While ineffective people management is considered a key reason that organisations fail to hit financial targets, a worrying boardroom divide over who should take responsibility is wreaking havoc.
According to a report entitled ‘Talent pipeline draining growth: Connecting human capital to the growth agenda’, although a huge 83% of HR directors believe that talent management falls within their remit, less than three out of 10 chief executives and chief financial officers agree.
But this situation is leading to disagreement about key elements of business strategy. For example, 77% of CEOs advocated cutting expenditure in areas such as training, skills development and staff qualifications over the next 18 months, while only 18% of HR directors felt the same.
Nonetheless, the survey conducted among 313 senior executives by the Economist Intelligence Unit, indicated that 43% acknowledged that a failure to hit key financial targets was down to inadequate people management, while two out of five admitted that it was leading to poor levels of innovation.
Charles Tilley, chief executive of the Chartered Institute of Management Accountants, which commissioned the report along with the American Institute of Certified Public Accountants, said: “This worrying boardroom divide threatens to destabilise sustainable growth by allowing the best talent to slip away.”
As a result, it was vital that organisations included a robust people management strategy within their wider business plan and developed appropriate metrics and key performance indicators that were subject to the same level of scrutiny as financial data, he added.
