A Glimpse Of The IBM Global Human Capital Study 2008

A human capital study was conducted for the year 2008 by the IBM Global Business Services Human Capital Management practice and the IBM Institute for Business Value with assistance from The Economist Intelligence Unit. More than 400 human resource executives from 40 countries across a variety of industries participated in a structured interview on the subject of workforce transformation.

The results have been enlightening, as they provide guidance not only to the HR function, but also to the entire organization. The analysis highlights 4 important themes that require the attention of senior executives across the organisation. Here, we have extracted the highlights of the first 2 themes:

Developing an adaptable workforce requires more than the ability to simply react to change. Successfully anticipating future business scenarios enables organizations to know what key competencies to target in advance of critical market shifts. Thus, developing an adaptable workforce is a critical capability to ensure business rapidly responds to changes in the outside market.

Global Trend

From the study, we see companies that are very capable of adapting to change are more likely to be able to predict future skill needs, identify expertise and collaborate. However, only 13 percent of organizations interviewed believe they have a very clear understanding of the skills they will require in the next three to five years.

Identifying future skill requirements isn’t enough, though. Leading companies will build, acquire or source these required skills prior to needing them. The combined ability to plan and execute will separate the winners from the "also-rans." More than 50% of the companies surveyed are actually having a challenging time to rapidly develop skills to address current/ future business needs; about 35% of companies interviewed also find their employee skills are not aligned with current organisation priorities (see Figure 1).

What are the Lion Group companies experiencing?

From CEDR/ Group HRD’s experience in conducting Training Needs Analysis (TNA) for the operating companies in the past 2 years, it is clearly shown that aligning employee skills to the current operational needs is still the first priority. The awareness to predict future skill needs is to be enhanced; it would be ideal if Lion Group companies were to consistently prepare the workforce for future business needs.

Generally, the Group appears to be more reactive in terms of human capital development, with more attention given to improving operational effectiveness; this is the situation most companies are facing according to this study. If we aim to be a world class organisation/ leader in the industry, time is not on our side. Are we doing something different to build a highly adaptable workforce?

No complex organization can transform itself without great leaders - those who can deliver today’s business results while guiding the organization through ongoing turbulence and uncertainty. The companies are placing their future at risk if they cannot identify, develop and empower the next generation of leaders.

Global Trend

Companies expressed their deep concern over the current and projected shortage of future leaders, with over 75% citing their inability to develop future leaders as a critical issue. About 35% of companies are currently lacking in leadership capability (see Figure 2).

Given the explosive growth in emerging markets, and the retirement of experienced personnel in more mature economies, this leadership shortage appears to be contributing to one of the primary business challenges - the struggle to expand into new markets/ geographies. As one Korean manufacturing company’s CHRO remarks, "We lack people who can manage and operate the business in a global environment."

Asia Pacific Trend

The study shows that there are two groups particularly vulnerable to growth constraints resulting from a lack of leadership: 1) Companies operating in Asia Pacific 2) Organizations within the industrial sector. For example, almost half of the companies based in Asia Pacific indicate lack of leadership capability as a primary workforce challenge. In this region, rapid growth, coupled with a relatively small pool of experienced leaders, has quickly thinned the ranks. As one VP of HR from a Singapore technology company summarizes, "Leadership at all levels is problematic."

Do we groom The Lion Group’s potential leaders?

Leadership capabilities at manager, executive and supervisory level have been constantly highlighted in TNA as a high to medium priority training need. In 2008, CEDR/ Group HRD conducted 11 sessions of leadership-related training and trained 238 people. The Lion Group had spent RM155,520 on leadership training in 2008. This shows that we are developing potential leaders. However, was this part of a long-term leadership development effort by companies to groom future leaders or was it carried out on an ad-hoc basis?

Similar to many companies in Asia, the Lion Group companies are expanding their businesses beyond the home market (especially in China and ASEAN countries) and we want to create more global footprints. Knowing that there are ample business opportunities out there, do we have sufficient number of leaders who are able to lead breakthrough projects? Do we have a leadership assessment mechanism/ leadership development process to prepare leaders for anticipated transformation? When we send the potential individuals for leadership training, do we provide them with sufficient hands-on leadership experience to prepare them for increasing responsibilities? Perhaps this is the right time to find answers to the above questions.