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Talent & Rewards

2011 Talent Survey

Igniting a High-Performance Culture

Igniting a High-Performance Culture

The economic challenges of the past three years have reduced organizations ability to deliver on their employer-employee contract. Often benefits or payor bothhave been scaled back. Collegiality and productivity of work environments have suffered. Although these decisions were necessary, they adversely impacted employees view of their organization and work experience. In 2010, an Aon Hewitt study of employee engagement found that:
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Just over half of employees are disengaged; There is a significant turnover risk (even among engaged employees); and Employees are stressed and exhausted; a result of doing more with less.

The Aon Hewitt 2011 Talent Survey results build on these findings and emphasize the role that employee engagement plays in driving business resultsboth failures and successes. Our 2011 respondents report that engagement continues to be low, and employees have become myopic, more focused on their personal situation and less concerned with what they can do to help the company succeed. And, we see a striking lack of confidence in leaders ability to deliver on the factors that will steer their organization in the right direction and motivate a disengaged workforce. What can organizations do to re-ignite the passion of their workforces and create a high-performance culture that will spark and sustain recovery? Reinstating programs that have been cut and getting back to normal will simply yield middle-ofthe-road results. We are challenged to create a new normal. We must be bolder, more aggressive, nimble, and, in many ways, smarter about how we manage our employees. Fresh ideas, new approaches, and rapid alignment strategies will lead to greater market share. The race to the new normal will create winners, as well as recession casualties. Aon Hewitts 2011 Talent Survey examines what organizations are doing today and what they plan to do in the future as they embark on efforts to re-engage workers and provide meaningful reasons for them to stay. In doing so, they will build stronger, more resilient, more innovative, more productive and more fun organizations. We hope these findings are helpful to your organization as you focus on building a strong future with a highly engaged workforce. Sincerely,

Kathryn J. Hayley Chief Executive Officer Consulting Americas

Aon Hewitt

2011 Talent Survey

Igniting a High-Performance Culture

Contents
3 2011 Talent Survey Executive Summary 9 Engagement Findings: Engagement Drives Passion and Productivity 17 Leadership Findings: The New Normal Demands New Leadership 21 Talent Acquisition Findings: Focus on Quality New Employees over Quantity 27 Next-Generation Communication Findings: Communication in the New Age of Employee Engagement, Recruitment, and Productivity 31 Survey Data

201 Talent Survey 1 Executive Summary

For the fifth consecutive year, Aon Hewitt surveyed employers across the United States to examine their talent practices, strategies, and challenges. The survey was conducted in late fall 2010, as the nation begins to slowly emerge from the worst financial crisis in modern history. We find organizations optimistic and cautiously beginning to change their focus from reducing costs to growth strategies.

2011 Talent Survey

Summary of Findings

As leaders transition toward growth, there is an increased focus on human capital: identifying and actively engaging the most critical employees, rapidly aligning the workforce around change, and thinking creatively about how to ensure that cost is managed to get the most out of every HR dollar spent. In this report, Aon Hewitts 2011 Talent Survey, we examine survey responses in four areas: leadership, engagement, talent acquisition, and next-generation communication. We report on:
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Key Findingsas identified by our respondents Commentary and Calls to Actionsteps to position your organization for success Survey Datathe complete findings for your reference

Engagement Drives Passion The economic challenges of the past three years have significantly impacted and Productivity organizations ability to deliver on their employer-employee contract.
Employee engagement is at an all-time low. And yet, for the past two years, retention levels have been at an all-time high, driven in large part by a close to 10% U.S. unemployment rate. With fewer companies hiring, consolidation of businesses and processes, off-shoring, outsourcing, and fewer mature employees leaving the workforce, many employees have become reluctant to stray from their current employer. As the economy shows signs of recovery, employees will begin to consider greener pastures. What happens if theres a mass exodus of key talent just as an organization is moving toward recovery? Organizational leaders are concerned and engagement strategies are a reported priority. Key Findings:
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Engagement of critical talent is a top concern. Engagement levels are low and there is a lack of confidence that leaders can retain their critical talent. Total rewards plays a significant role in engaging a workforce. Middle management will be critical to business strategy execution and engaging the workforce.

Aon Hewitt

The New Normal Demands Talented, effective, creative, and respected leaders have a dramatic impact New Leadership on employee engagement, innovation, and profitability. In an economic
environment where change is the norm, leaders are finding themselves ill-equipped to adapt and become a catalyst for change. In this years survey, one striking finding is the perceived lack of leaders effectiveness in delivering on the success factors that are critically important. Key Findings:
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There is a perceived gap in leadership effectiveness. There is a general lack of confidence in leaders ability to drive change.

Focus on Quality New Employees With job cuts and unemployment stabilizing, and business recovery on over Quantity the horizon, HR executives can look toward strategically growing their
workforces. Forty-five percent of respondents anticipate slightly to significantly greater hiring volumes than in the past year. Only 16% of the responding organizations anticipate slightly or significantly less hiring this year compared to last. Respondents also report an increased focus on the quality of candidates, citing a priority for more productive employees. With those directives, the shrunken talent acquisition function must be bolstered with the required employees to match business demand. Key Findings:
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Top hiring priority is quality, not quantity. The talent acquisition function is a strong candidate for process improvement. Social media is an emerging, but not yet prevalent, sourcing channel.

