SOURCE: The Boston Consulting Group

April 14, 2008 07:00 ET

Executives Worldwide See Talent Gaps as Top People Challenge in Every Region and Industry

Global Survey of 4,741 Executives in 83 Countries and Markets -- Conducted by The Boston Consulting Group, World Federation of Personnel Management Associations, and Society for Human Resource Management -- Identifies HR Priorities of Today and the Future

LONDON--(Marketwire - April 14, 2008) - Managing talent is the most critical human resources (HR) challenge worldwide and will remain at or near the top of executive agendas in every region and industry for the foreseeable future, according to a new global study conducted by The Boston Consulting Group (BCG), the World Federation of Personnel Management Associations (WFPMA), and the Society for Human Resource Management (SHRM). Key findings of the report, "Creating People Advantage: How to Address HR Challenges Worldwide Through 2015," will be presented today at the WFPMA World HR Congress in London.

The study, which is based on a global survey of 4,741 executives in 83 countries and markets, found that managers worldwide also rated improving leadership development and managing work-life balance as urgent priorities. The report provides rankings and analyses of 17 HR challenges in seven major regions of the world and suggests specific actions to address those issues.

"The study, the most comprehensive review of global HR practices ever conducted, provides piercing insight into the current and future challenges facing companies," said Florent Francoeur, president and CEO of WFPMA, one of the world's leading HR organizations.

In the United States, managing talent and improving leadership development emerged as the two most critical people challenges, followed by managing demographics and managing change and cultural transformation. Nearly one-half of U.S. executives said that they expect their companies to source talent globally by 2015, compared with just one-fifth of companies in 2007. Similarly, 21 percent of U.S. executives said that their companies will be moving businesses to new locations to access talent by 2015, compared with just 8 percent of companies in 2007.

"It may soon be harder to find and keep talented employees than to raise money in an IPO," said Rainer Strack, a BCG partner and one of the report's authors. "In the West, work forces are graying, while in developing markets, companies have an unquenchable thirst for skilled employees. Creating a 'people advantage' will increasingly translate into competitive advantage."

Other Challenges: Improving Leadership and Work-Life Balance

Improving leadership also ranked as a top three HR challenge in 10 of the 17 focus countries, including developed nations such as the United Kingdom and Japan as well as emerging markets such as China and India.

Managing work-life balance was rated a key future challenge in every region except the Pacific Region and a top-three priority in Argentina and Chile, Brazil, Canada, India, Italy, Singapore, and South Africa. Flexible work arrangements are the cornerstone of almost all work-life balance initiatives. Worldwide, more than 60 percent of executives said that their companies already offered flexible working hours, and nearly 80 percent said that they planned to do so by 2015. Offering part-time work was the second-most popular future action by employers.

"The days of company-loyalty-at-all-costs are over," noted Andrew Dyer, global leader of BCG's Organization practice and another author of the report. "Employees, especially the most talented ones, often make career choices based on factors such as flexible work hours and emotional gratification."

Disparate Views on Demographic Risks

While some issues were nearly universally important, others varied widely across geographic locations. Managing demographics, for example, was the fourth-highest priority overall, but executives in different countries offered strongly varying assessments of its importance. Those in the United States, Canada, Australia, and much of Europe (particularly Germany, France, and Italy) rated it a pressing issue. By contrast, Japanese executives, who have been grappling with the effects of an aging work force for years, did not rank it as a key HR priority.

"Many executives don't realize the serious problems they could face from a loss of knowledge and productivity if they don't start preparing today for labor shortages in five or ten years," Strack said. "They should analyze capacity and productivity risks for each location, unit, and job type and then develop a series of measures to mitigate anticipated shortfalls."

To receive a copy of the report or arrange an interview with one of the authors, please contact Eric Gregoire at + 1 617 850 3783 or gregoire.eric@bcg.com.

About the Methodology of the Study

BCG and the European Association for Personnel Management (EAPM) conducted the Web survey in Europe through January 2007, receiving 1,355 responses from HR and other executives in 27 European countries. In conjunction with that survey, during May 2007, we interviewed 102 senior executives in Europe. Between September and November 2007, a global Web survey was conducted in cooperation with the WFPMA, eliciting an additional 3,386 responses from participants in 56 countries and markets. The SRHM assisted with data collection for the survey in the United States. This survey was rounded out with 118 interviews with executives from those countries. In all, the two Web surveys elicited 4,741 responses from 83 countries, and BCG conducted 220 interviews with senior executives.

About The Boston Consulting Group

The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients in all sectors and regions to identify their highest-value opportunities, address their most critical challenges, and transform their businesses. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 66 offices in 38 countries. For more information, please visit www.bcg.com.

About the World Federation of Personnel Management Associations

The World Federation of Personnel Management Associations (WFPMA) is a global network of professionals in people management. It was founded in 1976 to aid the development and improve the effectiveness of professional people management all over the world. Its members are predominantly the continental federations, which are made up of more than 70 national personnel associations representing over 400,000 people-management professionals. For more information, please visit www.wfpma.com.

APPENDIX

Regional Profiles:

The BCG report "Creating People Advantage: How to Address HR Challenges Worldwide Through 2015" highlights key HR issues in seven regions of the globe. The regions are: North America, Latin America, Europe, Africa, Emerging Asia, Established Asia, and the Pacific Region.

Country Profiles:

The study also provides a summary of the findings in 17 focus countries.

North America:
--  Canada
--  United States

Latin America
--  Argentina and Chile
--  Brazil

Europe
--  France
--  Germany
--  Italy
--  Russia
--  Spain
--  United Kingdom

Africa
--  South Africa

Emerging Asia
--  China
--  India

Established Asia
--  Japan
--  Singapore
--  South Korea

Pacific
--  Australia

In addition, the report contains snapshots of 29 additional countries and markets. The remaining countries are not highlighted in the report because they were represented by fewer than 20 respondents.

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