Ongoing economic turbulence has served to magnify the contrasts between economies and employment markets around the world.
Western Europe – and, for the first time, parts of Central and Eastern Europe – have felt the impact of the global financial crisis and have seen revenue per employee fall. Asia, by contrast, has continued to grow.
When existing demographic trends are added to the mix, it’s clear that multinational organisations are facing sharply contrasting human capital challenges from region to region.
Four global trends have emerged:
Productivity dropped sharply in developed economies in 2011, making the regional differences in productivity much more pronounced. Latin America and Asia-Pacific are now showing far higher levels of productivity than Europe, giving them a strong competitive edge.
One of the major consequences of the crisis is that organisations in the West have chosen experience over youth, cutting back on the recruitment of younger workers and banking on the experience of older workers to see them through. While this strategy has worked in the short term, it’s storing up talent chain supply problems for the future.
The most significant – and worrying – legacy of the turmoil of the past few years has been the impact on employee engagement. Employees in the West that survived the cost-cutting cull have been left disillusioned and disengaged. The younger generation has been hit particularly hard as they see their opportunities dwindle and their career path blocked by older workers who can’t afford to retire. But poor employee engagement isn’t just a western problem; it’s equally severe in Asia, in spite of the high levels of demand for younger talent, where job-hopping has become the norm.
The best organisations are leading the way in using analytics and the capabilities of the HR function to make sure that they get the most from the investment in their people. There’s been a huge investment in human capital analytics in recent years and it’s paying dividends for organisations that were ahead of the game.
The advancements in data collection and analysis are an enormous opportunity for those who are prepared to take advantage of them.
PwC Saratoga is the recognised leader in the measurement and benchmarking of human capital in organisations, HR and finance function performance and transformation. Our specialists help clients to develop predictive analytics capability by identifying connections between HR, people, functional and organisational performance, using a range of quantitative and qualitative tools. This is supported by a global repository of metrics and qualitative best practice information from more than 2,400 organisations.