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Some 83 percent of the 1,200 CEOs surveyed globally plan to change their firm's talent management strategy over the next 12 months, and for 31 percent these changes will be major, the survey revealed.
The next priorities are risk management and investment, with 77 percent and 76 percent of CEOs respectively anticipating changes in these areas. Last year risk management was the number one priority for 84 percent of CEOs, followed by investment (81 percent), and talent third (79 percent).
Regional Differences
Globally, the picture varies from region to region. In Asia-Pacific and the Middle-East, 92 percent and 89 percent of CEOs, respectively, plan to make changes to their people strategy, whereas in North America the figure drops to 78 percent.
"As we move out of the downturn, CEOs are putting the focus firmly on their people," said Michael Rendell, global human resource services practice leader at PwC. "Competition for talent is intensifying as recruitment activity picks up in some sectors, and there are increasing difficulties finding staff with the right skills."
Rendell added that CEOs often speak of the importance of talent, but there little evidence of action being taken. "The survey findings are encouraging, suggesting talent will be reflected more in company strategy. HR professionals need to help CEOs see what can and should be done."
Non-financial Rewards
CEOs anticipate the main change to talent management will be using more non-financial rewards to motivate staff (65 percent), with CEOs in Latin America the most focused on this issue (80 percent).
Rendell noted that staff are not motivated by pay alone. "With labor markets more buoyant, firms need to make sure employees are engaged financially and emotionally," he said. "Non-financial rewards can include increased responsibility and developmental opportunities, anything which can help people see how they can reach their full potential. This in turn can help improve workforce skills, another priority for CEOs."
The other significant changes to HR strategy planned by CEOs will be sending more employees on international assignments (59 percent) and increased work with government and education systems to improve skills (54 percent).
Rendell viewed this as a positive trend. "This is good news as secondments can provide a way to develop employees' skills and keep them motivated, particularly where there is an absence of opportunity at their current location," he said.
Skills Issue
Indeed, CEOs believe the main challenge to talent over the next few years will be a limited supply of candidates with the right skills (66 percent), with CEOs in the Middle East (85 percent) and Africa (90 percent) the most concerned. Another major challenge according to the survey will be recruiting and integrating younger employees (54 percent), although CEOs in Asia Pacific don't see this as an issue (38 percent).
"Attracting and integrating younger employees, the so-called 'Millennials', who have grown up with technology, may help bridge some of the skills gaps," Rendell said. "Working with schools and universities to tap into this talent and harness it to business needs is also important."
Women are another important source of potential talent, and while some businesses have taken note, there is still a long way to go. Only 12 percent of CEOs surveyed say they see poor retention of female leaders as a key business challenge over the next three years, and 56 percent of businesses have no plans to change their policies. And only 11 percent of CEOs globally are planning to make significant changes to their strategies for attracting and retaining more female employees.
The 14th PwC Global CEO survey is based on 1201 interviews conducted from September to November 2010 with CEOs in 69 countries. 37 percent of CEOs polled lead companies with over $1bn annual revenues.
More information on the PwC study is available at www.pwc.com/ceosurvey.
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