Its report, Paradigm shift: building a new talent management model to boost growth, found that while high-performing companies are reaping the financial rewards by investing more in building talented teams and decentralising operations across the globe, fewer than half (45%) say they are effective at investing in talent management to meet financial targets.
In the survey of 600 global senior executives it found that companies are struggling to prepare their managers for future leadership positions by giving them exposure to different businesses and cultural environments.
Less than half (45%) of people surveyed said they are effective at investing in talent management to meet financial targets.
Achal Agarwal, president Asia Pacific at personal care corporation Kimberly-Clark, said: "Of all the barriers that can impede execution, talent is by the far the most critical.
"Without the right people in place to implement the strategic choices that have been made, companies will find it impossible to meet their objectives. I just cannot overestimate how critical it is to have the right talent and capabilities in place, and how easily lack of talent can become a barrier to growth," he said
Peter Matthews, chairman of global learning at Ernst & Young, said: "The scarcity of talent is fast turning out to be the single biggest obstacle to growth."
Liz Bingham, Ernst & Young's managing partner for people, added: "Few companies have done enough to adapt their approach to meet the complexities of the global economic and market environment.
"Companies looking for global growth will need to invest in developing an effective talent management strategy that successfully spans multiple geographies.
"The old hub-and-spoke model of a strong headquarters and a weak subsidiary that must look to the centre for all key decisions is no longer suitable."
Bingham added: "The talent model then was built for a time when demand was predictable, workloads stable, markets and management competencies well understood, and the upheavals caused by shifting demographics and technological advances still far in the future."
