Realizing the Value of People Management

Realizing the Value of People Management

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Realizing the Value of People Management

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  • Critical Mass Counts

    It’s no news that being well-rounded in people management represents an investment in the company’s long-term success. But at many companies today, that investment is at risk—even as talent risk has escalated. Before leaders yield to the temptation to cut back on people spending, they must keep in mind that people management has become an imperative.

    The good news is that it’s not just an imperative; it’s an investment with a tangible, near-term return. As we’ve shown, the correlation between people capabilities and economic success is undeniable. People management mastery translates into economic success—and competitive advantage.

    But excelling in leadership development, talent management, and performance management is not enough. Being a people company means doing more across the entire spectrum of people management activities, from employer branding to employee retention.

    And critical mass matters: companies must be good at many activities, and they must integrate those activities. Moreover, it’s not enough to carry out important people-management activities in a step-by-step, linear fashion. Each critical topic, and the critical activities it entails, needs to be carried out in parallel. There is an integrated logic in how a company builds, for example, its talent management, leadership development, and performance management efforts. So apply as many levers as possible simultaneously. That’s the key to keeping the supply of talent and leadership—along with economic performance—steady and sustainable.

    Study Methodology

    This study is a preview of the findings of our forthcoming 2012 global survey on people management, which is part of the Creating People Advantage series BCG has published annually since 2007. It is also the third global study produced in partnership with the World Federation of People Management Associations (WFPMA). For the 2012 study, we surveyed 4,288 respondents in 102 countries across a broad range of industries, from consumer goods and transportation to banking and health care. From our list of 22 HR topics, we asked companies to rate their current capabilities on a scale of 1 to 5 (where 1 = least capable and 5 = most capable); we then identified the capability gaps between high- and low-performing companies. To determine the correlation between people capabilities and economic success, we also asked the survey respondents to indicate their revenue growth and average profit-margin change from 2010 through 2011.

    The complete study results, along with comprehensive analysis, will appear in the full Creating People Advantage report, to be published in October 2012. Visit for further details.

    The most recent Creating People Advantage report, Time to Act: HR Certainties in Uncertain Times, was published in September 2011.
    Due to a technical adjustment, there were two different response-category ranges used for these questions (“10% to 20%” versus “10.1% to 20%”), which showed no impact on the results.