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Study: Where are Germany’s Future Business Leaders?

Feature Article | September 17, 2015 by Susan Galer

According to the Oxford Economics “Workforce 2020” study supported by SAP, companies in Germany may be at risk when it comes to developing leaders and a workforce with the skills required for global growth.

Sixty-eight percent of executives in Germany who reported that their companies have below-average profit margin growth over the past two years, called underperformers, say company expansion plans for growth markets are limited by access to the right leadership, compared to only 17 percent of high-revenue-growth organizations. In addition, respondents from 83 percent of high performing companies say they are prepared to lead a global workforce versus 56 percent of underperformers.

Closing the Skills Gap

Executives from German companies with below-average profit margin growth say a lack of leadership is an impediment to achieving their workforce goals. Source: Oxford Economics Workforce 2020 Study 2014

Executives from German companies with below-average profit margin growth say a lack of leadership is an impediment to achieving their workforce goals. Source: Oxford Economics Workforce 2020 Study 2014

Based on this study, executives agree that the workforce of the future will be increasingly flexible and diverse. An influx of millennial employees and contingent workers demands new workforce development and management programs at companies worldwide, including Germany. Yet underperforming companies in this country are not focused enough on addressing these trends through skill development.

For example, more than half of executives at companies in Germany with below-average profit margins report difficulty recruiting employees with base-level skills is impacting their workforce strategies. They also struggle to find employees with more advanced skills. In comparison, over half of high-profit-margin-growth companies say they offer supplemental training programs as an employee benefit — significantly more than underperformers. High-profit-margin-growth companies are also more likely to have a formal mentoring program (69 percent vs. 53 percent).

Making Human Resources Strategic to the Business

Regardless of performance levels, many companies are not making human resources (HR) a strategic priority. Just 50 percent of executives at high-revenue-growth companies say workforce issues are driving strategy at the board level. That number is only slightly lower for underperformers — 44 percent  — and those companies do not expect that number to grow in three years.

Findings like these only strengthen the argument for HR transformation at events I’ve been covering like SuccessConnect 2015, and HR Transformation taking place in Germany this week. The future of every business depends on a successful search for skilled workers and leaders worldwide.

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