A report by global professional services firm Ernst & Young reveals that 54% of high-performing companies and just 43% of low-performing companies say their firm has a strong pipeline of future leadership talent.

In a survey of 600 senior executives worldwide, respondents are even less optimistic that they will be able to find leaders with sufficiently diverse experience and backgrounds, with just 45% of the high performers and 36% of the low performers agreeing that their organisation has addressed these aspects of leadership development.

The report, ‘Paradigm shift: building a new talent management model to boost growth’, finds there is also a general lack of investment in talent management in most companies. Although high-performing companies are investing more in building talented teams and decentralising operations across the globe, less than half (45%) say they are effective at investing in talent management to meet financial targets. This falls to 36% in low-performing companies.

Peter Matthews, chair, global learning at Ernst & Young, says: “The scarcity of talent is fast turning out to be the single biggest obstacle to growth. Globally, companies are having trouble filling critical positions – roles in which they need people with the advanced skills essential to move the business forward. 

“Businesses are on the brink of a leadership crisis and nothing less than a ‘paradigm shift’ – a fundamental change in thinking – is required to tackle the talent shortfall.”