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.