Taleo's HR Challenges Survey asked more than 100 senior HR managers in the UK about the challenges they expect to face in the coming 12 months, what tools they need to help them and their HR budget expectations.
The survey found HR's top three challenges for 2010 to be succession planning, employee retention and providing leadership with better management information and reporting.
Employee retention was named as HR's biggest challenge in each of the previous three years. This year's emphasis on succession planning suggests that HR will also be focused on longer term growth drivers in 2010.
HR departments may not have additional budget to help them manage talent and support business leadership. Seven out of ten respondents 70% predicted less than 10% of their organisation's technology spend will be invested in tools to help them manage their talent in 2010.
More people expect their budgets to be reduced this year (32%), than expect it to rise (18%). But there are signs that the economic turmoil of the last year is stabilising, with 50% of respondents not anticipating any change in budget.
Chris Phillips, vice president of international marketing for Taleo, said: "Succession planning is now critical to ensure businesses have the talent they need to grow. Strategic succession planning links the leadership pipeline with top performer retention and leverage. As the economy slowly recovers, HR managers are worrying about short and long term employee retention. They are especially focused on identifying and engaging their key employees before they start to think about a move."
For the second consecutive year, HR managers agreed that the one thing that would help them do their jobs better in 2010 would be a software solution to improve performance management, succession and career planning.
Phillips added: "Given the continued squeeze on budgets, HR managers will need to be creative about saving money to help fund new projects. One tactic is reducing or eliminating recruiting agency fees by recruiting online or through internal mobility programmes. Given even a reasonable level of turnover, these savings can fund investments in other strategic areas, such as succession planning tools. The organisations that get succession planning right and hold on to their key talent will be the ones making the strongest recoveries in the shortest amount of time."
