Chief executives value experience in emerging markets and across business sectors as top skills for a C-level executive. Human resources directors, however, emphasise a far different list of preferred qualities.
The diverging views are one aspect of a recent CGMA report that points to a disagreement in the C-suite over talent development. The report, Talent Pipeline Draining Growth: Connecting Human Capital to the Growth Agenda, suggests that companies are missing out on financial goals and failing to innovate because of ineffective human capital management.
The CGMA survey asked respondents to pick three skills that they deemed most important in a corporate executive.
Seventy-one per cent of HR directors cited strategic vision and the ability to implement strategy. Just 22% of chief executives said that skill was important. Meanwhile, 28% of HR directors thought technical awareness was an important skill, while only 1% of chief executives chose that skill as important.
Chief executives valued experience in emerging or fast-growth markets as most important (66%), followed by experience in different business sectors (53%), experience or knowledge of change management (49%) and experience in international markets (49%).
Experience in emerging markets (20%) and experience in different sectors (17%) were near the bottom of HR directors’ ideal skills. After strategic vision and ability to implement strategy, HR directors’ top skill was leadership experience (54%) and experience or knowledge of change management (39%).
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CFOs who participated in the CGMA survey were generally in alignment with chief executives, picking experience in business sectors first (56%), followed by experience in international markets (55%) and experience with change management (51%). CFOs were more likely than chief executives (36% vs. 22%) to say strategic vision and the ability to implement strategy is important for C-level executives to possess. CFOs also ranked technological awareness (5%) relatively low.
Different visions of the ideal executive could be part of the issue. Another factor, said Nik Pratap, national director for senior finance at global recruiting firm Hays, is that, in a tight economy, employers realise the importance of finding the absolute best candidate.
“Anecdotally, across industries, it’s taken a lot longer to recruit for positions,” Pratap said. “In a number of those cases, it’s because it’s harder to attract new, talented people. (Hiring) has been delayed needlessly because more people are getting involved in the process, and those people have different points of view.”
The CGMA survey is the latest to offer insight to HR’s emerging role in bridging the gap between corporate strategy and human capital strategy. A majority of respondents in a PwC survey in the spring said HR departments must take a broader role in managing skill and talent shortages.
Managing existing talent
Chief executives and HR directors also have an apparent disagreement over the development of talent already on board: 77% of chief executives foresee cuts in workforce training in the next 18 months; just 18% of HR directors think that workforce training will be cut.
That disagreement is “staggering,” according to Pratap, but he understands why chief executives feel so strongly.
“It’s worrying when you see that, but everybody is a lot more cost-conscious,” he said. “Training is ruthlessly appraised by its worth as a long-term investment, and anything that doesn’t produce results quickly is not deemed to be as important.”
Pratap said companies that heavily cut employee development programmes become less attractive places to work. Then, hiring can become even more difficult. “One of the key assets of a company’s brand is a robust training and development programme,” he said. “If the company moves away from that, their brand should be weakened.”
Respondents in the CGMA report did agree on some things. HR directors and chief executives were somewhat in line when it came to the value of leadership experience: 54% for HR directors, 46% for chief executives.
Pratap added that internal alignment on a company’s “brand” is the best way for companies to merge views on what other skills are important in hiring executives. “There is one thing that should be consistent, that should be the employer brand – this is who we are, this is what we do, and this is what makes us a great employer,” he said. “If they focus on those things, they’ll have consistency.”
Related CGMA Magazine content:
“Deloitte Report Calls for Business-Driven HR Evolution”: As the social and economic centre of gravity shifts east, human resources departments must embrace an expanded role in the globalisation of businesses.
“Data Providing More HR Insight, Driving Success”: Research by Deloitte shows that data collected by organisations is allowing them to be more effective managing talent and controlling labour costs.
—Neil Amato (email@example.com) is a CGMA Magazine senior editor.