is for heterosexual employees to find one In my organization it is no more difficult for racial/ethnic minority employees to find a mentor than it is for white employees to find one Note: Averages are based on a scale where 1 = Disagree and 5 = Agree. Source: SHRM/Catalyst Table 11 Percentage of Organization s Employees Promoted Within Past 12 Months Percentage of TOTAL Employees Percentage of Female Employees Percentage of Racial/Ethnic Minority Employees Promoted Within the Last 12 Months Promoted Within the Last 12 Months Promoted Within the Last 12 Months (n = 166) ( n = 150) (n = 145) Average 9% 10% 6% Range 0 100% 0 100% 0 100% Source: SHRM/Catalyst 17

30 HR professionals from nonprofit organizations, compared with HR professionals in for-profit organizations, are more likely to agree that women in their organizations receive the same development opportunities as men. This suggests that the nonprofit environment is more favorable at developing women for leadership positions. Results from this research also reveal that more women hold top-level executive positions in nonprofit organizations, compared with forprofit organizations. HR professionals were asked to provide the percentage of employees in their organizations who had been promoted within the past 12 months. Table 11 depicts the results. Overall, 9% of all employees were promoted. Of the women employees in organizations, 10% were promoted. Six percent of racial/ethnic minority employees were promoted within the past 12 months. Management Levels by Gender and Race 7 Table 12 illustrates management levels by gender. Gender representation among nonmanagerial employees is relatively equal. The representation of women in managerial positions, however, decreases as the level of management increases. For example, nearly three-quarters (72%) of top-level executives are men, leaving only 28% of the leadership in the hands of women. Representation of women drops rapidly as one looks further up the corporate ladder. According to the 2003 Catalyst Census of Women Board Directors, 8 which examines gender representation within Fortune 500 companies, only 13.6% of these positions are held by women. The 2002 Catalyst Census of Women Corporate Officers and Top Earners 9 reports that 15.7% of the Fortune 500 corporate officer pool are women, while 7.9% of the highest titles are held by women, and a mere 5.2% are top earn- 7 In this survey, management levels were divided into three categories: top-level executives, managerial-level employees and nonmanagerial-level employees. 8 Catalyst. (2003). Catalyst census of women board directors. New York: Catalyst. 9 Catalyst. (2002). Census of women corporate officers and top earners. Retrieved from Table 12 Management Levels by Gender Top-Level Executives Managerial-Level Employees Nonmanagerial-Level Employees (n = 185) (n = 178) (n = 174) Males 72% 60% 48% Females 28% 40% 52% Note: Percentages are column percentages and may not total 100% due to rounding. Source: SHRM/Catalyst Table 13 Management Levels by Race Top-Level Executives Managerial-Level Employees Nonmanagerial-Level Employees (n = 160) (n = 153) (n = 152) African-American/Black (not of Hispanic origin) 5% 8% 13% Asian/Pacific Islander 2% 3% 6% Caucasian/White (not of Hispanic origin) 87% 81% 68% Hispanic/Latin 4% 5% 9% Native American (American Indian or Alaskan Native) 1% 2% 1% Other 1% 1% 2% Note: Percentages are column percentages and may not total 100% due to rounding. Source: SHRM/Catalyst 18