Engaging an Aging Workforce

By 2050, the world population will be over nine billion. Despite this growth and the flooded employment market, employers worldwide report difficulty in filling positions. Many are facing an HR paradox: How to find the right people at the right time, with the right skills in the right place, and fill the gap in the midst of plenty?

On a global scale, birth rates are declining and populations are aging. This means that there is a smaller pool of working-age talent from which to draw. The world average life expectancy was around 52.5 years in 1960. But today it is 68.9 years of age –31% higher in just 40 years. The percentage of individuals over age 65 who are in the labor force jumped about 40% from 1998 to 2008 … and this trend is set to continue.

Combined with these demographic challenges is a broader, more strategic challenge of the global talent mismatch. According to Manpower’s Annual Talent Shortage Survey, 34% of employers worldwide experience difficulty filling needed positions. So it’s not just about having the workers available amidst a shrinking pool of talent. It’s also about having the right people with the right skills needed to drive businesses forward.

Experienced workers will make up a larger percentage of the workforce and employers will need to find ways to keep them engaged. They will need to train managers to manage a multigenerational workforce that includes the young and the old. The skills mismatch is set to accelerate, creating an imbalance between supply and demand.

On June 28, I will be presenting on this topic at the SHRM 2011 Annual Conference and Exposition. I hope to see you at SHRM.

Loss of Top Performers a Growing Concern

As new opportunities begin to open up in the job market the loss of top performers has emerged as the top concern of across the nation. Right Management research found that as many as 30% of employers cite defection of top talent as their most pressing HR challenge. And a further 30% told us that they lack high-potential leaders in the organization. Twenty-two percent are suffering from low engagement and lagging productivity and 18% have a shortage of talent at all levels.

Loss of top talent is a growing concern for many employers. In fact, it’s now more of an expectation. After all, it’s no secret there’s a lot of pent-up frustration in the workplace and that many, if not most, employees have been floating their resume.

Many employers find themselves faced with a dilemma. Right now they don’t want to do much hiring, but at the same time they think they will lose top people. If these defections play out, that in turn will mean more hiring to fill key gaps. It seems certain that job churn and turnover will notch upward, which may harm growth at many organizations.

HR professionals know that recruiting and securing the right talent for key positions is a demanding process regardless of whether the job market is weak or strong. Top talent is clearly on the move. To secure the best available talent, organizations need to have a clear picture of the competencies required and the success profile for the positions for which they are hiring. Without this clear focus as well as a fast track on-boarding plan, organizations risk losing greater productivity and performance especially from new leaders being hired into the firm.

It’s imperative for organization’s today to have a well-constructed succession planning system for rapid replacement of key roles, and more broadly, a well aligned succession management plan to ensure firm-wide talent progression. Those that don’t are highly exposed to risks of underperformance and further loss of talent that could have been successfully developed for competitive advantage.

The Contingency Plan

As business leaders continue to be conservative with investments in talent, utilization of contingent, temporary and flexible workers continues to grow.

As many as 41% of employers have used more independent contractors over the past two years, according to recent survey of 430 senior human resource executives conducted by Right Management.

Nearly all companies are re-examining their talent management practices in order to align their workforce with their business strategy. This has required a behavioral shift that includes the greater flexibility afforded by independent contractors.

Many of the contractors eventually become full-time employees. But just as many workers these days prefer their independence and organizations must accommodate the goals of these people to stay competitive in the marketplace. Flexibility employment practices will help to attract the best and brightest talent available.

Individual employees want flexibility – in how, where and when they work. And employers are adjusting their human resource policies and practices to meet this demand. We also asked survey respondents if their organization had seen an increase in flexible working practices over the past year. Twenty-three percent said “Yes, a lot” and 54% said “Yes, somewhat.” Only 22% said no.

Such HR policies and practices are on the increase. One study reports that as many as 85% of organizations have flexible practices in place for employees. These might be more flexible work hours, telecommuting, or even a greater use of temporary or contingent workers for specific projects or short-term assignments. Companies that create more flexible options for workers typically foster higher levels of engagement and commitment, as well as build their brands in order to attract the best talent available in the market.

Worker Insecurity Could Be Harming Productivity

Despite signs the economy is steadily improving, most employees feel less secure in their jobs compared to a year ago. According to our research as many as 71% of workers reported they are less secure in their job than last year, while 14% feel just as secure and 15% more secure.

