- Our new talent survey with 3Sixty Insights explored the top concerns and challenges among HR leaders today. Only 18% of HR leaders surveyed said they are fully involved in business strategy, regularly collaborating with the C-suite, and that their talent strategy aligns with business objectives.
- This disconnect extends beyond the C-suite level with 71% of HR leaders saying they struggle with staffing challenges. A staggering 82% of employees told us they’ve looked for a new job within the past 12-18 months.
- HR disconnects and inefficiencies are contributing to $8.9 trillion lost due to low employee engagement, according to Gallup.
- HR leaders must devote more resources to understanding their current employees’ skills and capabilities, enabling them to better align work to business goals and achieve desired outcomes through insights-driven hiring strategies.
Your talent strategy has a significant impact on your business strategy—and if left misaligned, could harm your organization’s overall health and longevity.
According to our latest talent survey, completed with marketing research firm 3Sixty Insights, only 18% of HR departments effectively coordinate business strategy development, C-suite collaboration, and talent strategy alignment.
As a result, employees aren’t satisfied with internal opportunities and are looking elsewhere, HR is struggling to attract and retain skilled talent, and HR leaders don’t feel there is alignment between business objectives and talent strategies.
This top-down misalignment is proving detrimental to the overall health of the organization. While 71% of HR leaders told us they struggle with staffing challenges—especially when it comes to their top priority of recruiting new talent—82% of employees told us that they’ve looked for a new job in the past 12-18 months.
This disconnect between employer needs and employee expectations is contributing to significant business losses. A recent Gallup study found that HR inefficiencies and disconnects are contributing to a staggering $8.9 trillion, or 9% of global GDP, lost due to low employee engagement.
HR needs skilled talent. Employees want better opportunities. And the business needs people to drive objectives.
Strategic alignment is within reach—and the answer comes down to skills intelligence.
Here’s what we, as executives, must understand about the HR-business disconnect and how we can empower everyone to succeed.
Related content: The disconnect is real—and so is the solution. Read the entire talent survey now to learn more about how an insights-driven, skills-based approach can bring any organization back into alignment.
Employees are dissatisfied and looking elsewhere
I’ve got some bad news for you: most of your organization’s employees are likely looking for a new job.
Well, maybe not most of your organization’s employees. Perhaps your organization is that rare exception. Nonetheless, our survey found that 82% of employees were actively looking for another job.
That’s the same percentage of HR leaders we surveyed who said lowering turnover rates was a top priority for the next 12-18 months.
Certainly, those HR leaders are addressing what’s causing employee dissatisfaction to reduce turnover, right? They may be—they certainly believe they are—but employees aren’t seeing evidence of it.
Many employees believe HR is more focused on recruiting than retention—and they’re not wrong. The majority, 83%, of HR leaders told us that their top priority over the next 12-18 months is recruiting better candidates, with only 66% saying that cross-training or upskilling current employees is a priority.
When HR leaders were asked what initiatives are a priority to develop over the next 18 months, they ranked gaining a better understanding of the skills makeup in their talent networks last, with only 52% saying it’s a priority.
In our survey, employees said opportunities for promotion are the most important career tools an employer can offer, yet 47% of employees dissatisfied with their jobs do not believe their company supports internal mobility. This discrepancy points to a considerable gap between HR and the employees they’re meant to support.
To bridge this gap, HR needs to have a full understanding of their current workforces’ skills makeup—and the skills gaps they need to fill to support the business.
The benefits are many: reduced skills gaps, a more satisfied and motivated workforce, and slashed external recruitment costs with minimal staff turnover. These are critical benefits at a time when competitive organizations cannot afford to let top talent go due to a perceived lack of opportunities.
HR struggles go beyond recruitment
The majority of HR leaders reported struggling with both retaining and attracting talent. While many are still focused on recruiting at 83%, 82% said that lowering turnover, and identifying internal high performers to promote, at 81%, were their top three priorities.
