The Business Case

Why Now?

 

 

 

 

 

 

 

 

Career Systems International has long been in the business of career development. The Business Case for Career Development itself hasn't changed much – it's about talent: finding the best, keeping the best, growing the best, and maximizing the contributions of everyone to meet the organization's goals and strategies.

Today's environment, however, is unlike any other period of time, given the past 10 years of economic and business uncertainty. But the Business Case, for all intents and purposes, remains the same. Set forth below are several key reasons, supported by external research and reports, as to why career development matters to Organizations – what are the driving forces for companies to pay attention to today's changing workforce – to drive momentum to change or adapt to the changing needs around talent. As we look at the needs of the organization, of course, the impact is squarely on the shoulders of leaders and yes, talent themselves.

Some of the research that supports the criticality of career development include:

1. THE NEW NORMAL

Intense competition, emerging economies, rapid and ever present change. Customers that demand more and won't settle for less. Organizations doing more with less. Innovate or perish. These are just some of the brushstrokes that paint the picture of today's business landscape. Click here

Towers Watson 2010 Global Workforce Study (April, 2010) conducted online in 22 markets around the world between November 2009 and January 2010, includes over 20,000 full-time employees in mid-size to large organizations. Key Findings include:

  • The recession has accelerated the demise of the traditional employment contract or "deal" between employers and employees.
  • There is a gap between what employees want and expect and what employers can afford to deliver, compromising the employer's ability to shift their focus from recovery to growth.
  • We have a recession weary workforce, one with lower expectations, increased anxiety, and new priorities.
  • These findings pose enormous challenges for employers' efforts to: Sustain motivation and engagement; retain critical talent; and enable individuals to operate successfully in the new world.
  • Organization leaders know they must retain critical talent and enable individuals to operate successfully.
  • Employees understand they are solely or chiefly responsible for ensuring their long-term financial and physical health and well-being as well as their career and performance – but have serious doubts about their ability to take on these roles.
  • Employees are staying put to a greater degree than we've seen in a decade: 81% are not looking, 48% see no advancement in current job and 42% think they have to go elsewhere to advance their careers.
  • Confidence in leaders and managers is disturbingly low – particularly in terms of the interpersonal aspects of their respective roles.
  • Employees appear hungry for an emotional connection to management team and feel it's conspicuously absent right now.
  • Organizations need to, and want to, foster self-reliance on the part of employees:
  • Organizations must enable employees to build their skills, plan for their financial future and live healthy lives – "active security" vs. "passive security."
  • Organizations must create a more personalized work experience for employees and ensure more differentiated investment of financial resources in critical talent.
  • Organizations must strengthen agility and flexibility in the their structure, processes, management style and delivery of workplace program so they can be more adaptable and responsive to this relentlessly changing global business environment.
  • The recession has widened the gap between what people desire vs. feel they can achieve:
    • I want job security, stability and good pay and benefits (But I see the safety net eroding)
    • I want career advancement (But I may need to leave my company to get it)
    • I know I'm responsible for my own financial well-being, career, performance and health (But I'm not sure I can handle it)
    • I rely on my manager and my leaders (But they don't always deliver)
    • I want more freedom and flexibility in how I work (But I don't have the tools I need to be productive)
  • Companies will face greater challenges as they compete for talent on a global basis.
  • The next "war for talent" is likely to be waged inside organizational walls, as employers focus on advancing and retaining their top talent while also continuing to develop and engage the broader workforce.
  • Companies will also face the problems of being unable to move workers out of the organization in an orderly fashion because they are nearing, at or past retirement age, but also to find innovative and feasible ways to keep them (productive) longer, since they cannot afford to retire or many simply wish to continue working.
  • Organizations need to equip individuals to be more self-reliant in owning and managing their own performance, career, financial security, health and wellbeing and managers, obviously play a huge part.

2. THE SURVIVOR

The Kept-On Workforce is not happy. Disengagement is everywhere, and it is no doubt impacting productivity, performance and profitability. While people may choose to stay, they also choose to 'wait and see,' allow the economy to shift once again and until then, show up physically, but not necessarily bring their whole self to work (i.e., no discretionary effort). This can have a severe impact on organizations' bottom line, particularly as it relates to 'top performers/key talent.' Click here.

  • Watson Wyatt's Strategic Rewards Survey (2009/2010) found the economic downturn has led to a decline in employee commitment. (http:///denver.bizjournals.com/denver/stories/2009/09/21/daily11.html)
    • Employee engagement levels for all workers at the companies surveyed dropped 9% since last year; close to 25% for top performers.
    • The number of top performers who would recommend others to take jobs at their company has declined by nearly 20%.
    • Top performing employees are 26% less likely to be satisfied with advancement opportunities at their company.
    • They're also 14% less likely to want to remain with their company vs. take a job elsewhere.
    • They're 29% less confident in management's ability to grow the business.
    • 41% believe the pay and benefit changes made over the past year have had a negative effect on quality and customer service.
  • Business Week reported in March, 2009 that the Corporate Executive Board said "the number of disengaged employees increased by 45% in the past year, and they are doing something worse than quitting—they're staying." Adding to that, they shared that disengaged employees are 24% more likely to remain at their current employers. In addition, over the past four years the discretionary effort put forth by these employees has markedly decreased by 53%. (http://www.businessweek.com/managing/content/mar2009/ca20090313_334411.htm)
  • Harris' (Adecco) American Workplace Insights Survey (2009) found that "even during a recession, just having a job does not equate to job satisfaction" and recommends that career development is a mutual responsibility, particularly for companies looking to reduce an exodus of top talent. (http://www.rtoonline.com/Content/Article/sep09/employee-satisfaction-survey-results-090209.asp)
    • 76% are not satisfied about future career growth opportunities at their organization.
    • 48% are not satisfied with the relationship they have with their boss.

