Trends in Human Capital
Key Trends in Human Capital - A global perspective 2006 - A report compiled by PricewaterhouseCoopers
PWC’s latest HR report is driven by data collected from over 15,000 organisations in Europe and the USA, representing a wide range of industry sectors. According to Richard Phelps, PWC Partner, the report:
“Provides a powerful combination of information on both existing organisational human capital profiles, and those required in future to produce and maintain a sustainable human capital advantage in the marketplace.”
Overall, the report reveals a growing disparity between the performance of the economies of Europe and those of the US. The report highlights a number of key challenges faced by all organisations and provides a clear picture of the relative performance across the economies, looking through the parameters of Leadership, Outsourcing, Corporate Transparency, Innovation, Diversity, Talent Development, Performance Measurement and the Development of the HR Function.
Training Issues
As far as training trends are concerned, there follows an extract from the section of the report [page 24] that addresses these issues:
“... it is surprising and disappointing to see that all indicators of training investment continue the downward trend shown in last year’s report. In Europe, the average number of training hours fell from 23.9 in 2003 to 19.7 in 2004, development training hours fell from 7.9 in 2003 to 5.5 in 2004 and the proportion of employees receiving at least one day’s training experience in the given period fell from 67.1% in 2003 to 57.2% in 2004. Overall investment in training also fell in absolute terms from €704 per employee in 2003 to €552 in 2004.
The situation in the US presents a markedly different picture. The 2005 key trends in human capital report showed a leap of 35% in training investment in 2003; 2004 shows a less dramatic but nonetheless robust increase of 5.6%.
Of course, none of the above metrics provide any indication as to the quality of the training undertaken, or... reflect the level of non-formal training undertaken. However, it is generally the case that the organisations that demonstrate the highest levels of learning, training, and development investment, experience the greatest success in talent management. Part of the US economy’s ability to bounce back, adapt and respond quickly may also be attributable to US organisations’ apparent willingness to invest in increasing [and replacing] the skills and Trends in Human Capital aptitudes of their employees. Europe has to date shown less tendency or willingness to react in this way”.
The HR Function
The survey shows a drop in the average size of the HR function per full-time employee. In the US, the average size fell to 87:1, and in Europe, from 90:1 in 2003 to 92:1 in 2004. Interestingly, the spend on HR
in Europe, per full-time employee, fell to €1108, a fall of 2.4%. In the US, this same figure soared by 35%.
The report comments that there is little evidence to suggest that the influence of HR Managers and professionals has increased within organisations, over the period of the report. It continues by stating:
“In both the US and Europe, there is no indication that the internal drive to build business partnerships with line executives, to create a more strategic overall contribution, is having any marked effect. HR
effectiveness.... can only be measured by its impact upon key business decisions. It is difficult to find any consistent evidence that this is increasing in overall terms”.
Full copies of the report can be downloaded from http://www.ukmediacentre.pwc.com
Enquiries should be directed towards Kevin Delaney in the UK [+44 [0] 20 7213 2907
kevin.delany@uk.pwc.com
