Inability to Attract and Retain Talent and Other Human Resources Issues Are Top Threats to Canadian Corporate Profitability, Accenture Study Finds

July 19 2006 - The inability to attract and retain talent as well as other human resources issues are among the biggest threats to corporate profitability in Canada, according to results of a survey released today by Accenture (NYSE: ACN).

The purpose of the survey, which comprised interviews with 250 senior executives at leading businesses in Canada, was to identify and prioritize the threats to corporate profitability over the next six months and understand how executives' priorities shift over time.

When asked to identify factors that threatened their companies' profitability over the next six months, more than half (51 per cent) of respondents selected "inability to retain talent." This is an increase of 11 percentage points over results of a similar survey conducted in fall 2005. In addition, 51 per cent of respondents identified "other general human resources issues" as a threat to corporate profitability, compared with only 22 per cent of respondents in the previous survey who selected that as a threat.

"The workforce, including major human resources issues such as recruitment and retention, continues to be a top business challenge in Canada," said Bill Morris, Accenture's country managing director for Canada. "Canadian businesses need to address these challenges, as they feed directly into the issue of customer care and overall business performance. It is clear from these results that human capital is seen as a huge asset to Canadian business."

Rounding out the top issues threatening corporate profitability in Canada are "poor customer care," cited by 46 per cent of respondents; "compliance," cited by 44 per cent of respondents; and "misaligned corporate objectives" and "inability to focus on core competencies," each selected by 37 per cent.

In comparison to the same survey conducted in the fall of 2005, issues such as the "fluctuating dollar" and "macroeconomic forces" no longer rank in the top five threats to Canadian corporate profitability. In addition, "poor customer care" moved up 17 percentage points, selected by 46 per cent of respondents in the most recent survey.

From an industry perspective, executives in both the government and communications sectors ranked "human resources" as the top threat to profitability, with 57 per cent of respondents in each of those industries identifying it as a threat. "Inability to retain talent" was seen as the number two threat to corporate profitability by executives in those same industries, selected by 56 per cent of government respondents and 55 per cent of communications respondents.

Executives in the financial services industry, including those at banks and insurance firms, ranked "poor customer care" as the number one threat, selected by 53 per cent of respondents in that industry. Executives in the manufacturing industry selected the "inability to retain talent" as the top threat to corporate profitability, selected by 42 per cent of respondents in that industry. The same number of executives in the retail industry selected "poor customer care" as a threat, making it the top threat in that industry.

Top 5 business threats to profitability for senior executives (April/May 2006 survey):

Business Threats

1. Inability to Retain Talent
1. Other Human Resources issues
3. Poor Customer Care
4. Compliance with Government and other
regulations (Sarbanes Oxley)
5. Misaligned corporate objectives
5. Inability to focus on competencies

% of respondents
selecting issue
51
51
46

44
37
37

Top 5 business threats to profitability for senior executives (Fall 2005 survey):

Business Threats

1. Inability to Retain Talent
2. Fluctuating Canadian Dollar
3. Macroeconomic Forces and the
Global Economy
4. Poor Customer Care
5. Compliance with Government and other
regulations (Sarbanes Oxley)

% of respondents
selecting issue
40
31

30
29

23

The threats to profitability over the next six months selected least often by respondents in the current survey included: terrorism (13 per cent), weakening brand equity (16 per cent), lack of new products and services (17 per cent), inability to compete effectively (26 per cent) and fluctuating Canadian dollar (27 per cent).

About the study

A total of 250 senior executives from the same number of companies participated in the first quarterly study for the Ipsos-Reid Executive IT Panel research program, sponsored by Accenture. The study was designed to identify trends for the manufacturing, retail, finance, insurance, government, communications and services industries. The study, conducted between April and May 2006, comprised a telephone interview and online survey.

About Accenture

Accenture is a global management consulting, technology services and outsourcing company. Committed to delivering innovation, Accenture collaborates with its clients to help them become high-performance businesses and governments. With deep industry and business process expertise, broad global resources and a proven track record, Accenture can mobilize the right people, skills and technologies to help clients improve their performance. With more than 133,000 people in 48 countries, the company generated net revenues of US$15.55 billion for the fiscal year ended Aug. 31, 2005. Its home page is www.accenture.com. Its Canadian home page is www.accenture.ca.

Contact HRM Guide Network