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The Future of HR in Europe: Key Challenges through 2015

The Future of HR in Europe: Key Challenges through 2015. Most important topics. Cluster. Recruiting and staffing. Economic developments: global growth and competition. Managing globalization. Becoming a learning organization. Managing talent. Managing demographics.

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The Future of HR in Europe: Key Challenges through 2015

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  1. The Future of HR in Europe: Key Challenges through 2015

  2. Most important topics Cluster Recruiting and staffing Economic developments: global growth and competition Managing globalization Becoming a learning organization Managing talent Managing demographics Societal developments: changing environment Managing diversity Scientific assessment Managing corporate social responsibility Managing work-life balance Restructuring the organization Company performance BCG/EAPM-expert assessment Enhancing employee commitment Managing change and cultural transformation Improving leadership development Improving performance management/rewards Transforming HR into a strategic partner Reform/ improve HR Mastering HR processes Outsourcing HR/providing shared services Measuring HR and employee performance 17 relevant topics were systematically derived 40 potentially relevant topics in literature Note: Business and scientific literature as basis, growth rate of publications quoting specific HR topic as indicator for potential future importance Source: BCG/EAPM analysis

  3. Web survey responses Interviews • Country • Number of Interviews Finland 19 Norway 53 = 0 Estonia 36 < 10 Swe- den 86 < 20 • Belgium • 2 Russia 20 Latvia 4 < 50 < 100 • Czech Republic • 10 Denmark 41 ≥ 100 • Denmark • 5 Ireland 125 UK 64 • France • 14 NL 18 Poland 6 • Germany • 21 Germany 133 B 9 CZ 47 • Ireland • 4 Slovakia 4 Austria 45 • Italy • 11 Hungary 18 CH 72 France 113 Portugal 64 • Netherlands • 3 Slovenia 25 • Russia • 12 Bulgaria 28 Italy 99 • Spain • 5 Turkey 24 Spain 121 • Switzerland • 3 Greece 11 • United Kingdom • 12 • Total • 102 Cyprus 21 Malta 7 One of the broadest European HR studies—more than 1,350 responses and over 100 interviews Note: Other countries: 41 Source: BCG/EAPM analysis; Web survey in 27 countries with 1,355 responses

  4. Restructuring-related issues Growth-related issues 0–9% 10–19% 20–29% 30–39% 40–49% 50–59% 60–69% 70–79% 80–89% 90–100% Restructuring themes topped list of business issues in Europe, growth-related issues ranked high as well Austria Cyprus Denmark France Ireland Norway Russia Spain Switzer-land Bulgaria Czech Rep. Estonia Germany Italy Portugal Slovenia Sweden Turkey UK Cost reduction 71% 50% 67% 53% 39% 33% 70% 71% 61% 66% 45% 61% 55% 52% 50% 57% 57% 46% 44% Increasing labor productivity 84% 71% 86% 77% 29% 72% 58% 68% 55% 48% 55% 67% 65% 68% 19% 43% 43% 67% 33% Reorganization 53% 43% 71% 55% 54% 39% 50% 54% 47% 57% 43% 55% 40% 52% 52% 50% 56% 67% 33% Growth in your home country 51% 54% 48% 60% 68% 58% 29% 47% 45% 32% 57% 47% 35% 40% 34% 30% 28% 63% 45% Global competition 33% 43% 29% 38% 37% 25% 35% 47% 36% 33% 32% 44% 10% 32% 41% 40% 36% 33% 48% Growth outside yourhome country 44% 14% 48% 32% 44% 25% 35% 51% 21% 26% 42% 25% 35% 44% 17% 26% 31% 25% 55% Turnaround management 9% 7% 24% 11% 22% 17% 64% 16% 22% 15% 25% 16% 0% 16% 34% 22% 35% 33% 16% Changing the scopeof activities of your company 29% 14% 14% 6% 24% 11% 26% 23% 24% 23% 19% 13% 10% 28% 24% 24% 15% 17% 33% Business Process outsourcing 13% 29% 19% 13% 12% 11% 27% 23% 12% 13% 21% 17% 15% 0% 25% 17% 17% 33% 3% Post-merger integration 13% 11% 5% 17% 15% 14% 20% 29% 14% 17% 13% 8% 0% 4% 16% 9% 18% 25% 28% Business process insourcing 2% 14% 5% 0% 10% 0% 4% 4% 5% 2% 8% 8% 5% 8% 4% 7% 4% 0% 3% Other 9% 7% 0% 9% 2% 6% 4% 6% 6% 2% 8% 2% 0% 4% 7% 9% 7% 4% 9% • % of respondents: Still strong focus on restructuring, little focus ongrowth or global competition Note: Only countries with sample size equal to or larger 20 Source: BCG/EAPM analysis; Web survey in 27 countries with 1,355 responses