Communication in the New Age Most respondents agree that their organizations value the role that of Employee Engagement, communication plays in engagement and retention; they also agree that Recruitment, Productivity they are not very good at it. Most acknowledge that their communications
could be more effective at impacting employee behavior. They also report a wait-and-see approach to social media tools, with only 16% of organizations investing in this area. Key Findings:
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Traditional employee communication tools are still prevalent. Change communication is easier said than done. Social media networks are not prevalent in HR (yet).

2011 Talent Survey

Participant Demographics

A total of 1,328 individuals participated in Aon Hewitts 2011 Talent Survey. The confidence interval is 95% +/- 2%-6%. Numbers in this document are rounded. The participant profile is as follows:

Organization Size >5000 27%

500-5000 39%

<500 34%

Respondent Title C-Suite 17% Director 38%

Manager 28% Professional 14% Support 3%

Aon Hewitt

Respondents by Industry

Industry Accommodation and Food Services Agriculture, Forestry, Fishing, and Hunting Arts, Entertainment, and Recreation Construction Educational Services Federal Government Finance and Insurance Health Care and Social Assistance Information Management of Companies and Enterprises Manufacturing Mining and Quarrying Not-for-Profit Professional, Scientific, and Technical Services Real Estate and Rental and Leasing Retail Trade State and Local Government Technology Telecommunications Transportation and Warehousing Utilities Other Services (Except Public Administration)

Percentage 1% 0% 1% 2% 5% 1% 11% 10% 1% 1% 18% 0% 6% 7% 2% 4% 5% 6% 2% 2% 3% 8%

2011 Talent Survey

Aon Hewitt

Engagement Findings:
Engagement Drives Passion and Productivity
The economic challenges of the past three years have significantly impacted organizations ability to deliver on their employer-employee contract. Employee engagement is at an all-time low. And yet, retention levels have been at an all-time high for the past two years, driven in large part by a close to 10% U.S. unemployment rate. With fewer companies hiring, consolidation, off-shoring, outsourcing, and fewer employees retiring, many have become reluctant to stray from their current employer.

2011 Talent Survey

Key Findings

As the economy shows signs of recovery, employees may begin to consider greener pastures. What happens if theres a mass exodus of key talent just as an organization is moving toward recovery? The Aon Hewitt 2011 Talent Survey shows that:
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Engagement of critical talent is a top concern. Engagement levels are low and there is a lack of confidence that leaders can retain their critical talent. Total rewards plays a significant role in engaging a workforce. Middle management will be critical to business strategy execution and engaging the workforce.

Engagement of critical talent Retaining and engaging the workforce is a business-critical focus coming is a top concern out of the global recession, with more than half of the leaders rating them
as two of their top three concerns:
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Talent retention (31%) Business strategy execution (18%) Engagement of employees (16%)

When asked to anticipate the HR actions mostly likely to occur in 2011, we again see a concern about acquiring, keeping, and developing talent:
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61% anticipate an increased focus on talent development Nearly 40% anticipate an increased focus on hiring Nearly one-third anticipate increased turnover

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As the nation emerges from the most recent economic crisis, please select the area of greatest concern to you.

Area of Concern Aging workforce/retirements Business strategy execution Development of leaders to take on more critical work Engagement of employees Leading change Retention of top talent Succession planning Other

Percentage 9% 18% 10% 16% 6% 31% 8% 3%

Engagement levels are low and there When asked about their employees current level of engagement, 45% of is a lack of confidence that leaders can employers dont believe that their employees are focused on the job, retain critical talent 43% dont feel that their employees are immersed fully in their work, and
40% dont believe that their employees are driven to do whatever it takes to do their jobs.

Please indicate the extent to which you agree or disagree with each statement.
The majority of employees in this organization are passionate and enthusiastic about their work. The majority of employees in this organization are devoted to getting the job done right. The majority of employees in this organization are immersed fully in their work. The majority of employees in this organization are focused and concentrate intensely while on the job. The majority of employees in this organization are driven to do whatever it takes to complete the job.

Strongly Agree

Agree

Neutral

Disagree

Strongly Disagree

15%

52%

22%

10%

1%

22%

64%

11%

3%

0%

7%

50%

31%

12%

0%

6%

49%

34%

11%

0%

11%

50%

30%

9%

1%

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The respondents of Aon Hewitts 2010 Engagement 2.0 Study echo this concern and provide clear evidence that the actions taken during the global recession have impacted employee engagement. Theres a chink in the foundation of the employer-employee relationship:
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Over 50% are passive or actively disengaged 42% are not energized by their work Only 43% trust in senior leadership 40% are generally stressed to the point of feeling burned out 64% are physically exhausted when they get home from work

Respondents generally think that leaders play a significant role in the attraction and retention of key talent, but many agree that they may not be able to follow through:
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73% agree that senior leaders play a very or extremely important role in attracting talent 83% agree that senior leaders play a very or extremely important role in retaining talent Only 33% rate their leadership as very or extremely effective in retaining the talent they need for the future Less than one-third feel that leaders are very effective in hiring more productive employees

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Total rewards plays a significant role in Total rewards spend is one of the largest ongoing corporate costsyet, engaging the workforce the intended outcomes of this spend are not well articulated, understood,
measured, or realized. Respondents to the Aon Hewitt 2011 Talent Survey report that the current management of the cost of total rewards is half as effective as its importance.

