IT executives, along with finance and operations management, are more confident about investing and spending for the remainder of 2010, yet many business leaders believe growth and overall economic health is tenuous, according to a quarterly Corporate Executive Board (CEB) survey of 440 executives in more than 50 countries.
IT discretionary spending will rise in the third quarter, especially in software: 54 percent are expecting to have higher spending overall with 57 percent expecting more spending in software.
“Even though the overall outlook has moderated, there is still resilience in key investment areas such as anticipated R&D and IT CapEx,” said Oleg Polishchuk, senior director at CEB in an 18 August statement. “Furthermore, executives expect higher order volumes and plan to increase production levels.”
Human resource executives are not as bullish on employee engagement, though they do expect labour costs to rise between 1 and 4 percent. More than one-third of HR managers believe employees will be less engaged on the job. Higher employee turnover is a concern with more than 54 percent of human resource professionals expecting workers to seek new jobs.
“While fundamentals at large companies have recovered steadily across the past year in terms of both top-line growth as well as margins, executive concerns about the economic environment – especially the strength of consumer demand – have returned,” said Michael Griffin, managing director, Global Research at CEB, in the same statement. “Many companies are taking a wait-and-see approach, but history suggests that those who undercut growth investments during economic trough periods risk longer-term revenue stalls while those who make investments ahead of peers are more likely to seize outsized returns.”
A June study by CEB on employee satisfaction found 25 percent of employees identified as high-potential by their companies were looking to leave the company. By way of comparison, that number was only 10 percent in 2006. Similarly, 21 percent of employees said they felt highly disengaged on the job – a number that has tripled since 2007.
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It must be a serious concern for businesses across the IT sector that while investment in systems and solutions is rising, many HR executives believe that employees are likely to be less engaged currently and even looking to seek new jobs. It is perhaps even more alarming that the CEB has found that the number of employees feeling disengaged on the job has risen threefold in just three years and 25 per cent of employees identified as high potential by their companies are looking to leave.
The good news is that companies can take action today to reverse these worrying trends. To remain loyal and productive, individuals need to feel their growth aspirations and financial goals are within reach. So if they want to drive loyalty and ensure that their most talented staff are fully engaged, they need to actively address these objectives.
To help achieve this, businesses should implement unified talent development solutions that seamlessly integrate their learning and performance management initiatives. This will enable them to align employee performance goals with business goals, while using actionable career development and learning to develop employees to bridge competency and skills gaps. Such an approach also allows organisations to groom high-fliers and ensure that they are prepared to step up and take the place of the most senior staff as and when the need arises.
It is critically important that businesses make the effort to engage with their most talented employees because if they do not feel a sense of inclusion and of personal momentum within their chosen company, these staff will work less hard, become increasingly dissatisfied and ultimately look for other opportunities that offer them their desired growth.
James O’Gorman, solutions specialist manager, EMEA, SumTotal Systems