New Workforce 2020 Study: 5 Ways High Performing Companies Manage People and the Business
Intuition tells us that high-performing companies don’t operate like underperformers, and now research from Oxford Economics confirms it. The new findings are from the “Workforce 2020” survey of over 2,700 executives from 27 countries worldwide, which I’ve written about before. This latest cut compares responses from self-described high performing companies that reported above-average revenue or profit margin growth over the past three years to low-performers that had below-average profit margin growth.
1. High performers are more prepared for the future
Executives at higher-growth companies are on top of workforce trends such as globalization, diversity and the millennial influx. There’s no question myopia hurts low performers. For example, over 50 percent of executives at below-average revenue growth companies report difficulties recruiting employees with base-level skills versus 36 percent at high-performing companies.
2. High performers are more confident about their talent and business data insights
What you don’t know can eventually hurt you. Underperforming companies are more likely to say they know how to extract meaningful insights from data (44 percent vs. 35 percent of high-performers). However, underperformers are looking backward to improve or cut existing assets, viewing growth through a restructuring lens. Meantime, high performers are facing challenges head-on, especially the benefits of analytics and Big Data, exploring what happens when insights help align employee performance to business objectives. Not surprisingly, below-average-revenue-growth companies are significantly more likely to expect difficulties in the years ahead.
3. High-performers offer more advanced training and development programs
Over 50 percent of high-performing companies offer supplemental training programs as an employee benefit – significantly more than underperformers. High-revenue-growth companies are also more likely to have a formal mentoring program.
4. High-performers are more merit-driven but less likely to promote from within for senior positions
Sixty percent of high-revenue-growth companies said they were more merit-driven than tenure-driven, compared with less than half of underperformers. Underperformers are much more likely to say that long-term loyalty and retention is an important part of their talent strategy. They are also likelier to fill senior positions from within the organization (48 percent vs. 37 percent of high performers). The downside is they may be bypassing more qualified candidates to reward the tenured when filling leadership roles.
5. High performers believe they need to do more to prepare their leadership for the future
Executives at underperforming companies are more confident in their own assessment of leadership performance and development than high performers. But high performers are significantly more likely to say their leaders can inspire employees. And, they are more likely to give HR a voice in the C-Suite. Armed with a more forward-looking plan, it may be that high performers are more self-critical of their leadership shortcomings. And, in making room for workforce issues at the strategy table, high performers will be better prepared to meet future workforce needs.
The correlation is strong between workforce development and financial performance. It’s not too late for companies regardless of size and profitability to follow the same path to a stronger future.
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