Indicate how important managing the cost of total rewards is to your organization.
Importance

Extremely Important 25%

Very Important 36%

Important 29%

Somewhat Important 8%

Not Important 3%

Indicate how effective your HR organization is at managing the cost of total rewards.
Effectiveness

Extremely Effective 12%

Very Effective 36%

Effective 37%

Somewhat Effective 12%

Not Effective 3%

Only about half of responding organizations use annual total rewards statements. Those that do are reaping benefits from the transparency. Nearly 80% agree that total rewards statements are effective at helping employees understand and appreciate the value of their benefits. In addition, total rewards statements are reported to:
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Improve retention (69%) Improve employee engagement (63%)

Please rate the effectiveness of your annual total compensation or total rewards statements at impacting
Employees understanding and appreciation of the value of their benefits and the organizations substantial investment in them Employee/executive retention Employee engagement

Extremely Effective

Very Effective

Effective

Somewhat Effective

Not Effective

11%

30%

37%

19%

2%

8% 4%

20% 14%

41% 45%

26% 31%

5% 7%

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Role of middle management will be Middle managers are the delivery mechanism to the workforce, critical to business strategy execution communicating change and business strategy, developing models on how and engaging the workforce the workforce will contribute to the businesss performance. Twenty-six
percent of respondents agree that middle managers are most essential for carrying out critical work for the organization; nearly the same percentage as choose senior management. And, when asked what the main issues are that could prevent an organization from reaching its strategic goals quickly, ineffective decision-making and siloed thinking behaviors were the top two responses. Middle managers are also perceived to be an at-risk attraction and retention group. One-quarter of respondents report that middle managers will be the most challenging in regards to attraction and retention. No other position is thought to be more challenging.

What role in your organization do you see as being most essential for carrying out the critical work of the organization? What role in your organization do you see as being most challenging in regards to attraction and retention?

Role Executives First level management Individual contributors Middle management Other specialist specific to our industry Senior management Technical/scientific specialists

Most Essential 12% 12% 14% 26% 4% 29% 4%

Most Challenging 5% 12% 17% 25% 9% 19% 13%

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Aon Hewitts Perspective

In the past few years, the employee contract has been disruptedand in many cases decimatedas companies reacted to the economic downturn and legislative changes with programmatic cutbacks and continued shifting of benefits cost and risk onto employees. The Bureau of Labor Statistics shows a decrease in productivity (output per hour worked) for the first time in five consecutive quarters of strong productivity growth since 2009. The concept of doing more with less may have just reached a point of diminishing returns. Corporate stress and burnout are on the rise. Igniting a high-performance culture may well have to start with engaging the workforce. Highly engaged employees provide higher value. They are more effective at producing high quality and innovative products/ services, and they more positively impact customer satisfaction, cost, and revenue growth. Getting back to normal may not be good enough. To re-engage the disengaged and obtain an engagement lift, baseline rewards must meet baseline needs. But, giving all employees exactly what they want is unrealistic. A pragmatic approach is required for an immediate impact. Focus on the highest-value employees. The 80/20 rule applies to human capital20% of the organizations employees create 80% of the value. Invest in identifying the 20%, the relative value that they provide, and what they want. Then, deliver on those factors that are under your control. Organizations may also design and market programs targeted at specific high-value segments (e.g., generations, levels, job classes, or functions) to drive specific desired outcomes from those groups. Organizations are carefully considering the management and communication of total rewards, defined as everything an employer provides that employees perceive as rewarding or valuable. As we have seen from much of the data reviewed here, total rewards are far more than compensation and benefits. Leading companies are looking holistically at data to understand what rewards program designs will drive key employee outcomes. Not only do the drivers differ by employee segment, they also differ across the spectrum of attraction, retention, and engagement. The key is to expend the appropriate level of organizational focus, attention, and investment, commensurate with the relative value that an employee, or employee group, creates.

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Leadership Findings:
The New Normal Demands New Leadership
Talented, effective, and respected leaders have a dramatic impact on employee engagement, innovation, and profitability. They also drive organizational change from the top, working through middle management to translate strategy into tactical plans.

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Key Findings

In this years survey results, striking is the perceived lack of leaders effectiveness in delivering on those success factors that are critically important to lead the organization to the new normal. The Aon Hewitt 2011 Talent Survey shows that:
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There is a perceived gap in leadership effectiveness. There is a general lack of confidence in leaders ability to drive change.

There is a perceived gap in When asked about the importance of leadership credibility, almost leadership effectiveness unanimously (97%) respondents agree that leadership credibility is
important, very important or extremely important to the business strategy. Respondents were then asked about importance and effectiveness of current leadership for meeting business growth goals, driving innovation, meeting profitability targets, delivering desired customer service levels, ensuring safety, attracting talent, and retaining talent. Respondents agree that leadership is extremely important for:
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Meeting business goals (56%) Meeting profitability targets (56%) Delivering service (56%) Retaining talent (44%)

Yet, less than 20% of respondents rank leadership as extremely effective in the same categories:
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Meeting business goals (12%) Meeting profitability targets (14%) Delivering service (17%) Retaining talent (7%)

And, when asked if there is a shortage of qualified leadership, nearly 20% report that there is a leadership shortage right now; another 15% expect a shortage of qualified leadership in the next one to two years.

