Our report presents the results of Mercer's 2006 Global Business Challenges Survey. This online survey, conducted during September 2006, explores the key business priorities of a broad range of organizations and identifies the human resource management agenda of these organizations in addressing these business priorities.

We received a total of 406 responses to our survey, encompassing 373 organizations ranging from small, emerging private companies to some of the world's largest and most global corporations. 

You can download a brief version of the report (9 pages), the full report (40 pages) and a copy of a presentation deck with more information in PDF format on this page.

Capturing the emerging business challenges

Early in 2006 we conducted an extensive review of recent research prepared by a variety of consulting firms and academic, governmental and other relevant institutions. The focus of our review was the identification of the primary business challenges that our clients – mostly publicly held, multinational organizations – are facing.

Our review identified seven key challenges:

1. Changing Workforce Demographics - Increasing pressure from aging employee populations on leadership succession, workforce productivity, the financing of retirement and health care programs, and intergenerational knowledge transfer
   
   
2. Continuously Improving Processes - Better, faster, cheaper…all management and administration processes are under scrutiny, none more so than HR administration and the growing pressure to outsource or offshore employee services
   
   
3. Controlling Costs and Managing Risk - Reducing organizational costs and liabilities in order to meet earnings targets and to protect the investment dollars needed to generate growth; reducing the possibility of unanticipated events that may negatively impact business performance
   
   
4. Engaging Employees - The impact of employees’ changing commitment to the organization, due to reduced or eliminated investments in long-term employee development and tenure, such that employees have developed more of a “free agent” mentality to career development and organizational loyalty
   
   
5. Generating Top-Line Revenue Growth - Enhancing top-line revenue growth and market share through product innovation, increasing sales to existing customers, and identifying and securing new markets
   
   
6. Globalizing Business Operations - Acquiring, organizing and strategically deploying global resources, identifying and securing new markets, meeting the needs of global customers, and creating global alliances and partnerships
   
   
7. Responding to Emerging Skills Shortages - Attracting and retaining the talent needed to support a successful business model in an environment where key resources are increasingly difficult to identify as a result of changing education standards and rapidly changing organizational needs

What became clear from our review is that each of these challenges has significant implications for the management of human resources. It furthered our view that it is the way in which an organization manages its human capital and, in particular, how well it aligns its human capital with business strategy that is the difference between organizational success and mediocrity.

What was missing from our initial review, however, was a direct understanding of how these business challenges are prioritized by our clients and how they are driving the agenda for human resource management and specific HR-related activities, now and in the foreseeable future.

Consequently our survey asked participants to:

• Prioritize their current business challenges
  
  
• Identify their most prominent HR-related activities in response to each challenge

We analyzed the responses in order of priority and summarized activities under HR management headings, more specific details of which form the main content of this report.

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