Human Resources magazine conducted a survey late last year of the ASX top 100 companies, which examined HR representation at the board level
Human Resources magazine conducted a survey late last year of the ASX top 100 companies, which examined HR representation at the board level. We found that not one of the top 100 companies had a HR executive sitting on their board. While almost half the companies have HR representation at the executive management team level, this survey confirmed that HR is still struggling for credibility at the top.
However, this is changing. Recent conversations with a number of CEOs and senior HR executives indicate that there is a very gradual seachange in thinking at the top. This seachange is related to an appreciation of the people agenda and that high performers can actually make a difference. It’s beginning to dawn on executives that there is a significant competitive advantage to be secured through attraction and retention of talent. This realisation is still in its embryonic stages, but hey – change has to begin somewhere.
While HR professionals have been banging on the CEO’s door for decades, it seems that they are beginning to gain entrée – most often not through their own efforts – but through the research and networks of CEOs themselves. A recent global CEO study conducted by IBM Business Consulting Services found that a focus on high performing people and the having the right leadership candidates in the business was a top priority for regional CEOs.
There are always a number of leaders in the field, such as Lion Nathan’s Gordon Cairns, Bayer’s ex MD Alan McGilvray and AstraZeneca’s Jeays Lilley. These leaders serve as an example for other CEOs that genuinely want to learn more about the considerable benefits that an appreciation of the people agenda brings. However their competitors often don’t have much of a choice – either they keep pace or fall by the wayside as they watch their high performers go to competitors with better leaders, culture and opportunities.
This agenda is very much on the table of many American and European CEOs. A recent Society for Human Resource Management (SHRM) study found that as CEOs recognise the power of effective people management, the business value HR professionals contribute to their organisations grows. However, most CEOs expect HR professionals to have a firm grasp of the business and overall marketplace – a common failing in many Australian HR practitioners.
This was also reflected in Human Resources magazine’s most recent editorial board meeting. Held in Melbourne in early May, many of the views expressed at the meeting confirmed what we hear time and time again from business leaders. All too often HR practitioners are afraid to rock the boat because they lack a firm grasp on business reality and the confidence to speak to business leaders on a level playing field.
Many practitioners have an idealistic view of the world in the early stages of their career, but as reality sets in they realise HR is not all about happy smiling faces. This is a learning process, and it takes time and experience to step up to the plate that is required of HR professionals to make a contribution at the senior level. Once HR practitioners finally achieve that much vaunted title of ‘business partner’ and enjoy the hard-earned benefits that it brings, they can make a significant contribution to their organisation.
Australian HR practitioners are behind this eight ball compared to their colleagues in the US and UK. With a professional institute that has struggled for credibility over the decades, this is a reflection of the wider industry in that mid to senior level HR practitioners have to turn elsewhere when it comes to their professional needs.
This has been compounded by an isolation that peers in the US and UK don’t suffer from. But this is not an excuse HR practitioners can use anymore. As international HR expert Dr John Sullivan points out next door, Australian businesses can’t afford to turn a blind eye to competition from overseas anymore. In a wired world, competitors can sneak in and take your best talent from the other side of the globe.
This is not a prospect that many CEOs would like to entertain, but this is the reality for any forward thinking HR professional. It takes a special skillset and a number of years’ experience to reach this level, but without goals, where would any of us be?