This research finding surprised us. We really expected a more optimistic outlook by employees. In fact, we thought most respondents would tell us they were feeling at least as secure as a year ago now that it appears the recession is well past its depth. But it seems it will take more time for people to get over the trauma of the long downturn, and job security is probably the sort of indicator that lags behind any good news.

As further evidence, Manpower’s second quarter Employment Outlook projects that 74% of employers plan no staffing changes. With only 16% of companies expecting to hike hiring, and just 6% foreseeing any staffing decreases, it seems the word just isn’t getting through or that employers have been overly reticent about communicating their staffing plans with their employee base.

Persistent workplace unease can pose challenges for employers. Savvy leaders know that such widespread deep anxiety is no good for the organization in the long run. In order for employees to do their best they need to have a sense they’re valued by their organizations and engaged in a worthwhile pursuit. Top management has to address the job security issue head on, and communicate to workers what their role is in the organization’s future success.

Productivity may suffer when workers are busy with “water cooler” discussions, rumor mills and looking for a new job on your time-clock. The best thing a leader can do to promote security and confidence is to communicate regularly and with authenticity and candor. Most people feel greater confidence when they know they are dealing with the truth.

When was the last time you checked in on how your employees are feeling?

Stemming the Tide of Employee Defections

As new opportunities begin to open up in the job market the loss of top performers has emerged as the top concern of employers across the country. As many as one in three senior executives and human resource professionals told us that defection top talent is their most pressing HR challenge. A further 30% are suffering from a lack of high-potential leaders in their organizations and 22% have low engagement and lagging productivity. Staggeringly, 18% reported that they have a shortage of talent at all levels

Loss of top talent will likely emerge as the most pressing concern for many employers in the year ahead. This seems particularly prevalent in the service industry whose growth largely depends on the creativity and knowledge of their key employees. In fact, it’s now more of an expectation. After all, it’s no secret there’s a lot of pent-up frustration in the workplace and that many, if not most, employees have been floating their resume.

Many employers find themselves faced with a dilemma. Right now they don’t want to do much hiring, but at the same time they think they will lose top people. If these defections play out, that in turn will mean more hiring to fill key gaps. It seems pretty sure that in the year ahead job churn and turnover will notch upward, which may harm growth at many organizations.

Those organizations that can evaluate what drives workforce engagement – and the lack of it – are in a much better position to mitigate the risks of top talent flight to competitors. Simply understanding what the current workforce engagement levels are is no longer a sufficient strategy to stem the tide of potential attrition. Organizations that can identify what drives engagement in actionable terms, so that those drivers can be leveraged in an overall retention strategy, will be the winners of the emerging talent migrations.

Cutting Back on Cutbacks

For the past couple of years, organizations have cut costs and laid off staff. Most organizations have very little, if anything, left to cut. After two years of widespread downsizings most companies foresee few or no staff cutbacks in the year ahead. We recently surveyed more than 700 firms across the U.S. and learned that just five percent of firms nationally anticipate significant cutbacks or restructurings.

While it is anticipated that organizations will likely continue to be conservative with cash, many leaders are shifting from crisis mode to a growth agenda. According to research by Gartner, some 42% of CEOs are focusing more on revenue growth than cost control and 29% expect this to be the prime focus for 2011, according to Gartner research. In 2009, this research reflected CEOs’ focus on restructuring, layoffs, consolidation, write-offs and rebuilding trust.

So the road ahead will be one focused on growth. Many organization’s are at a point where they need to make a greater investment in talent to ensure strategic viability. An organization’s people are, in the end, the only differentiator that may be sustained. And a coherent strategy around talent will be needed to deliver on increasingly aggressive business goals. Businesses across the board have successfully taken costs out of their structure through a variety of methods. The challenge is rebuilding and growing the business with the talent left after the wake of cost cutting efforts.

Engagement and motivation levels are not the only challenges firms face when re-focusing the business on the future. The skill sets and abilities of the remaining workforce may or may not be what is needed to take the business forward. Organizations that evaluate what the “new normal” looks like – and how the mindsets, skills sets, motivations and abilities of the workforce need to be developed, adapted and changed to meet the future – dramatically increase their the chances of success.

