1. Challenges Facing HR Over the Next 10 Years
November 1, 2012

2. Key Findings
What will be the three biggest challenges facing HR executives over the next 10 years? Retaining and rewarding the best employees (59%), developing the next generation of corporate leaders (52%), and creating a corporate culture that attracts the best employees to organizations (36%).
What will be the biggest investment challenge for organizations over the next 10 years? About two-fifths (43%) of HR professionals indicated that obtaining human capital and optimizing human capital investments will be the biggest investment challenge.
Which tactics will be the most effective in attracting, retaining and rewarding the best employees over the next 10 years? The top four responses were providing flexible work arrangements (40%); creating an organizational culture where trust, open communication and fairness are emphasized and demonstrated by leaders (37%); providing employees with opportunities for career advancement (26%); and offering a higher total rewards package than organizations that compete for the same talent (26%).
How do HR Professionals expect the future workforce to evolve over the next 10 years? In terms of workforce size, the majority (69%) of HR professionals expect their organization to have a larger workforce in 10 years. Just over one-half (54%) indicate that their use of contract/temporary employees will not change, and 29% expect a growing proportion of contract/temporary employees. Nearly one-half (47%) indicate that over the next 10 years there will be a greater proportion of full-time employees, whereas the other half believe the workforce will stay the same (27%) or have more part-time employees (26%).
Challenges Facing HR Over the Next 10 Years ©SHRM 2012

3. Key Findings (continued)
Which HR competencies will be most critical 10 years from now? Over one-third of HR professionals think that the four most critical competencies in 10 years will be business acumen (42%), organizational leadership and navigation (40%), relationship management (37%), and communication (35%).
What components (subcompetencies) of business acumen will be most critical in 10 years? HR professionals expect the top three components to be HR and organizational metrics/analytics/business indicators (45%), knowledge of business operations and logistics (41%), and strategic agility (41%).
What bodies of knowledge do HR professionals rate as being the most important in 10 years? The four bodies of knowledge that were rated as most important were strategic business management, talent management, change management, and workforce planning and employment.
Challenges Facing HR Over the Next 10 Years ©SHRM 2012

4. Challenges in HR
Challenges Facing HR Over the Next 10 Years ©SHRM 2012

5. Over the next 10 years, what do you think will be the three biggest challenges facing HR executives at your organization?
Note: Percentages do not total 100% due to multiple response options. Respondents who answered “don’t know” were excluded from this analysis.
Challenges Facing HR Over the Next 10 Years ©SHRM 2012

6. Comparisons by organization sector
Over the next 10 years, what do you think will be the three biggest challenges facing HR executives at your organization?
Comparisons by organization sector
Publicly owned for-profit and privately owned for-profit organizations are more likely than nonprofit organizations to indicate that finding the right employees in the right markets where we do business around the world is one of the biggest challenges facing HR executives.
Comparisons by organization sector
Publicly owned for-profit (24%)
Privately owned for-profit (19%)
>
Nonprofit (8%)
Note: Only statistically significant differences are shown.
Challenges Facing HR Over the Next 10 Years ©SHRM 2012

7. Over the next 10 years, what do you think will be the biggest investment challenge facing organizations?
Note: Percentages do not total 100% due to rounding.
Challenges Facing HR Over the Next 10 Years ©SHRM 2012

8. Talent Management Tactics
Challenges Facing HR Over the Next 10 Years ©SHRM 2012

9. Over the next 10 years, which of the following tactics do you believe will be most effective in attracting, retaining and rewarding the best employees in your organization?
Note: Percentages do not total 100% due to multiple response options. An asterisk (*) indicates option was not included on 2010 survey.
Challenges Facing HR Over the Next 10 Years ©SHRM 2012

10. Comparisons by organization sector
Over the next 10 years, which of the following tactics do you believe will be most effective in attracting, retaining and rewarding the best employees in your organization?
Comparisons by organization sector
Nonprofit organizations are more likely than privately owned for-profit organizations to indicate that creating an organizational culture where trust, open communication and fairness are emphasized and demonstrated by leaders is one of the most effective tactics in attracting, retaining and rewarding the best employees.
Comparisons by organization sector
Nonprofit (51%)
>
Privately owned for-profit (33%)
Note: Only statistically significant differences are shown.
Challenges Facing HR Over the Next 10 Years ©SHRM 2012

11. Future Workforce
Challenges Facing HR Over the Next 10 Years ©SHRM 2012

12. Over the next 10 years, how do you expect the size of your organization’s workforce to evolve?
Note: Respondents who answered “don’t know” were excluded from this analysis.
Challenges Facing HR Over the Next 10 Years ©SHRM 2012

