For Almost 60 Percent of U.S. CEOs Planning to Hire this Year, Finding the Right Mix of People Won’t be Easy
NEW YORK, March 20, 2012 – In a new report released by PwC US, “Delivering results: Growth and value in a volatile world,” key talent findings from PwC’s 15th Annual Global CEO Survey reveal that, similar to last year, talent remains a top priority for CEOs, and the challenge of recruiting and retaining talent is still a key concern. According to the survey, 53 percent of global CEOs and 46 percent of U.S. CEOs see the availability of key skills as a threat to their growth prospects. And a majority of CEOs (68 percent global; 71 percent U.S.) wish they could spend more time focused on developing the leadership of their business and their talent pipeline.
Even in a weak labor market, PwC’s research finds that 40 percent of U.S. CEOs and 43 percent of global CEOs said their talent-related expenses increased more than they expected in the past 12 months. According to the report, this unexpected expense increase is a reflection of the major skills mismatch issue companies face today: talent shortages during high unemployment rates.
The findings suggest that talent constraints impact innovation, as 31 percent of global and U.S. CEOs say they were not able to innovate effectively in the past 12 months. Additionally, 29 percent of CEOs said that they were unable to pursue a market opportunity or have had to cancel or delay a strategic initiative because of talent in the past 12 months.
“CEOs across industries report that they are finding it difficult to hire and retain the 'right' employees. This in turn has created increased competition for this seemingly small pool of highly sought-after talent,” said Ed Boswell, U.S. Advisory People and Change practice leader at PwC. “Given how crucial talent is to achieving a company’s objectives, more CEOs are focusing their time on talent-related issues.”
According to the report, only a minority of CEOs are ‘very confident’ that they will have access to the talent they need over the next three years. However, the challenges are acute in knowledge industries such as pharmaceuticals and life sciences, and technology, and in heavy industries such as industrial manufacturing and automotive.
PwC also finds that in order to close the talent gap and manage the future, CEOs are looking for longer-term strategic views. According to the survey, most CEOs (79 percent global; 74 percent U.S.) say that the chief human resources officer (CHRO), or equivalent, is one of their direct reports. Given that most CEOs have six to ten direct reports, the report findings suggest that CEOs are integrating HR into strategic business planning and operations.
When developing talent, two-thirds of CEOs say it is more likely talent will come from promotions within their companies over the next three years. High-potential middle managers are the employees which more than half of U.S. CEOs (56 percent) fear losing the most. These operational managers are often a critical linchpin between strategy and customers - that is, they are frequentlythe group most aware of changing customer demands and responsible for executing strategic direction. Retaining this group is essential.
Developing and retaining talent at other levels is also becoming important as well with 84 percent of U.S. CEOs saying that they are making direct investments in workforce development. There is a more active, strategic role being played by business in education.
“We are in a talent crunch that is being felt across the world,” continued Boswell. “In order to address the issue, CEOs are changing talent management strategies and looking for fresh approaches to attract, engage and retain a workforce that will remain loyal to their company.”
A copy of PwC’s 15th Annual Global CEO Survey can be downloaded at www.pwc.com/ceosurvey.
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