The Chartered Global Management Accountant (CGMA) report, "Talent pipeline draining growth: Connecting human capital to the growth agenda", 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.
The survey of more than 300 CEOs, CFOs and HR Directors highlighted that over two fifths (43pc) of respondents partially attributed the failure of their firms to achieve key financial targets to ineffective people management, whilst almost the same proportion (40pc) say it has reduced their company's ability to innovate. There is also 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 (83pc) believe it is their remit yet conversely less than 30pc of CEOs and CFOs agree. This hinders effective decision making in key areas such as workforce skills, training and qualifications. For example 77pc of CEOs advocated cutting investment in these areas in the next 18 months, but only 18pc of HR directors agreed.
The survey was carried out by the Economist Intelligence Unit (EIU) on behalf of the Chartered Institute of Management Accountants (CIMA) and the American Institute of Certified Public Accountants (AICPA). Charles Tilley FCMA, CGMA, Chief Executive, CIMA, said "This worrying boardroom divide threatens to destabilise sustainable growth by allowing the best talent to slip away. It is vital that organisations embed a robust human capital strategy within the wider business plan and develop appropriate metrics and KPIs that are subject to the same level of scrutiny as financial data.
Arleen Thomas CPA, CGMA, Senior Vice President - Management Accounting, AICPA, said: "Ideas are the currency of the knowledge economy so human capital must be managed as rigorously as financial capital. 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".-PR
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