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There is a general lack of confidence in Respondents reflect a lack of confidence in their leaders ability to drive leaders ability to drive change change or effectively communicate change. When asked about leaderships
ability to manage change, only 9% report success to an extremely high extent and just 33% report success to a high extent. When asked about the importance and effectiveness of change interventions, respondents report significant gaps between extremely important and extremely effective:
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Communicating change: 45 percentage point gap Leadership alignment with change: 44 percentage point gap

When your organization implements change, how important is each of the following change initiatives? How effective is your organization at each?

Change Initiative Communication Leadership alignment with the change

Extremely Important 55% 57%

Extremely Effective 10% 13%

Aon Hewitts Perspective We operate in a world that is volatile, uncertain, and complex. Rapid-fire
change is the norm and is one of the biggest, if not the biggest, challenges facing an organization. Yet, enterprises often find themselves ill-equipped to adapt. So, change is often slow. When continuous change is the norm, the entire leadership team must be equipped to become catalysts for change. For many, this requires a new set of capabilitiesone of the most important being creativity. Leaders must now demonstrate speed and agility, navigate ambiguity and complexity, develop middle managers, lift engagement, and deliver relevant messages. We see the need for a revised set of leadership skills reflected in the survey responses that confirms a lack of leadership effectiveness and inability to lead the changes that are necessary. Organizations should evaluate current leadership by assessing leaders against critical competencies, and accelerating skill development in areas found lacking. Mid-level managers, too, are vitally important to rapidly aligning an organizations workforce around leaderships strategy and direction. They are in a unique position to bridge the gap between strategy and employee engagement, perceptions, and productivity. For a rapid alignment strategy to work, mid-level managers must be equipped with the right tools, driven by the senior leadership team, to internalize strategy, translate strategy into decisive local action, and drive performance. Our survey results find effective leadership communication lacking. Improving communication and empowering mid-level managers, who are closest to employees, will result in more efficient strategy execution and improved productivity.

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Talent Acquisition Findings:

Focus on Quality New Employees over Quantity
With retention of key employees a top concern and employers optimistically looking forward to bolstering the workforce in strategic areas, acquiring new talent becomes a driving force of organizational success.

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Key Findings

Respondents to the Aon Hewitt 2011 Talent Survey report a more optimistic hiring view of workers in the coming year, with 45% citing slightly greater to significantly greater hiring volumes than in the past year. Only 16% of organizations anticipate slightly or significantly less hiring this year as compared to last. The Aon Hewitt 201 Talent Survey shows that: 1
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Top hiring priority is quality, not quantity. Talent acquisition function may be a candidate for process improvement. Employee referrals continue to be the prevalent new hire source.

Top hiring priority is quality, When asked about the goal of their organizations talent acquisition function not quantity in the coming year, 55% report increased focus on the quality of candidates.
Similarly, when asked their top hiring priority, nearly 60% agree that it is very or extremely important to hire more productive employees. Less than 50% cite filling positions faster and staying on budget as a top priority.

How important is hiring more productive employees to your organization? Extremely Important 20% Very Important 39%

Important 30% Somewhat Important 7% Not Important 3%

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Conventional wisdom would lead us to believe that hiring quality employees is easier than in years past due to the glut of unemployed workers. However, with increased candidate volumes flooding HR departments and a lack of recruiting resources to process and screen hundreds of applicants for each position, organizations are finding it difficult to find quality hires in the traditional and virtual resume piles. Only 28% report that they are very or extremely effective at hiring more productive employees.

How effective is your organization at hiring more productive employees? Extremely Effective 5% Very Effective 23% Effective 51%

Somewhat Effective 18% Not Effective 3%

Talent acquisition function may be a With job cuts and unemployment stabilizing, HR executives can now look candidate for process improvement toward growing their workforces in strategic areas where growth is
anticipated. That growth will require many formerly downsized talent acquisition functions to match business demand with the required employees to deliver the goods or services. HR leaders appear less inclined to rebuild their recruiting function with full-time employees during recovery, with only 8% citing rebuilding the recruitment team as a primary goal in 201 They may look at smaller fixes 1. such as redesigning talent acquisition to be more scalable, streamlined, and to operate more cost-effectively, with 35% of respondents stating that recruiting and staffing could benefit from process improvement.

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Employee referrals continue to be the Social media is certain to change the face of talent acquisition, but prevalent new hire source respondents to the survey report a wait-and-see position. Only 24%
of respondents cite that determining how to use social media in recruitment is very or extremely important. And, when asked to rank the most effective sources of new hires, traditional recruiting techniques such as employee referrals and job boards top the list for both entry level/ hourly and experienced/mid-career new hires.

What are the most effective sources of hires for your organization?
(Choose up to 3.)

