The state of workforce performance and management

Nia Sarinastiti, Accenture, Senior Manager

Why has the workforce assumed such prominence in recent years? There are many reasons. For starters, unlike in years past when a company's greatest assets were its physical structures and equipment, knowledge and information are increasingly becoming the bedrock of the modern corporation.

While the former could be built and moved as necessary, the latter is largely developed, managed and represented by people. Companies that retain the brightest and most capable people have a huge edge over those that don't.

Secondly the workforce and the culture they create are arguably the only things that competitors can't easily duplicate as they can with new products, services, physical assets and access to financial capital. Furthermore, employees are the living embodiment of an organization's brand and values, and they interact with and represent that brand to customers and partners on a daily basis.

Despite the increasing importance of self-service options via the telephone and Internet, the personal touch is highly valued -- and rewarded -- by customers in all markets. And finally, the aging of the workforce will become a critical problem in the very near future for all companies -- particularly those in the manufacturing, industrial equipment, government and resources sector -- as baby boomers retire en masse, leaving the reins of companies in the hands of a less-populous generation.

The knowledge that departing employees take with them represents hundreds of thousands of years of collective experience that must be captured, institutionalized and leveraged by those who remain.

These are just the overarching trends. Of immediate concern to companies is the much anticipated economic recovery, which has increasingly shown signs of being more than simply a hope among corporate executives. When the recovery takes hold, organizations must be ready to act -- and that means, among other things, being staffed with the right number of employees possessing the skills necessary to dominate one's industry.

The workforce is growing in importance. This strategic and growing importance of the workforce is widely acknowledged by business executives as evidenced by a recent Accenture survey of 200 executives in six countries.

Responses to this survey indicate that issues relating to the workforce have become the highest strategic priorities on the executive agenda in companies around the world. In fact, four of the top five strategic priorities for all respondents are directly related to the workforce: (1) attracting and retaining skilled staff, (2) increasing customer care and service, (3) improving workforce performance, (4) changing leadership and management behaviors, (5) changing organizational culture and employee attitudes.

The executives roundly see "people issues" as more important to a company's success today than a year ago. Seventy-four percent of respondents said people issues are either significantly or somewhat more important this year -- regardless of country, industry or title -- while only six percent indicated they are less important. Further illustrating the rising stock of the workforce is the level of importance the human resource function has assumed among senior executives.

In the survey, 52 percent of respondents said the HR function is "very critical" to executing corporate strategy, and an additional 37 percent said it is "quite critical".

Surprisingly, chief executive officers felt more strongly about that than executives in charge of human resources themselves. Seventy percent of the former, compared with 54 percent of the latter, said that the HR function is "very critical" to executing corporate strategy. Similarly, a greater proportion (32 percent) of the "C-Level executives" (CEO, COO, CFO, CIO) ranked human resources as one of their three most important functional areas than did HR executives themselves (26 percent).

CEOs, in particular, ranked human resources in their top three importance priorities with 56 percent.

What does this imply? Having a high quality, performing human resources division is urgently needed within a company that has as one of its goals developing the performance of the rest of its people.