HR still a boardroom outrider

Jul 03 2008 by Nic Paton Print This Article

With businesses facing a critical shortage of experienced managers, now's the time for HR finally to stop being an "outrider" and become a valued, strategic business partner. And pigs might fly.

There is still a huge gap between what senior managers want from HR and what they are actually getting most of the time.

With markets tumbling, baby-boomers retiring and the labour market getting tougher by the day, firms are recognising they need to focus more on succession planning, retention and engagement.

But, while chief finance officers are stepping up when it comes to managing the figures and chief talent officers emerging as pivotal leaders in the war for talent, HR, much of the time, appears to be stuck in its ivory tower.

According to research by US consultancy Globoforce, there is a clear need for HR and finance to work together much more closely than they do.

While, CFOs and CTOs are forging new working relationships and creating business cases for processes, programmes and technologies that track financial outcomes, HR as a whole is, by and large, not proactive enough to become a proper, strategic partner, it argued.

HR, the poll of 250 HR and finance professionals found, is nowadays not only expected to take a more strategic position but also to quantify work with appropriate metrics and substantiate return on investment.

The difficulty is that, while nearly nine out of 10 felt HR needed to step up to the table and play a more strategic role than in the past, just two thirds believed it was doing so and having right amount of input in the company's strategic direction.

Nine out of 10 felt it was more important than ever for HR to be accountable for spending, with a similar percentage noting that HR needed to embrace a more metric-based standard for measurement.

"Business leaders understand that HR has the power to transform an organization by taking a strategic view and using technology to implement a measurable employee engagement solution that generates real results," said Derek Irvine, vice-president of global strategy at Globoforce.

"As this study shows, leaders also understand employee recognition can improve employee engagement and, by extension, their bottom line, shareholder value and customer retention.

"To get there, it is essential that today's global companies bridge the current gap between finance and HR, empowering these functions to collaborate on this new strategic imperative and ultimately implement a universal recognition platform that motivates, retains and attracts great talent," he added.

The value that HR could bring was clear in the survey's finding that employee recognition was critical to creating engagement and, therefore in turn, to boosting the bottom line.

Engaged employees were more likely to be high-performing employees, who in turn were less likely to leave their organizations.

In an ever more globalized environment, eight out of 10 also believed that addressing the needs of global employees was difficult, while nearly six out of 10 said creating universal recognition platforms for global companies was difficult.

CFOs, it found, were often not aware how much was being spent on recognition. While nearly everyone agreed HR and finance needed to be on the same page, just under six out of 10 said this was the case in their organizations, it added.

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