According to our research*, while 81% of CEOs see HR playing a critical role in developing business strategy, only 32% of them intend to recruit their next HRD internally.
Why is it that 50% of the CEOs surveyed feel it’s necessary to look outside their company to find the talent to align their people strategy and business challenges? And what is it they are looking for?
Much has been written about HR and its current capability. Common criticisms include that HR is too theoretical, lacks the drive to implement strategy, and is not strong enough in collaborating with senior leadership.
Common criticisms include that HR is too theoretical.
Our insight shows that 58% of CEOs want to see HR acting more as a strategic business partner, 48% want to improve the linkages between people and business issues, and the same number are seeking greater focus on outcomes rather than process.
It is our view that these findings not only define how CEOs want HR to have greater impact within their business but also define the attributes they seek from their next HRD.
Let’s explore these attributes in more detail.
HR leaders must understand the people ‘levers’ that will deliver the outcomes needed within the organisation. They must be able to suck in the data from the environment around them, identify trends, and act on them.
48% [of CEOs] want to improve the linkages between people and business issues.
A recent BBC documentary ‘The age of big data’ highlighted how police departments in California have successfully used data modelling to predict where and when crime is likely to occur, thus allowing a strategic and more effective deployment of police resources. The same principle needs to be applied by HR in the development of its focus areas.
Key questions to be asked include: where are the hotspots for this organisation? What are the people and customer trends the CEO and leadership team need to be aware of? How can we best predict people risks and develop actions to mitigate their impact?
Regulatory frameworks governing businesses and employment are complex and the penalties for non-compliance are increasing – the living wage and gender pay gap being just two recent examples. HR leaders will need to point out the benefits of compliance rather than hiding behind the letter of the law.
One HRD in the banking sector recently told us how she was planning to effectively implement the new Senior Managers and Certification regime at her organisation.
She spoke of the Executive Team’s concern that it would generate excessive paperwork that may hinder the bank’s operational effectiveness.
Her challenge is to ensure the bank creates a culture of accountability rather than one of process compliance that, in all likelihood, would serve only to defeat the purpose of the legislation.
She has since reached out across her HR contacts in the banking industry and is planning a series of cross-sector workshops with senior management to discuss their concerns and develop protocols.
Gaining these insights from other banks about how they are planning to respond, as well as dealing upfront with the nervousness of senior figures about the regulation, demonstrates the Navigator’s ability to synthesise the legal landscape into a story that clarifies the real value within the new legislation.
HR needs to link business strategy to innovative practices that will differentiate their organisation in the market place. It must build platforms that enable the company to win the war for talent, and build/retain a workforce that will best serve it during both prosperous and hard times.
A good illustration of this attribute in action is Telenor’s recent decision to align its maternity leave provisions for all its international employees to those offered within its home market of Norway. The impact of this decision will be of particular benefit to employees in Telenor’s emerging Asian markets where entitlements are often half that offered in Scandinavia.
Sigve Brekke, Telenor’s President and CEO, said “this is about strengthening Telenor’s competitiveness in the markets in which we operate. In order to do that, we rely on attracting the best talent from diverse backgrounds. We know that a diverse workforce drives innovation and better performance.”
Developing the three attributes
HR leaders need to have the three attributes identified above in order to align people strategy to the global and diverse nature of challenges that businesses face. The CEOs we spoke with agree these attributes provide an overview of the contribution they need from HR, but still doubt whether they exist in their entirety within their HR team. For HR leaders we suggest three actions that will provide confidence within their organisation of HR’s ability to deliver what’s required:
- Ensure people risk gets the air time it deserves. While many Executive Committees dedicate time to discuss people matters, 32% of senior HR professionals we spoke to believe more time needs to be allocated to this task in order to have a robust debate on people matters. HR needs to work with the Executive Committee in progressing the case for more time on the agenda to discuss people matters and risks by outlining the commercial implications of not doing so.
- Create alignment between senior stakeholders. 64% of senior HR professionals agree that there needs to be more alignment and commitment amongst the Executive Committee to drive and implement the people change agenda. This requires HR practitioners to demonstrate the full complement of stakeholder management skills to clarify the needs and wants of all members of the Executive Committee and to influence debate towards the best outcome for the business.
- Make the case for appropriate investment in people strategy. 65% of senior HR professionals indicate that they lack the technology platforms and budget to implement and enable the effective delivery of their organisations people strategy.
This final outcome from our research emphasises the real impact and value gained from the attributes outlined above. HR leaders who possess these qualities will better connect the dots that are needed to build the best outcomes for the business.
They will understand and prioritise the development of an HR team that values business understanding on par with technical understanding of practice areas.
They will have a complete understanding and awareness of the increasing availability of technology platforms and solutions to demonstrate the business impact of proposed strategies and also to move HR far away from its transactional service roots. They will possess the organisational awareness and political savvy to gain support from all key stakeholders and to ensure leaders manage people risks as robustly as they do financial and operational risks.
This is HR practice that is fit for purpose in 2016 and beyond.
*The research involved a survey of 320 senior HR decision makers and 40 CEOs from UK companies with 250+ employees.
About Tim Edwards
Tim is a Principal within the Financial Technology practice at Korn Ferry Hay Group. He has 10 years of cross-sector and multi-industry experience helping senior leaders and organisations create efficiency, realise ROI and improve the quality of their human capital investments.
His specific areas of expertise include multi-scale HR and business transformation, performance management, strategy development and organisational design.