Building future leadership capability

Increasing numbers of CEOs are stating that it is hard to find key skills such as global experience, the ability to lead and develop others, creativity and innovation. So where can businesses find the people they need?

PwC research shows that only 38% of executive-level jobs in the companies surveyed were awarded to existing employees. This suggests that some organisations may be neglecting existing talent. However, this trend could be changing as the majority of CEOs who responded to PwC’s 11th Annual Global CEO survey are trying to address skills shortages by investing in training and development for their existing employees.

Measuring the investment that companies make in training and development and relating it back to the benefit that it brings to the business is something that organisations are struggling with. A worldwide survey of reporting practices conducted by PricewaterhouseCoopers Saratoga, uncovered that only 34% of the 800 companies polled provided information about training hours per employee, and only 42% provided information about their total investment in learning and development. Further research suggests that only 20% of these companies are already measuring, or preparing to measure, their return on investment in such activities. This is an alarming statistic given that people costs account for an estimated 70% of total corporate expenditure.

There are a number of useful measures organisations can use to quantify people performance and impact, these include:

• Revenue per full-time equivalent (FTE)
• Profit per FTE
• Cost per FTE
• Wealth created per FTE
• Training hours per FTE
• Return on investment in human capital
• The ratio of remuneration to costs
• The ratio of remuneration to revenues
• Total absence rate
• Total resignation rate
• The total rate of job offers accepted

The way that these measures are used together can:

• give insightful information into the areas of people development that organisations need to address; and
• offer statistics that can be used to benchmark year on year performance and against peer organisations.

To find out more, please contact us on +44 (0)207 213 1313 or e-mail enquiries@saratoga.pwc.com.