Business Leaders Don’t See HR as Key to People Strategies
While 60 percent of senior business executives consider people issues to be a significant factor in corporate strategy, relatively few of them look to their human resources teams for help on those issues, according to a study released Tuesday, May 29, by consulting firm Deloitte Touche Tohmatsu and The Economist Intelligence Unit.
The study found that 52 percent of companies don’t have a chief human resources officer or equivalent executive assigned to such people issues as developing a high-performance culture or meeting talent needs.
Deloitte and The Economist surveyed executives from 468 companies on several continents, including 104 HR leaders and 155 senior business executives.
Only 23 percent of corporate leaders see their HR departments as currently playing a crucial role in coming up with corporate strategy and having a significant impact on operating results. And although business experts increasingly recognize people as a key intangible portion of a company’s market value, 63 percent of executives rarely or never consult their HR team on mergers and acquisitions. Even when it comes to regulatory compliance, a traditional HR domain, 26 percent rarely or never check in with HR.
From Workforce magazine.
It is not the first time I’ve read this sort of study, but it concerns me a lot. Yes, the sample isn’t huge, but the numbers are similar to stuff I’ve read before. It doesn’t seem to be getting any better. A couple of years ago there was a big huff about the “why we hate HR article”, but has much changed? Should HR care? At the end of last year I had the opportunity to listen to Dave Ulrich, a leading HR academic. Strong, inspiring stuff, but the Deloittes survey points to a more depressing reality.
I’ll be a little forward here and tag several HR-HCM related bloggers out there and see if we can’t get a series of posts going on this. I’m asking Donald. Jim, Max, Laurie, Jason, SystematicHR, Michael, Alice, Systematic, Karen, Michael, Debra, Gautam, Tom and the evilhrlady to get the ball rolling, but feel free to add more to the list.
Fancy a podcast anyone?
Vendorprisey 
Thomas, as you know, me’s not a HR-HCM folk-type, but bugger me:
Business Model = “How to use your resources to create the value defined in your strategy, and how to keep some of the value yourself”.
Unless you’re an aluminium melter I suspect that resource #1 for most out there is the HR/HC part… so, don’t they have a Business Model or what?
Ah well, guess most have skipped the Strategy/Business Model part and gone for wishy-washy mission statements instead 😀
I’m up for this — if we can’t function as the ‘regulatory police department’ of an organization, how can we be leaders and teachers?
Sigh, it’s a bit depressing at times.
Good topic, Thomas – it’s the elephant in the room, isn’t it? Stay tuned, I’m having some fresh discussions with representatives from both camps in the upcoming 2 weeks which I’m sure will focus me.
-Systematic
The Other “TO”-
I’m just wrapping up some interesting survey work on this very topic (and many others HCM technology related) and will weigh in shortly.
Cheers,
Jason
I posted my response http://evilhrlady.blogspot.com/2007/06/does-hr-add-value.html
Excellent question!
Albeit a smudged line, where do we cross over into the OD world? The OD world is not regulatory, but facilitative. Is our thinking too boxed to do anything about the HR reputation? Maybe we should just move into the realm of OD where every ‘leader’ needs a set of skills to participate in the development of an organization?
Thomas – a great question. Yes HR should be worried – because if CEOs really do believe that people are crucial, and HR aren’t providing what they need, they’ll get it elsewhere. For a longer response, see my post:
http://donaldhtaylor.wordpress.com/2007/06/19/hr-is-our-least-important-asset-say-ceos/
Thomas, I think the subject is key and the answer straigthforward. Today HR is not strategic and will not be until it links talent management with value creation. If it does that, it will have a strategic role and will actually increase its creative side.
Otherwise it will be replaced by softwares and we will have missed an opportunity to make the economy a more talent-based economy (appart from a market-driven economy).
Unfortunately, it doesn’t surprise me much that people don’t think of HR as a strategic partner. I think we’ve been waiting too long for management to make the shift in thinking, and it’s time to take matters into our own hands.
Ram Charan talked about this during his keynote at HR.com’s show at the end of last year. What I remember is this: if HR (and by extension the whole talent management value chain) is to “get strategic” we are going to have to pull ourselves up by the bootstraps and get it done. Which is to say, in no uncertain terms, the onus is on us to MAKE OURSELVES matter at that level.
How? One obvious place to start is data. Who do we have, where? Who don’t we have, where? What talent do we need for tomorrow and and how do we get there from here? Let’s get the data first, and then the whole world opens up.
Most don’t have the data. But, without it we’re all just waiting for the Jack Welch’s of the world to bring their people-focused thinking to every company in America – and, let’s be honest, that could take a while.
More from Erik on the blog.
My two cents, for what they’re worth – http://zapaterismo.typepad.com/my_weblog/2007/06/hr-strategic–1.html
Hello
Great book. I just want to say what a fantastic thing you are doing! Good luck!
G’night
Hi TO:
Been keeping a low profile around the HR space – but I have to say that the results of the article are NOT surprising to me. I spend many years workng with, calling on, selling to and being an HR Pro.
Really solid leadership in HR is the exception (10%) rather than the rule. No doubt about it. Part of this is that great leaders to the hard part of people stuff right (Jack Welch) and so don’t need great HR people; part of it is that HR has (in the USA) become the de-facto agent of the government within the company. Not exactly the thing to endear yourself to the operating units.
HR (90%) has accepted an administrative role, so that is what they are. Administrators.
I’m going to put a post up on this on my blog over the weekend.
Tom O’Brien
HR Daily Advisor has done several articles on this theme, and we’ll do more. The founder and CEO of BLR, Bob Brady, has been both serving and observing the HR community for 30 years and is strong on moving HR to a more strategic plane. Read a few of his e-pinion pieces in our archives, available under “Tips Topics” on our website.
Include us in.
Sorry folks, I’m a bit late for the party.
Coincidentally, I wrote this piece in response to a UK survey saying that HR executives are unhappy about the impact their function has on companies.
http://flipchartfairytales.wordpress.com/2007/08/24/hr-too-wimpish-to-drive-organisations/
I have said for a long time that, just because CEOs are seeing people management as more important, it doesn’t necessarily follow that HR functions will benefit from this. In the worst case, CEOs may decide that stratigic people management is just too important to leave to HR people.
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