Companies throughout Europe know that they need to improve their people management capabilities if they are to succeed in a business environment marked by economic uncertainty and talent shortages. However, they often struggle to translate these HR aspirations into specific actions. A new report by The Boston Consulting Group (BCG) and European Association for People Management (EAPM) gives clear, quantitatively derived guidance to companies on how to strengthen their people-management skills.
For many regional companies, investing in people management is highly relevant. Klaus Kessler, senior partner at BCG Abu Dhabi, says: “In comparison to European companies, many regional employers are investing even more in enhancing the skill levels of their employees, building capabilities that match future needs and providing opportunities to local talent. It is even more important to understand which activities generate a positive return and which ones are misguided and won’t contribute to the positive development of the region”.
The report, Creating People Advantage 2013: Lifting HR Practices to the Next Level, is the seventh in an annual series examining critical trends in managing people. This year’s research drew survey responses from more than 2,300 executives across a broad range of industries in 34 countries throughout Europe. The research team supplemented those findings by conducting in-depth interviews with 37 HR leaders. The authors analysed people management capabilities among the survey population, focusing on ten key areas and the efficiency of companies’ efforts to improve.
Identify the root cause of success
“Company leaders understand the need to enhance their capabilities in key people management areas, but they don’t have a playbook that says where to start or which measures should be priorities,” says Rainer Strack, senior partner at BCG and a co-author of the report. “Our goal this year was to provide a set of differentiating activities – the most effective drivers of success across ten HR areas.”
The empirical nature of the findings distinguishes this report from much of the current thinking regarding people management. “We broke the survey population down into highly capable and low-capability companies, and isolated the activities that separate them,” says Jean-Michel Caye, senior partner at BCG and co-author of the report. “It allowed us to build our argument on data, instead of intuition or anecdotes.”
In the area of talent management and leadership, for example, the results indicate that highly capable companies have several activities in common, such as strategically planning their talent and leadership needs on a long-term (more than five-year) basis, rather than reacting only to the most pressing needs.
Similarly, in the area of HR analytics, the results show that highly capable companies have a workforce demand model in place that is linked to driving, for example, business strategy, productivity and technology. This way these companies can accurately predict the job profiles they’ll need to execute their strategy, by business unit, location and critical skills needed.
In the area of recruiting, best-in-class companies excel in having an employer value proposition that is systematically developed on the basis of a thorough analysis. A further key differentiator between highly capable and low-capability companies is a clearly defined and integrated social media strategy.
“For companies seeking to improve their performance in talent management and leadership, as well as the other examined key HR topics, these measures should be considered as high priorities,” says Filippo Abramo, president of the EAPM and a co-author.
