Less than one-half of C-suite impressed with HR's strategic role

Differences when it comes to priorities: Survey
|hrreporter.com|Last Updated: 10/24/2012

Nearly three-quarters (72 per cent) of CEOs and CFOs would like the head of HR to be “a key player in strategic planning.” Yet only 45 per cent believe HR is fulfilling that role, according to a survey by the Economist Intelligence Unit (EIU).

“The significant difference between the wishful thinking on the part of C-suite executives polled in our survey and the current reality of the HR function is puzzling,” said Gilda Stahl, editor of a series of reports on C-level perspectives of the HR function. 

“Heads of HR appear to be reluctant to step up to the plate, although C-suite executives polled believe HR wants to assume a more strategic role (64 per cent of respondents). Perhaps HR’s senior executive colleagues are denying them access to important meetings on strategy.”

The HR department can raise its profile by aggressively marketing its measurable contribution to the business, developing a personal rapport with the CEO and CFO — while bearing in mind that each has different concerns — and taking initiative in developing the company’s people strategy, said EIU.

Most CEOs and CFOs (69 per cent of respondents) view their relationship with HR as close and trustful. And 63 per cent described their relationship with HR as “one of their most valued professional relationships.”

However, a gap exists between the issues discussed most frequently in meetings between heads of HR and CEOs and CFOs and those most worrisome to the C-suite. Topics discussed most frequently in meetings are employee compensation (87 per cent), employee satisfaction (85 per cent) and HR processes and systems (77 per cent).

Yet the issues that are of gravest concern to the C-level respondents are talent shortages: insufficient talent within the organization as a whole (53 per cent) and insufficient leadership talent (49 per cent), found the survey of 235 C-level executives in North America, Western Europe, Eastern Europe and the Middle East.

The CFO is a harsher judge, found the EIU. CFO respondents rated the head of HR lower than CEOs in every category, such as identifying and recruiting key talent (45 per cent of CFOs versus 58 per cent of CEOs), creating an organizational culture that values excellent performance (36 per cent versus 52 per cent) and succession planning (25 per cent versus 43 per cent).

This more critical view may result from differences between the two functions, said the EIU. For example, different time horizons or a focus on costs versus workforce satisfaction, or a lack of understanding by CFOs of the range of HR leaders’ abilities.

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