More than 3,500 respondents from 101 countries participated in our online survey in 2014. (See Exhibit 1.) We also conducted 64 in-depth interviews with HR and non-HR executives at leading companies in a variety of regions. (For more about the survey methodology, see Appendix I; for a list of executive interviewees, see Appendix II.)
To identify HR priorities, we analyzed ten broad HR topics, which were further broken out into 27 subtopics. (See Exhibit 2.) For example, the topic of training and people development includes three subtopics: training and learning, career models and competencies, and assignment management. This categorization allowed us to look at big-picture trends and to drill down into specific analyses. We asked the survey respondents to rank each of the 27 HR subtopics by its future importance, their companies’ current capabilities in the subtopic, and the levels of effort invested in the subtopic.
Exhibit 2 shows the ten HR topics ranked by respondents’ assessment of future importance. The 27 subtopics are color-coded according to the levels of effort invested. Interestingly, while levels of effort broadly link to future importance, there are notable exceptions. For example, leadership, talent management, and strategic workforce planning are among the highest priorities, yet they received only average levels of investment. Clearly, companies must be more consistent in their investment decisions.
In addition, we combined future importance and current capabilities into a single metric—defined as urgency for action—and ranked all 27 subtopics by this dimension. The subtopics most urgently in need of action across all industries were leadership, talent management, behavior and culture, HR and people strategy, employee engagement, and strategic workforce planning. (See Exhibit 3). (For more on leadership, see “PepsiCo Offers Its Executives a Master Class in Strategy.”)
Urgency is determined by calculating the difference between future importance and current capabilities, and then multiplying that difference by future importance.