Human resource professionals are making slow strides in becoming strategic business partners within their organizations, according to new research Next generation HR from Hay Group, the global management consultancy.
Only 34 per cent of those surveyed believe HR is making a significant strategic contribution to their organization; most (60 per cent) positioned themselves somewhere in the middle, confirming that there’s still much room for improvement.
The research, which surveyed over 1,400 HR professionals and senior management from around the world, found that the cost cutting and efficiency priorities – introduced to weather the economic storm of recent years – have now evolved to a focus on driving performance and growth. Meanwhile, the emerging HR concerns for the years ahead lie around developing the workforce and ensuring the right people are in the right roles and doing the right work.
“As market demands continue to change, organizational success will hinge on HR’s ability to connect human capital decisions with business strategy. HR will need to stop clinging to traditional processes and inefficient silos and move toward an integrated approach that links work and people to business results. Such change is critical if HR is to transition to its rightful place of strategic business partner,” said Phil Johnson, Hay Group’s global head of work measurement.
However, respondents report that there is still significant misalignment across HR disciplines:
* Only 40 per cent say work measurement and talent management processes are closely aligned
* Even fewer (36 per cent) say talent management and organizational effectiveness are closely aligned
* Slightly more than one-third (39 per cent) say they have moved away from traditional silos, but this leaves 61 per cent that haven’t – or worse still, are unsure.
The research highlights how HR will lag behind management expectations if a holistic approach to people management – based on a framework of understanding work – is not adopted. Jobs are at the heart of HR processes, therefore it’s crucial to analyze work if people resources are to be best deployed to deliver on business objectives.
Despite 76 per cent of respondents saying they use a formal work measurement system, the research suggests that many organizations are not seizing upon the full potential or making the most of their investment.
“Organizations are largely limiting work measurement systems to the setting of base pay and for grading purposes,” said Johnson. “We’re starting to see more companies use work measurement to support succession planning, career pathing and other talent management decisions, and as a job and organization design diagnostic – but most are missing out on its true value. Used to its full extent work measurement can feed enormously powerful information into strategic decisions and improve the overall efficiency of the organization. Understanding people and work is at the core of what we see as next generation strategic HR.”