Australian HR behind global eight ball

by 01 Nov 2006

AUSTRALIAN COMPANIES are generally less aware of the value HR can add and slower to move on workforce issues than their European and US counterparts.

A global study of 251 executives found that very few Australian companies rate HR as a top three business critical function, and most prioritised HR and training near the bottom of a list of 12 key business functions.

They also had less faith in HR and training towards progressing business goals, and were less likely than many global companies to adopt business metrics to measuring HR performance outcomes.

Peter Cheese, global managing partner in human performance for Accenture, which conducted the study, said it could be that Australian companies are not yet making the connection between strong HR and training capabilities and business performance.

“There are a number of critical human capital elements. Firstly, specific job content skills for mission critical functions are clearly recognised, but in general executives do not feel that their workforces are performing at market leading levels,” he said. Only 9 per cent of Australian companies considered their workforce to be industry leading in the study.

Furthermore, companies also struggle to identify which skills are lacking and do not always feel their training functions are aligned (only 3 per cent of Australian companies surveyed said they were very satisfied with their training function, compared to 10 per cent globally).

“Secondly, alignment to strategy is critical – does the workforce understand the key strategic business priorities and are they aligned to them?”Cheese asked.

The study indicated that top executives generally do not feel their people are well aligned (36 per cent of Australian companies said that less than half their workforce understand company strategy and what is needed to be successful in their industry, versus 40 per cent globally).

“We also found leadership capabilities a consistent area of concern for many organisations, specifically the supervisory and middle management ranks, which most employees report to,” Cheese said.

“Acquiring new customers and driving greater customer loyalty were viewed as the highest areas of importance, followed by driving innovation, and workplace adaptability and flexibility. These values were seen as core to instilling a high performance mindset in the workforce.”

Cheese said HR has typically been underinvested in, compared to other corporate functions. In many cases, he said HR needs to transform to become both more efficient in its administrative capabilities, and effective in driving greater business value.

“This has shifted the focus of investments to new, more comprehensive HR systems, consolidation of activities into shared service centres, re-skilling of HR to perform the role of business partner, and providing better information and value metrics.”

He said there was increasing attention on HR in Australian companies, many of which now operate as part of a global economy and face similar challenges to companies from other countries.

More than half the Australian companies in the study saw talent sourcing as a challenge or severe challenge, which was higher than the global benchmark at 43 per cent.

“HR in the US and Europe is undergoing a lot of change,” Cheese said.


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