Treat employees like customers and build long-term relationships

Take the time to secure long-term and strategic relationships with your current employees, both average and high performers. Successful employee relationships mean strong retention. This will save your organizations thousands if not millions of dollars by reducing attrition.

If you are able to retain top performers, this transforms what some employees may consider a short-term opportunity into a long-term and genuine partnership. As companies endeavor to secure both share of market and share of mind from customers and prospects, apply the same concept to your employees.

Given the high cost of recruiting, training, and retention, it will invariably cost your company more if you are continually seeking new external talent. Using a long-term and strategic approach and – i.e., growing from within – offers numerous benefits: a sustained organizational culture, evolving institutional knowledge, strong and enduring customer relationships, and a pipeline of internal talent to support and accelerate succession planning.

Engage your employees. Share with them your vision and strategic plan. Ask your employees to review and validate the marketing strategy and tactics used with customers. If employees see sickly quality control practices, poor customer service, and lack of sales and marketing integration, this wil make it impossible to convert high-performing employees into long-term organizational assets. Effective leaders do not micromanage. They recognize, for example, that requiring their team to check in every day and report on their progress is demeaning and not motivating. Instead, build personal and trusting relationships and create win-win solutions.

An organization's marketing and PR activities attempt to build and secure long-term customer relationships. Apply this same concept to your employees. It is far more cost effective and organizationally beneficial to respect and treat your employee well. If employees feel genuine emotional engagement they will be are inspired and commit their full energy, loyalty – and future – to the company.

Playing Goal Keeper

In sports, a goal keeper is a player that is charged with directly preventing the opposite team from scoring by defending the goal. As a leader, you need to be a goal keeper of a different sort. You need to be the one who establishes goals for your team, clearly communicates them on a regular basis, and the person who helps your talent to learn ways to fulfill and exceed the set objectives.

Goal setting involves establishing specific, measurable and time-targeted objectives. Sure, that sounds easy enough. But how do you do this in an uncertain operating environment, where the winds of change are constant and the latest fire drill flips the priorities? In essence, goal setting today is a lot like chasing moving targets. But the reality is that uncertainty and change are the norms of doing business today. If you don’t establish goals, it’s easy to lose your line of site and miss out on fulfilling the broader vision for the organization.

With a clear vision, one that is regularly articulated and discussed with your team, you can define accountability for meeting goals and have a solid platform to loop back and review performance. It’s important for leaders to regularly communicate with the team, set milestones on the path to achieving the goals, and ask for regular updates from everyone on progress.

If you can’t measure it, you can’t manage it. Establish concrete criteria for measuring progress toward the attainment of each goal you set with your team. When you measure progress, the whole team is more likely to stay on track, reach target dates, and experience the sense of achievement that spurs everyone on to continue the efforts required to reach new goals.

Boost the commitment and development of your team by setting goals that will help to stretch their learning. Employees want career development opportunities. Employees want to be led by those who recognize and appreciate them, and who give them the opportunity to be challenged and enriched by their work.

Is your team clear on the goals for your organization? Are you actively keeping them on track to fulfill them?

It's Time to Get Off the Bench

There’s a lot of data circulating in recent months, including our own, that cite how many employees are displeased with management, disengaged, stressed with more work and longer hours and looking for opportunities to leave. But will they really leave? As Dan Walter put it in a recent post: “Employee engagement surveys are like New Year’s Resolutions.” Meaning, what people say they want to do is not always what they actually do.

But the reality is employees are leaving. One in two employees has been approached with a job offer in the past 6 months, while 54% of companies reported losing top performers in the same time period.

Our own engagement research found that as many as one in two employees are disengaged. If you are doing your own engagement studies, then you have insights into how your own employees are feeling. If you have the data, act on it. Those who “quit and stay” -- we call them "Benchwarmers" -- are a real drain on productivity. While many may want to quit, the worst thing is that many don’t. Instead, you run the risk of them quitting in terms of their commitment and loyalty, but staying on the payroll just the same. That is not to say that these people are no longer valuable to the organization. They may have just lost interst in their job or role but could still be highly committed to the organization’s direction, values and culture. Oftentimes, with the right type of re-assignment, re-deployment or expanded job responsibilities, these people can be effectively re-engaged. It is often far more cost effective to look for ways to re-engage this group rather than lose these people who you've invested in and who possess valuable institutional knonwledge.

