HR is at the table: CEOs

But stronger business acumen still needed from profession
By Sarah Dobson
|Canadian HR Reporter|Last Updated: 06/05/2011

While many HR professionals might feel they don’t have or deserve a seat at the executive table, that’s not the view of many top executives, according to a report by the Human Resources Professionals Association (HRPA) and Knightsbridge Human Capital Solutions based on interviews with 20 Canadian CEOs.

Human resources is considered vital to the business in managing workforce levels and putting the best talent in the right roles, especially in knowledge-based sectors, said Bill Greenhalgh, president of HRPA, speaking at an event for the report, The Role and Future of HR: The CEO’s Perspective. But, for some reason, there’s a strong disconnect — CEOs need strong leaders in HR while HR doesn’t feel valued by the C-suite.

“I’ve always found this urban myth very mystifying,” he said.

The majority of CEOs believe HR is making strong contributions in strategic areas such as talent management, succession planning, engagement, recruitment and retention. And they believe HR has done a good job working as a partner to the CEO during a tough couple of years, said the report. At companies that grew during the recession, CEOs appreciated HR’s support in aggressively attracting talent from newly available pools of external candidates. At those companies that downsized, CEOs felt HR made critical contributions in developing transparent, clear employee communications and retaining top talent, found the survey.

HR adds strategic value and helps organizations prosper, said Susan Robinson, principal of leadership solutions at Knightsbridge in Toronto, speaking at the event.

“Every CEO commented about the critical strategic and tactical role HR played,” she said.

HR has the same visibility as any other function, such as finance or marketing, and is as critical as any of these other areas. But CEOs also realize how hard it is to measure the value of HR, said Robinson. However, it’s the knowledge-based sectors that appreciate the strategic value of HR — the profession is still emerging in other sectors such as manufacturing and resource, she said.

While senior HR executives have a rightly earned place at the table, it’s up to HR leaders themselves to be more assertive in having their voice heard around that table, found the report. CEOs said they understood their own role as sponsors in helping organizations understand the critical contribution of HR to business success but HR executives need to be more forward in demonstrating their value and demanding their issues be recognized.

“There’s a seat at the table there, there for the asking, there for the right HR person,” said Robinson. “Senior HR executives can and should have a seat at the table but HR leaders need to assert themselves.”

Business savvy is critical for CEOs when it comes to the skills they want in HR professionals. It’s the greatest strength and the greatest weakness of HR executives, according to the CEOs interviewed. They want HR to understand the front-line business, how to increase productivity in key areas, how to maintain the business and flexibility in a unionized environment and to realize there are trade-offs to introducing certain programs or policies, said Robinson.

The need for better business acumen is the big area for improvement, according to the CEOs, as few HR people can articulate business issues. HR executives should be business people first, HR leaders second, they said.

“To that end, CEOs want senior HR executives to focus on business priorities rather than on policies and programs that are sometimes impractical or even irrelevant to the top or bottom line of the business,” said The Role and Future of HR. “Virtually across the board, CEOs stressed that HR executives need to get better at understanding the challenges and business needs of supervisors and front-line managers on a first-hand basis.”

HR executives also need to forecast critical social, legislative and people trends, so organizations can implement programs that have front-line buy-in and really matter to the business, said the report. Instead of being presented with “the sky is falling” scenarios when it comes to newer legislation, the CEOs want HR to get in front of the legislation to find out how the business can achieve its goals while still being compliant, said Robinson. There is far too much focus on the punitive aspects, they said.

As part of that, HR executives also need to be “culture-builders” who can build more than the sum of the parts, get the best energy out of the whole team and advocate for employees. HR should have greater communication skills than any other executives, said the CEOs, and be able to balance the personalities of the executive team.

Also important are trust, integrity and influence, found the report. The HR team needs to be seen as trustworthy, able to collaborate effectively and be a trusted advisor to the CEO.

There are several common attributes, such as business acumen, that are shared among an executive team, said Jay Forbes, president and CEO of Teranet, a Toronto-based e-services company. But there are also nuances to the chief human resources officer (CHRO) role that distinguish it from others, such as empathy, communication skills and selflessness. Maintaining a sense of cohesiveness and alignment among the executive team is critical for HR, said Forbes, who spoke at the event, and that means having humility, gaining confidence and acting as a go-between among the members.

“It’s an artful role the CHRO can play in terms of moulding a cohesive, well-aligned, highly functional executive team,” said Forbes. “We need the CHRO to be every bit as involved in the strategic planning process as any of their colleagues.”

To successfully execute strategy, a high level of employee engagement is needed, through training and development and understanding the skill sets and competencies required, he said. CHROs craft communication strategies and programs that cascade what is often a nebulous strategy into something that is understandable and relatable, said Forbes.

“That provides tremendous value,” he said.


Tips for HR professionals

What the CEO needs from HR

When asked what they expect HR’s central role to be in the coming years, CEOs expect HR to deal with:

• talent management and succession planning

• the employment brand

• four generations in the workplace

• employee communications

• social media

• trend analysis and forecasting

• change management.

Source: The Role and Future of HR: The CEO’s Perspective

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