HR letting us down, say CEOs

Apr 28 2008 by Nic Paton Print This Article

It has long been known that Europe - and particularly Britain - struggles to keep up with America when it comes to productivity, agility of response and innovation.

But even America's economic might is being threatened by the nimbleness of the emerging economies of Asia and south and central America, with nine out of 10 chief executives believing people issues are at the heart of the problem.

All of which begs the question, why isn't HR doing more to help?

A study by consultancy PricewaterhouseCoopers has argued that there is little evidence of HR having increased its presence or profile within the boardroom, despite years of arguing this is where its future lies.

Yet the poll of more than 1,150 chief executives globally found their top concerns was "the people agenda", with two thirds believing it is where their time would be best spent.

The report argued, damningly, that "the future of the function still remains a matter for speculation."

It added: "With the establishment of shared service operations to handle increasing amounts of the traditional transactional HR role, the future of the function relies increasingly upon its ability to establish a high level of strategic business presence. To date it has largely failed to do so."

The critique comes just days after a study by UK-based think-tank the Adecco Institute argued that the increasing mobility of skilled workers around the world, especially those within developing nations, was creating a talent crisis that will need all HR's talents and focus to resolve.

Its study of 5,000 HR professionals argued that growing skills shortages around the world would require HR to carve out a new role for itself as a long-term talent manager of skilled workers.

The PwC report identified Asia, central and eastern Europe, Brazil, Indonesia, Turkey and Mexico as creating "a new global business landscape" when it came to innovation and challenging the mature economies of the West.

While there was a growing recognition among CEOs of the importance of people to sustainable business success meant that more, this did not mean HR was gaining in importance, argued PwC.

In fact, it was quite the reverse, with CEOs feeling they had little option but to sideline HR and start taking an interest in HR and people management issues themselves.

"Only 43 per cent of CEOs globally in the latest PwC survey agree that their HR function is equipped to handle changes required to compete for talent," it said.


Older Comments

How ironic is it for 1,150 UK chief executives to complain about the quality of their Human Resource departments and 5,000 HR executives to spotlight the talent crisis arising out of the flexible labour market, which employers are tacitly supporting in huge measure (“HR letting us down”, April 28).

For the same reason they have an even more serious problem that they don’t even appear to be aware of. The increasing mobility of skilled workers has also imposed on employers the phenomenon of corporate amnesia and the inability to better benefit from their own experiences. These are related phenomena that explain the pandemic of repeated mistakes, re-invented wheels and other unlearned lessons that litter modern industry and commerce, all of which have an effect on productivity and competitiveness. Unlike the skills problem, however, corporate amnesia is something HR departments CAN do something about.

Instead of lame induction programmes, they could better manage their employers’ hard-won and expensively-acquired ‘organisational memory’ and then implement formal experiential learning procedures, disciplines that are still largely misconceived and studiously ignored in the workplace. Having to reinvent the corporate wheel every time an employee leaves for another job doesn’t make much sense.

Everyone seems to be correctly identifying the importance of employees to productivity and competitiveness. How much better would their performance be with the benefit of their new employers’ hindsight?

Arnold Kransdorff. author “Corporate DNA: How Organizational Memory can Improve Poor Decision-Making” (Gower, 2006). &

Arnold Kransdorff

If Presidents and CEO’s would invite HR to the board room, they’d be getting HR’s input during strategic discussions instead of after. Much better to find out during the meeting that all other things being equal between options A and B, if HR says option B would be easier to accommodate, then choose B during that meeting is much better for achieving goals ' not a month later (after HR was 'notified' about the decision for option 'A') when everyone has started implementing option A.

Colleges and universities could help by giving credence and value to the HRD (development) side of the profession, and not just see “HR” as HRM (management). Sadly, I’ve heard of more than one university’s business college turn its nose up at associating itself with HRD. Fools.

By the same token, HRM professional who are not schooled in HRD specializations should not try to fake it til they make it. HRD is a highly-skilled specialization within the field.

HRM and HRD are two sides of the HR profession, and the sooner C-level execs take note of this and incorporate both sides into their planning process, they will continue to pass the buck and blame HR for their own short-sightedness.

Dan Bobinski USA

Gentlemen - Let's make this even more simplistic. Once a majority of top HR executives begin reporting directly to the CEO - I believe we will begin to see a quantum shift. Only by removing the filter inserted from a CFO or COO's perspective will the future of HR move forward. The CEO MUST have a DIRECT pipeline to the head of the HR function. If support and communication does not happen through this direct channel nothing will change.

I for one will never take a senior executive position that does not allow me to report directly to the CEO. HR reporting to finance is a recipie for disaster - these two functions could not be more opposite.

I am very suprised that this obvious aspect is not being discussed.

Donna Sykes, SPHR USA