EXECUTIVE BRIEF

State of the Global Talent Nation:

Organizations Struggle to Ready Workforces to
Meet Growth Demands

Third Annual Softscape Survey Reveals That 94% of HR Professionals Feel Their
Workforces Are Still Not Adequately Prepared to Meet Future Goals

A Softscape Executive Brief

January 2008

Workforce Readiness Moving Slowly

The demands on the rapidly changing workforce continue to increase, and the need for
improved employee productivity and effectiveness has become paramount. However, as
organizations are faced with increasing pressures to achieve more with less, they continue to
struggle with keeping pace in measuring and preparing their workforce to meet growth plans.
A recent Softscape survey of more than 250 human resources professionals from around the
world finds that an unprecedented 94 percent do not feel their personnel are adequately
prepared to meet their companies’ future goals. This percentage is up significantly from
previous years. In 2006, only 64 percent felt their employees were unprepared. By 2007, it
had reached 86 percent. The trend was spread almost evenly across geographies, with North
America only slightly (17%) more concerned than EMEA and APAC.
This annual survey, which Softscape has conducted during each of the past three years, shows
that while there is an increasing trend toward workforce readiness, it is moving too slowly to
keep up with most company’s growth plans.

2008
2007
94%
2006 86% Not Adequately
Not Adequately Prepared
64%
Not Adequately Prepared
Prepared
Source: Softscape - Results from the past three “State of the Global Talent Nation” surveys

The primary reason HR professionals are increasingly less confident about their workforce
readiness lies in their organizations’ immediate need to improve a variety of HR processes. More
than half (55%) felt unconfident that their organizations effectively manage their HR processes.
Given the misgivings about preparedness, it comes as no surprise that the top concerns facing
organizations today are all related to employee retention, development, and performance.
Top Concerns

Source: Softscape 2008 “State of the Global Talent Nation” survey

These workforce concerns facing HR professionals include retaining skilled talent

(24%), finding top talent (22%), developing future leaders (21%), impacting workforce
performance (11%), motivating employees (10%), and reducing overall HR costs (4%).
Some of the global trends fueling the need for change in how organizations manage their
workforce include the tightening labor market worldwide, a sharper focus on workforce
productivity, continued globalization, a move to shared services, and changing workforce
demographics.

Key Findings

• Workforce productivity is a new focus as organizations seek to do more with less

while trying to contain costs.
• Individual roles are becoming more multi-functional, and are requiring ongoing skill
development and real-time learning and collaboration.
Retention
• Whether they are expanding or downsizing, companies are seeking to leverage
Development centralized shared services to support global initiatives.
Performance • As the more tactical HR functions are commoditized, strategic HR functions are
becoming more integrated and further outsourced.
• Productivity gains and cost reductions are being realized through systematic focus
on improving talent management processes.
• Changing workforce demographics are forcing organizations to deploy new ap-
proaches to how they plan, hire, develop, and retain their staffs.

Ongoing business transformation is also prompting organizations to look for ways to rapidly
evolve their workforce to achieve a new level of productivity and effectiveness. Leading
global organizations are turning to integrated people management technology, with
business intelligence measurement capabilities at its core, to better drive performance.

2 © Softscape 2008, “State of the Global Talent Nation”

Talent Acquisition
Improving hiring effectiveness has become a top priority for organizations as the global
labor market tightens. Nearly 92 percent of organizations say improving quality of hire is
a top priority for their executive teams. It is important to note that senior management 92%
at many organizations is increasingly more aware of workforce-related issues and their
Improving
impact on the overall business than in previous years as human capital management
(HCM) is now a concern with boards of directors. Quality of Hire
Top Priority for
Many organizations are leveraging performance-based goal setting during their Executives
on-boarding process (48%), with the concepts for building performance-based cultures
being embraced across many different types of companies.
Competencies are also coming back into vogue as companies realize the value of
defining what it takes to be successful in a particular role. More organizations are linking
competencies to hiring processes to improve the quality of hire. Forty-nine percent of
respondents currently have a paper-based competency process, while 32 percent are 81%
implementing a software-based solution.
Improving the quality of hire with candidate assessments is still not utilized by many Linking
organizations (43%). Of those who do use pre-hire assessments, 23 percent are still Competencies to
using a manual paper-based assessment process, which prevents real-time reporting. Hiring Process
Thirty-five percent have moved to software-based candidate assessments.
More companies are measuring hiring effectiveness in order to impact and predict
productivity gains. Speed (50%) and cost (47%) of hire are still the top priorities for
organizations measuring hiring effectiveness, while post-hire performance (32%) and
productivity (11%) assessments are gaining in popularity.

