Workforce Issues Top List of Executives' Strategic Priorities, Accenture Research Finds

Despite Weak Economy, Leaders Increase Human Resource Investments But Believe Workforce Shortcomings Still Impede Competitiveness

NEW YORK, April 1, 2003 New research from Accenture shows that, despite the weak economic environment and cost-cutting pressures, workforce-related issues top executives’ list of strategic priorities, and these business leaders are also concerned that their workforces lack critical skills, compromising their companies’ ability to compete effectively.

Based on interviews with 200 senior executives in the United States, Europe and Australia, the research found that three in four respondents (74 percent) reported that people-related issues are more important to a company’s success than they were a year ago.

In addition, when asked to choose their companies’ top strategic priorities, respondents chose workforce-related priorities as four of the top five. These were "attracting and retaining skilled staff"; "changing organizational culture and employee attitudes"; "changing leadership and management behaviors"; and "improving workforce performance" -- all chosen by more respondents than "industry consolidation," "cost reduction" and "competitive pressures." "Customer care and service" was the only non-workforce-related priority among the top five.

A separate global study by Accenture of nearly 500 business leaders also found that human resource issues are the top concern for companies. That study found that “changing organizational culture and employee attitudes” is the number one business issue on the executive agenda. Also ranking near the top of the list were “reducing workforce-related costs” and “improving workforce performance.” That study, which will be released shortly, offers additional evidence of how workforce issues are a key corporate priority.

In the study released today, three-quarters of respondents said their companies increased or maintained their human resource (HR) and training and development budgets (73 percent and 78 percent, respectively) over the past year, demonstrating their commitment to workforce issues. However, only 17 percent reported that they are very satisfied with the progress they’ve made on their training programs, and only one in four said they believe that most of their employees have the skills to execute their jobs at industry-leading levels.

This dissatisfaction might be due in part to the fact that many companies do not adequately measure the impact of their HR or training initiatives. For instance, more than one-third of respondents (40 percent) said their companies do not regularly measure the business impact of these initiatives against factors such as retention, employee satisfaction, innovation, productivity and quality.

In fact, more than half of respondents (57 percent) said their companies never or rarely measure their training investments against employee retention, and the same number said their companies never or rarely measure the impact of HR investments on employee satisfaction. Additionally, more than one-third said their companies never or rarely measure investments in human resources or training against customer satisfaction (39 percent and 35 percent, respectively).

“Since people are the greatest competitive asset for most companies, senior executives must create an environment in which staff can thrive,” said Peter Cheese, managing partner of Accenture’s Human Performance service line. “Investments in human resources, training and development enhance employee satisfaction and improve workforce performance, but measuring the impact of those investments is key to ensuring companies’ ongoing success.”

The survey also uncovered a perceived weak spot in employees’ knowledge of corporate strategy and their role in executing it. Only 12 percent of respondents said they believe that a considerable majority (75 percent) of their employees understand their company’s overall business strategy. Additionally, only 17 percent reported that they believe a considerable majority of their employees understand the connection between their jobs and execution of corporate strategy.

On the positive side, the research identified 27 companies from the survey that are meeting the human performance challenge head-on. These are companies in which respondents said they consider the HR function valuable and strategically important; align human resources, training and development with their business goals; measure the impact of their HR, training and development efforts; use information technology to give employees greater control over how and when they access these programs; and ensure that their workforces understand their customers’ needs.

“In a difficult economic environment, every employee must understand the organization’s goals and how his or her work contributes to the company’s success," said Harry Brakeley, managing partner of Accenture Learning. “Leading companies do this well and provide guidance to others seeking to create and sustain a high-performance workforce.”

Among other findings of the research:

Survey Methodology
Between August and December 2002, Accenture and NOP World, an independent research company, conducted in-depth telephone interviews on human performance issues with 200 CEOs, COOs, CFOs, CIOs and senior HR executives in the United States, United Kingdom, France, Spain, Germany and Australia. Respondents’ companies represented a range of industries, including financial services, manufacturing, resources, retail, hospitality, communications, entertainment and travel.

About Accenture
Accenture is the world’s leading management consulting and technology services company. Committed to delivering innovation, Accenture collaborates with its clients to help them realize their visions and create tangible value. With deep industry expertise, broad global resources and proven experience in consulting and outsourcing, Accenture can mobilize the right people, skills, alliances and technologies. With more than 75,000 people in 47 countries, the company generated net revenues of $11.6 billion for the fiscal year ended August 31, 2002. Its home page is


Priya Pereira-Sawian

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