Without the right people, companies cannot attain maximum profitability and effectiveness. That is why the paths of HR and finance are starting to increasingly overlap in companies today. Interesting news about this was brought, for example, by a recent international study called Talent Pipeline Draining Growth: Connecting human capital to the growth agenda, which was prepared by The Economist Intelligence Unit research company for the American Chartered Institute of Management Accountants (CIMA) and American Institute of Certified Public Accountants (AICPA) organizations. The study -- which involved 313 senior managers in the positions of executive, finance and HR directors of mostly large companies from the entire world, and the results of which were reported by the businessfinancemag.com website -- pointed out the following six important problems:
1. Problems in talent management
The respondents expressed their dissatisfaction with the quality and usefulness of company data about employees as well as with the ability of companies to work with this data. This makes it impossible to make effective decisions related to human capital management. And that is why it is necessary for human resources to work together more with finance because finance knows how to collect and analyze data better than anyone else.
2. Differing opinions held by directors on talent management
Whereas CEO’s and CFO’s have a similar opinion on talent management, HR directors think differently. For example, 77 % of CEO’s consider decreasing expenditures on employee education and skills and qualifications development to be a part of the company’s strategy in the following 18 months. The same opinion is held by 49% of CFO’s, but only by 18% of HR directors. Which is why all of these executives should meet and clarify their priorities.
3. Bad succession planning
51 % of respondents said that their companies do not have formal succession management plans at the level of the highest executive positions such as CEO, CFO and COO. In spite of this, 36 % of HR directors believe that their company has enough talent among its employees. But only 10% of CEO’s and CFO’s also think this. So once again the need for a joint discussion is pretty clear here.
4. Lack of tools for talent management
Companies need better data and indicators so that they can designate with greater certainty the specific tools that will always be most suitable for specific situations.
5. Differing opinions held by directors on who should measure the effectiveness of talent management
Here the opinions of CEO’s and CFO’s on one side, and HR directors on the other, differ once again. Two thirds of CEO’s believe that measuring talent management effectiveness is the domain of CFO’s. However, 83 % of HR directors consider this measuring to be their own domain. But the right path will again most likely be one of cooperation.
6. Insufficient quality of data and analytical tools
Only 12% of CEO’s are satisfied with the data on the company’s human capital. And even 38% of HR directors admit that they lag behind in this area.
The full study can be downloaded for free at this site.
-kk-