HR too slow in becoming strategic business partners

by Stephanie Zillman14 Jun 2012

In the move from ‘personnel’ to ‘human resources’ HR professionals have been steadfast in proving the strategic business case for bringing HR to the boardroom table. Yet new research has shown that HR is making slow strides to this end.

According to new findings from Hay Group, inefficient processes and disconnected disciplines continue to hold HR back from taking a front seat as a strategic business partner.

The research, which surveyed over 1,400 HR professionals and senior management from around the world including Australia and New Zealand, found that the cost-cutting and efficiency priorities – introduced to weather the economic storm of recent years – have now evolved to a focus on driving performance, productivity and growth. Meanwhile, the emerging HR concerns for the years ahead lie around developing an increasingly mobile workforce and ensuring the right people are in the right roles and doing the right work.

Just 27% of those surveyed in Australia and New Zealand believe HR is making a significant strategic contribution to their organisation. The majority of HR professionals (66%) positioned themselves somewhere in the middle of the scale, confirming that there’s still much room for improvement. Globally, just 34% consider HR’s strategic contribution as ‘significant’.

As market demands continue to change, organisational success will hinge on HR’s ability to connect human capital decisions with business strategy. “HR will need to stop clinging to traditional processes and inefficient silos, and move toward an integrated approach that links work and people to business results. Such change is critical if HR is to transition to its rightful place of strategic business partner,” Anand Shankaran from Hay Group said.

Hay Group research highlights that building a workforce for the future is the growing priority – below are the Pacific (Australian and New Zealand) results:

Last 5 years Now Next five years
1. Reducing employee turnover 1. Enhancing individual and team performance 1. Developing future leaders
2. Reviewing reward strategy / redesigning reward programs  2. Increasing productivity and ‘doing more with less’ 2. Enhancing individual and team performance
3.  Enhancing individual and team performance 3. Improving employee engagement 3. Ensuring greater return on investment through people
4. Improving employee engagement 4. Developing future leaders 4. Increasing productivity and ‘doing more with less’
5. Complying with HR legislation 5. Creating more efficient performance management programs 5. Attracting talent


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