3. PERFORMANCE & PRODUCTIVITY IMPACTED

Engagement is not only dropping, but it's significantly impacting business results.
Click here.

  • Engaged employees generate 33% higher profits, operate at 50% higher productivity, and score 56% higher in customer loyalty surveys. (Gallup)
  • The disengaged workforce is costing the US economy more than $300 billion a year, or 11% of payroll costs, according to Gallup.

4. MASS EXODUS OF TALENT ANTICIPATED

Most employers will see an unprecedented exodus of talent as the job market rebounds.
Click here.

  • 54% of American workers report they're likely to look for new jobs once the economy turns around (Adecco, American Workplace Insights Survey, 2009). 71% of Generation Y (those between 18-29) will be looking.

5. TALENT & SKILL SHORTAGES WILL RETURN

The Bureau of Labor Statistics continues to report that there will be severe talent and skill shortages through 2012. Organizations must build a culture of development to fill the talent pipeline and create a job market within the organization, instead of pushing people out. Click here.

  • 60% of the 21st century jobs demand skills that only 20% of our workforce has (US Department of Education, 2007).
  • More than 75% of the workforce must be retrained to keep the jobs they have (US Department of Labor).
    • Everyday 11,000 boomers turn 50. This boomer population then bequeaths their jobs to younger counterparts – the Gen X'ers. But wait … there are only 43 million Gen X'ers to fill the 152 million shoes represented by the Boomers; the next decade will bring with it a huge need for added skills to keep productivity optimal.

6. CAREER DEVELOPMENT IS ONE OF THE THREE KEY DRIVERS OF ENGAGEMENT

across all generations, functional areas, cohort groups (diversity) and levels within an organization. Click here.

  • Because today's workforce is more diverse than ever, it will require a broader, more creative perspective on career development and the options available to engage and retain all employees and transfer intellectual capital. Today's demographic mix brings with it challenge and boundless opportunity for leaders who recognize that career development is not a one size fits all.
  • Aligning talent to new roles and challenges equates to increased productivity – A white paper by Accenture, called "Untapped Potential: Stretching Toward the Future" states that 58% of today's workers are interested in doing more.
  • According to Gallup (2008) Career advancement or promotional opportunities are cited by 32% of their respondents as the #1 reason for leaving. (Pay & Benefits is second at 22%).
  • The Aberdeen Group's survey results show that the firms enjoying "Best-in-Class" performance shared a vital common characteristic: 83% put in place development plans that are agreed to by managers and employees.
  • Only 15% of talent in "sweet spot." A recent survey (2010) by Human Capital Institute found that only 15% of the respondents thought talent in their company were in their "sweet spot" which was defined as equal parts what people love, what they are great at and what the organization needs.
  • Right Management's 2009 study "Advancing Careers, Driving Results" polled more than 28,000 employees in 15 countries, and data shows that successful organizations include career development as a regular part of their talent management strategies.
    • The Right study showed that organizations that support employees with opportunities to learn, grow and advance careers are six times more likely to engage employees, four times less likely to lose talent and two and a half times more likely to be productive.
  • The Conference Board (2006) conducted a meta-analysis of twelve major research studies to distill the common themes among them regarding the drivers of employee engagement. Eight themes emerged as commonalities among major approaches to in the studies. Career development opportunities were number 4 on that list.
    • Trust and integrity.
    • Nature of the job.
    • Line of sight between individual performance and company performance.
    • Career growth opportunities.
    • Pride about the company.
    • Coworkers/team members.
    • Employee development.
    • Personal relationship with one's manager.
  • The top three global drivers according to Aon Hewitt (2011) are career opportunities, brand alignment, and recognition; in fact, career opportunities has consistently ranked in the top three for the past 3 years across all regions in Aon Hewitt's employee engagement survey.
  • Findings from Blessing White (2011) find that 32% of Chinese respondents selected career development and training as atop driver of job satisfaction—en element of engagement—followed by more opportunities to do what I do best at 20%, results that reflect is reflect its relatively young workforce.
  • Twenty-eight percent of Indian respondents selected career development and training and 21 percent selected more opportunities to do what I do best.
  • In the Merit Principles Survey administered to almost 37,000 workers, the U.S. Merit Systems Protection Board (2008) posits that federal employees found prospect for future personal and professional growth to be most important.
  • Globally, career development and the opportunity to advance retain their top spots in all rankings; an outcome not surprising in a world where top talent are truly "free agents" and the only real safety net is the portfolio of portable skills that can be deployed anywhere.
  • A CSi Study reports:
    • 80% of employees indicated they have more abilities than they are currently using in their organizations
    • 64% of employees reported that working for their organization inspires them to do their best
    • Only 43% of employees reported that their managers were able to advise them about how to be successful in their organization
    • Only 39% of managers can coach employees in how to write a realistic career development plan
    • 50% of managers know how to retain talent by helping employees use the organization as a job market
    • 49% of employees surveyed reported having a clear understanding of the challenges and trends that will impact their organization's business over the next 1-2 years, creating the potential for mismatched expectations between employee career expectations and what the organization can legitimately 50% of managers know how to retain talent by helping employees use the organization as a job market.