Developing potential leaders, enhancing managerial and supervisory skills, and dealing with competitive pressures are at the top of the list of challenges faced by HR and training executives, according to the 2005 Business Issues Survey conducted by The Ken Blanchard Companies.

Respondents were asked to define their organisation's top management, employee development and business challenges from a list provided.

For the third year running, developing potential leaders was listed as a priority, with 58% of respondents claiming this to their top management challenge. Selecting and retaining key talent was also a key issue for 53% of respondents. These issues were followed by reducing costs, selected by 50% of respondents, and creating an engaged workforce (48%).

Nearly two-thirds - 61% - of respondents said their major employee development concerns centred on developing managerial and supervisory skills. Other key employee development challenges included customer relationship skills, selected by 44% of respondents, interpersonal communication skills (40%), team building skills (38%), executive development (32%), sales skills (31%), professional skills (28%) and IT skills (23%).

When it comes to business challenges, competitive pressure tops the rankings with 63% of respondents listing this as a major challenge - a full 24 points above any other business issue. Respondents cited overseas competition, reduced demand for products, market share erosion, pricing pressure from offshore competitors and concerns about meeting customer criteria in view of dwindling budgets and resources.

A shortage of skilled labour is the next most pressing concern (39%), with respondents citing skill shortages and lack of trained talent at all levels.

Responses were collated from over 5000 international HR, training and other business leaders.