Sources Employee referrals Job boards Resume mining, Internet and/or company resume databases Agencies (search firms or temporary) Company website careers pageunsolicited applications Social media (LinkedIn, Twitter, Facebook) Existing employees (internal placements) Print media (newspapers, trade journals) Job fairs/recruitment events/open houses Unsolicited walk-ins, resume, application School outreach (college, technical school, or high school)

Entry level/ New hires 48% 30% 12%

Experienced/ Mid-career 40% 31% 20%

16%

28%

29%

25%

5%

10%

21%

27%

12%

9%

9%

4%

9%

2%

11%

3%

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Aon Hewitts Perspective With job cuts and unemployment stabilizing and business recovery in most
industries looming, HR executives can look toward growing their workforces in strategic areas outlined by executive management. The key acquisition issues HR departments will face are:
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How to react to fluctuating business demands combined with an urgency to hire productive new employees to support the new growth. How to best structure the talent acquisition function to be nimble, and how to cost-effectively scale up to meet business demand to deliver high-quality, productive employees to the organization.

Workforce planning tools will become increasingly important to HR executives and they will invest here as they work with their business units to help accurately forecast their near-term and long-term workforce needs.

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Next-Generation Communication Findings:

Communication in the New Age of Employee Engagement, Recruitment, and Productivity
Todays employees are empowered, confident, hard to reach, and equally hard to engage. Individual communication toolse-mails, conference calls, webinars, hard copy mailingsdont seem to have the desired impact. And communication for communications sake, without a tie to business strategy or an overall plan, is ineffective.

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Key Findings

Respondents confirm that most organizations value the role that communication plays in employee engagement and retention. However, they also report that those communications have not been closely aligned with an organizations overall business strategy. The Aon Hewitt 2011 Talent Survey shows that:
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Traditional employee communication tools are still prevalent. Change communication is easier said than done. Social media networks are not prevalent in HR (yet).

Traditional communication tools Where organizations are focused on employee communication, the use of are still prevalent more traditional methods such as e-mail and intranets still far outweighs
the use of emerging social media tools. Even in the recruiting space there is a disconnect where 55% of employers see social media as an important tool to leverage when reaching recruits, but only 5% to 10% of employers think social media is an effective source of candidates.

Change communication: When an organization implements change, 55% believe that easier said than done communication is extremely important, while only 10% of those same
organizations believe that they are extremely effective in delivering that communication. Today less than half (47%) of the organizations in the survey provide total rewards statements to employees, even though most find them to be effective in every category of the survey. Since 54% of organizations believe that employees understanding of the value of the total rewards program is important to their overall business strategy, it is reasonable to assume that more organizations will embrace personalized total rewards communications.

Social media networks not prevalent Only 16% of organizations are investing in social media tools, with most still in HR (yet) depending on established methods such as e-mail (push) and intranets
(pull). Reluctance to embrace new technologies appears to carry ahead over the next three years, where only 30% of organizations believe that they will invest in social media as a means of communicating with employees. Generally speaking, investments in communication over the next three years are split almost 50-50 between increased budgets and holding steady. While companies do not seem to be focusing on social media in the next three years, a large number, 67%, either have formal policies in place dictating how employees should use social networking tools, or are working on formulating those polices.

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Aon Hewitts Perspective The survey data confirms that while most organizations believe that
communicating with employees is extremely important, the vast majority will admit that they are not very good at it. There is a fairly large disconnect between belief and actual results. While one can speculate on the reasons (e.g., internal staffing issues, budget, other priorities), it is clear that companies feel their communications could be more effective in impacting employee behavior. We feel strongly that organizations need to:
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Communicate with employees using tools that they use. Personalize those communications. Using targeted messaging based on employee demographics can be a highly effective means of engaging and retaining employees.

With all of the press that social media receives today, it is not yet the communication of choice for organizations budget dollars, at least in the near term. We believe these tools can be a highly effective and productive means of communicating; however, employers lack employees personal cell phone numbers and e-mail addresses, and that is hindering the expansion of social media as a broad-based resource. Allowing employees to opt in to text and e-mail message services is gaining some momentum, although it is still too soon to tell if most employees will embrace the technology for this purpose.

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201 Talent Survey Data 1

2011 Talent Survey

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Do you anticipate your organization will experience any of the following HR events in 2010 and/or 2011?
(Select all that apply.)

HR Event Global off-shoring HR outsourcing Recruitment process outsourcing HR systems integration or upgrades; automation of manual HR activities Review of total rewards HR cost cutting Increased hiring Increased turnover and/or retirements Increased focus on leadership, talent development, and succession planning Increased focus on HR productivity and process improvement Increased focus on safety Use of new social media for job candidate or employee communications 8% 11% 13% 49% 38% 27% 38% 29% 61% 48% 20% 35%

Please indicate your organizations top HR strengths.

(Select all that apply.)

HR Strength Internal service excellence provided to employees Recruiting and developing a talented workforce Driving innovation Ensuring safety Low-cost function Competitive benefits Competitive compensation Recognition as an employer of choice in your market Organization effectiveness/organizational change Mergers and acquisitions facilitation 43% 27% 8% 13% 24% 50% 23% 22% 15% 8%

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Which of the following administrative areas of HR could benefit from a process improvement within your organization?
(Select all that apply.)

