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Stuart Lauchlan

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HR and the CEO – not quite good enough yet…

CEOs and CFOs believe that the HR function’s expertise and experience in people issues can help companies make difficult but crucial staffing decisions in challenging economic times.
According to a study the Economist Intelligence Unit, senior executives in Western Europe value their relationship with senior HR leaders, with 69 percent of respondents saying that their relationship is “close and trustful” and 63 percent saying their relationship with the head of HR is “highly valued.”
However, there is room for HR to play a more strategic role in organisations. Only 38 percent of Western European executive respondents believe their head of HR is a key player in strategic planning, and only one in ten believe the role is extremely key.
But the majority of respondents expressed concern with the head of HR’s understanding of the overall business. Specifically it was found that: 
  • Forty-two percent believe the head of HR is too focused on process and is not a “big picture” person
  • 36 percent say he or she doesn’t understand the business well enough.
  • Eighty-one percent of respondents who strongly agree with the head of HR on the organisation’s people strategy also feel that their HR executive is a key strategic player.
  • More than two-thirds of respondents at companies with more than 1,500 employees worry that insufficient leadership talent will harm their organisation financially within the next 12 months, compared with only 49 percent at smaller companies.
  • Forty-two percent of respondents at the largest companies often discuss executive performance and development, compared with 24 percent in all smaller companies.

The EIU concludes: "It appears that the HR function in Western Europe still has work to do to convince senior executives that it can play a key role in the strategic direction of organisations. The survey also suggests that the head of HR might be able to increase this influence through impressing the CEO in one-to-one meetings."
The Economist Intelligence Unit – on behalf of software firm Oracle –  surveyed 235 C-level executives, 95 of whom were based in Western Europe, including Belgium, France, Germany, Italy, Switzerland and the UK.

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