Corporates pay greater attention to human capital
Our Mumbai Bureau
MUMBAI, Dec 29: Watson Wyatt, a leading global management consulting company conducted a worldwide study with 2,143 companies in 22 countries and has found out that world business leaders see people as a key to growth in the 21st century.More than four-fifths of the corporate executives from around the world consider the development of management talent (87%) and employee knowledge(84%) to be the twin pillars of the future business success, according to the survey. The survey also found that respondents identified three human resource issues-leadership development, emoluments for performance and training and development as the top workforce concerns in the coming two or three years.The survey conducted by Watson Wyatt is titled ``Competing in a Global Economy''. It includes responses from top executives at 2,143 companies in over 22 countries. Collectively, the companies employ more than 8.1 million workers. Of the executives responding, 40 per cent are Chief Executive Officers(CEOs). More than 75
participants are members of the Global Fortune 500. Where in the past, business success was predicted on efficient deployment of machinery and financial capital, the successful companies of today are the ones which best mobilize intellect and ingenuity. Workers are no longer mere factors of production, but are now ``human capital'' that must be managed in more innovative ways, lest that capital remain untapped or even walk out of the door. ``The globalisation of the economy has forced companies across the world to reorganise both their structural and financial capital to achieve a competitive edge. But to reach the next level of performance, companies must focus on their human capital-their people,'' says Ivan Mathais, Managing Director, Watson Wyatt, India. The survey found that business leaders are increasingly aware of the central role that leadership plays in helping companies to succeed. In fact, 70 per cent of respondents cited the ``ability to lead/manage people'' as the most important skill
needed by managers. The most important factors in improving employee productivity and financial results that came out were communication between management and workers; creating an environment of shared values and goals and developing management talent. Seventy-eight percent of all respondents said that performance-based pay is important to implementing business strategy. Motivational pay also leads to improved worker productivity according to 78% of the respondents. And 77% of the executives believe motivational pay is a key to attracting, developing and retaining an effective workforce. A separate Watson Wyatt study of 614 U.S. organisations found a strong correlation between aligning pay programmes with business strategy and financial performance. Companies that achieved this link reported total shareholder return (TSR) of 13.6% in comparison 9 percent for companies that did not. Sixty-one percent of companies responding said they have defined ``core competencies''-set of skills their employees need
for the company to compete in the global market. Another 87 % of the CEOs said that increased worker knowledge and skills are important in improving financial results. Other highlights of the study which were researched included-domestic and global competition; corporate restructuring; Organisational challenges; aging of the workforce etc. Watson Wyatt is a leading global management consulting company with more than 5,000 associates in 36 countries. In India Watson Wyatt operates through a joint venture with ABC Consultants private Limited-a leading search and selection organisation.
Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.
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