Boardroom divide is letting talent slip away, reveals global report
Tom Newcombe, September 18, 2012
A Chartered Global Management Accountant (CGMA) report reveals that the financial performance and growth prospects of many businesses are being blighted by their failure to make the most of their human capital.
Talent pipeline draining growth: Connecting human capital to the growth agenda, a survey of more than 300 CEOs, CFOs and HR directors, highlighted that over two-fifths (43%) of respondents partially attributed the failure of their firms to achieve key financial targets to ineffective people management, while almost the same proportion (40%) said it has reduced their company's ability to innovate.
It also showed a significant disconnect at the senior management level with regards to talent development, as many business leaders do not agree on where the responsibility for measuring a firm's talent management strategy lies.
An overwhelming proportion of HR directors (83%) believed that there was a disconnection at high level, but less than 30% of CEOs and CFOs agreed. This hindered effective decision-making in key areas such as workforce skills, training and qualifications. For example, 77% of CEOs advocated cutting investment in these areas in the next 18months, but only 18% of HR directors agreed.
Charles Tilley chief executive of CIMA, said: "This worrying boardroom divide threatens to destabilise sustainable growth by allowing the best talent to slip away."
"It's vital that organisations embed a robust human capital strategy within the wider business plan and develop appropriate metrics and key performance indicators that are subject to the same level of scrutiny as financial data."
Arleen Thomas, CGMA senior vice president, management accounting, said: "It is clear from our research that many companies are falling short of their potential because they lack thorough, relevant information about their people to support effective strategy, hiring and training decisions."
The CGMA report was commissioned by the Chartered Institute of Management Accountants (CIMA) and the American Institute of Certified Public Accountants (AICPA), and was conducted by the Economist Intelligence Unit (EIU).
The global online survey of 313 senior executives was carried out in July 2012.