HR divided between the strategists and the silos

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40% of HR Directors now make it to the boardroom table but up to 50% admit to not knowing the contribution their role makes to other functions and executives across the business

New research looking at the relationship of the HR Director to the CEO and Financial Director across businesses has found that 40% of HRDs now have a place at the boardroom table with a staggering 87% being part of their company’s Executive Management Committee.

However, despite the integration, a surprising 50% of HR Directors and above admit to not knowing the contribution their role makes to other functions and executives across the business.

The first findings of the research, which was commissioned by NorthgateArinso and conducted by Dr Anthony Hesketh, of Lancaster University Management School in collaboration with the HR Business Network, suggests that while CEOs have necessarily been working closely with their Financial Directors during the downturn, HRDs have increasingly been called to top table conversations, forming what might be described as a “Golden Triangle” between the executives driving the strategic, financial and people propositions.

The research assessed a sample of over 150 managers and executives in addition to qualitative interviews with a select group of CEOs, finance directors and senior HR executives. Full research findings will be unveiled on 17 November 2011.

Dr Hesketh, a senior lecturer at Lancaster University Management School, said of the findings:

“An anaemic, jobless, recovery is now giving way to increasing announcements of redundancies as fears of another capital crunch grips company leaders. With recent labour market data taking a turn for the worse, organisations are once more looking at where their cloth can be cut accordingly. It is in the essential role as a value broker of their company’s talent that HR directors have emerged as critical friends of CEOs.”

Dr. Steve Foster, Business Consultancy Manager at NGA says “There is no doubt that the business savvy HRD is a valued voice for senior management to hear in these times. Tough choices are being made by CEOs and their boards as to where and how deep to cut – it’s a delicate balance between becoming streamlined enough to endure current economic headwinds, and hanging on to enough of their capital investment in talent to succeed in the future. What HRDs now have to do is prove they deserve their seats on the boards and start talking a language their CEO and Financial Director understands, which more often than not amounts to one thing: the bottom line. ”

Glen Kieran, Founder of HR Business Network concluded: “This research shows categorically that HRDs are being required more than ever to deliver on business strategy, to be fully aligned to business objectives and to actively demonstrate where their actions impact the bottom line. But it also appears that while many do understand how they need to contribute, an equal number need more clarity about how their role, or the role of HR, fits within the organisation in these chaotic times.”

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  1. Well, how many years have we been producing and reading articles about how HR needs to justify its place at the top table by reference business strategy and HR’s impact on the bottom line? If we haven’t achieved that yet then maybe we never will or perhaps we need to be demonstrating that HR adds value in other ways – putting a human dimension forward, promoting core values such as integrity, care and respect. Otherwise we simply become the organisational hatchet people.

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