HR’S ALLOCATION of staff time and resources is considerably out of alignment with the priorities of both senior line managers and HR professionals, according to recent research from the US.
HR’S ALLOCATION of staff time and resources is considerably out of alignment with the priorities of both senior line managers and HR professionals, according to recent research from the US.
The survey, which took in about 1,700 line managers and 550 HR managers and supervisors, found that only one-third of line managers and less than half of HR professionals rate the performance of their companies’ HR departments as good.
However, 83 per cent of senior line managers, on average, consider HR’s major functions critical to their companies’ business success.
“Clearly, HR recognises that there is a real opportunity to improve the way it provides services and how they allocate spending,” said Bruce Pfau, national practice director of organisation effectiveness at Watson Wyatt, which conducted the survey.
The HR Scorecard Alliance noted that the link between HR budget allocations and the HR functions that line managers deem most important needs to be tightened considerably.
“Currently, there doesn’t appear to be a strong correlation between how resources are allocated and the perceived value of the various HR activities,” said Pfau.
“Indeed, while line managers ranked staff selection as second in importance, it was 36th in spending. Likewise, employee retention was rated third in importance, but ranked only 44th in spending.”
The study also identified significant gaps between what line managers perceived as important HR functions and how HR is performing those functions.
“The good news is that HR and line managers generally agree on the main priorities for HR,” said Pfau. “The main challenge, therefore, is for HR to put dollars where they count most so that resources will better align with priorities.”
As a first step, companies should conduct an activity-based cost analysis of how HR is spending its time and money, Pfau said.
“Not all HR activities are equal. Once a company sees how its resources are being allocated, it should be relatively easy to adjust spending so that the highest value-add activities are receiving the biggest portion of the budget.”