Either way, you’re courting disaster if you don’t address the problems within the organization that are leading to high levels of disengagement, while failing to support one of the greatest sources of influence on engagement levels: managers. If left unaddressed, customer service, ability to attract high caliber talent, the employer brand, productivity, and ultimately, performance will all suffer. Make the hard decisions fast about the complacent employees who are warming your benches. No company is going to move to the number one position in their industry with a complacent workforce.

Do you know who the benchwarmers are in your organization? Do you know your options for dealing with them?

Relinquish Control and Share the Glory

One of the best ways for leaders to really demonstrate how much they value their employees is to relinquish control, loosen the ties and give them exposure throughout the organization. It’s a great way to prove your trust in them while at the same time helping to build their confidence and manage risks.

Recognizing your team and empowering them to represent your department demonstrates how much you value their contributions and confidence in their ability. This effort goes a lot further than merely saying “Thanks”. Although regular demonstrations of appreciation do go a long to foster engagement, commitment and pride. As Bob Sutton writes in his blog, it’s about giving as much credit to each employee as he or she deserves. The good boss goes the extra mile to make sure that employees succeed in their jobs and keep developing skills. And this includes giving them the opportunity to communicate and shine with higher levels of management in the organization.

It may feel risky to loosen control and let go of micromanaging. But a good manager empowers people in ways that make employees want to do their best to and contribute in meaningful ways. The end result is better performance, higher productivity and stronger commitment.

Of course, an employee may miss the mark from time to time. But this is an opportunity for the leader to be a coach and not a referee. Help employees to learn from mistakes and address conflicts rather than ignore or dismiss it. Model your own behavior as a way to inspire your employees to emulate you.

At the end of the day, you want to be a mentor to your employees so that they can be the best they can be and prepare them to take the company forward. Are you ready to relinquish some control?

Solve a business problem: develop employees

We all know that organizations are facing a much more difficult landscape than they did two years ago. Organizations at the forefront of their industries are the ones that attract the best and the brightest talent who bring the innovation and creativity needed to win.

Organizations that value their employees know that they bring a unique set of experiences and expertise. They realize those in the trenches can see where efficiencies can be created and are often the best source for innovation. Encouraging employees to share their perspectives and insights will help an organization enrich its offerings, address organizational issues, become more creative, more efficient, offer a fresh point of view, and escalate the competitiveness of their organization.

Employees want to be involved in business strategy execution and in helping their employer to be more successful. These future leaders want to play an active role and contribute to its success in a meaningful way. Employees are no longer content watching from the sidelines; they want to be part of the decision process.

However, study after study share findings indicating future leaders are poised to leave organizations once the job market improves, while engagement research shows that keeping employees engaged is a key to retention.

Leaders must address how to improve engagement while staying focused on business needs. Developing employees is highly correlated with increased engagement and employee retention. However, simply developing employees may not lead to improved organizational results. There needs to be a link between development and the strategic goals of the organization. An Emerging Talent Program focused on identifying and developing high potentials is a catalyst many high performance organizations use to engage and retain their best and brightest. With direction and input from senior leadership, employees identified as “Emerging Talent” are given organizational goals to research, analyze, and make recommendations on. Examples include identifying additional solutions or offerings, establishing more effective practices, and identifying new market strategies. Throughout the program senior leadership assesses the direction of the projects and makes refinements where necessary to ensure constant alignment with business objectives. Recommendations are then reviewed by senior leadership, decisions are made based on strategic priorities, implementation owners are identified, and action plans are created. Throughout this implementation process the Emerging Talent members are fully involved, and their development continues to expand as a result. Upon completion of the one-year Emerging Talent program, members become mentors and coaches to the next program class to help share their insights and give feedback on the direction of the projects.

Organizations that engage employees through development activities, such as an Emerging Talent Program, while focusing on strategy, increase engagement and retain key talent, creating the high performance workforce needed to move the company to the forefront of their industry. When implemented as part of an organization’s overall business and talent strategy, engaging high potentials by offering development opportunities solves a critical business issue: having the right people with the right skills in the right roles.

Finding Your Next Big Idea

You never know where the next great idea is going to come from. Creative ideas and innovative thinking are what it takes to succeed in today’s hyper competitive market. The best place to look? In your own workplace. Employees have a lot to contribute. In fact, 57% of employees say they regularly make suggestions in the workplace.