13. Over the next 10 years, how do you expect the size of your organization’s workforce to evolve?
Comparisons by organization sector
Privately owned for-profit organizations are more likely than nonprofit and government organizations to expect the size of their organization’s workforce to grow larger over the next 10 years.
Comparisons by organization sector
Privately owned for-profit (80%)
>
Nonprofit (62%)
Government (36%)
Government organizations are more likely than privately owned for-profit organizations to expect the size of their organization’s workforce to get smaller over the next 10 years.
Comparisons by organization sector
Government (39%)
>
Privately owned for-profit (11%)
Nonprofit organizations are more likely than privately owned for-profit organizations to expect the size of their organization’s workforce to have no change over the next 10 years.
Comparisons by organization sector
Nonprofit (23%)
>
Privately owned for-profit (10%)
Challenges Facing HR Over the Next 10 Years ©SHRM 2012
Note: Only statistically significant differences are shown.

14. Over the next 10 years, how do you expect your organization’s use of contract or temporary employees to evolve?
Note: Respondents who answered “don’t know” were excluded from this analysis.
Challenges Facing HR Over the Next 10 Years ©SHRM 2012

15. Comparisons by organization staff size
Over the next 10 years, how do you expect your organization’s use of contract or temporary employees to evolve?
Comparisons by organization staff size
Organizations with 25,000 or more employees are more likely than organizations with 1 to 2,499 employees to expect a growing proportion of contract or temporary employees over the next 10 years.
Comparisons by organization staff size
25,000 or more employees (57%)
>
1 to 99 employees (25%)
100 to 499 employees (21%)
500 to 2,499 employees (29%)
Note: Only statistically significant differences are shown.
Challenges Facing HR Over the Next 10 Years ©SHRM 2012

16. Over the next 10 years, how do you expect your organization’s employment status to evolve?
Note: Respondents who answered “don’t know” were excluded from this analysis. Percentages may not total 100% due to rounding.
Challenges Facing HR Over the Next 10 Years ©SHRM 2012

17. Over the next 10 years, how do you expect your organization’s employment status to evolve?
Comparisons by organization staff size
Organizations with 25,000 or more employees are more likely than organizations with 1 to 99 employees to expect a growing proportion of regular part-time employees over the next 10 years.
Comparisons by organization staff size
25,000 or more employees (44%)
>
1 to 99 employees (16%)
Comparisons by organization sector
Privately owned for-profit organizations are more likely than nonprofit and government organizations to expect a growing proportion of regular full-time employees over the next 10 years.
Comparisons by organization sector
Privately owned for-profit (58%)
>
Nonprofit (38%)
Government(21%)
Government organizations are more likely than privately owned for-profit organizations to expect a growing proportion of regular part-time employees over the next 10 years.
Comparisons by organization sector
Government (50%)
>
Privately owned for-profit (21%)
Challenges Facing HR Over the Next 10 Years ©SHRM 2012
Note: Only statistically significant differences are shown.

18. HR Competencies
Challenges Facing HR Over the Next 10 Years ©SHRM 2012

19. Ten years from now, which of the following competencies do you see being most critical for the HR professional?
Note: n = 472. Percentages do not total 100% due to multiple response options.
Challenges Facing HR Over the Next 10 Years ©SHRM 2012

20. Ten years from now, which of the following competencies do you see being most critical for the HR professional?
Comparisons by organization staff size
Organizations with 2,500 or more employees are more likely than organizations with 1 to 99 employees to see business acumen as being most critical for the HR professional 10 years from now.
Comparisons by organization staff size
2,500 to 24,999 employees (56%)
25,000 or more employees (59%)
>
1 to 99 employees (24%)
Organizations with 100 to 499 employees are more likely than organizations with 2,500 to 24,999 employees to see HR technical expertise and practice as being most critical for the HR professional 10 years from now.
Comparisons by organization staff size
100 to 499 employees (35%)
>
2,500 to 24,999 employees (14%)
Organizations with 2,500 to 24,999 employees are more likely than organizations with 100 to 499 employees to see global and cultural effectiveness as being most critical for the HR professional 10 years from now.
Comparisons by organization staff size
2,500 to 24,999 employees (27%)
>
100 to 499 employees (10%)
Note: Only statistically significant differences are shown.
Challenges Facing HR Over the Next 10 Years ©SHRM 2012

21. Comparisons by organization sector
Ten years from now, which of the following competencies do you see being most critical for the HR professional?
Comparisons by organization sector
Publicly owned for-profit organizations are more likely than nonprofit organizations to see business acumen as being most critical for the HR professional 10 years from now.
Comparisons by organization sector
Publicly owned for-profit (57%)
>
Nonprofit (34%)
Challenges Facing HR Over the Next 10 Years ©SHRM 2012
Note: Only statistically significant differences are shown.

