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    You are here Home » CEOs

    The Three Human Capital Management Concerns Keeping U.S. CEOs Up At Night

    Last updated on Jun 5, 2014 by Dan McCarthy · This post may contain affiliate links

    Guest post from Bhushan Sethi:

    Most US
    CEOs say
    technological advances will transform their businesses within the
    next five years. But almost three quarters say they’re worried about the skills
    gap
    in their organizations.

    After surveying 1,344 CEOs in 68 countries, we found that
    70% of US CEOs are concerned about the skills gap. And 86% say technology
    advances are going to transform their businesses within the next five years. So
    the relationship between talent quality and financial success isn’t just
    causal. It’s completely consequential.

     

    Three concerns crucial to human capital management
    leadership over the next few years are:

     
    1.     Transformation
    requires trust –
    Departmental changes are nothing new, and most
    employees will go along to get along when the degree of change is small and the
    rate is slow. Bigger changes require more. Employees need to trust their
    leaders when the leaders ask them to take a leap of faith. This is going to be harder to do
    than it used to be. Five years after the financial crisis, just 32% of US CEOs say
    the level of trust with employees has improved. Being transparent about where
    the company is going and what it takes to be successful is an approach managers
    will have to embrace to regain that trust.

     2.     The
    people you have now are the people you’ll have later
    – In the past,
    large-scale change could be achieved by replacing people. But consider the
    data…this is beyond “large-scale” when:
     

    ·      
    62% of US CEOs are considering or planning
    change in customer growth and retention strategy

    ·      
    62% are doing the same in how they use and
    manage data and data analytics

    ·      
    54% are focused on their R&D and innovation
    capacity

    This skills gap is just too big for managers to fire and rehire
    their way out of the problem. To cope with this degree of change, training for
    tomorrow must become as important as revenue today. This is especially true
    when it comes to digital skills because they’re inherently cross-function. Consider
    the integration of big data and customer service. IT people can’t bring data
    sources together in a useful way without understanding what each data point means.
    Customer service professionals, who are wonderful at understanding the ebb and
    flow of customer moods, must learn to be scientific in their measurement and
    approaches. To boot, each must learn the other department’s skills while not
    fighting over turf. The leader’s role here is to point towards a common goal,
    motivating people to learn from each other so that they can achieve this new
    opportunity. The skills gap, in other words, is very much a leadership gap.

    3.     The meaning of a diploma – As much as we
    bemoan the paucity of skills training in higher education, it’s not possible
    for schools to be close enough to industry to have a perfect match between
    training and needs. The good news is that industry can do more. A number of
    companies are offering MBA programs at night inside their own buildings. Others
    are working hand-in-glove with community colleges to train operators for their
    plants. There are even instances where companies have approached high schools to
    encourage shop classes so that people will develop welding and pipefitting
    skills. There are no limits to the practical, if inventive, ways companies can
    develop the talent they need.

    Looking at these problems and their solutions, it becomes
    clear that the secret to closing the skills gap isn’t closing the skills gap --
    it’s seizing the leader’s mantle.  That’s
    not a title or a position, but a role of pointing to the valley, telling the
    people about the danger ahead and then inspiring the changes necessary to survive
    and prosper.

    How prepared are you for this challenge? To answer that
    question, simply ask yourself another: How invested are you in your people’s
    skills?

    By Bhushan Sethi, PwC managing director in the
    firm’s Advisory practice, focused on human capital issues.
    « You Can’t Climb the Corporate Ladder if Your Manager is Stuck on the Rung Above You
    10 Ways to Motivate Your Employees »
    AFTER ENTRY

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