Due to a lack of workforce management, large corporations are losing revenue and market share potential. In its study of 300 Fortune Most Admired companies, Convergys Corporation found that even companies known for implementing best practices estimate overspending by at least 10 percent on their workforce, and that their employees are underperforming by 10 percent.

How does that translate to the bottom line? Companies are "leaving money on the table," says Pat Vallejo, director of Industry Marketing for Convergys (www.convergys.com) and project manager for the Convergys 2004 "Workforce Agility" study. For example, a $10 million company that decreases its workforce costs by 10 percent and boosts productivity by 10 percent would gain nearly $1.25 million in annual savings, according to Convergys.

Although the U.S. Labor Department reports that the productivity of American workers rose at an annual rate of 2.9 percent last spring, the Convergys study found that 84 percent of executives surveyed may not be taking full advantage of their workforce's potential, and half of all HR executives acknowledge they do not have enough information about their workforce to increase their competitive advantage in their industry. "Sixty-three percent [of HR executives] still don't have access to centralized data," says Peter Hirano, vice president of professional services and marketing for Convergys.

Despite an increased demand for a flexible workforce, the study found that companies:

• Have trouble retaining top talent
• Don't have systems in place to identify the most skilled employees
• Aren't providing more training for their most strategic employees compared with the training provided to other employees

In addition, companies struggle to respond to business needs quickly. "There's still a lot of rigidity in a lot of companies," says Vallejo. Forty-five percent of respondents indicated their company is "rigid" in terms of its ability to reallocate people to projects across lines of business or teams. Only 16 percent indicated that their company is "flexible."

Study participants also reported a significant gap between human resources needs and business goals. According to Convergys, 55 percent claimed that work structured around jobs--instead of skills and competencies--is a major barrier to optimizing their key talent. Eighty percent of senior executives stressed the importance of focusing on retention and development of their strategic employees and most skilled talent, but fewer than 20 percent of HR executives report that their company is highly proficient in either of those areas.

How can companies manage their workforces more efficiently? Be flexible, Hirano says, and implement processes that shift the workforce as business demands change: "Deploy the right people at the right place at the right time to support the changing needs of your business."

He also recommends that you look through a wide-angle lens when working to close the gap between HR needs and business goals. For example, study how one plant's productivity differs from productivity at another plant, analyze the makeup of the workforce at the top-performing plant and what drives productivity there, and determine why one plant is more successful than the other. Then, implement changes at other plants to boost productivity throughout the company.