Key Trends in Human Capital: A global and Belgian perspective Edition 2006

Transcription

1 in Human Capital: A global and Belgian perspective Edition 2006 Summary of findings Peter De Bley, Director HR Services Kevin Delany, Partner HR Services PricewaterhouseCoopers LLP PwC

2 Summary of findings 1. Emergence of a new competitive landscape 2. Importance of off-shoring and outsourcing 3. Leadership development is not improving 4. Corporate transparency demands have increased 5. Innovation and talent development crucial to business success 6. Good work-life balance linked to top business performers 7. Gender diversity 8. HR Function still not at centre of corporate strategy Slide 2

3 1. Emergence of a new competitive landscape Performance gap is increasing between European and US economies Emerging markets of Eastern and Central Europe, India and China are growing substantially more than Western economies - Such markets are now competing on knowledge and expertise, not just cost US remuneration increases are far higher than Europe s, though profitability increases outweigh this Slide 3

4 Belgium is very productive but. Our costs are far too high Revenue per FTE ( ) Median UK 142,008 C&E Europe 58,796 Western Europe 169,546 All Europe 166,916 US 260,543 Costs per FTE ( ) Median UK 138,999 C&E Europe 55,122 Western Europe 164,152 All Europe 161,989 US 181,481 Profit per FTE ( ) Median UK 3,495 C&E Europe 719 Western Europe 4,827 All Europe 4,700 US 55,128 Belgium 137, , ,084 Belgium 131, , ,815 Belgium 1,104 6,233 19,795 Slide 4

5 Remuneration ( ) Median UK 34,735 C&E Europe 7,640 Western Europe 38,340 All Europe 37,855 US 70,090 Belgium 39,930 49,831 61,935 Remuneration/revenue (%) Median UK 24.1 C&E Europe 14.6 Western Europe 22.2 All Europe 21.6 US 28.0 Belgium Remuneration/Costs (%) Median UK 24.5 C&E Europe 14.1 Western Europe 22.9 All Europe 22.7 US 34.9 Belgium Slide 5

6 2. Importance of off-shoring and outsourcing Decisions to off-shore and outsource are considered strategic issues Scale of Western companies offshoring has not increased but quality has: - third parties are now delivering higher value-added services and are well-equipped to perform them. HR Professionals need to understand the key benefits and risks in the use of third parties and off-shored employees, to enable them to guide their organisations in the strategic decision-making process. Slide 6

7 Your journals and magazines have covered most of the outsourcing and off-shoring deals in Belgium We observe a huge increase in - Outsourcing - Off-shoring - Shared service centers Mostly these decisions are not taken in Belgium anymore Slide 7

8 3. Leadership development is not improving Interest in effective leadership continues but enhanced performance is not resulting from these investments New approaches to leadership development are required Slide 8

9 Leadership: Just a small case study Absenteeism rate Euro 1000 Today: 7.9% Simulation 6.9% Decrease 1% Benchmark 4% Top 25%-ile Revenue 263, , ,458 Costs 250, , ,426 Profit before tax 13,132 14,432 17,032 Profit fluctuation - +10% +30% The value add of leadership development should be translated into The paradox of leadership today Slide 9

10 4. Corporate transparency demands have increased Stakeholders want more information from businesses HR executives need to understand what information is required, the metrics needed and how to communicate this effectively Slide 10

11 5. Innovation and talent development crucial to business success Relative levels of spending on training are higher in the US than in Europe Spending on training in Europe is steadily declining There is no established link between training spend and innovation however, there is a consistent relationship between those companies that invest in learning and development and competitive business results. Slide 11

12 Belgian employees receive significantly less training, Companies in Belgium invest significantly less in training 1 hour training costs significantly more in Belgium Belgium Europe L&D Hours per FTE L&D Inv per FTE ,140 L&D Cost per Hour L&D Hours per FTE L&D Inv per FTE L&D Cost per Hour Slide 12

13 6. Good work-life balance linked to top business performers Survey focus is on employees actions rather than words Companies are being marginally more effective at rewarding performance HR executives need to assess whether employees are more committed to increasing productivity and competitive rather than just expressing their contentment The work/life balance: does commercial success partially result from offering family-friendly policies, or are those policies a by-product of success? There is a lack of evidence but top performers in western economies tend to operate with positive employment policies. Slide 13

14 Do we really work that hard in Belgium??? Average hours worked per year per person: The quantity of hours worked is not that high, the quality is probably excellent (deduction based on financial results/fte) Slide 14

15 7. Gender diversity is not that well established in Belgium Gender diversity Belgium 10,3 23,3 42,1 Europe 26,7 41,0 55,0 Gender diversity continues to show a wide disparity across all sectors at all levels. Slide 15

16 8. HR Function still not at centre of corporate strategy Human Capital issues have a powerful impact upon all businesses competitive abilities There is little evidence to suggest that the HR role is similarly developing to a higher level of strategic influence within business organisations The HR function can begin to develop the tools and policies that should help place them at the centre of corporate strategy by using incisive data and analysis Slide 16

17 in Human Capital: a global perspective 2006 Conclusion The EU should increase productivity Companies in Belgium should reduce their costs (not only salary costs) increase female diversity Increase training investment Slide 17

18 "The information contained in this presentation is for general guidance on matters of interest only. The application and impact of laws can vary widely based on the specific facts involved. Before taking any action, please ensure that you obtain advice specific to your circumstances from your usual PricewaterhouseCoopers client service team or your other tax advisers. The materials contained in this presentation were assembled on 27 April 2006 and were based on the law enforceable and information available at that time." Slide 18