A recent Mercer survey, Human capital planning 2010, revealed the challenges and concerns employers face as they contemplate or initiate human capital planning for the coming year. The survey, conducted in July 2009, drew responses from nearly 160 US employers representing a range of sizes and industries. Following is a summary of the key findings, with variations by organization size or ownership highlighted:

• The planning process is expected to change most.
  • More than half of the respondents (51 percent) said the process used to set strategic human capital priorities is likely to be somewhat or significantly different this year. Fewer expected the number of stakeholders involved in the process (43 percent), the analytical tools and data used in the process (42 percent) or the timing of the process (35 percent) to be different.
    
    
• Cost and economic factors continue to dominate.
  • By far, respondents expected that the greatest challenge for the 2010 human capital planning process will be dealing with the uncertainty of the economic environment (69 percent).
  • Most organizations (66 percent) indicated that the primary driver for their 2010 human capital decisions will be cost containment/ reduction, as opposed to responding to noncost business needs (20 percent) or matching competitive practices (14 percent).
  • Respondents were asked whether various aspects of human capital planning would receive more, less or about the same level of emphasis in 2010 (see Exhibit 1 on page 5). The area most likely to receive increased emphasis is workforce costs (63 percent), followed by high-potential employees (60 percent), critical skills (54 percent) and development of workforce contingency plans based on different business scenarios (51 percent). Responses to this question varied significantly by organization and ownership. For example, nonprofit entities (74 percent) and organizations with less than $1 billion in revenue (69 percent) are most likely to place increased emphasis on workforce costs, while organizations with fewer than 1,000 employees (65 percent) are significantly more likely to develop workforce contingency plans based on different business scenarios.
    
    
• Despite emphasis on critical talent, gaps remain.
  • Respondents were relatively confident that they had correctly identified their critical skills and high-potential employees, but less confident that they had communicated this information effectively or had adapted their human capital programs to meet the needs of these groups. Likewise, respondents were not as confident that these valuable employees would stay with their organizations as the economy improves. Nonprofit organizations were least confident about whether they had correctly identified high-potential employees. Larger organizations with 5,000 or more employees were least confident of retaining high-potential employees and those with critical skills.

• Elements of employment deals are expected to change.
  • Most respondents were very (21 percent) or somewhat (75 percent) confident that their current employment deals will attract the future workforce they need to meet business requirements.
  • However, more than four in 10 respondents indicated that their employment deals will include a greater emphasis on career development (47 percent), incentive compensation (42 percent) and leadership connection with the workforce (41 percent) in 2010. The emphasis on retirement benefits and base pay is least likely to change.

• Governmental actions are likely to have an impact.
  • Most respondents expected that governmental reform and regulatory proposals and/or actions around pay, benefits and other workforce issues (for example, unionization) will affect their human capital planning and decisions for 2010; 18 percent said the impact is likely to be significant, while 47 percent said they believe it will be moderate.
    
    
• Respondents have confidence in their HR functions.
  • Most participants indicated they are very (37 percent) or somewhat (56 percent) confident that they have the right HR organization and resources to effectively implement their 2010 human capital plans.