OREANDA-NEWS. August 22, 2008. Companies now have the tools to establish how happy a work force is with their work and their employer. Once they have established this, they can then make improvements, increase employee engagement and boost performance says a new PricewaterhouseCoopers (PwC) report ‘Managing People in a Changing World’.

In PwC’s recent global survey of 1,150 CEOs across 50 countries, 89% of CEOs agreed that the people agenda is one of their top priorities and 67% agreed that it is where their time would be best spent.

They can be used to enhance the image of the company as a responsible employer, or improve employee retention in fast developing markets where staff turnover is high due to a buoyant labour market. Levels of engagement are even beginning to be perceived by some investors as an important indicator of a company’s financial health and sustainability.

The report, ‘Managing People in a Changing World’, also looks in detail at financial performance, productivity, outsourcing, leadership, innovation, talent management, diversity, work/life balance and the growing concept of work place wellness, all through the lens of PricewaterhouseCoopers extensive human capital (HC) database, Saratoga. The report is published every two years.

The report shows how companies can plot levels of engagement for an entire work force by looking at data relating to resignation levels, absence rates, employee attitudes, training hours per full-time employee (FTE), performance related pay and incidence of grievance. These range from the high levels of engagement that produce positive behaviours such as flexibility and innovation to the other end of the scale where companies experience resignations, absence, pilfering, theft, oppositional solidarity, even sabotage.

The traditional focus on high performers and ‘high flyers’ is shifting to include ‘pivotal employees’. These are segments of the workforce that are expected to create value and determine the success of the organisation. They can range from the receptionist to the sales director and the contribution of these core people has a disproportionate impact on determining both the success of an organisation and its sustainability.

There is increasing evidence that CEOs and other senior executives, recognising the importance of human capital, are assuming more active roles in activities that historically were regarded as the precinct of the HR function. Only 43% of CEOs globally in the latest PwC survey believe that their HR function is equipped to handle changes required to compete for talent. We continue to see organisations that have outsourced HR services to third parties are consistently struggling to drive both cost efficiency and service effectiveness.

The report also charts the rise of a new kind of offshoring — Knowledge Process Offshoring (KPO) — where traditionally sacrosanct knowledge or judgement services such as research and sales and marketing are run from other countries. The KPO market globally is predicted to grow to US16.7 billion by 2010–2011, implying an annual growth rate of 39% and employing some 390,000 professionals by March 2011. Here, countries such as India, China, Russia, Poland, Hungary and republics from the former Soviet Union provide high levels of skills at comparatively low cost for many western economies experiencing skills gaps.

It is predicted by PwC that by 2050 the BRIC economies (Brazil, Russia, India and China) plus others, such as Indonesia, Mexico and Turkey will outstrip those of the current G7 (US, Japan, Germany, UK, France, Italy and Canada). Foreign direct investment into these countries continues at a pace likely to continue as they offer lower cost resources, increasingly highly skilled workforces and, an increasingly aspirational consumer base.

William Schofield, Human Resource Services Partner, PricewaterhouseCoopers Russia, commented:

“While the report is based on a global survey the findings are just as relevant to the Russian market. At a time of continued economic growth and developing skills shortages, businesses need to have a better understanding of their workforce - to gain that edge over the competition an engaged workforce may be the key differentiator. The metrics covered by the Saratoga survey enable a business first to gain a greater appreciation of employee engagement and secondly to start to develop to strategies to enhance it.”