Employees really want to be heard. Making suggestions signals they are thinking about the performance of the organization and want to contribute in a much more meaningful way. And this can be a great opportunity for organizations – if you have the right organizational culture, processes and leadership to support and leverage it.

An important demographic to consider are those just entering the workforce. They bring a new perspective and aren’t encumbered by the old way of doing things. They have lots of ideas. What motivates this group is the opportunity to contribute at a higher level, play a more active role in the organization and grow in their career. This is an important group to engage. Why? They are our future. However, most college graduates don’t expect to stay long in their first job. Consider how to encourage younger workers to contribute creative ideas as a great way to engage them, develop them and build long-term commitment.

Given flatter organizations and potentially less opportunities for promotion, encourage innovation and help younger workers to feel part of the organization by listening and supporting ideas. Use the opportunity to develop employees by having them be accountable for implementing their ideas and measuring the impact. Encourage suggestions but provide coaching to ensure the suggestions are meaningful and executable. Have them make a compelling business case, research any associated costs and related trends. It’s also a great way to raise individual visibility and credibility throughout the organization.

Be sure employees’ ideas and suggestions are not only acknowledged, but that employees have a chance to make them happen.

Do you work in an environment that encourages employees of all levels to make suggestions?

Measurement minus action equals disengagement

A recent article in BusinessWeek focused on the increasingly important role of measuring employee engagement and tying these findings to corporate performance. Leaders need to assess and understand engagement levels in the same way they need to understand other critical management information, such as financial, productivity and customer data. Measuring employee engagement levels on a regular basis enables organizations to tie job satisfaction, commitment, loyalty and advocacy levels to key business metrics and adjust strategies and practices accordingly.

But measurement without action can do more harm than good. Simply surveying for current engagement levels and then doing nothing with that information often leads employees to feel they aren’t being heard. This, in turn, can negatively impact morale and trust.

Robust, business-oriented measurement and analysis is required to identify key drivers of engagement for your organization. Survey design should be aligned to the specific nuances of your firm and its strategy, values and culture. And it should provide a measure of an employee’s engagement to both the job and the organization as a whole. This knowledge provides key insights that help organizations to predict behavior and its impact on key business metrics.

We measure engagement levels by four main categories:

-- Disengaged employees, who are likely to underperform and leave;
-- Benchwarmers, who are likely to underperform and stay;
-- Free Agents, who are likely to outperform but leave as soon as the opportunity arises; and,
-- Stars, who are likely to outperform and stay.

Identifying and analyzing engagement levels and the drivers of success is the first step. The real challenge is in equipping your business to act and ensure that change is embedded in the culture so that the workforce remains focused and aligned to business strategy. An engaged workforce is the key to sustained competitive advantage and accelerated business performance.

As many as one in two employees are completely disengaged. Are you actioning your engagement data with the same diligence you give to other key business metrics?

Finding the meaning of... Work

Finding meaning in your work takes a bit of a different path than Monty Python’s parody on The Meaning of Life. Sure, it requires some philosophizing and speculation and probably a few calamities along the way. But most importantly, it requires some understanding of your values, motivators, demotivators, skills and strengths.

People want their jobs to be meaningful. And as they grow more aware of social and environmental issues, they become more interested in having their work align with those values. In fact, as many as 75% of employees find their work to be meaningful, according to a recent poll conducted by our research team. Only 4% of employees rarely or never find meaning in what they do.

Our findings suggest that most people care about their work – how it challenges them, offers a sense of worth or allows them to contribute to larger organizational goals and values. But finding your work meaningful doesn’t necessarily translate into high performance. As a leader, I’m sure you want to strive for a convergence of meaningful work and high performance - creating a powerful catalyst for employees to further the organization’s objectives. It benefits the organization to not only help employees find the kind of work that inspires and motivates them, but ensure employees are committed to the success of their company.

Business schools are doing little to prepare employees to find jobs they enjoy, but leaders and managers can play a real role in helping employees achieve meaning and engagement. Creating this type of environment can be difficult because each individual’s preferences are based on personal values and choices. However, managers are in a great position to identify individual preferences by regularly engaging employees in career discussions – uncovering those areas that drive increased levels of meaning and satisfaction. The challenge is to dig a little deeper and learn whether these same employees are engaged with their job as well as the organization.

Have you had career discussions with your employees lately?

