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Summary of Mercer's 2016 Global Talent Trends Study

Core Content

Mercer's 2016 Global Talent Trends study highlights the evolving landscape of talent management, emphasizing the need for HR to adapt to new workforce realities. The report underscores the challenges and opportunities in building diverse talent pools, embracing the new work equation, architecting compelling careers, simplifying talent processes, and redefining the value of HR in a rapidly changing world of work.

Main Trends and Challenges

1. Talent Scarcity and Rising Competition for Talent

• Talent competition is expected to increase significantly in 2016, with 90% of employers anticipating this trend.
• Talent scarcity is a growing concern, particularly in Asia, South Africa, and the U.S., due to the mismatch between the skills needed and the skills available.
• Core skills are expected to change by 2020, with the WEF Future of Jobs report predicting that over a third of current core skills will be outdated.

2. Leveraging a Global, Diverse, and Multigenerational Workforce

• The need to manage a diverse talent pool is a top priority, with 62% of organizations globally reporting that developing local leaders in emerging economies is a strength.
• Global mindset is a key in-demand skill, especially in Italy and China, while less critical in South Africa, Mexico, and the U.S.
• Internal labor market (ILM) mapping shows a decline in female representation at higher levels, with only 20% of executives being women globally.

3. The Rise of Free Agents and Contingent Workers

• The contingent workforce is becoming more prevalent, requiring new approaches to engagement and management.
• Talent flow and demographic insights are crucial for developing a comprehensive understanding of the workforce and creating targeted strategies.

Employee Priorities and Satisfaction

1. Career Development and Flexibility

• Career progression is a major concern for employees, with 1 in 3 planning to leave within the next year due to a lack of opportunities.
• Flexible work arrangements are increasingly important, with only 46% of employees globally having access to flexible schedules, despite 66% of employers believing they support productivity.

2. Manager Support and Coaching

• Employees rate their managers poorly on their ability to support career development and provide coaching, with only 31% giving an A or B grade.
• Coaching capability is one of the top three in-demand managerial skills, but many employees feel their managers are not meeting their expectations.

3. Transparency and Rewards

• Pay transparency is lacking, with only 50% of employees believing their organizations are transparent, despite 66% of organizations claiming to be.
• Reward segmentation is common in Italy, Mexico, and China, with over 80% differentiating compensation for key segments.
• Total rewards are being tailored to individual preferences, with technology enabling more flexible and personalized approaches.

Regional Differences

• Latin America is the only region on track to achieve gender parity in the professional workforce.
• Italy and China employees report the lowest satisfaction with their organizations' development efforts.
• Mexico, Brazil, and India show higher transparency in reward practices compared to other regions.
• Asia places a high value on career progression and clear rungs in the career matrix.

Key Recommendations

1. Build Diverse Talent Pools

• Use analytics to understand talent flows and skillsets.
• Broaden the definition of the internal labor market to include external talent and partners.
• Remove barriers to internal mobility and communicate progressive practices effectively.

2. Embrace the New Work Equation

• Communicate a clear employee value proposition (EVP) that reflects the evolving expectations of the workforce.
• Individualize rewards and focus on financial wellness, flexibility, and tailored benefits.
• Incentivize managers to act as talent developers and scouts.

3. Architect Compelling Careers

• Develop a career framework and ensure it is implemented effectively.
• Create stepping stone roles to support career progression.
• Conduct dedicated career conversations that go beyond traditional performance reviews.

4. Simplify Talent Processes

• Streamline recruitment, onboarding, and performance management to improve efficiency.
• Use predictive modeling and data insights to inform talent strategies and identify flight risks.

5. Redefine the Value of HR

• Position HR as a strategic business partner by demonstrating its impact on talent development and business outcomes.
• Focus on employee engagement, development, and retention through data-driven initiatives.

Conclusion

The 2016 Global Talent Trends study reveals that while organizations are aware of the need for change, they are not yet fully meeting the expectations of their employees. The focus on diversity, flexibility, and career development is critical for future-proofing HR and bridging the gap between employers and employees. With the right strategies and tools, HR can play a pivotal role in shaping a more agile, inclusive, and employee-centric workforce.