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Business Expansion Creates Challenges for HR
The increasing focus on business expansion is exerting pressures on many HR departments, according to a recent study. Some HR leaders appear to be lacking in expertise.
Two-thirds of business professionals believe HR is failing to quickly respond to strategic challenges posed by organizational growth, according to a recent survey of HR and business leaders by the Human Resource Planning Society and the Institute for Corporate Productivity. A similar number say the emphasis on growth in the organizations is slowly changing the meaning of "strategic HR." The survey of professionals in 466 companies also revealed that many HR directors struggle to assume a key role in their organizations' growth strategies, with one-third saying they are "on the sideline," focusing on targeted issues such as talent acquisition and integration. "It can be hard for HR to keep up in high-growth companies," says Jay Jamrog, i4cp's Senior Vice President of Research. "Those firms are not only scrambling for the talent they need to keep growing, they tend to have a strong focus on issues such as meeting customer needs, delivering quality products and staying innovative. A lot of HR pros don't have much expertise in these areas. It requires a different kind of strategic HR to help drive growth." Not all HR leaders feel out of the loop, however. About one-fifth (20 percent) of respondents said HR leaders are critical members of their organizations' executive teams and 16 percent said HR plays a key role in promoting organizational growth in their companies. "Even though they are in the minority," Jamrog says, "these are the HR professionals who are probably the true business partners. They understand the executive point of view and know what it takes to help their companies grow." Being in the loop is not always a requirement for HR to play an essential role in an organization, he says. "There's a lot of ways for HR to play a valuable role," he says. While all HR leaders may not be part of the discussions in developing corporate strategy, "they are very good at developing good strategy that supports the [overall] strategy." "I hesitate to say that HR is bad because of this because I know many organizations that HR doesn't sit at the table, but they are very good at HR," Jamrog says. Meanwhile, a different survey by Washington-based Corporate Executive Board notes that nearly nine in 10 HR executives are unhappy both with the strategic impact their function has on their organizations and critical about HR's basic ineffectiveness at managing people. Charles Fay, professor and chair of the human resource management department at Rutgers University in Piscataway, N.J., says HR sometimes fails to react to strategic challenges because "HR leadership has no seat at the table." In other cases, he says, "they may have a seat but their training and experience have not prepared them to deal with production, marketing, financial or other policy issues." That is changing, however, he says, as the "younger generation of HR leaders," not only reacts to strategic challenges, but is able to stay "on top of developments that may result in strategic challenges." "When HR people can translate HR strengths into opportunities for the organization," he says, "they have lots of impact. It's the feel-good guys who have no impact." It's difficult to react to strategic challenges when HR leaders are not "included in meetings where strategic issues are discussed," says Ilene Gochman, practice director of organization effectiveness in the Chicago office of Watson Wyatt Worldwide. "HR may not have the full picture of the company's direction and its people implications," she says. Fay says that in times past, most HR inroads to the executive team were largely reactionary -- responses to problems that cost organizations money. Now, he says, "HR leaders understand that most organizational problems have HR aspects and have demonstrated to senior executives that HR has something to contribute. When HR is ignored or not respected, it probably deserves that status." When an organization's growth is dependent on the proper application of human capital, Fay says, "HR is critical to growth." When HR leaders really understand the business, he says, "they can suggest human capital solutions to organizational problems and opportunities." "Growth requires additional human assets or more efficient use of existing human assets," Fay says. "If that's not HR's bailiwick, I don't know what is."
September 5, 2007 Copyright 2007© LRP Publications |
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