Tuesday, March 10, 2015 Josh Bersin by Deloitte

Today, driven by shifts in both work ethos and the transparency of the job market, employee retention and engagement are now the #1 problems companies face. (3,200 respondents from over 100 countries)

This is the third year we’ve done this study, and we looked at more than ten different trends in the research. The results show that 87% of companies now rate “retention, engagement, and culture” as an important imperative and 50% rate it “urgent.” The #2 trend, the need to build a global leadership pipeline, was a close second.

Companies are struggling with their culture because of a variety of factors. First, millennials now make up the largest part of the workforce, and they demand flexibility, mobility, and accelerated development like never before. Second, every company’s employment brand is now “on the internet,” so if you have weak management or a poor working environment, people know about it (we call this “the naked organization”). Third, companies have not kept up with their leadership development and performance management practices – so often management itself is not driving the right behaviours to make people want to stay.

One of the biggest factors may be learning. Our research shows that the #3 priority issue is the need to revamp and improve employee learning. This is not only a problem of skills development, but also one of engagement. The research shows that companies with high performing learning environments rank in the top for employee engagement – demonstrating how important learning is to engaging and empowering people.

Another major finding is that HR skills remain a challenge. 80% of companies believe HR skills are an issue and 39% rate this problem urgent. This means we, as HR professionals, owe it to our organizations and ourselves to take the time and money to develop ourselves. Rotational assignments, bringing non-HR people into the function, and training are all part of the solution.

Analytics was rated a high priority, as we may expect, but the progress is slow. And companies are very focused on fixing performance management, with almost 60% already in the process of re-engineering the process. We’ve been studying performance management for almost ten years now, and our research clearly shows why and how it should be simpler, more agile, and more developmental in nature.