European companies appear to be struggling to find human-resources professionals with the right mix of skills to support business unit managers. A survey of HR directors at 20 global corporations based in the United Kingdom also found that core HR services such as employee data management and recruiting are often poorly executed. The troubling gulf between the needs of the business and the ability of HR to respond will force many companies to rethink their approach to the recruitment, training, and development of HR employees.

These findings echo our experience throughout Continental Europe and should worry boards and senior executives, who spend increasing amounts of time on people-management issues. Sixty percent of the HR directors we interviewed, for example, said that the senior-management teams of their companies devote more than one day a week to such issues (exhibit). One leader commented, "Everything we do today is a people-management issue."

While half of the HR directors in our sample thought their function was "well positioned" to meet the goals of the company's management agenda, more than one-third admitted that it wasn't. The latter group's unease appears to be founded on...