Stretching to new heights

With flatter organizations and leaner resources, we need to make the most of what we have. Often, staff cuts necessitate the assignment of new roles and responsibilities to existing employees. Stretch assignments can be a productive way to develop employees and also meet the business demands you’re expected to deliver on without adding head count.

Research reported in Fast Company revealed that 68% of Emerging Leaders said that stretch assignments had the greatest impact in accelerating their development. For High Potential employees, 57% reported the same.

To make stretch assignments successful for all parties, it’s important to set realistic goals at the outset. Engage employees in discussions to make sure the new projects are aligned with their skills and interests, as well as those needed for the business. And once underway, schedule regular reviews to discuss progress and track results.

Stretch assignments provide numerous benefits, broadening both the individual and the organization to achieve new heights in performance. As Elliott Masie cites in a recent Great Leadership blog: “Unfortunately, organizations do not use stretch assignments often or strategically in their leadership development efforts.” He continues with listing the multitude of benefits, including lower cost development, bonding with the organization which bolsters retention and engagement, and career path exploration for high potentials.

There are also some limitations to factor in. Stretch assignments are custom for each individual and are not a one-size-fits-all initiative. If you want the latter, send your leaders to a workshop. As a leader, you need to be hands-on in actively supporting the assignment and your employee. This includes coaching or mentoring throughout the process and committing resources to provide employees with the experiences that will hone their skills.

Yes, stretch assignments can be complicated. But the return far outweighs the risk when implemented properly.

Take a break...and get a productivity boost

The sad reality is that most of us senior leaders don’t take all of our allotted vacation time each year. And if we do take a break, we remain plugged in to the 24/7 service culture we have helped to create. We remain completely accessible to any and all who want us. As leaders, what we need to understand for ourselves and also impart to our employees is that no one is bigger than the company. If you can’t leave work for a few days or a week, then there is a serious problem that will result in an unsustainable situation.

There are tremendous benefits to taking a break. I’m not going to focus here on the obvious benefits of being refreshed and recharged. I’m talking about the value to your team and your co-workers. Believe it or not, taking a vacation and being out of reach can actually boost productivity. You give your team a break from worrying about all the things you throw in their way when they are trying to get their work done. You also give them the chance to shine and be more visible by stepping up and taking on some of the responsibilities you need covered. It’s also a great way to develop people and expand their experience. But the trick is to not undo all they did while you were out, just because they did it differently.

Still in doubt? Read this terrific article on 10 Reasons to Go on Vacation for further inspiration.

As a senior leader, no one expects these days that you will completely disconnect while you are away. Technology is driving around-the-clock work cultures. The traditional work and play boundaries are blurred. Empower your people by letting them know you are “leaving it in their hands.” Use the opportunity to grow your team.

When is your next vacation planned?

Improving Customer Service to Accelerate Organic Growth

In today’s hypercompetitive marketplace, we are all looking for an edge to fuel growth. A recent article in the Wall Street Journal piqued my interest. The focus was on using customer service as a growth engine. Sure, at the heart of growth is the need to retain customers and spread the word to reach new customers. But how can we make sure each and every customer experience is extraordinary? How can we channel customer service to accelerate organic growth?

Great customer service can take an undifferentiated product and send it through the roof. It can help to grow your business through referrals and cross-selling. These results are driven by the experience the customer has from working with your employees and your solutions. The key is to equip and empower employees to consistently deliver great customer service and exceptional experiences.

Happy employees translate to happy customers. Tracking employee engagement levels can provide insight into the customer experience. We know from our client work that there is a direct link between high employee engagement scores and favorable customer experiences. By isolating the key drivers of employee engagement and focusing on developing programs that boost engagement, our clients can directly link their employee engagement scores to customer satisfaction, and ultimately, to bottom line profitability.

To do this requires connecting and aligning all employees to the overall business strategy. Employees need to understand their role in driving success, be given an active role to play and be empowered to offer and act on ideas to improve the business. It’s about creating an organizational culture where employees want to work. These people need a compelling reason to work with you beyond a paycheck.

In an environment where companies are holding on to cash and deferring investments, customer service can be the growth engine to accelerate performance. What are you doing to improve the experience your customers have?

Leadership Development Making a Comeback

After several years of employers cutting spending on training, Bersin & Associates reports that half of the companies they surveyed plan to increase leadership development budgets and almost one-quarter plan to increase spending by more than 10%.

