Businesses Lacking Effective Leaders

Many people know that leaders play a vital role in meeting business goals and profitability targets, delivering service and retaining talent. However, according to a recent survey, companies aren’t investing in effective leaders and their businesses could pay the price.

For its “2011 Talent Survey,” Aon Hewitt, the global human resource consulting and outsourcing solutions business of Aon Corp., surveyed 1,328 employers nationwide and discovered a significant capability gap in leaders, as most organizations focus on growth in today's post-recession environment. 

Only 12% of respondents say their leaders are extremely effective at meeting business goals. What's more, just 14% believe their leaders are extremely effective at meeting profitability targets, 17% say the same holds true for delivering service and 7% believe their leaders are extremely effective at retaining talent.

"As we emerge from one of the worst recessions in history, company executives must develop new leadership skills in order to improve workforce productivity and stimulate engagement," says Amy Mills, VP with Aon Hewitt. "They also must invest in developing middle managers who can bridge the gap between leadership strategy and employee actions, and are best positioned to effect change. In fact, our survey shows a crisis in confidence that corporate leaders will be able to reposition their companies for profitable growth and create an engaging work environment."

According to Aon Hewitt, leaders must be more creative in this post-recession environment. Other key capabilities include:

• Focus on the most valuable talent and pay for performance

• Demonstrate speed and agility

• Develop middle management

• Increase employee engagement

• Develop leadership resiliency

In addition, this survey revealed that 45% of respondents are planning to hire more employees in 2011 than they did in 2010, and only 16% expect to hire fewer employees this year than they did last year. 

However, previous reports show that IT job growth is still slow. An analysis of the February 2011 U.S. Department of Labor National Employment Report shows a net gain of only 2,600 seasonally adjusted jobs in the IT sector. Also, a report issued late last year by Robert Half Technology indicates 89% of CIOs plan to maintain current IT personnel levels.

Additional findings from Aon Hewitt’s 2011 Talent Survey:

• Employers' top three concerns are talent retention (31%), business strategy execution (18%) and employee engagement (16%)

• Sixty-one percent of employers will increase their focus on talent development, 40% anticipate a greater focus on hiring, and nearly one-third anticipate increased turnover in 2011

• Seventy-eight percent of employers agree that total rewards statements, which provide an overall look at compensation and benefits in a user-friendly manner, are effective at demonstrating value to employees. In addition, total rewards statements are reported to improve retention (69%) and improve employee engagement (63%).