Many chief executives are failing to deliver on their promises to invest in people, despite claiming it is the key to improving competitiveness, research shows.
Twelve months after consultancy PricewaterhouseCooper's (PwC) annual Business Insights survey found that improving skills was seen as the top priority for companies, this year's report found almost half of the companies admitted to not spending enough time training their people. This is despite 58% of respondents identifying learning and development as the primary driver to improving people performance.
"There is a considerable gap between corporate rhetoric and action," said Isabel McGarvie, a partner at PwC, who led the research. "Saying you will invest in HR is easy, but turning good intentions into profitable business practice is the real test."
The survey of more than 500 CEOs, finance and HR directors in medium-sized firms showed that 75% of companies claimed they were in growth and expansion mode, and that improving the performance and productivity of their people was vital to deliver that growth.
"CEOs clearly understand the fundamentals of good HR/people practice, but many appear reluctant, or unable, to implement them," said McGarvie.
"The issues raised by the research are not all about soft HR. If companies get people policies right, the impact on the bottom line is positive, and there will be less fighting in the marketplace for increasingly scarce talent. The sooner the rhetoric turns into focused activity, the sooner the bottom-line impact will come through," she added.
The report also found that HR still has quite some way to go if it is to take its place at the centre of most companies. While 73% of HR directors said they saw their role as strategic, 51% of CEOs described the primary role of the HR function as "an administrative centre".
Business Insights survey: other key findings
- 41% have no succession planning processes
- 88% said effective communication had a direct impact on the bottom line
- 92% rely on the company grapevine to communicate with staff
- 40% admit to never having carried out a staff survey
- 69% want to introduce metrics to improve people/HR effectiveness
Source: PwC Business Insights survey
COMMENTS
The PwC Business Insights survey findings will probably come as no surprise to many HR professionals.
It seems to me that there may be two main reasons for the divergence between rhetoric and practice. In the first place, too many organisations still see training as a cost rather than as a means of increasing the value of people in and to the organisation. Secondly, training and development is still frequently seen as being about sending people on training courses, with the costs of training and opportunity cost of being away from the workplace too high a price to bear, particularly for SMEs.
Significant development of staff can be achieved through really effective leadership in the organisation, particularly if the CEO and senior team set the right tone. Clearly there must be a means of ensuring that development needs align with business objectives; there are also occasions when formal training may be the most cost-effective way of meeting a development need. But organisations need to ensure that their managers see the development of their staff as a key driver of improvements in business performance, rather than an optional, and time-consuming, role once they have completed the real task!
Ian Wilder
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