HR Administrative Area Recruiting and staffing administration Onboarding/Offboarding Leadership development and succession planning Benefits administration Training coordination/Tracking Workers compensation administration Global talent management 35% 37% 57% 19% 34% 10% 18%

What regions of the world will require your greatest focus on talent issues in the coming year?
(Select all that apply.)

Region Europe Russia Asia/Pacific India Africa Middle East U.S./Canada Latin America 10% 0% 14% 5% 2% 2% 74% 7%

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As the nation emerges from the most recent economic crisis, please select the area of greatest concern to you.

Concern Aging workforce/retirements Business strategy execution Development of leaders to take on more critical work Engagement of employees Leading change Other Retention of top talent Succession planning 9% 18% 10% 16% 6% 3% 31% 8%

When, if ever, do you anticipate that a shortage of qualified leadership will impact your organizations performance?

Outlook Now, we currently have a shortage. Next 1-2 years Next 3-4 years Next 5-9 years Next 10+ years We do not anticipate a shortage of qualified leaders in our organization. 19% 15% 26% 17% 2% 22%

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Please rate how important it is that your organizations leaders

Importance

Extremely important a b c d e f g Meet business growth goals Innovate Meet profitability targets Deliver desired customer service levels Ensure safety Attract talent Retain talent 56% 29% 56% 56% 36% 30% 44%

Very important 28% 39% 26% 32% 25% 43% 39%

Important

Somewhat important 4% 6% 3% 1% 9% 5% 3%

Not important 3% 1% 4% 0% 5% 1% 1%

10% 25% 10% 11% 25% 21% 14%

Please rate the effectiveness of your organizations leaders to

Effectiveness

Extremely effective a b c d e f g Meet business growth goals Innovate Meet profitability targets Deliver desired customer service levels Ensure safety Attract talent Retain talent 12% 7% 14% 17% 17% 5% 7%

Very effective 34% 21% 31% 38% 35% 27% 26%

Effective

Somewhat effective 16% 31% 15% 11% 9% 23% 22%

Not effective 2% 5% 4% 1% 2% 3% 4%

36% 36% 36% 33% 37% 41% 40%

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What role in your organization do you see as being most essential for carrying out the critical work of the organization?

Role Executives Senior management Middle management First level management Individual contributors Technical/scientific specialists Other specialist specific to our industry 12% 29% 26% 12% 14% 4% 4%

10

What role in your organization do you see as being most challenging in regards to attraction and retention?

Role Executives First level management Individual contributors Middle management Other specialist specific to our industry Senior management Technical/scientific specialists 5% 12% 17% 25% 9% 19% 13%

11

What is the main issue preventing your organization from reaching your strategic goals quickly?

Issue Governance, structure, and efficiency of decision making Inability of leaders to drive strategic change Insufficient leadership capacity Investment Lack of talent/succession pool Siloed thinking/behavior Workforce engagement 17% 13% 12% 12% 7% 29% 10%

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What are the most important elements that your organization currently considers when making rewards and other HR program decisions?
(Choose up to three.)

Elements Cost Competitive position Legal/regulatory compliance Alignment with the business performance Leaderships rewards philosophy Risk to the enterprise Ability to attract, retain, and engage the right talent 58% 25% 17% 38% 16% 7% 33%

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What are the most important elements that your organization should be considering when making rewards and other HR program decisions?
(Choose up to three.)

Elements Cost Competitive position Legal/regulatory compliance Alignment with the business performance Leaderships rewards philosophy Risk to the enterprise Ability to attract, retain, and engage the right talent 28% 34% 12% 50% 17% 5% 55%

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Please indicate how important each HR program is to your organization.

Importance

Extremely Important a b c d e f Managing the cost of total rewards Attracting and assessing the talent the organization needs Retaining the talent the organization needs Enhancing employee engagement and performance Planning future workforce requirements Managing a multi-cultural, global workforce 25% 31% 38% 31% 16% 11%

Very Important 36% 42% 37% 39% 35% 18%

Important 29% 20% 17% 20% 31% 25%

Somewhat Important 8% 6% 6% 8% 14% 18%

Not Important 3% 1% 2% 2% 4% 28%

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Please indicate how effective your HR organization is at delivering each of the following.

Effectiveness

Extremely Effective 12% 6% 8% 3% 3% 5%

Very Effective 36% 25% 26% 17% 12% 10%

Effective 37% 41% 41% 40% 35% 35%

Somewhat Effective 12% 24% 21% 30% 37% 26%

Not Effective 3% 4% 4% 9% 14% 24%

a b c d e f

Managing the cost of total rewards Attracting and assessing the talent the organization needs Retaining the talent the organization needs Enhancing employee engagement and performance Planning future workforce requirements Managing a multi-cultural, global workforce

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Please indicate the extent to which you agree or disagree with each statement.

Agreement

Strongly Agree The majority of employees in this organization are passionate and enthusiastic about their work. The majority of employees in this organization are devoted to getting the job done right. The majority of employees in this organization are immersed fully in their work. The majority of employees in this organization are focused and concentrate intensely while on the job. The majority of employees in this organization are driven to do whatever it takes to complete the job.

Agree

Neutral

Disagree

Strongly Disagree

15%

52%

22%

10%

1%

22%

64%

11%

3%

0%

7%

50%

31%

12%

0%

6%

49%

34%

11%

0%

11%

50%

30%

9%

1%

17

How does your anticipated hiring volume in the upcoming year compare to the prior year?

