A CGMA report has revealed that the financial performance and growth prospects of many businesses are being blighted by their failure to make the most of their human capital.
The survey Talent pipeline draining growth: Connecting human capital to the growth agenda, polling more than 300 CEOs, CFOs and HR directors highlighted that over two fifths (43%) of respondents partially attributed the failure of their firms to achieve key financial targets to ineffective people management, while almost the same proportion (40%) say it has reduced their company's ability to innovate.
There is also a significant disconnect at the senior management level with regards to talent development as many business leaders do not agree on where the responsibility for measuring a firm's talent management strategy lies.
An overwhelming proportion of HR directors (83%) believe it is their remit yet conversely less than 30% of CEOs and CFOs agree. This hinders effective decision making in key areas such as workforce skills, training and qualifications. For example 77% of CEOs advocated cutting investment in these areas in the next 18 months, but only 18% of HR directors agreed.
The survey was carried out by the Economist Intelligence Unit (EIU) on behalf of the Chartered Institute of Management Accountants (CIMA) and the American Institute of Certified Public Accountants (AICPA).
Charles Tilley, CIMA chief executive, said: 'This worrying boardroom divide threatens to destabilise sustainable growth by allowing the best talent to slip away. It is vital that organisations embed a robust human capital strategy within the wider business plan and develop appropriate metrics and key performance indicators that are subject to the same level of scrutiny as financial data.
'In order to do this, business leaders need to receive the right information which can be translated into actionable insight. This is pivotal to effective decision-making and there must be clarity on responsibility, accountability and ownership for the talent within all our businesses. CGMAs have the ability to unite financial facts and non-financial information to provide this insight from a position of independence and objectivity. They can help organisations to create closer collaboration at the executive and operational levels - especially between finance and HR.'