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Foundation Survey Identifies Top Human Capital Challenges

By Ann Pomeroy   11/27/2007
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Both HR and non-HR C-suite executives say their top human capital challenge for the future is succession planning. But they have scant confidence that their companies are prepared to address this and other major issues.

In a study conducted by the Hay Group under the leadership of the Society for Human Resource Management (SHRM) Foundation, 526 C-suite executives at companies of all sizes identified the following as their most pressing concerns:

    • Succession planning.

    • Recruiting and selecting talented employees.

    • Engaging and retaining talented employees.

    • Providing leaders with skills to be successful.

    • Rising health care costs.

    • Creating and maintaining a performance-based culture.

A majority of executives at both global and U.S.-based firms who participated in the online survey were in general agreement about these problems, although global executives considered rising health care costs to be less severe than their colleagues at U.S.-based companies.

On the issue of succession planning, one respondent opined that, “The greatest challenge will focus on convincing senior executive management to make the necessary investments in preparing tomorrow’s senior leaders through rotational assignments, education and training, and other developmental experiences.”

Many companies have a significant number of employees approaching retirement. One respondent noted that 60 percent of his company’s senior managers are eligible to retire within the next five years, so, “We have a rather short window for preparing the pipeline.”

Small companies often have no natural pipeline, noted one respondent, because “[there is] usually only one specially trained person in any job.”

In addition, the SHRM Foundation commissioned a thorough literature review on the same topics prior to conducting the study. The web-based survey was based on in-depth interviews with 36 C-suite executives.

Most-Needed Help and Where to Find It

Asked to name the kinds of tools, information and support that would be most valuable to executives charged with helping organizations meet these challenges, 50 percent of respondents said they need tools for assessing current and potential leadership talent, identifying leadership capabilities, and measuring employee performance and productivity.

All respondents said case studies and best practices are helpful; 66 percent want some guidelines for identifying high potentials, motivating employees of different generations, designing effective wellness programs and creating effective performance management systems.

And half the C-suite execs said they need strategies for filling leadership positions, retaining high potentials and rewarding top performers.

Where do these executives turn for help? Respondents identified their top five resources:

    • Conferences and seminars.

    • Professionals in other companies.

    • Consulting firms.

    • SHRM Online.

    • HR Magazine.

The survey results will be used to help the Foundation identify future research projects. The full survey report can be found at

Ann Pomeroy is senior writer for HR Magazine.

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