By Daniel Hunter
Leadership is at the forefront of talent issues for the majority of UK companies, according to Deloitte’s UK Human Capital Trends 2015 survey.
Almost nine in ten (86%) organisations cite leadership as one of their biggest challenges. Leadership remains the most pressing concern for UK companies for the third year running, and is also the second most important issue raised by organisations globally. At the same time, only eight per cent of organisations believe that their leadership pipeline is “excellent” to address the problem. The trend’s “capability gap” — the difference between the survey’s importance index and readiness index — has also risen to 35, the widest gap across any of the issues assessed in this year’s report.*
An organisation’s ability to develop Millennial leaders (people born after 1982) is a particular challenge, with only six per cent of UK respondents declaring that they have “excellent” programmes in place. Whilst half of UK organisations say that their succession plans are not clear and current, the Deloitte Millennial Survey 2015 revealed that almost six in ten Millennials hope to gain a senior position in their organisation during their working life.
Anne-Marie Malley, head of Deloitte UK’s human capital practice, said: “By 2025, Millennials will represent three quarters of the workforce. With four million baby boomers retiring each year, Millennials will become ever more important to organisations, and shape the world of work in the future. And yet, our research shows a clear lack of commitment to this vital group’s development. This needs to be urgently addressed.”
Culture and engagement crisis looms
An organisation’s culture — defined as deep employee engagement, meaningful work, strong leadership importance, and job and organisational fit — has risen as a key issue for companies worldwide over the past few years. In the UK alone, less than 20 per cent of organisations believe that they can clearly define their culture, and communicate and measure it. As a result, eight out of ten respondents said they suffer from a lack of employee engagement.
Ms Malley said: “Fundamentally, culture needs to align with and support the business strategy. Clear organisational culture is now widely recognised as a critical challenge with tangible business impacts. It is no longer seen as a ‘soft concept’ or a ‘nice to have.’”
Learning and development gap increases
The 2015 results reveal that learning and development has become a serious talent challenge for UK organisations, moving from the eleventh most important issue in 2014, to become the fourth biggest challenge this year. Indeed, over seven in ten survey participants rated learning as a “very important” or “important” problem. Learning capabilities have also dropped significantly, as the “capability gap” has nearly doubled in the past year, from 12 to 20.
A big factor that is potentially increasing this capability gap is technological change. For example, despite the increase in the availability of digital and mobile learning tools, only eight per cent of respondents rate themselves excellent at providing mobile learning.
As a result, nearly 80 per cent of UK business and HR leaders surveyed cite workforce capability as one of their most important challenges, yet only four per cent believe they are “very ready” to address the issue.
Freelance and part-time demand grows
As companies look to freelance and part-time workers as a fast way to access networks of innovators, technical experts and seasoned professionals, the use of ‘on demand’ talent appears to be growing in popularity in the UK. This is reflected in the six out of ten UK HR leaders who reported that their need for such workers will continue to grow over the next three to five years, almost ten per cent higher than the global figure.
HR faces a crossroad
Only one in ten UK organisations rate their HR performance as “excellent”, and none felt that their organisations provide “excellent” development for HR. Furthermore, 66 per cent cited that their HR functions were lacking the capabilities to meet the rate of change across the organisation.
Ms Malley added: “Traditionally viewed as an administrative function, HR is now expected to be bold, agile, business-integrated, data driven and deeply skilled in attracting, retaining and developing talent, to align to the overall goals of the organisation.”
“The war for talent is becoming more ferocious, as the UK economy grows, technology changes the way we do business, skills become more specialised and generational transitions occur. To help attract and retain talent, organisations need to revamp their entire strategy to measure, manage and improve employee engagement.
"Companies are seeing an increasing demand for leadership at all levels, especially among Millennials. However, improvements are not coming through fast enough. It is clear that something needs to change in order for UK companies to effectively navigate the new world of work.”