Assessment
Improving workforce productivity and performance remain top issues for senior
executives, with 66 percent saying that they are very important.
However, organizations remain ineffectively paper-based despite the increased
importance on improving performance and productivity. Sixty-six percent of organizations
still use an inefficient paper-based process to communicate and align organizational
66%
goals to their employees and manage an overall annual review process. Seven percent Improving Workforce
still do not, and do not plan to, link to or communicate overall corporate goals. Productivity
Fifty-two percent have successfully deployed pay-for-performance policies and processes. Top Priority for
The concepts of pay-for-performance are being deployed, but they are primarily Executives
paper-based, and often only for executive management.
Finding new ways to increase employee engagement are also on the rise as organizations
seek to improve overall performance. At the top of the list for employee engagement are:
52%
• Challenging work (29%)
Successfully
• Constant learning opportunities (25%) Deployed
• Empowerment or autonomy (20%) Pay-for-performance
• Annual salary increases (15%) Processes
• Non-monetary recognition (11%)

3
 Development
Learning and development are becoming more important to most organizations. Seventy-six 76%
percent say learning and development are high priorities for their executive management teams.
Learning &
Unfortunately, development still tends to be underfunded by many organizations. Development
Most HR professionals (81%) say the lack of regular employee development opportunities is Top Priority for
impacting overall employee retention. Executives
At the same time, performance-driven learning is becoming the de-facto norm, as performance
appraisals remain the primary trigger for employee development (89%). However, many
organizations are struggling to successfully implement processes that link performance and
development (45% implemented successfully, 44% unsuccessful). The struggle is due in part to
89%
many still using manual processes (62%). Implementing
Measurement of the effectiveness of development is helping and is increasingly important, Performance-Driven
especially in determining ROI on training expenditures (69%). Learning
Companies are seeking to better understand their overall organizational skill gaps in order to
support future needs and succession plans, but the majority still lacks an effective means to
warehouse an overall skills inventory (65%).
To get more productivity out of fewer resources, there is a growing trend toward multi- 69%
functional roles and shared services (41%). Many HR professionals (35%) indicate that the
majority of their employees have complex multi-function roles. This is also driving the need for Measuring
more real-time employee development. Training
ROI
Management
Investments in HR technology are increasing as organizations seek to solve key business
challenges, including:

• Scattered information across silos of files and systems that prevents reporting (18%)
• The lack of a system to accurately define and track talent management functions (17%)
• Inconsistent execution across divisions and departments (16%)
• A lack of total process management (16%)
• Limited visibility into skills inventory (10%)
• Limited alignment between employees and organizational objectives (10%)
• A lack of effectiveness in reaching performance targets (5%)

As a result, strategic HR functions are becoming more integrated and increasingly outsourced (41%). 41%
This includes functions for performance, compensation, succession, learning, and recruiting.
Integrating
HR professionals want to access real-time metric-based reports focused on retention and Multiple
productivity. Critical reports for organizations include: HR Functions

• Training’s impact on performance (13%)

• Employee productivity improvement rates (11%)
• Time to productivity (10%)
• Cost per hire (9%)
• Compensation to performance ratios (9%)
• Time to fill (8%)
• Promotions by performance rating (8%)

4
“Value is derived from real-time results. When technology makes employees more effective, organizations
see it in their bottom-line.”
- Dave Watkins, CEO & Co-founder, Softscape

Global Trends Fueling the Need for Change

There is an invariable need for organizations to expedite new and improved internal processes to support
the changing landscape of global influences on their businesses.

Tightening Labor Market

Competition for high-performing talent is increasing as fewer skilled workers enter the market. Based on
baby boomer retirement and average university graduate statistics, there are approximately nine percent
fewer workers starting careers than those leaving the workforce through 2011, while overall global
unemployment has come down 17 percent since 2003.
Salary costs are rising as new entrants are demanding higher pay. At the same time, employer skill
expectations are higher, and they are not willing to pay more for fewer skills. All of this is requiring
companies to apply new approaches to how they attract and retain top talent.

