Evidently, 'people problems' are no longer being siloed under HR departments, as the Annual CEO Benchmarking Report 2019 by The Predictive Index (PI) finds. In fact, talent optimisation challenges are actually keeping CEOs awake at night.
Surveying 156 CEOs, presidents, and chairpeople, the report found that for the C-suite, the #1 priority this year is strategy development (39%), while the second-most cited response was talent strategy (30%).
These two were followed by operational execution (16%), strategy alignment (9%), and prediction of market trends, as well as competitor analysis (at 3% each).
Breaking it down further, a distinct pattern emerged when these CEOs where asked to identify their top three challenges. The majority of their top challenges map back to people strategy and talent management; and their #1 challenge is finding the right talent.
These are (displayed in the graph below as well):
- Finding the right talent
- Aligning employees with strategy
- Getting the most out of people
- Creating a great work environment
"CEOs’ fixation on optimising their talent makes sense—not just on an emotional level, but also on a financial level,” said Mike Zani, CEO of The Predictive Index.
“If left unchecked, by 2030, the talent shortage could result in about $8.5 trillion in unrealised annual revenues. So there’s the ubiquitous reality that ‘our people are our most valuable asset,’ and another truism uncovered in the survey: People are most companies’ biggest expense."
This last part was shared in the report which found that 64% of CEOs cite having employee-related costs that constitute at least half of their overall costs.
Additionally, it was found that nearly 70% of CEOs report needing help with talent strategy and execution. The top three activities they need the most help with are leadership development, employee performance, and pre-hire selection.
Even CEOs find it hard to hold the line with employees, as these CEOs’ biggest weaknesses were identified as holding people accountable and getting rid of under-performers.
Kirk Arnold, Executive in Residence at General Catalyst and PI board member, said: "What’s most interesting is the order in which you need to think about strategy and talent is often reversed. The #1 priority needs to be talent. Getting the right team together is the most important piece of the puzzle, and only then can you tackle the strategy issues."