Are HR And CEOs Headed For A Showdown?
There is definitely a showdown coming. In fact, it may have already arrived. A recent Universum study stated that the “schism within organizations around issues of talent attraction, employer branding and retention have simmered for more than a decade.” In response China Gorman, CEO of the Great Places to Work Institute, wrote on Tuesday that she believes that a massive showdown is coming between HR and CEOs. While I obviously share her belief that the showdown is coming, I don’t agree that HR will be on the losing side.
Call me an optimist but I’m not the only one. In The Talent Company’s HR Pulse study we surveyed human resources professionals globally on the state of HR. The results of this study show that HR’s mood is positive; more than 50% of our respondents indicated that their HR team has improved in the last year.
Let’s look closer at the current state of talent. In their annual CEO survey PwC revealed that 63% of CEO’s are concerned about talent shortages and the availability of key skills. They’re right to be worried.
Study after study has identified talent as a significant gap. For instance, in our recent Pulse on Leadership study, The Talent Company surveyed HR and Business Leaders and fully 54% of our respondents gave their organization a failing grade on identifying current and future leaders. Furthermore, 78% of respondents said that HR needs to be more proactive in partnering with business leadership to develop talent programs.
Why is HR failing at their mandate?
The Conference Board says the reasons are varied but attributes it primarily to human resources still being viewed as a support function, administrative overload, HR’s inability to invest in long-term strategic planning and a lack of critical business skills (such as data-driven analysis or forecasting) on the part of HR leaders.
So, you may ask why we’re feeling positive. Again, looking at our HR Pulse results we can see that in the last year HR effectiveness has improved due to process improvements and efficiencies, companies adding key HR expertise to support their growth agenda and better alignment between HR programs and business needs.
HR is finally getting a seat at the table as a strategic partner. The Society for Human Resources Management conducted a survey that indicates that “more than six out of ten HR professionals agreed that their head of HR was strongly involved in business decisions at the board level”.
Now that we have a seat at the table we need to be less concerned with keeping that seat and focus on being able to influence the talent agenda. While the PwC global CEO survey reported that 93% of CEOs know they need to change their strategy to attract and retain talent, 61% of respondents admit they have not done so yet.
The time to act is now!
Make the next year a period of change and transformation for your Human Resources and Talent functions.
First, ensure you are able to deliver on your core mandate. Continue to identify process improvements and use technology in smart ways to optimize transactional functions. More importantly, make sure that you retain your key Human Resources professionals.
Once the right team and tools are in place, your Human Resources team members can become true HR Business Partners who can deliver services in a consultative, forward thinking and innovative way.
My colleague, Gord MacDonald, succinctly summarized this approach as The 5 C’s Of Being A Business Consultant:
- Provide Credible people leadership to the company, with an emphasis on the human versus the capital side of human capital.
- Build a Collaborative company culture.
- Leverage the uniqueness of the company Culture. Doing what is right for the company.
- Influence appropriate Change management at the organizational level.
- Know what Customers want from the business.
In summary, our HR Pulse results revealed that HR’s top three priorities for the next year are talent and leadership development, talent acquisition and a focus on employee engagement. Focusing on these priorities will help ensure HR are successfully contributing to company growth and profitability.