Workforce Productivity Improvement

Making the workforce more productive is another driving force as organizations continue to seek ways
to do more with less while trying to contain costs. Employees are working longer hours and performing
multiple functions to meet productivity constraints. But the value to pay ratio is not always equal to
overall productivity. Organizations are realizing they need to better align their workforces with company
objectives and link compensation and rewards to specific individual performance. Equally important is the
need to groom and retain the next generation of an organization’s leaders.

Globalization
As organizations continue to expand, they require globally distributed teams and attract the best talent,
regardless of location. Resource capabilities, availabilities, and interactions have to be seen and managed
from a higher level and take into consideration the cultural and value-based differences across diverse teams.
Increased pressures to meet different compliance requirements in various regions is also forcing
companies to look for better ways to manage their employees in a more unified fashion. Global
coordination requires the blending of diverse skill sets, and organizations need to be able to plan and
forecast resource requirements based on current deficiencies. This means bringing skills to challenges, not
challenges to skills.

Centralized Shared Services

The trend toward shared services is also changing how organizations manage their total workforce.
Economies of scale are changing as large organizations trim resources and spin-off divisions to become
more agile, and as mid-sized companies grow rapidly across diverse regions. Companies seek to align
their best practices, while keeping costs down, by sharing services. Paramount is getting global teams to
collaborate more effectively by leveraging and pooling the right resources and skills sets worldwide.
This requires organizations to adopt a single source of accurate and timely workforce information to
better plan needs, manage costs, and make more informed strategic decisions.

Changing Demographics
Finally, there has been a dramatic impact on workforce demographics as skill bases change across
different age groups and geographies. Many aging workers are working longer into their careers.
Younger workers are expecting more, including instantly accessible information. Both are creating a
diverse workforce motivated by very different needs. This has changed how organizations plan and hire.
Organizations are also shifting how they manage skills inventory, collaboration, and knowledge sharing.
And they require an infrastructure to support it. There is even a greater focus on how to hire from within
and leveraging succession planning as the primary process for identifying development needs.
Each of these trends is creating the need for change in how organizations plan, acquire, align, develop,
reward, collaborate, manage, and analyze their workforces. Human resource professionals clearly have a
much more strategic function in their business as they are chartered with addressing these challenges. 5
 Bottom-Line Impact
The connection between shareholder value and workforce effectiveness has clearly reached
the executive suite. Organizations today are asking their HR leadership to define and
implement a holistic human capital management strategy that aligns the efforts of the
workforce with the goals of the organization.
Overall, human capital management is viewed today as an inherent need driven by executive
and board level priorities. An integrated approach to people management technology is key
to building a superior corporate culture based on performance and accountability.
These new corporate practices are changing the landscape of management and development
from process-driven to purpose-driven. In an era of global expansion, technological
commoditization, and a shrinking labor pool, it is ever more critical to rely on the skills of the
workforce to drive competitive advantage and continued growth.
Every organization has its own set of unique requirements and challenges. However,
Softscape’s research clearly identifies several key initiatives universally underway at companies
of all sizes and geographies. The top six technology initiatives include:

Larger
companies
Source: Softscape 2008 “State of the Global Talent Nation” survey
only slightly
more
prepared When analyzing the survey data by company size and further segmenting it by stated
preparedness, an additional trend emerges: larger companies are only slightly more prepared.
The workforces of large enterprises (more than 5,000 employees) are still only slightly more
prepared than the overall group (42% to 38%). This trend has remained consistent for the
past three years, but the majority of companies remain concerned about the state of their
overall readiness.

Executive Commitment
The results of this survey point to another important trend: senior executives are increasingly
recognizing the need to align their people management processes by leveraging human
capital technologies and outsourced services.
Executives clearly understand that to effectively compete and grow their businesses,
they need to employ a high-achieving workforce, and that human capital management
technology is central to achieving this goal.

6
Retention, development, and measurement are key business drivers for implementing talent
management technology in the coming year, according to survey respondents.
The Softscape survey also revealed that organizations are concerned about the current ability of
their workforces to meet future plans and are beginning to take steps to fix this problem.
Top Ten Business Drivers
Road Map to Success For Implementing HCM Technology

Regardless of where an organization is in terms of readiness, there are several steps that should
be done to become better prepared to meet future goals. ► Improving Retention

1. Redefine Processes First

► Leadership Development
The key to success is clearly defining processes and how they will cross-sect other processes,
departments, business units, and divisions. A detailed initial analysis prior to implementing
technology will help you map the technology to specific business requirements, not just replace ► Operational Effectiveness
an inefficient manual process. Also consider re-engineering certain processes to achieve greater
success with the technology deployment.
► Employee Motivation

