As economic recovery gathers pace, the HR profession has a real chance to exert direct influence at board level. This is according to a thought-provoking article entitled Has HR finally hit the big time? (external website) from US HR specialist Dona Roche-Tarry. This chimes with 2010 benchmarking research by IRS for XpertHR, which indicates that UK HR departments have become more effective, efficient and influential as a direct result of the recession (subscription to XpertHR benchmarking required to access full data).
Roche-Tarry writes that one unexpected consequence of the global economic downturn is that it has placed human capital issues at the heart of the business agenda for many organisations. This has in turn created both opportunities and challenges for the HR profession: “HR and issues of talent management are finally front and centre. [...] But it also puts pressure on some HR leaders to raise their game.”
She believes that the recession has resulted in many areas that are the traditional preserve of HR – such as executive compensation, succession planning and leadership development – becoming “hot buttons for CEOs and boards across all industries and across all borders”. Roche-Tarry argues that CEOs that do not wish to repeat the mistakes that led to the recession would do well to consider making “the head of HR a direct report rather than being just another area of accountability for an over-worked COO.”
Despite Conservative leader David Cameron’s recent criticism of UK HR professionals as little more than “form-fillers”, there is strong evidence to suggest that HR departments across the country are ready to “raise their game” in this way.
As I mention in a recent XpertHR video, HR has come out fighting in response to the challenges posed by the recession.
Benchmarking research from IRS for XpertHR on HR roles and responsibilities in 2010 (subscription to XpertHR benchmarking required) indicates that – as a direct result of the recession – HR departments are doing more with less, and doing it effectively. They have also become more influential over the course of the recession (subscription to XpertHR benchmarking required to access data in each of these areas).
Indeed, it is ironic but true that responsibility for enacting the post-election public spending cuts (a version of which will be enacted whichever party or potential coalition of parties ultimately takes office) will inevitably fall to public sector HR departments will find themselves in an absolutely critical position. The HR profession will consequently be expected by the incoming Government to play a key role in helping to secure the economic recovery.
With UK HR departments having already proved themselves effective, efficient and increasingly influential over the course of the recession, burgeoning economic recovery presents them with the opportunity to increase their influence further, perhaps securing a place at the board.
Roche-Tarry advises HR professionals to take two key actions to help prepare themselves for the challenges and opportunities of a place on the board. These are worth quoting in detail:
The first step is to engage in strong, individual coaching from a combination of savvy business executives and seasoned HR directors. [...] Step two is to build an advisory board, of sorts, of successful HR leaders whom you can turn to for advice and guidance during the tumultuous times head. If HR leaders are doing this for each other, their own professional stock within the company – and throughout the greater business community – can only go up, perhaps even faster than the economy rebounds.
- Many thanks to Mervyn Dinnen (external website) for highlighting Dona Roche-Tarry’s article via Twitter.