A failure to demonstrate strategic value is damaging HR’s reputation with business leaders, warns a new Chartered Institute of Personnel and Development (CIPD) report.
HR is perceived as implementing rather than devising strategy by business leaders, according to the CIPD survey of 369 business leaders and 107 senior HR professionals.
This means that business leaders doubted HR’s contribution to company performance. Tellingly, almost a fifth of the business leaders surveyed were unaware of HR’s contribution to strategy.
“It is clear that HR still has work to do in terms of increasing its visibility and impact and ultimately in demonstrating the organisational value they deliver,” says CIPD chief executive Peter Cheese.
“HR needs to make better use of metrics to look forward, support and inform the business agenda, but HR leaders must also have the courage, and the business savvy, to effectively challenge and influence business leaders and strategies,” he adds.
The report, HR Outlook: A variety of leader perspectives, also pinpointed the need for HR to balance the tension between short-term cost priorities and longer term people issues.
While cost management was cited by 71% of HR professionals and 64% of business leaders as a priority, it was the longer term issues of leadership development and matching talent development with future skills requirements that was keeping HR people counting sheep at night.
The conflicting priorities of cost reduction and increasing employee engagement put HR at the heart of the business agenda in the current economic climate, according to Cheese.
“Business leaders are looking to HR for creative solutions to the challenges the business faces – but there still needs to be a solid and robust business case for action,” he says.
Ultimately there are six insights that need to emerge from the findings, argues the CIPD:
- Increase visibility and impact.
- Have the courage (and skills) to challenge and influence.
- Use data-based evidence to support the business (not the HR) agenda.
- Be curious and be credible.
- Keep an eye on the long term- don’t forget to invest in talent and future leaders.
- See the current economic climate as an opportunity to be creative and demo HR’s strategic contribution.
