The HR dilemma: keeping close to the boardroom

Citation

Greatorex, M. (2012), "The HR dilemma: keeping close to the boardroom", Strategic HR Review, Vol. 11 No. 3. https://doi.org/10.1108/shr.2012.37211caa.007

The HR dilemma: keeping close to the boardroom

Article Type: HR at work From: Strategic HR Review, Volume 11, Issue 3

Short case studies and research papers that demonstrate best practice in HR

The modern workplace has seen a radical transformation in recent years, as the effects of technology, globalization and the economy force businesses to adapt and evolve. The nature of work itself is also becoming more complex, with modern working practices continuing to follow an increasingly international, cross-generational, multi-partner and technologically dependent design.

Research commissioned by Hyland Software and carried out by the independent research firm Fast Futures (Talwar and Hancock, 2011), has highlighted that the HR function, in particular, is facing an extended period of rapid change and transition. Modern HR teams must now not only keep pace with the current working agenda but also work towards what, for many, continues to be a long-standing aspiration of aligning more closely with the overall business agenda and being seen and heard in the boardroom as a true strategic advisor and partner.

A lack of confidence

The Fast Futures study confirmed the fact that moving the HR agenda from the back office to the boardroom remains possibly the biggest professional hurdle facing the discipline. Of the 200 business professionals questioned in the study, almost all (91 percent) of those polled agreed that “the biggest challenge for HR in most organizations will be to bridge the gap from a transactional function to a strategic business partner.”

A “lack of business and strategic understanding in the HR function” was identified by 46 percent of respondents as being the most important factor in preventing the HR function delivering effective strategic solutions to the business over the next decade. The same number identified the “failure to attract, develop, retain and reward suitable talent at all levels” as a potential barrier to boardroom influence. A third of participants (33 percent) were also concerned about a “lack of senior management buy-in to HR’s role as a strategic partner.”

Transcending to a strategic function

The research went on to identify several critical challenges in the pathway to HR becoming a more strategic service function. The first priority was ensuring that the function has a deep understanding of how the business operates, how its ambitions and business models are evolving, and the competitive context and key drivers of change that are shaping the overall strategy.

To achieve this, the researchers identified that HR must develop a more effective foresight capability – continuously looking ahead for emerging trends and developments that could directly impact the business, the workforce and even the future of the HR function. And while there are – and will continue to be – many global HR issues that are crucial to the boardroom agenda, HR teams must also consider the practical steps needed to build deeper strategic insight and drive closer business alignment.

Speed is of the essence

The speed at which activities are initiated is critical to achieving these aims. For this reason, HR must look at its own effectiveness in terms of service delivery, speed of response, process execution, workflow automation and cost control. Indeed, the time-consuming nature of some of these more transactional elements has proven a long-standing challenge for HR departments when seeking to transcend to a more strategic role.

Here, next-generation cloud-based technologies are, for many organizations, opening the door to business-focused remote working possibilities, as well as speeding-up day-to-day transactional activities and replacing paper-based documentation and other manual systems with time-saving, automated processes. The additional capacity these efficiencies bring present a significant opportunity for the HR department to spend less hours engaged in time-consuming activities and more time supporting the overall business agenda in a more active and strategic way.

What’s next for HR?

Aligning HR and talent strategies with business strategies was singled out by 73 percent of respondents in the Fast Futures poll as being the highest strategic priority for the HR function over the next decade. Many business chiefs seem to agree; in PricewaterhouseCoopers’ (2010) annual global CEO survey, 97 percent agreed that finding the right talent was the most critical factor for their business growth.

This perceived talent gap is proving a challenge for employers everywhere; for example, a 2011 Boston Consulting Group study estimated that, in order to sustain economic growth, by 2030 the United States will need to add more than 25 million workers, while Western Europe will require 45 million (Baier et al., 2011). This future talent shortage could also be further compounded by global factors such as the impact of emerging markets attracting migrant workers away from the UK.

While it is difficult to anticipate the full impact of global trends such as talent shortages and migration or burgeoning corporate social media agendas, the research did identify a range of future predicted areas that HR would be well-placed to strategically advise on. These included:

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  Demographic change.

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  Global workforce planning.

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  Corporate social responsibility.

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  Organizational transformation.

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  Change management.

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  New models of working.

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  Developing a learning culture.

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  Work-life balance.

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  Cultural renewal.

In reality, however, the issue for HR is not only making the transition from service function to strategic planner but also whether the organization decides that this role is best performed by HR itself, the corporate strategy function or individual business units. Here, as before, time could prove to be the crucial factor; according to a study by PeopleManagement.co.uk (PM newsdesk, 2011), while 65 per cent of HR directors considered themselves to be strategic assets to the business, those responding to the poll said they spent just 15 percent of their time on strategic work.

The risk, therefore, is that if HR continues to focus on transactional requirements, the strategic advisory aspect of the role could be outsourced – putting even greater distance between HR and the boardroom.

Mark GreatorexBased at Hyland Software.

About the author

Mark Greatorex is responsible for the Europe and Africa region on behalf of Hyland Software. His long and successful career in the software industry includes periods at Microsoft, IBM, Oracle, HP and most recently Meridio (now an Autonomy company). His extensive experience of the ECM (enterprise content management) industry enables him to help customers and business partners alike use this exciting technology to solve real world business problems. He is a past chairman of AiiM Europe (the ECM industry body). Mark Greatorex can be contacted at: enquiry@hyland.com