Hiring Volume Significantly greater Slightly greater About the same Slightly less Significantly less 12% 33% 39% 10% 6%

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18

How important are the following recruitment programs to your organization?

Importance

Extremely important 20% 18% 17% 14% 7% 4% 14%

Very important 39% 32% 32% 28% 18% 20% 34%

Important 30% 28% 31% 36% 25% 31% 30%

Somewhat important 7% 13% 15% 16% 26% 27% 15%

Not Important 3% 9% 5% 6% 25% 18% 7%

a b c d e f g

Hire more productive employees Reduce early turnover of new employees Fill positions faster Stay on recruitment budget Launch new recruitment technology Determine how to leverage social media in recruitment Improve onboarding/orientation program

19

How effective is your organization at implementing the following recruitment programs?

Hire more productive employees Reduce early turnover of new employees Fill positions faster Stay on recruitment budget Launch new recruitment technology Determine how to leverage social media in recruitment Improve onboarding/orientation program

Effectiveness

Extremely Effective 5% 7% 4% 11% 5% 3% 4%

Very Effective 23% 19% 17% 27% 13% 8% 16%

Effective 51% 43% 39% 45% 34% 26% 37%

Somewhat Effective 18% 26% 32% 13% 28% 35% 32%

Not Effective 3% 5% 8% 3% 19% 28% 10%

a b c d e f g

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What are the most effective sources of entry level/hourly new hires for your organization?
(Choose up to three.)

Sources Employee referrals Job boards Resume mining Internet and/or company resume databases Agencies (search firms or temporary) Company website careers page unsolicited applications Social media (LinkedIn, Twitter, Facebook) Existing employees (internal placements) Print media (newspapers, trade journals) Job fairs/recruitment events/open houses Walk-in unsolicited resume/application School outreach (college, technical school, or high school) 48% 30% 12% 16% 29% 5% 21% 12% 9% 9% 11%

21

What are the most effective sources of experienced/ mid-career new hires for your organization?
(Choose up to three.)

Sources Employee referrals Job boards Resume mining Internet and/or company resume databases Agencies (search firms or temporary) Company website careers page unsolicited applications Social media (LinkedIn, Twitter, Facebook) Existing employees (internal placements) Print media (newspapers, trade journals) Job fairs/recruitment events/open houses Walk-in unsolicited resume/application School outreach (college, technical school, or high school) 40% 31% 20% 28% 25% 10% 27% 9% 4% 2% 3%

2011 Talent Survey

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22

Which properly describes the goal of your organizations talent acquisition function for the upcoming year?
(Choose up to three.)

Sources Becoming more lean Increased focus on quality of candidates Creating more scalability in our process to respond to changing business needs Implementing new recruitment technology Developing processes that address global talent needs Rebuilding the recruitment team Evaluate increased use of outsourcing Evaluate in-sourcing work that was previously outsourced 15% 55% 30% 22% 12% 8% 7% 3%

23

Please indicate the extent to which you agree or disagree with each statement.

Agreement

Strongly Agree Our organizations change initiatives achieve the desired behavioral and business outcomes. Leaders actions and behaviors support messages in our organization. Our communication drives desired behavioral outcomes. We have a stated HR strategy and plan. We measure the ROI of HR initiatives. We measure satisfaction with HR services.

Agree

Neutral

Disagree

Strongly Disagree

4%

41%

40%

13%

2%

12%

43%

27%

15%

3%

c d e f

5% 14% 5% 11%

39% 40% 22% 31%

38% 21% 30% 26%

16% 18% 34% 25%

2% 5% 10% 6%

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When your organization implements change, how important is each of the following change interventions?
Communication Leadership alignment with the change Rewards and consequences Measurement Capability building Governance and decision rights Stakeholder involvement Workforce transition (e.g., headcount reduction, redeployment)

Importance

Extremely Important 55% 57% 14% 17% 13% 13% 26%

Very Important 32% 31% 36% 37% 33% 32% 38%

Important 10% 8% 35% 31% 37% 36% 24%

Somewhat Important 2% 3% 11% 11% 13% 15% 8%

Not Important 1% 0% 4% 3% 4% 3% 4%

a b c d e f g

12%

31%

38%

13%

6%

2011 Talent Survey

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25

When your organization implements change, how effective is your organization at each of the following change interventions?
Communication Leadership alignment with the change Rewards and consequences Measurement Capability building Governance and decision rights Stakeholder involvement Workforce transition (e.g., headcount reduction, redeployment)

Effectiveness

Extremely Effective 10% 13% 3% 5% 3% 5% 6%

Very Effective 26% 29% 15% 15% 12% 17% 23%

Effective 35% 31% 39% 32% 38% 44% 37%

Somewhat Effective 24% 22% 32% 35% 36% 27% 26%

Not Effective 5% 5% 11% 13% 11% 7% 7%

a b c d e f g

6%

20%

43%

24%

6%

26

Do you use business metrics to measure the success of a significant organizational change?

Agreement Yes No 51% 49%

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Please indicate the business metrics used to measure the success of a significant organizational change.
(Choose up to three.)

