PwC’s 11th Annual Global CEO survey, launched earlier this year contains a number of key messages for Human Resources professionals.
Getting and keeping good people
Talent attraction, retention and development is one of the greatest headaches for CEOs. In a competitive and uncertain environment, the right talent can mean the difference between a business failing and thriving. Businesses must be able to identify the right talent with the agility needed to drive value and challenging conditions. 62% of CEOs believe they need to change the current talent strategy.
Change management
Managing people through change is a major challenge for many organisations and one of the focal areas for development is middle and senior management. In an environment of constant change (90% of CEOs have made up to 8 major current changes in the way their businesses operate in the last 3 years) the ability to mobilise people to deliver change is essential. CEOs say they are confident their leadership teams are competent to drive change but they do not see these efforts reflected in results.
A considerable part of the blame for failing to realise the benefits of major change programs is attributed to middle and senior management. 50% of CEOs say that a lack of motivation on the part of middle management is a major obstacle and 48% say that lack of change management skills and experienceat more senior levels is also a serious barrier.
Human resources capability
Is the HR function up to the job? The ability to compete for talent is critical and the sort of skills
that come with experience are particularly hard to find. CEOs are concerned that few Human Resources function are seen to be sufficiently effective in this regard. Only 43% of CEOs believe their HR teams are equipped to handle any change required to compete for talent. 39% of CEOs were unable to answer this question at all, perhaps indicating a perception that HR is a service delivery function not a driver of strategy.
Mergers and acquisitions – people issues
Are people issues a barrier to successful mergers and acquisitions? 75% of CEOs believe their main sources of competitive advantage are the ability to adapt to change, first rate customer service and access to key talent. When engaging in M&A activity, poor management of HR becomes a source of anxiety for 34% of CEOs and 30% of CEOs are concerned about conflicting workforce expectations. More than 50% of CEOs heading large companies worry about handling cultural conflicts and capturing full value of the deals
they undertake.
Key messages
The key messages for full Human Resources professionals from PwC’s latest CEO survey include the following:
- there is a need to revisit your organisation’s people strategy to better understand the human impact on the organisation through more sophisticated measurement and valuation techniques
- there is a need for a new approach to talent attraction and retention - HR needs to have the right skills in the business to ensure it is competitive, they also need to look at the demands of the “millennial generation” to understand whether their current incentive program is relevant for tomorrow’s world, and
- people need to be put at the centre of change in order to “manage change through people” – strategies and objectives are delivered by people not by systems or processes; this means that people are central to any change management program; often, unfortunately, the right people are engaged too late in the process and, at management level, not fully brought into the vision early enough.
What are the next steps?
Key action points for HR professionals to consider arising from the CEO survey include:
- demonstrating the link between people and value
- articulating the impact HR policies and procedures have on overall business strategy and demonstrating, in financial terms, how the people strategy supports the business
- taking responsibility for effectively measuring the return on investment delivered by the people strategy, and
- being seen as more than a business partner and more as a key enabler and “steward” of the organisation’s key people.
By taking these steps the HR function can work more closely with their CEO to demonstrate effectively the value it adds to the business. By working together more closely with senior management to address people challenges HR professionals will be better positioned to become a trusted advisor and better able to assist business leadership to understand the impact of people issues on the organisation's overall results.
For further information, please contact your usual PricewaterhouseCoopers Legal adviser, or:
Neil Napper, Legal Partner
Corporate and Commercial
Phone: +61 2 8266 6647
neil.napper@au.pwc.com