What’s behind this change in investment strategy? Many companies fear an exodus or shortage of qualified leaders as the economy picks up and customers re-engage. Their pipelines are weak or non-existent. Executives across most industries are having a hard time finding strong managers to fill vacancies. The result is that leadership training is gaining urgency amid the stronger economy.

Companies have been tested over the past few years as they experienced heightened levels of economic turmoil and unpredictability. Weaknesses in leadership capabilities are showing. As many as one-in-two managers fail. Not just at the top of the house, but for many firms leadership bench strength is proving to be shallow.

Looking for a quick fix, many companies opted for short-term approach to declining revenues by cutting costs during the recession. Companies are now restructuring and changing their models to include leadership development as they are struggling to find managers well-equipped with the leadership capabilities and behaviors needed to handle the kinds of changes we are experiencing at an ever-quickening pace. Engagement, retention, productivity and performance are suffering as a result of poor communication, lack of customer focus, ineffective strategic thinking, and the inability to link one’s workforce with the business strategy.

As your business levels start to pick up, consider the investments in leadership development you need to make to build a pipeline of ready-now leaders at your disposal, regardless of what changes might come your way.

Engagement: "It's Not My Job!"

As many as one-in-three organizations don’t hold their managers accountable for employee engagement levels. Forty-six percent try to do so, but they don’t have any formal systems in place to monitor. Meanwhile, our research and many other knowledgeable sources reinforce that a strong correlation exists between engagement levels and leader behaviors and actions.

Not everyone believes that managers impact engagement, as noted in recent article in Employee Benefits News. Some managers believe that keeping employees engaged is not part of their job description.

Employee engagement is a complex issue. It is true that engagement is driven by many factors which both include and exclude a managers’ influence. And it’s a natural reaction to feel frustrated about being held accountable for things that are often ill-defined. However, some of the top drivers identified in our global research are actually directly aligned with those behaviors cited in the Employee Benefit News article as those for which a manager should be held accountable, such as providing employees with guidance, necessary tools, empowerment and respect. These behaviors have been shown to directly influence engagement levels. The issue isn't just accountability, but understanding how strategy, leadership, processes, culture and customer service factors correlate with engagement.

Employee engagement can’t be dismissed by managers with a “not my problem” attitude. It has to be addressed through management where challenges to engagement levels can be reliably linked to actions or inactions. However, the other factors outside the manager’s influence that drive engagement levels need to be understood and contextualized for each organization so that accurate and effective action plans can be developed and implemented. If you don’t know what drives engagement in your organization, it’s impossible to create an employee engagement strategy. It’s different for every organization, country and industry.

One of the common challenges many organizations face is that managers are often not provided with the coaching or support to develop the behaviors that are important for driving engagement. Many managers are focused on “managing” and getting things done, with little effort on leading and empowering others.

Do you know the engagement drivers for your organization and are you providing the leader development needed to foster engagement-related management behaviors?

Re-recruit your top talent

Linda Heasley, who heads up The Limited, was recently quoted in the New York Times as saying she “re-recruits her team every day”. In these times, not a bad business strategy!

The reality for employers is that 54% of organizations reported involuntarily losing high-performing workers during the first half of the year. Less than one-third were able to retain most of their top talent.

We know there are a lot of unhappy and dissatisfied employees coming out of the recession. But organizations must really focus on their top performers. Top performers are responsible for a significant percentage of the organization’s performance results and are more inclined to walk out the door than ever before. The real top performers in any organization will always have an opportunity to move. As business conditions improve, this will likely create more opportunities for high-value talent to pick and choose what suits them best.

Heasley’s advice is a good reminder that leaders should try to stay in tune with employees at both individual and collective levels. While engagement studies may provide insight into the sentiments of the overall workforce, it’s really important for companies to have a much broader enterprise-wide engagement strategy. One key component of such a strategy includes career discussions with individual employees. Managers need to know what their workers are thinking, what they want from their careers, and align this with the direction of the business.

An organization’s talent is often a company’s only differentiator. And high-performing employees are key to executing on business strategy. Business viability is at risk when workforce strategies and talent plans are ignored.

Employee engagement needs to be an active and ongoing part of your overall workforce strategy and part of leadership's everyday mindset. Do you know the engagement levels of your own workforce? And are your top-performers at risk of flight?

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