Why People Management Matters

When it comes to expenditure, the biggest single item for the vast majority of businesses is salaries and related costs.  In view of this, one would think that looking after that investment would be a high priority.  Many see it this way but many others don’t.  So why does people management matter?


It is not uncommon for 60% of the total expenditure of a company to be on staff.  If there were any other investments of this scale on anything else in the business, don’t you think it would be getting a high level of attention?

Talent shortage

Much has been written about talent management over the last few years about the war for talent.  For example, in response to The Chartered Institute of Personnel Development (CIPD) eighth learning and development survey, 47% of respondents identified that there was a shortage of high quality talent in UK organisations.  In some professions these numbers are even higher.  Against this backdrop of talent shortage, people management takes on increased importance.

Without People There Is No Business

While there are some business (such as internet based businesses) that may be less people dependent, the vast majority still are highly dependent on people to:

• Attract clients or customers
• Make sales
• Provide the product or service
• Physically ship the product
• Manage customer relationships
• Keep on top of the finances
• Look after legal aspects
• Set policies
• Innovation
• Sourcing supplies and services

Without people in the above and many other areas of the business, the organisation would simply not function.


As well as the challenge to attract staff, retention is also a huge issue for many businesses.  The employment landscape continues to change.  Industries are consolidating which means that even big employers cannot give long term guarantees.  There is much greater mobility in the workforce.  Many more people are able to go and work overseas and keep in regular touch with people back home through the use of technology.  All of the above add to the retention challenges that businesses face.


Our parents might have been happy just to have a job but those entering the workforce have much greater expectations.  They are looking for and expecting:

• Opportunities for progression
• Challenging and enjoyable work
• Work that has some meaning for them
• A good work environment
• A balance between their work and their life

At the end of the day, if you are an employer who wants to get results and is dependent on people to deliver them, people management needs to be given a high priority.

About the Author Duncan Brodie

Since 2006 I’ve worked with in excess of 8,000 accountants and professionals in workshops, seminars and one to one helping them land their next jobs and become better leaders, presenters and business partners. Before that I spent 25 years in accountancy climbing the career ladder from Payments Clerk to FD. I’m a CIMA Fellow, Certified Professional Coach and Team Coach Facilitator.

Leave a Comment:

Add Your Reply