Australian business: HR not important

by 28 Nov 2006

LESS THAN one in five Australian companies rate HR as an important business function while only one-third have developed HR and training programs that specifically support organisational objectives.

A recent cross-industry study conducted by Accenture also found that 42 per cent of Australian companies have no formal measures to evaluate the impact of HR and training initiatives and just 3 per cent identified training as a business critical driver.

“The availability and quality of human capital assets will come under increasing pressure in the years to come,” said Catriona Brash, managing partner of Accenture Human Performance, Australia.

“All businesses need to start to design and execute the strategies that will enable them to deal with the impact of an ageing workforce and declining skills. There is concern that the majority of Australian businesses either aren’t recognising these threats or aren’t yet thinking about how they will respond.”

The study also found 48 per cent of Australian companies felt that the ageing population would impact on their business over the next five years. Of those, 21 per cent said they were already feeling the impact and 55 per cent said the shrinking talent pool would likely exacerbate the issue.

Furthermore, despite concerns of a shrinking talent pool, two-thirds of companies felt that knowledge capture and sharing capabilities were not a major concern.

“Workforce effectiveness has been found to be a critical point of difference. Businesses leaders distinguish themselves through workforce strategies that focus on improving human capital capabilities, delivered through effective HR and training platforms,” Brash said.

On a global scale, the study of 251 senior executives found Australian executives are failing to adequately address workforce engagement and human capital development, and as a result, are falling behind their global counterparts in workforce skill levels.

Just 9 per cent of Australian companies describe their workforce skill level as industry leading, compared to 14 per cent globally.

Furthermore, only 27 per cent of Australian companies felt that more than three quarters of employees understood their company strategy and what was needed to succeed in their industry.

The top three organisational functions identified by Australian respondents as critical to business were sales (61 per cent), customer service (52 per cent), engineering, and finance (both 27 per cent).

However, when asked how they felt these functions were performing, fewer Australian companies than their global counterparts described these functions as high performing – with the one exception of the sales function.

Less than one-third (30 per cent) of respondents assigned the maximum rating to their sales function, and under a fifth provided the same appraisal to their customer service, finance and engineering functions (18 per cent, 11 per cent, and 11 per cent respectively).

“High performing businesses differentiate themselves by how well they manage their workforce capabilities and align them with organisational objectives,” said Brash.

“Many organisations are focused on improving customer interfacing functions, but these results suggest they are not paying enough attention to how human capital development can improve the performance of these areas.”


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