22. Ten years from now, when considering Business Acumen for HR professionals, which of the following components (i.e., subcompetencies) will be most critical?
Note: n = 469. Percentages do not total 100% due to multiple response options.
Challenges Facing HR Over the Next 10 Years ©SHRM 2012

23. Comparisons by organization staff size
Ten years from now, when considering Business Acumen for HR professionals, which of the following components (i.e., subcompetencies) will be most critical?
Comparisons by organization staff size
Organizations with 2,500 to 24,999 employees are more likely than organizations with 1 to 99 employees to consider HR and organizational metrics/analytics/business indicators as being most critical for the HR professional 10 years from now.
Comparisons by organization staff size
2,500 to 24,999 employees (57%)
>
1 to 99 employees (34%)
Note: Only statistically significant differences are shown.
Challenges Facing HR Over the Next 10 Years ©SHRM 2012

24. Rate the importance of these bodies of knowledge for HR professionals 10 years from now.
Body of Knowledge
Average Rating (0 to 10)
Strategic Business Management
8.8
Talent Management
8.6
Change Management
8.5
Workforce Planning and Employment
Compensation and Benefits
8.3
Human Resource Development
8.2
Employee and Labor Relations
8.1
HR Technology
8.0
Risk Management
7.7
Global and International Human Resources
6.9
Note: n = 446. Respondents rated each body of knowledge on a scale from 0 (not important) to 10 (very important).
Challenges Facing HR Over the Next 10 Years ©SHRM 2012

25. Organization Demographics
Challenges Facing HR Over the Next 10 Years ©SHRM 2012

26. Demographics: Organization Industry
Percentage
Professional, scientific and technical Services
20%
Health care and social assistance
17%
Manufacturing
16%
Educational services
13%
Finance and insurance
12%
Accommodation and food services 7%
Transportation and warehousing 6%
Arts, entertainment and recreation 5%
Government agencies
Administrative and support and waste management and remediation services 4%
Religious, grant-making, civic, professional and similar organizations
Note: n = 461. Percentages do not total 100% due to multiple response options.
Challenges Facing HR Over the Next 10 Years ©SHRM 2012

27. Demographics: Organization Industry (continued)
Percentage
Retail trade 4%
Construction 3%
Information
Real estate and rental and leasing
Repair and maintenance
Wholesale trade
Agriculture, forestry, fishing and hunting 2%
Mining 1%
Personal and laundry services
Utilities
Other 9%
Note: n = 461. Percentages do not total 100% due to multiple response options.
Challenges Facing HR Over the Next 10 Years ©SHRM 2012

28. Demographics: Organization Sector
Challenges Facing HR Over the Next 10 Years ©SHRM 2012

29. Demographics: Organization Staff Size
Challenges Facing HR Over the Next 10 Years ©SHRM 2012

30. Other Demographics
Is your organization a single-unit organization or a multi-unit organization?
Does your organization have U.S.-based operations (business units) only, or does it operate multinationally?
Single-unit organization: An organization in which the location and the organization are one and the same.
28%
Multi-unit organization: An organization that has more than one location.
72%
U.S.-based operations only
71%
Multinational operations
29%
n = 470
n = 473
For multi-unit organizations, are HR policies and practices determined by the multi-unit headquarters, by each work location or by both?
What is the HR department/function for which you responded for throughout this survey?
Multi-unit headquarters determines HR policies and practices
51%
Each work location determines HR policies and practices 3%
A combination of both the work location and the multi-unit headquarters determines HR policies and practices
46%
Corporate (companywide)
71%
Business unit/division
17%
Facility/location
12%
n = 348
n = 347
Challenges Facing HR Over the Next 10 Years ©SHRM 2012

31. Challenges Facing HR Over the Next 10 Years
Survey Methodology
2012 response rate = 17%
2010 response rate = 17%
Sample composed of 487 (2012) and 449 (2010) randomly selected HR professionals from SHRM’s membership
Margin of error +/-5%
2012 survey fielded September 14 to September 28, 2012
2010 survey fielded August 10 to August 23, 2010
Challenges Facing HR Over the Next 10 Years ©SHRM 2012

32. Challenges Facing HR Over the Next 10 Years
About SHRM Research
For more survey/poll findings, visit
For more information about SHRM’s Customized Research Services, visit
Follow us on
Project leader:
Tanya Mulvey, survey research analyst, SHRM Research
Project contributors:
Mark Schmit, Ph.D., SPHR, vice president, SHRM Research
Evren Esen, manager, Survey Research Center, SHRM Research
Alexander Alonso, Ph.D., SPHR, director, HR Thought Leadership
Copy editor:
Katya Scanlan, SHRM Knowledge Center
Challenges Facing HR Over the Next 10 Years ©SHRM 2012