Top U.S. Executives See Rapidly Shrinking Talent Pool

Business Wire, Dec 13, 2007

HR Survey Finds Recruiting and Retaining Tomorrow's Leaders and Skilled Employees Is Number One Priority

SHRM Foundation Pledges Resources to Address Need

ALEXANDRIA, Va. -- A new study released today concludes that the most critical challenge facing America's chief executives and their organizations is finding and retaining the best talent, particularly in top-leadership positions.

According to research conducted with 526 C-Suite executives by the Society for Human Resource Management (SHRM) Foundation, three out of four said that "succession planning" was their most significant challenge for the future. Additionally, approximately seven out of ten respondents said the next most pressing problems were "providing leaders with the skills they need to be successful" (71 percent) and "recruiting and selecting talented employees" (69 percent). These survey findings also corresponded to the results of in-depth interviews that were conducted with 36 additional top executives.

"This is a wake-up call for every organization, regardless of size or type of business," said Wayne Cascio, chairman of the Board for the SHRM Foundation. "The shortage of skilled executives who are being groomed to succeed existing ones is real and it may threaten the ability of many firms to achieve their long-term strategic objectives."

"Ensuring we have the best leaders and the right talent goes to the heart of every organization's sustainability and continued success," said Susan R. Meisinger, President and CEO of SHRM.

The five most significant future challenges facing companies regardless of size, location or industry were: 1) Succession Planning; 2) Recruiting and Selecting Talented Employees; 3) Engaging and Retaining Talented Employees; 4) Providing Leaders with Skills to be Successful; and 5) Rising Health Care Costs. In general, C-suite executives do not feel confident that their companies have a plan to address these human capital challenges, particularly among smaller companies.

"Top executives are beginning to realize the right people are not in the pipeline to fill vacancies left by retiring Baby-Boomers," said Cascio. "Sadly, too few organizations have developed succession plans or invested in fostering the talent they need for tomorrow."

"We were surprised by the absence of research and tools to address these human capital challenges," said Larry Fogli, director of the SHRM Foundation's Research task force. "CEOs and business leaders have identified this as their top need; now we need to respond quickly and provide the necessary assistance."

To that end, the SHRM Foundation has committed additional resources to this topic and will convene a consortium of leading organizations to develop solutions.

The SHRM Foundation funded the research project to identify the most pressing human capital challenges faced by top executives. In addition to interviews with individual business leaders, and an online survey of 526 executives, the research also included interactive discussion sessions with top business leaders, and a comprehensive review of existing literature.

Background

The Society for Human Resource Management (SHRM) Foundation engaged Hay Group to conduct research to identify the most pressing human capital challenges faced by chief human resource officers (CHROs) and other C-suite executives. The research consisted of three parts; a comprehensive literature review, phone interviews with a select group of C-Suite executives, and a detailed on line survey.

Methodology

Literature Review. The SHRM Foundation commissioned a comprehensive literature review to examine and categorize various literatures focusing on current and emerging human capital issues. The results of this review pointed to talent management as the top issue facing HR professionals. Talent management includes succession planning, development, recruitment, and retention. Other top HR issues were leadership development; culture transformation and change management; HR technology; work/personal life balance; diversity; health care management; globalization; and business ethics.

C-suite Interviews. Hay Group invited 36 C-suite executives to participate in the in-depth interviews. The executives included a cross-section of companies (e.g., different industries, company sizes, global and US-based companies).

Survey Design. Hay Group designed the Human Capital Challenges Survey based on: 1) research conducted by Hay Group and SHRM; 2) results of interviews with C-suite executives; 3) input from the SHRM Foundation; and 4) discussions with Hay Group consultants and SHRM subject matter experts. The survey was sent to one C-suite executive each at 6,024 companies. A total of 526 C-suite executives (from 526 companies) participated in the survey.

The survey was designed to provide statistically reliable data for the business population as a whole as well as to take into account company size (small versus medium versus large companies); global companies versus US-based companies; and type of executive responding (HR versus Non-HR).