The Chartered Institute of Personnel and Development (CIPD) has suggested that senior HR and wider business leaders are both clearly focused on the short-term business priority of cost management, but must work harder to balance important issues.

It suggests that the challenge for HR is to balance the tension between responding to short-term cost imperatives and keeping longer-term people issues firmly on the agenda, as these are what will really make the difference to sustainable performance.

These revelations come in wake of new research, based on a survey of 369 business leaders and 107 senior HR professionals.

The report, ‘HR Outlook: A variety of leader perspectives’, reveals that although 64% of business leaders and 71% of HR professionals cited cost management as their top priority, when it comes to what keeps them awake at night, HR is more likely to be worrying about longer-term people issues. Most notably, leadership development (41% of HR respondents versus 18% business leaders) and talent development in line with future skills needs (27% HR versus 18% business).

Peter Cheese, CIPD Chief Executive, commented:

“This is a time of real opportunity for HR. In what is often called the ‘current economic climate’, but would more accurately be called ‘the new normal’, businesses face many conflicting priorities, such as reducing costs at the same time as trying to increase employee engagement.

“This puts HR issues at the heart of the business agenda now more than ever. Business leaders are looking to HR for creative solutions to the challenges the business faces – but there still needs to be a solid and robust business case for action. Using metrics effectively to inform business decision-making is essential.”

In addition to these findings, the research also discovered that many business leaders remain unconvinced about HR’s contribution to business performance, suggesting they are not currently demonstrating their strategic value as strongly as they could.

It indicates that HR is perceived by business leaders, to be more involved in implementing strategy than in devising it, with almost a fifth of business leaders saying they do not know what HR’s contribution to strategy is.

Cheese added:

“It is clear that HR still has work to do in terms of increasing its visibility and impact and ultimately in demonstrating the organisational value they deliver

“HR needs to make better use of metrics to look forward, support and inform the business agenda, but HR leaders must also have the courage, and the business savvy, to effectively challenge and influence business leaders and strategies.”