To take advantage of the economic upswing, employers will have to become smarter about strategies on talent management and succession planning, according to a survey by Towers Watson. 

The survey, conducted in September 2010, polled HR executives representing more than 700 companies worldwide. Results show that 51% of respondents reported a talent drain in key skill areas as a workforce challenge that could hold back growth.

In addition, 49% of participants admitted the lack of succession planning as a top challenge, while 38% cited concerns about attracting the right talent.  Interestingly, U.S. companies are less worried about an exodus of key talent compared to other countries in the survey. 

"Companies clearly see talent as an integral part of growing their businesses when the economic recovery firmly takes hold,” says Ravin Jesuthasan, global head of talent management consulting at Towers Watson.

"And despite respondents’ cautious optimism about growth in the coming year, they recognize that an inability to attract new talent or hold on to key individuals could prove to be the difference between growing and remaining stagnant. What’s most striking -- and worrisome -- in light of this concern is that many respondents aren’t truly prepared to address talent issues,” he adds.

The survey also shows that nearly 30% of executives indicated they have a formal game in place for acquiring talent, while 25% said the same about retaining talent. Meanwhile,  21% of respondents have adequate resources for succession planning, according to the survey.

"The global lack of a sufficient governance capability in talent management and succession planning is a real concern, particularly since the least prepared organizations will not only find themselves at a significant disadvantage over time, but may lose critical momentum in trying to catch up to more advanced peers once recovery is in full swing," says Nigel Bateman, a director of international consulting at Towers Watson.

Other findings from the survey include:

  • In North America and Europe, about one in three respondents said they would continue reducing staff or actually begin doing so for the first time. For companies in Asia Pacific and Latin America, any similar actions appear to be largely completed, and the emphasis on cost management is shifting to more “evergreen” initiatives, such as more restrictive travel policies, tighter bonus criteria and restructured career ladders.
  • Respondents from every region view Asia Pacific as the top area for growth for their companies in 2011. Respondents from every region also listed expanding products and services and entering new markets as their top strategies for driving growth, although virtually all will continue to focus on bottom-line management as well.
  • Globally, very few HR executives serve on their company’s risk committee. However, two-thirds or more say that their HR function is involved in a fairly broad set of risk management activities that go beyond traditional safety concerns.

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