How aligned are the views of HR and other business leaders about business priorities? Do they agree about the impact HR has on business performance? How do we need to be working together in 2014?

CIPD’s latest HR Outlook survey compares the views of HR and non-HR business leaders about HR’s contribution and impact on business performance. There are some clear areas where their views are aligned, but also some areas of disconnect. Overall, the survey findings draw attention to where HR perhaps needs to work differently with the rest of the business, and also to areas where HR is doing great things but need to make their contribution more visible across the business.

Where do HR and the wider business agree?

HR and wider business leaders generally agree about what the current and future business priorities are. Cost management remains the top priority for the majority of organisations. But despite concerns that this focus on costs and budget restrictions may be all consuming, our findings show that organisations are balancing this with a focus on the longer-term priorities of talent management and leadership development.

And interestingly, both groups say they are kept awake at night by the same issues, although to different extents. Leadership development and talent management is on people’s minds – more so for HR, consistent with their core people agenda remit. For both groups this focus is within the wider context of cost restraints.

Looking ahead, it is clear that our priorities are changing. When asked what their business priorities will be in three years’ time, although cost management once again featured as the top priority, both HR and other business leaders also included innovation and exploiting new technology in their top five lists. These priorities didn’t feature in last year’s top 5 lists and were not rated as a current priority this year. Perhaps now the current economic context is being viewed more as the ‘new normal’ where investment in the business needs to continue, rather than a temporary operating environment where we continue to focus on consolidation?

Where are HR and other business leaders not so connected in their views?

The most prominent disconnect of views in the survey is about HR’s role in strategy. HR leaders say they are much more involved in setting, implementing and communicating business strategy than responses from other leaders suggest. And worryingly, around a fifth of business leaders said they didn’t know what their senior HR people’s involvement in strategy was. We delved a bit deeper into this mismatch of views, asking both groups what they thought the barriers were to HR increasing their contribution.

Both groups said that HR can sometimes be seen to focus more on operational rather than strategic issues. Business leaders also question how well some HR professionals understand the rest of the business. Most interestingly, and what could go some way to explain business leaders’ views, is that HR flag their visibility as an area for improvement. They highlight that they are doing great things, but they don’t make their contribution clear enough to the rest of the organisation and perhaps don’t demonstrate their impact as much as they could.

What do the findings mean in practice for HR?

I think the real value of the survey comes from considering what the findings mean in practice. Do they resonate with your experiences? Are things different in your sector and context? If so, how?

Since launching the findings in November, we’ve been further exploring them at a variety of events with HR professionals from different organisations and industries. We also interviewed both HR and non-HR business leaders to try to shed further light on what the results are telling us about how we may need to work differently. Some key areas of focus for HR have emerged, including:

• The importance of building relationships throughout the organisation. As well as raising HR’s visibility, building relationships with key stakeholders will also promote a better understanding of the operational and commercial aspects of the business, which both business and HR leaders identified as an area for HR capability development.
• Further develop HR’s influencing skills and reputation as a core business decision-maker to gain stakeholder support and commitment.
• Continue to champion the importance of talent management and leadership development. This includes within the HR function itself to ensure you are developing HR leaders of the future.
• See the economic climate as an opportunity to further demonstrate what value HR can add to the business. Two-fifths of HR leaders told us that the economic context has increased their opportunity to make a strategic contribution. The context has presented a greater need to focus on strategic issues such as succession planning, leadership development and workforce planning. And HR told us they have also increased the business’ view of their function through top-quality execution of the transactional HR activities presented by the economic climate (for example redundancy).

Share your views with me at @MillerJillC