2. Implement an Integrated Technology Platform

► Workforce Performance
Avoid siloed implementations that fragment the very data that will provide detailed reports and
analyses. Integration should also include system of record for core employee data. Consider the
benefits of going beyond a simple connection to an HRMS, and work to fully integrate all other ► Cost Reductions
employee-related information into a single system including competencies, skills, experience,
certifications, performance and compensation history, career goals, development plans,
employee records, and other profile data. ► Risk Mitigation

3. Communicate From the Top Down ► Paper-Process Reduction

When rolling out new technology, an organization should motivate company-wide participation
in all initiatives leading from the top down. If the CEO uses the technology, everyone will ► Compliance
use it. Also, regular communication before, during, and after rollout is integral. Like all major
technology deployments, involve all constituents and make them a part of the process.
► Growth & Value
4. Measure It
Measurement is the first step to improvement. One of the most important benefits of
implementing an integrated HCM strategy, is the plethora of reports and analyses that can
come when all data is inherently connected. Consider not just standard reporting needs, but
also additional analytics that can offer more detailed analysis. Analytics is a sometimes misused
word, but when implemented correctly will offer a new level of depth and insight into all
aspects of people management.
Understanding historical trends is also critical to future success, but organizations must take that
further by predicting workforce trends and modeling industry best practices.
It is critical to remain flexible throughout strategy development and execution to create a system
of human capital management processes that effectively match the organization and meet
the needs of the business now and into the future. When implemented successfully, people
management technology can offer the organization the means to better manage the business
in real time.

7
“It’s up to human resources
professionals to break
the perception of being
in a supporting role and
Source: Softscape 2008 “State of the Global Talent Nation” survey, Top reporting needs
demonstrate just how
powerful workforce analysis
can be to a business’s Survey Methodology
bottom-line.”
Softscape surveyed more than 250 HR professionals from around the world in the fall of
- Christopher Faust, 2007. The distribution of respondents was spread almost evenly across a variety of industries
EVP Global Strategy and among small companies (less than 1,500 employees), mid-size companies (1,500-5,000
Softscape
employees), and enterprises (more than 5,000 employees). Respondents answered questions
about workforce skill readiness, business drivers for talent management, and what key initiatives
are being undertaken to ensure preparedness. The results are organized into the following
categories: talent acquisition, assessment, development, and management.

8
 State of the Global Talent Nation Report 2008

Authored By
Christopher Faust, Executive Vice President Global Strategy, Softscape
For more information, contact cfaust@softscape.com

About Softscape
Softscape is the global leader in integrated people management software that enables
organizations to more effectively drive their business performance.
Recognized by industry analysts as the most comprehensive strategic human capital management
(HCM) solution, Softscape provides complete employee lifecycle management, including a core
system of record, in a single, integrated platform for improved business intelligence.
The company offers customers of all sizes and in all industries the most flexibility and choice with
multiple purchase, configuration, and deployment options. For more than a decade, Softscape has
helped millions of workers across 156 countries be more successful at their jobs while contributing
to bottom-line results.
Softscape’s customers represent Fortune 500/Global 2000, mid-market, and government
organizations, including Procter & Gamble, Barclays, AstraZeneca, Seagate, GKN, Edcon,
LandAmerica, and the U.S. Department of Homeland Security.
Softscape is based in Massachusetts with offices in London, Sydney, New York City, Chicago, San
Francisco, Hartford, Washington, D.C., Bangkok, Hong Kong, and Johannesburg.

www.softscape.com

Copyright © 2008. All Rights Reserved. Reproduction without written permission is strictly prohibited. The Softscape logos and referenced
products are either trademarks or registered trademarks of Softscape, Inc. All other brand and product names may be trademarks or
registered trademarks of their respective holders. 08_1211ls

Worldwide Headquarters Softscape EMEA Ltd APAC Headquarters

Softscape, Inc. Suite B, Loddon Vale House Softscape Asia Pacific Pty Ltd
One Softscape Center Hurricane Way Level 1
526 Boston Post Road Woodley 52-54 Stanley Street
Wayland, MA 01778 USA Reading RG54UL East Sydney, NSW 2010
800-881-2546 (US & Canada) United Kingdom Sydney, Australia
+1 (508) 358-1072 (+44) 118 969 5634 +61 (0) 2 9358 3966