Business Metrics Revenue growth Cost savings Market share Innovation Speed of transition/integration/restructuring Customer satisfaction Health and safety measures Employee retention Employee productivity Employee engagement 22% 22% 6% 2% 5% 17% 3% 8% 5% 8%

28

How involved was HR in your most recent organizational change?

Involvement Deeply involved in creating the strategy, then asked to execute Provided input to the strategy, then asked to execute the plan Asked to execute the plan Not involved There have not been recent organizational changes. 31% 40% 12% 9% 8%

2011 Talent Survey

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29

Does your organization use annual total compensation or total rewards statements?

Agreement Yes No 47% 53%

30

Please rate the effectiveness of your annual total compensation or total rewards statements at impacting

Effectiveness

Extremely Effective

Very Effective

Effective

Somewhat Effective

Not Effective

Employees understanding and appreciation of the value of their benefits and the organizations substantial investment in them Employee/executive retention Employee engagement Employee savings activity or participation Executives understanding of their unique pay, benefits, and wealth accumulation opportunities Participation in voluntary plans

11%

30%

37%

19%

2%

b c d

8% 4% 4%

20% 14% 17%

41% 45% 38%

26% 31% 29%

5% 7% 10%

11%

30%

38%

16%

5%

5%

16%

42%

26%

10%

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Please rate the importance of each of the following to your organizations business strategy.

Importance

Extremely Important 34% 39% 36% 33% 53% 28%

Very Important 40% 41% 42% 37% 33% 43%

Important

Somewhat Important 4% 3% 4% 7% 2% 4%

Not Important 1% 0% 1% 2% 1% 2%

a b c d e f

Employee understanding of business objectives Employee capability to deliver on business objectives Employee engagement Building a strong corporate culture Senior leadership credibility Managing organizational transformation/change Employees understanding of the value of your organizations total rewards Employees understanding of how your organizations employee benefits plans work Employees understanding of changes to policies/procedures Employee health and wellness Safety

20% 17% 18% 21% 11% 23%

15%

39%

33%

11%

2%

17%

39%

34%

8%

2%

i j k

17% 27% 36%

39% 36% 26%

35% 27% 25%

8% 9% 10%

1% 1% 3%

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32

Please rate the extent to which your organizations communication strategy is focused on the following.

Extent

Very high Extent 18% 9% 11% 18% 18% 9%

High Extent 36% 36% 34% 31% 37% 31%

Some Extent 35% 43% 42% 37% 33% 44%

Little Extent 9% 10% 11% 12% 10% 13%

None 2% 2% 3% 3% 3% 3%

a b c d e f

Employee understanding of business objectives Employee capability to deliver on business objectives Employee engagement Building a strong corporate culture Senior leadership credibility Managing organizational transformation/change Employees understanding of the value of your organizations total rewards Employees understanding of how your organizations employee benefits plans work Employees understanding of changes to policies/procedures Employee health and wellness Safety

5%

25%

44%

21%

5%

9%

39%

38%

12%

2%

i j k

8% 12% 21%

33% 35% 28%

45% 37% 31%

11% 13% 14%

2% 3% 6%

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Please select the communication areas your organization is currently investing in.
(Select all that apply.)

Communication Areas E-mail Organization intranet Online newsletters/brochures Printed newsletters/brochures Town halls/all-organization meetings Printed materials mailed to employees homes Multimedia/video Focus groups Electronic bulletin boards/dashboards (e.g., SharePoint) Instant messaging Pulse surveys Social networking (e.g., Facebook, MySpace) Blogs/discussion boards Podcasts Text messaging 61% 57% 39% 29% 42% 29% 20% 23% 24% 13% 13% 16% 12% 4% 5%

2011 Talent Survey

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34

Please select the communication areas your organization will invest in 3 years from now.
(Select all that apply.)

Communication Areas E-mail Organization intranet Online newsletters/brochures Printed newsletters/brochures Town halls/all-organization meetings Printed materials mailed to employees homes Multimedia/video Focus groups Electronic bulletin boards/dashboards (e.g., SharePoint) Instant messaging Pulse surveys Social networking (e.g., Facebook, MySpace) Blogs/discussion boards Podcasts Text messaging 36% 42% 33% 15% 27% 14% 28% 22% 31% 14% 19% 30% 21% 14% 8%

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Over the next 3 years, will your organizations total investment in communication:

Communication Investment Decrease Increase Stay the same 2% 50% 47%

36

Do you have any formal policies that dictate how employees use social networking tools?

Social Networking Policies Yes, employees are informed of our social networking usage policies No, but we are working on formulating those policies No, we have no formal policies We do not use social networking tools 39% 28% 20% 13%

2011 Talent Survey

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About Aon Hewitt

Aon Hewitt is the global leader in human resource consulting and outsourcing solutions. The company partners with organizations to solve their most complex benefits, talent and related financial challenges, and improve business performance. Aon Hewitt designs, implements, communicates and administers a wide range of human resource, retirement, investment management, health care, compensation and talent management strategies. With more than 29,000 professionals in 90 countries, Aon Hewitt makes the world a better place to work for clients and their employees. For more information on Aon Hewitt, please visit www.aonhewitt.com.

Copyright Aon Hewitt 2011