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The Way forward for HR

"Investment in people" may be the new mantra but it seems it still has some way to go before the mechanisms to achieve it are in put fully into place.
Somewhat incredibly, for example, as recently as last year only 17 out of the UK`s top 100 Stock Exchange listed companies even had an HR Director on their main executive board. And research by Deloitte & Touche demonstrates that although the majority of CEOs now rate HR highly, putting investment in people second as their key strategic priority after "having an effective overall business strategy", there is still a significant difference of opinion between them and their HR Directors as to what is truly important. In fact in the Deloitte & Touche survey only 7% of CEOs and HR Directors working for the same company identified the same area in which they believed HR needed to improve the most.-----It seems that the main issue is one of communication Ä and not just with other staff. Over half (55%) of the CEOS and HR Directors interviewed, whilst agreeing that internal communication was a key strategic priority, were unclear as to whose responsibility it actually was. Again surprisingly, although the CEOs interviewed rated effective internal communications as the most important HR issue, the mean of HR Directors put it only fifth on the agenda, preferring instead to concentrate on employee relations. And whilst the CEOs ranked maximising the return on investment in people as second on their hit list, the HR Directors put it only tenth.-----At least when it comes to the basics of the HR functions both seem to agree Ä 63% of CEOs interviewed and a slightly more nervous 54% of HR Directors rated their company`s delivery of payroll, pensions and benefits administration and compliance with employee law as "very effective". But again there were also significant differences of opinion on performance: although 43% of HR Directors felt that they were very effective in recruiting new talent, only 28% of CEOs agreed. Nor were they always agreed on their failings Ä whilst less than a quarter (23%) of the HR Directors felt they were very effective in reducing sickness and absenteeism, they apparently were impressing the bosses slightly more, with nearly a third or 31% rating them as very effective in this area. Tellingly, only 22% of CEOs felt that executive remuneration was very effectively handled, as opposed to 32% of HR Directors.Though at least there were some areas of almost complete agreement Ä only 13% of CEOs and 12% of HR Directors for example were impressed with the application and use of HR technology.-----So what can be done about this apparent dichotomy of opinion? Deloitte & Touche`s conclusion is that CEOs and their HR Directors should simply talk more Ä or "engage in a more regular and detailed dialogue about priorities, ensuring that they are driving the alignment of HR and business strategy from the top down". But if this is something of a "no-brainer", Brett Walsh, their UK Head of Human Capital Advisory Services, is keen to emphasise the economic benefits of better communication. As he puts it, the opportunity for HR is to "demonstrate its ability to make a genuine impact on business
performance".The financial facts already prove his point Ä of the UK FTSE 100 companies that have HR representation at executive board level, average Earnings per Share over the survey period were 22% higher than for the other FTSE companies. And the same is true over the Atlantic: the University of Michigan Business School recently estimated that the aggregation of HR agendas and activities impact the overall financial performance of a business over a three year period by approximately 10%. HR clearly has a key role to play for the future Ä it just appears that in the UK at least there is still a lot of progress to be made in integrating it into business thinking.

Date de dernière mise à jour : 08/01/2009 - 3:10 PM

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