HR’s changing role – through the eyes of the wider executive
As businesses continuously face a multitude of strategic issues, one of the challenges for HR is how better to make its voice heard in the boardroom when these issues are discussed. While on the one hand the Board and the wider executive are saying they want HR to take a more proactive, strategic approach, HR is not always invited to have a seat at the table. To resolve this “catch 22” situation and align itself more effectively with the strategic needs of the organisation, HR should focus on understanding and aligning itself with the perspective and the expectations of the wider executive, in particular the Board.
To find out how well HR is aligned with the Board and where the gaps are, this study explored the
extent to which directors and non-executive directors share the same views about the role and performance of HR functions. To begin with, both groups were asked how well prepared HR teams are to meet organisations’ needs and requirements in the next five years. As the chart opposite shows, both non-executive directors and HR directors give HR functions in general scores of just over 3 out of 5 for their level of preparedness to meet organisations’ needs and requirements in the next five years. These scores indicate that both HR directors and NEDs believe HR functions are somewhat prepared but not well prepared for the future.
HR directors are slightly more positive about their own teams than about HR functions in general, however with an average score of 3.5 out of 5, they are not exactly confident about their own level of preparation either.
To find out how well HR is aligned with the Board and where the gaps are, this study explored the
extent to which directors and non-executive directors share the same views about the role and performance of HR functions. To begin with, both groups were asked how well prepared HR teams are to meet organisations’ needs and requirements in the next five years. As the chart opposite shows, both non-executive directors and HR directors give HR functions in general scores of just over 3 out of 5 for their level of preparedness to meet organisations’ needs and requirements in the next five years. These scores indicate that both HR directors and NEDs believe HR functions are somewhat prepared but not well prepared for the future.
HR directors are slightly more positive about their own teams than about HR functions in general, however with an average score of 3.5 out of 5, they are not exactly confident about their own level of preparation either.
Some non-executive directors perceive HR functions as lacking strategic direction and being too process-driven. This view is shared by some in the HR director community, who feel that under the economic pressures of recent years, the focus of many organisations has been on the short term in response to the pressing immediate challenges. However, HR is now in a position where it is of the
essence to address longer term strategic issues, as solving these will be crucial to organisations’ future competitiveness and success.
essence to address longer term strategic issues, as solving these will be crucial to organisations’ future competitiveness and success.
Eversheds Sutherland comment
Diane Gilhooley
Head of the Global Eversheds Sutherland Human Resources and Pensions Practice
Every organisation – large or small - faces a number of exciting challenges, from the competition for talent on a global stage, managing a flexible workforce, through to the benefits and challenges of social media and its impact on brand. HR leadership and influence is critical to the development of a response to these challenges.
Yet the function responsible for ensuring a successful heard sufficiently in the boardroom. The global challenges set out in this report are going to be met by HR leadership with the support of the board and it is vital that HR is given the opportunity to articulate its strategic value, not just on HR matters - but on a broad variety of business critical issues.
To prepare for the strategic challenges that will come to the fore over the next five years, HR directors have identified a number of strategic priorities. It is encouraging for those who would like to see HR take on a more active role in the boardroom that HR directors’ priorities are largely aligned with the key HR priorities for the next five years as identified by non-executive directors, namely:
This suggests that the two groups may not be as far apart in their thinking as some of the previous comments would seem to indicate.
HR directors continue to adopt new technologies and automate HR processes, which should help to free up their time to collaborate with other parts of the business and become the more strategic business partners that many organisations are asking for. In this way, technological innovation represents a way to increase operational efficiency, allowing HR to reduce the burden of many processes and to shift their focus towards a more proactive, forward-thinking approach.
Compared to other regions, UK HR leaders are most likely to be taking steps to shift towards strategic business partnering (60%). They are also most focused on gender reporting, which is understandable, considering the gender reporting requirements which have been recently introduced by the UK Government.
Meanwhile, HR leaders in continental Europe (68%) are most likely to be taking steps to increase alignment with senior executives and the Board, and are most likely to bring in external expertise/consultancy (39%). Amongst respondents in Asia-Pacific, the majority (75%) are taking steps towards further centralisation of HR activities.
- succession planning (HR directors’ no.2 priority)
- employee engagement (HR directors’ no.3 priority)
- staff training and development (HR directors’ no.5 priority)
- talent management (HR directors’ no.1 priority)
- improving diversity (HR directors’ no.7 priority)
This suggests that the two groups may not be as far apart in their thinking as some of the previous comments would seem to indicate.
HR directors continue to adopt new technologies and automate HR processes, which should help to free up their time to collaborate with other parts of the business and become the more strategic business partners that many organisations are asking for. In this way, technological innovation represents a way to increase operational efficiency, allowing HR to reduce the burden of many processes and to shift their focus towards a more proactive, forward-thinking approach.
Compared to other regions, UK HR leaders are most likely to be taking steps to shift towards strategic business partnering (60%). They are also most focused on gender reporting, which is understandable, considering the gender reporting requirements which have been recently introduced by the UK Government.
Meanwhile, HR leaders in continental Europe (68%) are most likely to be taking steps to increase alignment with senior executives and the Board, and are most likely to bring in external expertise/consultancy (39%). Amongst respondents in Asia-Pacific, the majority (75%) are taking steps towards further centralisation of HR activities.
“Most HR functions see themselves as good partners, but what does that mean? Partnership can mean quiet support or a more assertive kind of partner. I think we should welcome challenge and innovation from HR to define how business will be impacted by the 2020 talent pool. HR have a unique opportunity to shape new technology solutions in these changing times.”
Julie Chakraverty, Non-Executive Director, Aberdeen Asset Management
“Most HR functions are administrative and process driven, lack strategic competence or understanding…but at the same time are highly defensive!”
Non-Executive Director of multiple organisations
“Talent management is often not very strategic. Some HR leaders have a mainly tactical, processoriented view — busy running an HR service and lacking the skills to challenge business leaders’ strategic thinking. Some business managers see talent as something HR needs to deliver to them on request, not part of their day job to nurture. Put these two groups together in the boardroom and you get an operational discussion, not a strategic view of the business we need to be in, mapping out the types of talent we need to get there, and then leading through a strong discussion to management plans and accountability for delivery.”
Non-Executive Director of multiple public sector organisations
“To make sure it stays relevant, HR is going to have to continue to change and adapt over the coming years and make sure it’s truly responsive and not just waiting to be asked.”
Jeremy Phillips-Powell, Group Director, Talent and Organisational Effectiveness, RSA
Non-Executive Director of multiple organisations
“Talent management is often not very strategic. Some HR leaders have a mainly tactical, processoriented view — busy running an HR service and lacking the skills to challenge business leaders’ strategic thinking. Some business managers see talent as something HR needs to deliver to them on request, not part of their day job to nurture. Put these two groups together in the boardroom and you get an operational discussion, not a strategic view of the business we need to be in, mapping out the types of talent we need to get there, and then leading through a strong discussion to management plans and accountability for delivery.”
Non-Executive Director of multiple public sector organisations
“To make sure it stays relevant, HR is going to have to continue to change and adapt over the coming years and make sure it’s truly responsive and not just waiting to be asked.”
Jeremy Phillips-Powell, Group Director, Talent and Organisational Effectiveness, RSA
