Recognise This! – HR must provide strategic value to claim a place on the executive team.

What’s the reporting structure for HR in your organisation? Do you have a CHRO or similar that reports directly to the CEO? Or does HR report up through operations (the COO) or finance (the CFO)?

Workforce Management recently featured research showing a trend for HR to report up through the CFO more often.

“Nick Araco, president and CEO of the 2,000-member CFO Alliance, finds that taking on HR tasks ‘is becoming the norm’ for CFOs at midsize firms. … Araco sees an ongoing collaborative role for CFOs within HR. ‘They have a respect for those who specialise in the area of human resource management, and the goal collectively would be to continue to be involved, but in a truly collaborative way—to inform them with key financial metrics, tools and resources.’”

This corresponds to research (full white paper available for download) we conducted in 2008, finding:

  1. Human Resources must take a more strategic role in the business.
  2. Employee recognition improves employee engagement, which increases retention and productivity, thereby positively affecting company performance.
  3. Business leaders believe creating a universal recognition platform for global companies is difficult.
  4. CFOs are not aware of how much they are currently spending on recognition programmes.
  5. The Chief Talent Officer (CTO) and the CFO must work together to chart the course for the future.

I’m curious what you think. Should HR stand alone as a strategic function in the organisation and, as such, report directly to the CEO as part of the executive team? Or should HR be part of the Finance department (or another department)?

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