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Organisations facing leadership ‘capability gap’

Organisations are facing a leadership “capability gap” and cite leadership as one of their biggest challenges, according to research by Deloitte.

The firm’s UK Human Capital Trends 2015 report found 86% of UK organisations say leadership is one of their biggest challenges. Only 8% ranked their leadership pipeline as ‘excellent’.

The research also highlighted a capability gap. The difference between the importance of leadership and how ready organisations feel they are to succeed in this area has risen to 35, the widest gap of any HR issue in the report.

It also found businesses are falling short in developing Millennial leaders, as only 6% of companies said they have “excellent” programmes in place for younger staff.

Deloitte UK’s head of human capital practice Anne-Marie Malley warned that firms need to “urgently address” this issue.

“By 2025, Millennials will represent three-quarters of the workforce,” she said. “With four million Baby Boomers retiring each year, Millennials will become ever more important to organisations, and shape the world of work in the future. And yet our research shows a clear lack of commitment to this vital group’s development."

Learning and development is another key concern for UK businesses, with organisations ranking it the fourth most pressing challenge, up from 11th in 2014.

While 80% of UK businesses said workforce capability was an important challenge, only 4% said they were “very ready” to address it. The research suggests organisations are also missing out on the benefits of using technology to support learning, with only 8% saying they are excellent at providing mobile learning.

The HR function in particular is also missing out on learning opportunities, with no respondents feeling their organisation provides “excellent” development for HR.

Only one in 10 (10%) rated the performance of their HR as excellent and 66% said the functions are ill-equipped to manage the fast pace of change in their businesses.

Malley said HR is now expected to be “bold, agile, business-integrated, data-driven and deeply skilled in attracting, retaining and developing talent, to align to the overall goals of the organisation”.

She added: “Companies are seeing an increasing demand for leadership at all levels, especially among Millennials. However, improvements are not coming through fast enough. It is clear that something needs to change in order for UK businesses to effectively navigate the new world of work.”