Do CEOs actually care about good HR?

good HR
Rachael Brown, HRM Online

By

written on February 4, 2016

We asked hundreds of company directors, CEOs and non-HR executives if they value good HR practice. Here’s what they had to say.

The business landscape is an agile and rapidly changing environment. Boards and CEOs have to look beyond the horizon and contemplate how an uncertain future will impact the lifespan of their organisation.

What will be the thing that separates the grain from the chaff? The Australian Human Resources Institute (AHRI) and its research partner, Insync, sought to answer this question in a recent report. The survey sought the views and opinions of 821 company directors, CEOs, non-HR executives and HR professionals. Each respondent was asked to rate the importance and performance of HR based on 17 key attributes that combine to make good HR capability.

This number comprises 10 HR skills and behaviours, and seven areas of knowledge and capacity, all designed to determine who HR professionals are and what they know and do. These 17 attributes look beyond the ‘hiring and firing’ stereotype of HR to showcase the profession’s value as a strategic partner to businesses and industry leaders.

“Look at the context of the world we live in, with digital disruption, technology, globalisation – that’s the stuff that keeps CEOs up at night,” says Nick Barnett, CEO of Insync, who partnered with AHRI to conduct the survey. “We need to be more future-focused, and that means using HR beyond the operational issues.”

Better people management and good HR are central to guaranteeing future business success. More than 90 per cent of executives rated employee engagement as critical to an organisation achieving its goals, and 95 per cent of HR professionals agreed. What’s more, when asked whether good HR has an important role in influencing and shaping an organisation’s culture through people management practices, 94 per cent of executives agreed and 98 per cent of HR professionals agreed.

That last statistic points to a slight discrepancy between how HR sees itself and where organisations rank the profession in order of importance, says Barnett. CEO and agency heads have high expectations for HR professionals, which are confirmed by those who work in the industry itself. But HR, by its own admission, often doesn’t live up to the promise entailed in those expectations, says AHRI CEO Lyn Goodear.

“The central reason goes to standards,” she says. “In a world that is fast changing and requires organisations to be fleet-footed, nimble and agile, the bar has long been set too low for HR.”

However, Goodear stresses that it’s not just HR practitioners who are responsible: “In the end, CEOs and agency heads need to demand that business partners responsible for the human capital of the enterprise must be clear about what they promise and be able to do what they promise.”

To help turn potential into reality, here are five ways HR practitioners – and businesses in general – can raise the bar:

1. Anticipate and lead change

According to executives, the two biggest opportunities for reaching good HR practice are future-oriented behaviour, and culture and change leader. HR professionals share similar thoughts, rating those two behaviours as part of a suite of four areas for improvement. In the words of one CEO respondent, HR should “understand broader organisation strategy beyond people dynamics and create opportunities for future planning and scenario planning.” HR should know more about an organisation’s culture than anyone else, and constantly ask: Is our culture sufficiently adaptable, agile and innovative to meet future challenges? Practitioners should also look at the speed at which their organisation operates. According to survey results, ‘stakeholder mentor and coach’ and ‘strategic architect’ are two areas where demand outpaces supply; executives clearly value wise counsel from HR, and they want more of it.

2. Live and breathe professionalism and credibility 

The Insync study found that ‘professional’ and ‘credible’ ranked as the two most important attributes for HR among business leaders and HR professionals. One respondent noted that professionalism comes from “developing trust though effective communication and providing reason and purpose,” and another stated “model the way, exhibit and live the values of the organisation, keep confidences and treat people respectively.” Brand is important, especially after the GFC, and certification and professionalisation are key to elevating business perceptions about the HR industry. “If you look at comparable occupations, they all have certification standards,” Barnett says. “Why shouldn’t HR? That’s what will contribute to the profession becoming a critical part of future business success.”

