Looming crisis in engagement and retention of employees

Media release

09 March 2015

Employers face looming crisis in engagement and retention of employees

Deloitte survey reveals organisations lacking programmes to define and build a strong culture

Lack of employee engagement is the top issue currently facing 87 percent of human resource (HR) and business leaders, up from 79 percent last year, according to a Deloitte survey. Yet the majority of organisations are still failing to take action to improve their culture, potentially jeopardising future growth.

Released this week, Deloitte’s Global Human Capital Trends 2015 survey draws on the opinions of over 3,300 HR and business leaders in 106 countries, including New Zealand.

Leadership gaps – last year’s most critical issue – continue to be top of mind with 86 percent of respondents citing it as a top issue this year.

Deloitte partner Hamish Wilson, who leads the Human Capital practice for the firm in New Zealand, says that leadership and employee engagement are also the top issues facing Kiwi organisations.

“Leadership, in particular, is a longstanding issue for New Zealand organisations. And there’s a significant capability gap between the levels of importance that HR and business leaders place on these issues and their assessment of the readiness of their organisations to respond to them,” says Mr Wilson.

“Workers are becoming more mobile, contingent and autonomous, and as a result, harder to manage and engage. In this new world of work, organisations need to re-imagine the way they manage people and come up with new, out-of-the-box ideas to make themselves relevant.

“There really is a great opportunity in all of this for proactive employers that get it right,” he concludes.

The number of respondents who cited engagement as being “very important” doubled from 26 percent last year to 50 percent this year. Sixty percent said they do not have an adequate program to measure and improve engagement, indicating a lack of preparedness for addressing this issue. Only 12 percent of HR and business leaders have a program in place to define and build a strong culture; while only 7 percent rated themselves as excellent at measuring, driving, and improving engagement and retention.

The number of respondents who said leadership was a “very important” issue jumped from 38 percent last year, to 50 percent this year. Yet only 10 percent believed they have an “excellent” succession programme.

Other trends particularly relevant to New Zealand workplaces include:

• Learning and development – into the spotlight: Recognising the fact that a general lack of skills is likely to impede business growth, 85 percent of HR and business leaders ranked learning and development as a top issue, compared to 70 percent last year, making this the third most critical issue in this year’s survey.

• HR and people analytics – stuck in neutral: The survey reveals that analytics is one of the areas where organisations face a significant capability gap. Three quarters of respondents cited talent analytics as an important issue, but just 8 percent believe their organisation is “strong” in this area – almost exactly the same as in 2014.

• Reinventing HR – an extreme makeover: Only five percent of respondents rate their organisation’s HR performance as “excellent,” and just 22 percent believe that HR is adapting to the changing needs of their workforce.

To read the full report, explore the interactive dashboard or download the infographic, go to www.deloitte.com/nz/HCTrends.

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