  5. 5 future topics require the most immediate need for action to improve capability in Europe

  6. Denmark Capabilities in managing talent and in changemanagement will play critical role in Denmark

  7. 0 10 20 30 40 50 60 70 80 90 100 Æ Europe Today (2007) In future (2010–2015) Carried out by superior capable companies Managing talent Companies with successful talent management used especially two actions Which of the following aspects of talent management are and will be the key areas for action of HR in your company? • Respondents (%) • Developing tailored career tracks +12% • Sourcing talent locally -33% • Developing specific compensation schemesfor talented people +60% • Enhancing the number of visible talents for the • corporate center +40% • Sourcing talent globally +38% • Hiring talent from competitors -41% • Moving businesses to new locations to access • talented people +700% • Establishing alumni networks +300% • Launching initiatives targeting specific communities +50% Note: Participants could make multiple selections. The positive influences are identified through regression analysis with 10 percent confidence level Source: Web survey; BCG/EAPM analysis

  8. Æ Europe Today (2007) In future (2010–2015) Carried out by superior capable companies Managing change and cultural transformation Except for ensuring visible leadership all actions with a positive influence will be less important than in Europe In which of the following change levers does and will HR play a role in your company? • Respondents (%) • Communicating a vision for action +33% • Ensuring visible leadership +23% • Closing gaps in capabilities (assessment,training, staffing) +15% +33% • Ensuring alignment of the HR system with the desired • culture and/or the expected reorganization • Managing social relations (unions, workers' council) +22% • Maintaining rigorous program management(project, milestones, financial follow-up) +50% • Mobilizing stakeholder support +25% • Installing a head of change management who is as • important as, e.g., the head of finance +400% Note: Participants could make multiple selections. The positive influences are identified through regression analysis with 10 percent confidence level Source: Web survey; BCG/EAPM analysis

  9. Æ Europe Today (2007) In future (2010–2015) Carried out by superior capable companies Managing work-life balance All actions with positive influence will become more important in future than in the rest of Europe Which are and will be the key aspects of work-life balance your company offers? • Respondents (%) • Flexible working hours -6% • Teleworking +88% • Part-time working +0% • Sabbaticals +100% • Job sharing +167% • Compensatory time +133% • Parent's sabbatical +0% • Career couple programs +67% • Increase headcount (and decrease productivity) +0% Note: Participants could make multiple selections. The positive influences are identified through regression analysis with 10 percent confidence level Source: Web survey; BCG/EAPM analysis

  10. Some observations • Danish respondents believe managing talent is #1 challenge and priority, in line with rest of Europe • Need for identifying “top 10%” in an organization early – the future leaders • Offer additional opportunities in terms of development, responsibility and compensation • Danish respondents view “managing cultural transformation” critical • Reflecting a more global footprint of most companies today and higher knowledge content • Danish respondents, however, do not view demographic risk management a priority • Despite aging work force, also in Denmark • Despite record low unemployment – bottlenecks in all functions and at most levels already Get basic HR processes right and focus on top future topics

  11. HR departments face major challenges • Non-HR executives want HR to get the basics (basic processes, recruiting/staffing, and strategic partnership) right • However, this is where HR overestimates its own capabilities most • HR capability assessed to be 65% stronger if HR receives top management support • However, only 35% of HR professionals feel that they receive top management support • Clear focus for the future: need for action in topics with high future importance and low current capability • Only 30% of the respondents have already started to tackle the top future topics Get basic HR processes right and focus on top future topics

  12. 4. Initiate projects with dedicated teams 5. Secure support from top management Conclusion 17 HR topics • 2. Understand the • internal environment • • HR audit • 1. Understand the • external environment • • Business strategy • • HR trends 3. Select the most critical HR topics and prioritize projects and initiatives You can order the complete study at marketing.de@bcg.com (please provide your full postal address)

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