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What's Keeping You Up Now?

Top HR leaders weigh in on the revealing results of our latest "What's Keeping HR Leaders Up at Night" survey.

Friday, September 2, 2011
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It's awfully tough to fall asleep when you're counting fleeing workers in your head instead of fleecy sheep. So it should come as no surprise that HR leaders are doing more tossing and turning at night these days.

Certainly, their stress levels are up.

In our second edition of the "What's Keeping HR Leaders Up at Night?" survey, 74 percent of HR executives say their level of job stress has increased in the past 18 months. Almost one-third -- 32 percent -- blame that on the difficulty they encounter in retaining key talent.

"And it absolutely should keep them up at night," says Wayne Cascio, senior editor of the Journal of World Business and a professor at The Business School at the University of Colorado in Denver. "I would be worried, too, and I'd be especially concerned about replacing high performers."

This latest survey on the insights and perspectives of 782 senior-level HR executives at organizations nationwide finds that the top two challenges identified in last year's survey -- ensuring employees remain engaged and productive (41 percent), and retaining key talent as the economy recovers -- also remain top of mind for this year's respondents.

Cascio says the results of the survey are more likely to give HR leaders nightmares than sweet dreams because they show how other HR leaders view both in-house and external talent: as precious a commodity as oil or gold.

According to this year's results, concern over losing key talent rose to 61 percent, up from 58 percent a year ago, with 21 percent saying they are "extremely" concerned this year.

"That's scary, because those are your rainmakers, your stars, your 'A' players, the people you don't want to lose," he says, "and poaching is very real."

While the survey shows a slight uptick in the number of respondents who view the current state of employee morale and engagement in their organizations as strong (34 percent compared to 30 percent a year ago), the overall findings show that many of the same concerns about the overall psyches and mind-sets of their workforces that HR leaders held a year ago continue to trouble them today, such as the effects of corporate downsizing.

Last year, 54 percent said downsizing has either "significantly" or "mildly" hindered their organization's ability to achieve its goals and objectives. In this year's survey, that number jumps to 73 percent. 

Brian Hults, vice president of organization and people development at Atlanta-based Newell Rubbermaid, can't recall a more challenging time in his three decades in HR.

"Between having multiple generations in the workforce to the demand [for healthy bottom lines] from Wall Street, it feels like the decks have been stacked against us," he says. "I think it makes it difficult for all of us."

Engage! Engage!

At Newell Rubbermaid, says Hults, HR is viewed in terms of three separate buckets: enabling the execution of business strategy, motivating employees and effectively managing HR to hold cost structures down.

But it is the dripping sound coming from the holes in that motivation bucket that troubles him most these days.

"This is the one that most keeps me up at night," he says, adding that a recent employee-opinion survey came back saying workers want more communications and training opportunities.

So, in an effort to open the lines of communication, the company began hosting regular all-employee meetings with senior leaders in its headquarters' auditorium and added more social-networking offerings to satisfy millennials' constant cravings.

According to the survey, the company's response was not a unique one: Sixty-seven percent of this year's respondents say they are also increasing employee communication, while 59 percent say they are also providing employees with additional training and development opportunities. (See graphs on next page.)

Hults says his HR function also has increased its efforts in providing more career paths and career planning for employees.

So has it helped?

"We've made progress in a number of the traditional areas that you would leverage to improve retention," he says. "But what we've found [is] we still have substantial turnover issues. We're kinda scratching our heads on this one, so we recently partnered with Aon/Hewitt to create a formal engagement survey with employees to try and solve the riddle."

While the riddle may yet remain unsolved for the time being, it won't be for a lack of trying. Hults says he has the luxury of being able to dedicate about one-third of his time to the engagement issue. "I'm really lucky in that I'm probably spending 30 percent to 40 percent of my time on [it]," he says. "For me, this is a huge, huge part of my job."