And while they said they’re invested in their current talent—75% of HR leaders told us that they think they have the right tools and resources to help employees grow in their roles—only 52% cited gaining a better understanding of their current employees’ skill sets as a priority. In fact, nearly one in five HR respondents admitted that they have little to no insight into the skills makeup of their organization’s workforce.
How can you hire or promote talent if you don’t know what skills you already have—and what you need?
If HR teams were to put as much effort into understanding the skill sets of their current employees and the needs of the business as they do in staffing, they would be better positioned to identify high-performing employees suitable for promotion, or refocus energy on reskilling and upskilling current employees.
These moves would go a long way to reduce staff turnover because they align with employees’ needs. Additionally, internal recruitment lifts morale by showing employees that the organization values their contributions. What’s more, reskilling and further developing existing talent could help fill any existing and anticipated skills gaps the business foresees.
Of course, this assumes that HR has insight into and involvement in the organization’s overriding objectives and strategies—not a safe assumption to make. In turn, both executives and HR must prioritize using technology to gain insights into the skills makeup of their workforces.
HR must become a strategic business partner—for everyone
Only 53% of the HR leaders surveyed said they were fully involved in overall business strategy from the outset, with only 52% consistently collaborating with the C-suite on long-term, strategic initiatives for the business. Only 44% felt there was full alignment between business objectives and talent strategy.
If HR isn’t fully aligned with executive priorities, how can they effectively plan their workforces to deliver on that work?
Again, the answer comes down to skills. With a complete view of the skills you have, the skills you need, and even a roadmap of how to acquire them (buy, build, or borrow) via talent intelligence, HR leaders are poised to take their seats at the table with the data-driven insights they need to support the business.
Aligning talent—one of the most important assets any organization has—to work benefits the bottom line. The average cost of replacing an employee can cost half to two times their annual salary, according to Gallup.
That 82% of employees looking for new opportunities elsewhere could be stemmed if HR leaders explored the skills makeup of their workforces before looking for external candidates.
HR and executive leaders must find ways to effectively use skill insights to offer scalable, meaningful, and effective opportunities for employees and move the business forward at the same time.
How to bridge the talent-business gap
Despite the struggles, 96% of global companies surveyed told us that they currently use or plan to use AI, with 67% showing high satisfaction with their current tools and a plan to invest even more in AI-powered HR technologies.
AI-powered talent intelligence can go beyond recruiting to give HR and leaders a complete view of the talent life cycle. That includes actionable insights based on skills insights that can help manage talent.
AI can identify employees ready for upskilling or reskilling, putting them on a career development path toward more interesting work or even promotions.
Conversely, employees can use talent intelligence to drive their careers by discovering training opportunities, interesting projects, mentors, and more—all through a skills-based lens showing them what’s possible.
These implementations can and will improve employee satisfaction and retention.
What’s more, by analyzing internal and external data, talent intelligence can help HR predict future talent needs and proactively identify potential skills gaps, all aligned to the organization’s overall objectives.
When HR devotes more time to understanding the business and strategically developing, cross-training, and promoting employees, they keep and make the most of their talent—the best-case scenario for any organization.
Executives can help talent leaders succeed by inviting HR, as the experts and stewards of talent, to be strategic advisers to the business. HR wins by reducing turnover and filling skills gaps. And the organization benefits by gaining a more motivated and productive workforce aligned to delivering on business goals.
The opportunity for greater alignment in talent strategies across the entire organization is now. The only question remains: are you ready to take it?
For more findings from the Eightfold and 3Sixty Insights talent survey, download the full report.
Chano Fernandez is Co-CEO of Eightfold AI. Chano brings over 20 years of global leadership and entrepreneurial experience in the technology sector, with a focus on cloud, SaaS and enterprise software solutions. At Eightfold, he will continue to demonstrate his exceptional ability to scale businesses in a profitable and accelerated fashion, in close collaboration with his teams. Prior to joining, Fernandez held senior leadership positions at several companies including SAP, Infor, Blue C, McKinsey & Company and most recently as Co-CEO at Workday.