HR's Evolving Image

Developing leadership, creating a high-performance culture, and retaining talent are functions that would seem to naturally fall under the domain of human resources. But a new study suggests company leaders don’t think HR has the business insight necessary to deliver on these and other strategic people objectives.

Deloitte Touche Tohmatsu, a New York–based tax, audit, consulting, and financial advisory firm, and the Economist Intelligence Unit, a business information research firm in London, jointly conducted a study called “Aligned at the Top” which was published in May. It is a survey of 531 executives (40 percent HR leaders and 60 percent senior business executives) on topics ranging from talent management and operating efficiency to strategic initiatives and whether or not a “C-level” HR position is needed to make human resources more influential and visible.

The study concludes that HR is often not consulted in workforce development matters. For instance, 63 percent of senior executives said they rarely or never consult with senior HR employees regarding mergers and acquisitions, and 26 percent said they rarely or never consult senior HR leaders regarding compliance and regulatory issues. The study also reports that while many HR executives understand the importance of people issues such as finding and retaining talent—especially as a large number of mature workers begins to retire and the pool of qualified employees decreases—their attention is on improving HR operating efficiency.

Other study findings:

•  85 percent of respondents said they believe that people are vital to their company’s performance, yet only 4 percent of senior executives said people management and HR functions were considered “world-class” at their organization.

•  Only 23 percent of survey participants said that HR plays a crucial role in strategy formulation and operational results at their company.

•  52 percent of companies surveyed said they don’t have a chief human resources officer or similar C-level executive.

•  Currently, only 17 percent of survey participants feel their organization perceives people management as a strategic, value-adding function rather than a cost-center function. But that number jumps to 45 percent when participants were asked how their organization will view people management three to five years from now.

•  48 percent of respondents said that people issues are highly important in the face of increasing competition and 32 percent said human capital is highly important as businesses contend with advances in technology.

Why do so many executives take a dim view of their company’s performance at managing people? Twin Cities–area HR professionals sound off on the survey’s findings, and tell us what they think about HR’s evolving role.

HR With an Attitude

Susan Gebelein, executive vice president of client relationship management at Personnel Decisions International, a leadership and human resources consulting firm based in Minneapolis, says the results of the study don’t necessarily align with what she sees in her consulting practice. “From the executive’s point of view, HR at its best helps an organization implement and formulate strategy,” she says.