While “people problems” have traditionally been siloed under Human Resources departments, the Annual CEO Benchmarking Report 2019 from talent optimization platform The Predictive Index (PI) finds talent optimization challenges are actually keeping CEOs awake at night.
“CEOs’ fixation on optimizing their talent makes sense—not just on an emotional level, but also on a financial level,” said Mike Zani, CEO of The Predictive Index, in a news release.“If left unchecked, by 2030, the talent shortage could result in about $8.5 trillion in unrealized annual revenues. So there’s the ubiquitous reality that ‘our people are our most valuable asset,’ and another truism uncovered in the survey: People are most companies’ biggest expense.”
Key research findings:
Strategy development and talent strategy are CEOs’ top priorities
“As a former CEO, this report really resonated with me, because, of course, your priorities are strategy and talent,” said Kirk Arnold, executive in residence at General Catalyst and PI board member, in the release. “What’s most interesting is the order in which you need to think about strategy and talent is often reversed. The #1 priority needs to be talent. Getting the right team together is the most important piece of the puzzle, and only then can you tackle the strategy issues.”
Business problems are people problems
Four out of the top five biggest challenges CEOs face relate to talent optimization:
- Finding the right talent
- Aligning employees with strategy
- Getting the most out of people
- Creating a great work environment
People are a company’s biggest expense
Sixty-four percent of CEOs report having employee-related costs that constitute at least half of their overall costs.
CEOs need help with talent optimization
Nearly 70 percent of CEOs report needing help with talent strategy and execution. The top three activities they need the most help with are leadership development, employee performance, and pre-hire selection.
Even CEOs find it hard to hold the line with employees
CEOs’ biggest weaknesses are holding people accountable and getting rid of underperformers.
In January 2019, The Predictive Index conducted a survey of company CEOs, presidents, and chairpeople, securing respondents through Respondent.io, Critical Mix, and the company’s own existing database. Through those means, the company collected 156 completed surveys.