Mercer Study Shows Workforce Priorities for 2010

Jan 24, 2019

By AMA Staff

As employers begin the process for setting workforce priorities for 2010 following a difficult year of layoffs and pay cuts, most expect the planning process to be different from 2009, with greater emphasis on defining talent needs and managing associated costs.

According to Mercer’s Human Capital Planning 2010: Defining the Talent Agenda survey, nearly two-thirds of US organizations participating in the survey plan to put greater emphasis on workforce costs (63 percent) and high-potential employees (60 percent) in the coming year. Other areas to receive more emphasis in 2010 include critical skills and development of workforce contingency plans based on different business scenarios.

“Today’s business environment offers employers the perfect opportunity to take a fresh look at the talent they have, the talent they need, and the best way to engage and reward employees going forward,” said Jason Jeffay, principal in Mercer’s human capital consulting business. “By assessing talent needs and critical skills, and realigning them with key strategic and financial priorities, organizations can effectively prepare for economic recovery and future growth.”

Jeffay points out that HR leaders are approaching planning for 2010 differently from past years as indicated by more than half (51%) of organizations. Business scenario techniques and data-driven approaches should be more effective, he said.

Mercer’s survey examined the actions organizations are taking as part of the planning process to assess their human capital needs for the coming year and develop a plan to support future business success. It includes responses from nearly 160 midsize and large employers across the United States. 

According to the findings, more than two-thirds (69%) of organizations believe the greatest challenge for next year’s human capital planning process is the uncertainty of the economic environment. In line with this response, nearly the same (66%) indicated that the primary driver for workforce decisions in 2010 will be cost containment as opposed to responding to non-cost critical business needs (20%) or matching competitive practices (14%).

Despite an emphasis on critical talent and identifying “high-potential” employees, approximately one in four organizations remain concerned about retaining top performers. Twenty-seven percent of organizations are not at all confident that their current human capital programs adequately reflect the importance of their high-potential employees and, moreover, that these employees will stay with the organization as the economy improves. Given the importance of key talent, few organizations (16%) are very confident that their programs reflect the value of top performers and even fewer (11%) are very confident that these employees will remain following an economic turnaround.

“Potential disengagement of top performers is a consequence of the economic challenges faced in the past year,” explained Jeffay. “Detailed career paths, communication campaigns, and improved performance management programs can reengage employees, and ultimately drive organizational performance.”

According to Mercer’s survey, most organizations are very or somewhat confident that their current employment deals will attract the workforce needed to meet business requirements. Regardless, almost half (47%) anticipate employment deals in 2010 to place greater emphasis on career development. Other elements of the employment deal to receive more attention in 2010 compared to 2009 include incentive compensation (42%) and leadership connection to the workforce (41%).

“Making the right investments in human capital plays an important role in an employee’s decision to join or stay with an organization,” said Jeffay. “Approaching rewards more holistically to include career development and training allows companies to attract and retain those employees that will contribute to its future success.”

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