HR ‘behind the curve’ in addressing strategic issues
In the case of strategic HR planning, it seems to a be a matter of too much to do, and too little time to do it.
A new report out from the Hackett Group reveals HR departments are behind the curve when it comes to addressing major goals in organizations, including aligning talent strategies to business needs, dealing with critical talent and skill shortages and embracing new technologies. That’s because, human resources professionals say, they’re held back by limited resources, flat or decreasing budgets and too many responsibilities, making it hard to deal with more strategic goals for their companies.
The consulting firm surveyed 180 HR executives and found that while they had ambitions about company goals — and recognized the importance of such goals — they rated themselves low in being able to perform key initiatives. The most critical enterprise goals that HR organizations rated themselves least able to support were: adapting talent management strategies and processes to deal with changing business needs; dealing with shortages of talent and critical skills; implementing organizational change more effectively; improving the development of agile executives who can lead effectively in a volatile business and organizational context; and supporting enterprise innovation initiatives.
Taken together, says Scott Leuchter, the Hackett Group’s global people and HR transformation practice leader, these critical development areas “represent a huge deficit in the capabilities that businesses require most from HR organizations.”
The problem is, says Harry Osle, the firm’s global HR practice leader, is that HR departments are stuck dealing with the day-to-day.
“Most HR organizations are simply too busy fighting fires to get out in front on strategic issues,” he says. “In many cases they are in reactive mode, with too much on their plate and an inability to say no to work that does not allow HR to become more strategic.”
The number of full-time equivalent HR employees is expected to decline by 1.4% this year, on top of a decline of 1.3% last year, the report said. And budgets are projected to decrease by an average of 1.6%, compared to a reduction of 0.3% in 2016.
Also significantly, most HR execs said they were not prepared to deal with new digital technologies, even though they said they expect technology to “fundamentally change the performance and service delivery model of HR organizations over the next few years.” Less than half (47%) have an HR digital transformation strategy, and just 34% said they possess the resources and skills necessary for successful execution today.
There is some good news in the report: HR leaders said they planned to address several major shortcomings in 2017. The top priority was talent-related changes, followed by weaknesses in HR technology and information capabilities and organizational structure/processes.
But experts say they aren’t holding their breath.
“Given the broad and ambitious change agenda and budgets that will remain flat at best for a majority of organizations, [our] assessment is that it is doubtful that resources currently in place will be sufficient to make all of the improvements necessary to close HR’s substantial capability gaps,” the Hackett Group report said.
To really deliver on strategic value for organizations, Osle says, organizations must change the mindset that they have too much on their plate.
“To build a real leadership position within the organization, it is essential that HR find ways to more effectively manage and prioritize its service portfolio, adopt proactive demand management techniques from IT and make headway on transformation and improvements in key talent areas,” he says.