CEOs focus on people in uncertain economy

The uncertainty of the global economy is causing chief executive officers (CEOs) from across the globe to focus on their human capital.

Research from The Conference Board and the Chartered Management Institute (CMI) revealed that a worker-centric approach will be employed in 2014 in a bid to maximise future growth.

This will focus on creating a workplace culture based on employee engagement and better management. It is believed this strategy will improve competitiveness, win new customers and boost productivity for businesses the world over.

According to the CEO Challenge 2014, knowing how to best develop, engage, manage and retain talent is the biggest challenge facing organisations over the next 12 months. This is closely followed by customer relationships, innovation, operational excellence, and corporate brand and reputation.

Rebecca Ray, senior vice president, Human Capital at The Conference Board, and a co-author of the report, said: "Though particular strategies vary from region to region, business leaders worldwide are working to optimise their greatest resource—their employees and those who will lead them. This emphasis on people-related issues makes perfect sense in a still-uncertain economy.

"Building a culture that supports engagement, employee training, leadership development, and high performance is something companies can control, and is making the difference between growing market share and simply surviving in 2014."

A global talent shortage is making human capital an even greater issue and contractors have been identified as key in plugging the gap. However, this must be matched by cultivating workforces internally. Indeed, Ms Ray claims "human capital may well be the engine that revives economic growth".

Businesses certainly have a preference for dealing with the talent shortage within their own company and will be prioritising the creation of a strong internal talent pipeline in 2014, opposed to recruiting externally.

CEO Challenge 2014 revealed that nine out of ten human capital strategies globally focus on current employees. This includes providing training and development, improving engagement and intensifying efforts to retain talent.

Management performance is also a focus and improving leadership development is now ranked 5th globally, moving up from 10th place in 2013. Among European CEOs, management performance is actually ranked as the number one priority.

CEOs were also asked to list leadership attributes most critical for future success. Integrity topped the list globally, followed by leading change, managing complexity, an entrepreneurial mindset and the ability to retain and develop talent.

The importance of integrity to CEOs reflects a change in culture following high-profile ethical scandals, according to The Conference Board and the CMI.

CMI’s director of strategy, Petra Wilton, said: "It’s good to see European leaders in particular recognising that leadership development is critical to getting this right. Leadership attributes like integrity, leading change and managing complexity are fundamental to cracking the challenges facing managers and leaders in the year ahead, and will be absolutely key to future success."

Ms Wilton added that the findings of the study back up its new Valuing your Talent initiative. The CMI is working with the UK Commission for Employment and Skills, CIPD, Chartered Institute of Management Accountants, Inventors in People and the Royal Society of the Arts to create a practical tool for leaders to measure and improve their people management and development processes.