Business leaders are demanding more business-driven human resource management strategies, but less than one in three organizations have adopted even a single strategic HR initiative. Company-wide commitment is a major hurdle, finds new research from HR Certification Institute® (HRCI®).
The HRCI study, Strategic HR Emerges as a Company-Wide Strategy, also finds that only 13 percent of HR leaders would classify their companies as "very" or "extremely" committed to strategic HR.
Strategic HR: Hurdles and Successes
Reasons for the lack of commitment vary, but the most common hurdles cited are a lack of C-suite support and constant reaction to crisis management challenges. At organizations without strategic HR, only 54 percent of C-suite and line managers say they will support the adoption of strategic HR and only 36 percent say they are "extremely" or very "committed" to the idea.
Where strategic HR is more the norm, company-wide commitment to strategic HR is stronger. Nearly 90 percent of HR leaders, line managers and C-suite executives at these companies collectively agree they are satisfied with the results. Strategic HR initiatives are proactively driven by HR leaders.
C-suite and line management support for strategic HR also gains more momentum at organizations in growth mode, the study finds. Perhaps it is no coincidence that growing companies tend to pay more attention to emerging HR and industry trends rather than accepting "the way it’s always been done before."
HR as a Business Strategy
Collectively, the HRCI study finds a mixed bag of reasons for the lack of strategic HR adoption. Without a doubt, HR owns a large piece of the solution. HR professionals must continue to drive and grow strategic proactive people management solutions. But company-wide commitment must also evolve.
When strategic HR initiatives are successfully put in play, they emerge as more holistic, business-driven HR actions that embrace leadership vision and department-by-department goals. Given the right commitment and support, HR managers ranked the most important strategic HR initiatives they would implement:
Such HR practices require a great deal of C-Suite and line management involvement. Courage and conviction are also needed by all business parties to step out of comfort zones and take on more strategic talent management responsibilities. For example: Is the performance management system working for every department? Do business leaders value HR? Do supervisors really understand how to interview and hire the best employees?
Some HR staples ― reducing risk and ensuring compliance, for example ― will always be a top concern and a major role for HR practitioners, but the profession can no longer just rely on risk reduction, old processes for filling positions without an eye to the future, employee satisfaction surveys without analysis for change, or compensation and benefits administration that is not linked to culture and employee engagement.
HR at a Major Crossroads
The HR profession and the next generation of talent management strategies are at a major crossroads. Moving to ditch the status quo in favor of more strategic HR approaches requires a careful mix of consulting and technological approaches with in-house strategies. While outsourced solutions play an important role, business leaders will continue to ask more of HR leaders to provide strategic, analytically based views and decisions that unlock employee potential and maximize business results.
In this effort, HR and business leaders are faced with many new questions. What is the right mix of HR technology, HR outsourcing and in house HR expertise that adds the most strategic value? How can the C-suite, line management and HR work better together to drive business outcomes? How can HR better address the needs of both internal and external stakeholders?
The companies with the best answer to these questions, led by competent HR leaders, will be the winners.