Challenges of Growth

Meanwhile, at casual-clothing retailer VF Corp., based in Greensboro, N.C., Vice President of Organization Development Ron Lawrence says the HR challenges his company currently faces are largely a by-product of its success, much of which he attributes to "the fiscal conservatism that is so much a part of our DNA." That corporate trait, if you will, was a key factor in the company's doubling its stock price and making last year the best of VF's 112 years in operation.

"We are facing the challenges of managing our growth," says Lawrence, pointing to the acquisition of the Timberland brand as a recent example. "And we've also got the challenges that many companies have around succession planning."

(For the sake of comparison, this year's survey finds 291 of the executives reporting their workforce increased over the last year, while 242 say their organization has decreased in size. And just 12 percent called succession planning a top-three HR challenge.)

Such growth requires that VF's talent pipeline never runs dry and, to that end, Lawrence's main focus is managing that pipeline; 44 percent of this year's respondents also listed talent management as the area in which they are spending the majority of their time.

Lawrence says he's constantly working to ensure that the company's best and brightest know exactly how the company feels about them.

"We're being transparent about how much we value them," he says, adding that specific communication strategies have been put in place for company leaders. "We're a culture that will tell you, 'You are top talent,' " he says. "Our goal is [to get] our leaders ... always talking to their rising talent." 

Lawrence says his personal stress level has risen slightly over the past year -- mostly due to the acquisitions -- but that's been mitigated by the company's home-field advantage, of sorts, when it comes to culture.

"We are in the business of casual-lifestyle clothing brands," he says. "So you don't come into VF and see a lot of people wearing business suits. People are wearing jeans and casual shirts. It ... really does speak to our culture."

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He adds that the company compared "very well" to Google in a recent employee-sentiment benchmarking survey done with the Internet giant that's known for its proactive approach to younger workers.

Such a combination of culture and communication has helped keep top talent from leaving the company, he says.

"And we lose very few, less than 2 percent of top talent," he says.

The Power of Stress

Finding a top-level HR executive who says his or her stress level has actually decreased over the past 12 months would be like finding the proverbial needle in a haystack, but Andrew Goodman, chief human resource officer at New York-based E*Trade, says just that.

However, that decreased stress level can only be truly appreciated when one considers where he was a year ago.

Arriving at the online-trading provider E*Trade one month after the arrival of new CEO Steven Freiberg in the spring of 2010, Goodman found himself confronted with an unfamiliar HR function in need of new components and processes.

" 'We have a lot to do in a short period of time,' " he recalls thinking at the time. For himself personally, he says, "there was a lot to absorb and understand."

Since his arrival, Goodman has built an HR team that has implemented a number of initiatives, including an employee-experience survey, and has earned the trust and sponsorship of his chief executive.

"To some degree, I feel a bit better right now in having the right team and capabilities to do what I'm here to do," he says.

His ultimate goal is not to get his stress level to zero, however, because stress can often help bring about progress.

"I think a little bit of stress is a good thing, because we all want to be able to push the envelope a bit," he says.

And while the survey's overall results resonate "pretty closely in terms of what's center stage out there," Goodman says, he also sees a larger, more troubling trend in the data.

HR's function, he says, is to ensure a good return on a company's investment in its people. But, to him, the results reveal an HR mind-set that has been conditioned -- particularly after the last few painful years -- to simply cut costs and "do more with less." 

Indeed, 31 percent of respondents say the size of their organization's workforce decreased in the last 18 months, and 21 percent say their own HR department decreased in size in the past 12 months.

In approaching the difficult economy this way, says Goodman, many HR executives have "lost their compass" on HR's true function.

"You can't manage talent from simply a cost perspective," he says. "I think if you are able to influence and stay true to investing in talent and strategy, then you'll sleep a lot better . . . ."

Chart: Biggest HR Challenges

Chart: Concern with Losing Talent

Chart: Workforce Changes During Past 18 Months

Chart: Employee Retention Efforts

Chart: Stress Levels

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