Welcome to the ‘World of Work’ blog, where KPMG’s experts will be sharing our views on topics and news which highlights how business performance can be improved through people.
I’m kicking off with my thoughts on a Financial Times article (subscription required). It highlights the key challenges cited by CEOs, globally and by region, according to a survey of 1,020 respondents by the US-based Conference Board.
This annual ‘CEO Challenge’ study cites European executives’ top priority in 2014 as being human capital. This is followed by customer relationships and innovation (human capital is also ranked highest globally). Interestingly, the survey’s top five planned approaches to addressing this human capital challenge are:
These findings should help focus minds on where HR competitive advantages will be won or lost as businesses look to their growth agendas.
If I could add two further approaches to this list, I’d highlight the importance of matching the capacity, location and skills of the workforce to forecasted business needs – not just today’s needs. I’d also add that, as economic conditions improve, it’s important to get the right mix of skills and the right pace of growth in a way which is cost effective and represents good value to the wider business and its investors.
How to retain ‘critical’ talent - number three in the list - is unsurprisingly back in the spotlight, given the signs of improved economic conditions. Attitudes towards critical talent are maturing. It’s better understood that having the right roles and a whole workforce approach to talent management are as important as focusing on star performers. Ways of working are becoming ever-more complex and ‘war for talent’-style approaches lack the sophistication needed today.
Turning to training and development: All the evidence points to the effort and resources dedicated to training and development having a high return on investment. This applies both in financial terms and improving employee engagement and productivity – so this is a rewarding focus area.
The last of the five planned approaches to addressing human capital challenges, ‘improving corporate brand and employee value propositions to attract talent’, reflects the fact that as the employment market becomes more competitive, organisations will find themselves having to work hard to attract talent. Focusing on having the right corporate brand and employee value proposition is seen as being a powerful asset in achieving this aim.
The HR function cannot assume a right to help the CEO with this human capital agenda, but I can’t remember a better opportunity for HR to play such a central role in steering businesses towards success.
This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.