3. Good HR behaviours are more valued than knowledge

Consensus among executive and agency respondents was that the ways HR do what they do is more important than what they know. This runs counter to recent trends in the industry that highlight data and analytics acumen as the way of the future. However, all 17 HR attributes featured in this survey are important to well-rounded and good HR practitioners – this is just a friendly reminder that the ‘human’ component of human resources is still very much a factor in the profession. Along with future-oriented and credible/professional, the other highly rated attributes are: resolver of issues; collaborative; understand and care; and solutions driven.

4. Be more self-aware

Across the board, executives said HR performance was lower than the performance ratings given by HR professionals. This shows that executives and agency heads are more critical of HR than HR is critical of itself. However, according to respondents, HR is very much aware of these shortcomings. Both HR and executives rated HR’s performance of each attribute lower than the respective importance of the attribute. This indicates that proactive, strategic HR continues to be an aspiration rather than a reality. This is an opportunity for HR practitioners to assess its role within businesses and reaffirm the image that it wants to present. One way to accomplish this is to seek feedback from employees about how the department is performing. As one respondent said, “Our head of HR is constantly seeking employee feedback to better his team, and he isn’t afraid of getting out there and hearing what is truly going on on the ground.”

5. Champion the genuine care of employees

As Barnett points out, “If HR is known for anything, it’s the understanding and care of people.” He says that good HR practitioners really need to leverage that strength, and not let others within an organisation denigrate the importance of caring for the company’s people. As mentioned earlier in this article, leaders see employee engagement and people management as key drivers of future business success. HR can – and should – remind everyone that people are very often a company’s biggest competitive advantage. HR must build a compelling narrative that explains the link between this quality and the performance of the business. Therefore, emotional and social intelligence is critical, and HR must lead by example.

AHRI certification distinguishes HR professionals who are practising effective and strategic HR. To find out more about HR certification, click here

Comment

4 thoughts on “Do CEOs actually care about good HR?

  1. I read this research with interest. My experience is that leaders are seeking that HR step up as a solutions oriented contributor. HR is often seen to be inward looking and overly concerned with best HR practice and dogma, rather than what is best suited to business requirements and being on the front foot in change. The research reinforces the business focus from HR that senior leaders need and want.

  2. I also read this article with interest. As someone who has often had to bridge the divide between CEO expectations, business needs and HR capability the results of this study confirm my experience. However, I believe that the only way HR will be able to meet (and hopefully exceed) expectations in this space in the future is if senior leaders take responsibility for ensuring that aspiring HR talent are exposed to a broad array of operational issues as part of their career development. It seems unfair to expect performance beyond capability – most of the skills required to deliver value at this level require real experience at the coal face in order to better understand the commercial realities of organisations. The findings of this survey confirm my belief that it is dangerous to reach the top of a functional career path in any support function without gaining understanding of the whole business and its key operational challenges.

  3. Interesting article. What is most lacking in HR is championing people’s agenda and quantifying its relevance from business perspective. Although HR not alike Finance, Production, Marketing and other ‘numbers’ related dept. but quantifying and reporting people’s factors and issues into ‘visible readable numbers’ will make HR functions stand-out from the rest.

    HR Metrics is one of the good example where people numbers is important to business. The same applies when HR conduct industry and salary benchmarking, where numbers reporting become very significant in influencing business decision making.

    Qualifying and quantifying ‘PEOPLES’ into numbers is the name of the game and that’s HR job whether we realised it or not. If you don’t believe me, lets look into our Talent Programme alone, where there are a lot of numbers that we used and assigned to our talent candidate before we make our final selection. Although some numbers are sensitive to be published, but it’s still a number game to the business.

    In the nutshell, NUMBERS to HR is the name of the game and ability to qualify and quantify PEOPLES by numbers is the ultimate HR aims and case to be championed throughout one HR practitioners profession.

  4. HR within the Government is not about caring for the people. It is about kicking them out when there are issues. A person injured in the line of duty that claims workcover is a target. A person with a physiological injury is made out to be a liar and there is no support given. I think your tips should expand on how this can be improved. HR is no longer the supporting team that you go to for help.

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