HR and CEOs are at odds when it comes to investments in training and development, according to a report. Three in four (77 per cent) CEOs said their firm will cut spending on T&D in the next 18 months, but only one in six (18 per cent) HR directors had this expectation, found the report, based on a survey of 300 CEOs, CFOs and HR directors around the globe, including Canada.
“It did suggest a worrying disconnect and a misalignment on something that perhaps is quite critical for an organization to effectively deploy their strategies,” said Ana Barco, head of innovation — talent management at the Chartered Institute of Management Accountants (CIMA) in London, which carried out the survey along with the American Institute of Certified Public Accountants (AICPA).
“Given we’re talking about C-suite members, we’d expect there to be more of a connection and singing from the same hymn sheet,” she said.
One reason for this disconnect is organizations are operating in a volatile market where competition is extremely high and firms are constantly trying to strike a balance between efficiency and savings, and investments, said Barco.
“Organizations have to look at what their plans are and review and change them far quicker and more often than perhaps in the past… and the HR function may just be a bit out of step and a little behind,” she said.
The fact that HR sometimes doesn’t connect training and development opportunities to clear bottom line outcomes may also be contributing to the disconnect, said Michael DeVenney, president of leadership development training firm Bluteau DeVenney in Halifax.
“Senior leaders focus on the strategic priorities and they really want to see a visible and measurable outcome. And, a lot of times, HR can look at what can be the best for people in terms of policy,
programs and development, but they don’t necessarily tie that to how it will actually impact the company,” he said.
A mismatch between HR and CEOs can be harmful to an organization because senior leaders may discount T&D programs that can actually help with the productivity and performance of the firm, said DeVenney.
To reduce this disconnect, human capital needs to be embedded in the overall organizational strategy and HR needs to be a strategic partner at the C-suite, even if it has to fight to get there, said Barco.
HR needs to understand the key priorities for the year and present programs that are the most relevant, and show how they will actually impact the goals, said DeVenney.
“I use numbers a lot because, typically, at the senior table, most people have come from finance and operations — and numbers rule,” he said. “So, if you can’t make it hard and measurable, it’s probably going to be seen as an elective and (CEOs) cut those first.”
But only 12 per cent of CEOs are confident about the quality of metrics they receive on human capital, found Talent Pipeline Draining Growth: Connecting Human Capital to the Growth Agenda.
HR should partner with finance to add credibility to its data, said Barco.
“Finance has the skills to take non-financial, intangible information as well as the financial and being able to analyze it and provide insight from that so HR has more credibility in their reporting, their business case, their investment proposals,” she said.
Cutting investments in training and development can have negative impacts on an organization. Two in five firms (43 per cent) said talent management shortcomings were a key factor in their business’ failure to meet financial targets. And another two in five (40 per cent) said such issues hindered innovation at their company, found the report.
“We’re seeing more and more people who want to see career pathing, want to see more effective development and if senior leaders don’t understand the reasons for it, they don’t provide it and you can end up with more turnover and people just not being ready to lead when you need them,” said DeVenney.
Skills of tomorrow lacking
On that note, more than one-third of HR leaders believe they cannot sufficiently prepare their workforce for tomorrow’s skills demand, found a survey by Lumesse, a provider of talent management solutions based in Surrey, U.K.
“You do have a bit of a perfect storm — resources under pressure, the world changing faster, organizations expecting more from HR. For many organizations, that’s a recipe that’s doomed to fail,” said Jeremy Langley, marketing and business development director at Lumesse in London.
Eighty per cent of HR leaders agreed employees have to learn more, and faster, than they did five years ago to succeed in their roles, found the survey of 800 HR leaders from across the globe. As a result, HR leaders believe more than 30 per cent of employees feel insecure in their jobs.
“Don’t look at what necessarily the skills are now, because that’s probably based on what was needed four years ago… look forward five years at what you want to achieve, what are the pivotal positions you need to make a difference, what are the pivotal skills you’re going to need and where’s the gap? Then start training on that,” said DeVenney.
Going forward, HR should offer training around strategic thinking, relationship-building and openness to and understanding of change, because CEOs want to see more of these traits at their organizations, he said.
Only 10 per cent of HR leaders believe employees see HR as an extremely useful partner for skills development, found the Lumesse survey. And more than 70 per cent of HR leaders said employees see HR as providing little or no learning, or just the minimum skills for them to succeed.
HR should help employees determine how they want to develop their careers and what steps they need to take, said DeVenney. And this should always link back to the organizational strategy, he said.
“HR shouldn’t try to become a command and control function. It should embrace the fact learning is done in many, many ways and support it and point the organization in the direction of (appropriate) content or learning sources,” said Langley.
Having good training and development programs in place can positively impact the long-term, sustainable success of an organization through cost savings, succession planning, improved efficiency and effectiveness, and retention, said Barco.
An organization that is constantly learning and focused on learning is an organization where people have less of a reason to leave, said Langley.
“If I’m working in an organization where my skills are continually being developed, whether formally or informally, then I have a vested interest in that organization’s success and my own success within it.”
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